# **Box 1: “Climate Smart” Criteria for Affordable Housing in the United States**

The federal low‐income housing tax credit (LIHTC) program was established in 1986 to serve as an incentive for private investment in affordable rental housing. Although it is a federal program, state housing finance agencies guide the annual distribution of LIHTC through published documents called Qualified Allocation Plans (QAP). These QAPs define how applications for LIHTC money will be evaluated – and developers seeking this money must earn high marks against these criteria in order to compete for these funds. Since 2005, the number of green criteria – those related to smart growth, energy efficiency, resource conservation, and health protection—have steadily increased. In 2012, Connecticut and Maryland became the first states to achieve perfect scores on Global Green’s annual ranking of QAPs. Moreover, for the first time, the proportion of “A” states was greater than every other grade category. This is in stark contrast to the 2005 results in which no states received an “A” and seven states received an “F”.

The impact of including green criteria in QAPs is significant. According the Department of Housing and Urban Development, LIHTC units account for over one‐third of all multifamily rental housing constructed each year. In 2010 and 2011, LIHTC units accounted for over half of all new multifamily rental units.

Sources: Global Green USA. “2013 QAP Analysis: Green Building Criteria in Low‐Income Housing Tax Credit Programs.” (November 2013).

Fuhry, Lauren and Walker Wells. “Green Goes Mainstream in Low‐Income Housing.” _Planning Magazine_ Volume 79, Number 9 (2013): 31‐35.

www.huduser.com “Characteristics of LIHTC Projects, 1995 ‐2012”. Accessed November 11, 2014.

As suggested by the “climate‐smart” criteria offered above, there are several approaches available to design projects that meet performance goals along with reduced carbon emissions:

- Reductions in scale or increases in density of the physical structure;

- Reducing the carbon‐intensity of the fuel sources generated by or served to the structure;

- Designing or installing energy efficient or carbon sink technologies; and

- Designing to reduce the embedded carbon in materials and processes used in construction.

In this section, we offer a brief explanation of how these approaches may be implemented to produce low carbon alternatives to conventional infrastructure projects.

The scale of an individual project, both in physical size and density, is an essential driver of energy use and greenhouse gas emissions. With buildings, for instance, an extensive literature documents the relationships between energy consumption, area of interior space, area of the exterior walls, and numerous other endogenous and exogenous variables that are predictive for carbon emissions. Density influences wall space, and can be changed through either reductions in scale or increases in scale. Though planners debate this subject, all measures generally treat density as a function of the scale of the structure divided by the scale of the parcel it occupies (altered, for instance, by floor area ratios). Efficiencies in the use of space can have the effect of reducing energy demand by reducing the cubic meters of heated and cooled space needed to perform the same amount of work. Scaled up, efficiencies reduce demand for development.

Page | 16