U.S. National Green Bank Can Help Stretch Affordable Housing Dollars

A massive columned bank building, much covered with green ivy
This scene was created by affordablehousingaction.org and is licensed under CC0 1.0 Universal Public Domain Dedication

So, what does a green bank do, anyway? According to the article linked below, green banks help make investments in climate change by facilitating loans to customers that banks would typically not consider, either because they are too small or to high a risk.

How can this kind of green investment help struggling/low income homeowners? The article describes how a worker at a day care centre was able to install solar panels on the roof of her first home (which she purchased at age 60). She would not have been able to afford the panels on her own. Following the installation, her electricity bills were cut in half.

The article gives other examples of deals that green banks have put together. It explains how the national green bank will support local initiatives as well as helping people with low incomes. People with low incomes include minority communities that have less access to the capital they need to make energy upgrades to their homes. They also tend to have high energy costs compared to their wealthier neighbours.

It’s interesting to learn that in this day and age of social media, word of mouth is still working as a way to promote innovation. The day care worker who installed solar panels spread the word at her workplace and in her neighbourhood. So far, three others have followed her lead.

The U.S. Government has announced plans to invest US$27 Billion in a national green bank. The money was approved as part of the Inflation Reduction Act. There are already 22 green banks at the state and local level. Investing this much at the national level is part of the country’s strategy to have a net zero electric grid by 2035.

Read the full story at reasons to be cheerful: ‘Green Banks’ Are Turning Climate Action Dreams into Realities

Human Rights Perspective

The above article highlights two aspects of the United Nations right to adequate housing. At an individual level, the green banks are helping to prevent homelessness by reducing ongoing housing costs and making housing more affordable. They are specifically intended to assist marginalized groups. Installing solar panels increases their housing stability.

The article also illustrates some of the roles that governments can play in facilitating the right to adequate housing. Governments can create the legislative framework for green banks to operate. Governments can also direct funding to support green banks.

Going deeper, the UN’s guidance describes state governments’ obligations to “progressively realize the right to adequate housing.” There is an expectation that state governments will lead work toward the right to adequate housing “to the maximum of their available resources.”

There are many avenues open to a state government. Training and education, which are part of the national green bank program, are two examples. Training will expand the workforce trained to install panels and facilitate access to funding, by assisting disadvantaged groups to access work that pays well. The education is intended to assist consumers to make informed decisions, for example deciding to invest in solar panels. The UN’s discussion about state governments’ obligations begins on page 29 of the Right To Adequate Housing.