Green Affordable Housing: Cost-Benefit Analysis for Zoning Incentives

Armin Jeddi Yeganeh, Andrew Patton McCoy and Steve Hankey
Additional contact information
Armin Jeddi Yeganeh: The Myers-Lawson School of Construction, Virginia Polytechnic Institute and State University, Blacksburg, VA 24061, USA
Andrew Patton McCoy: The Myers-Lawson School of Construction, Virginia Polytechnic Institute and State University, Blacksburg, VA 24061, USA
Steve Hankey: School of Public and International Affairs, Virginia Polytechnic Institute and State University, Blacksburg, VA 24061, USA

Sustainability, 2019, vol. 11, issue 22, 1-24

Abstract: In the year 2017, about 89% of the total energy consumed in the US was produced using non-renewable energy sources, and about 43% of tenant households were cost burdened. Local governments are in a unique position to facilitate green affordable housing, that could reduce cost burdens, environmental degradation, and environmental injustice. Nonetheless, limited studies have made progress on the costs and benefits of green affordable housing, to guide decision-making, particularly in small communities. This study investigates density bonus options for green affordable housing by analyzing construction costs, transaction prices, and spillover effects of green certifications and affordable housing units. The authors employ pooled cross-sectional construction cost and price data from 422 Low-Income Housing Tax Credit (LIHTC) projects and 11,016 Multiple Listing Service (MLS) transactions in Virginia. Using hedonic regression analyses controlling for mediating factors, the study finds that the new construction of market-rate green certified houses is associated with small upfront costs, but large and statistically significant price premiums. In addition, the construction of market-rate green certified houses has large and statistically significant spillover effects on existing non-certified houses. Existing non-certified affordable housing units show small and often insignificant negative price impacts on the transaction prices of surrounding properties. The study concludes that the magnitude of social benefits associated with green building justifies the local provision of voluntary programs for green affordable housing, where housing is expensive relative to its basic cost of production.

Keywords: density incentive; earthcraft; energystar; green premium; hedonic pricing; LIHTC; rehabilitation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.mdpi.com/2071-1050/11/22/6269/pdf (application/pdf)
https://www.mdpi.com/2071-1050/11/22/6269/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:22:p:6269-:d:284800

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().