Families spend, on average, more than half their income on housing and transportation expenses. For many already stretched thin on housing costs, rising gas and utility prices could be the breaking point. Gas prices are over $4 a gallon, electricity bills have risen nearly 30% since 2021, and more than one in six households are already behind on utility bills. Thirty-two percent of families report cutting back on food and medicine to keep the lights on.
New pressures are making the problem even more dire. The explosive growth of AI data centers, already consuming more than 4% of US electricity, is projected to drive energy demand dramatically higher in the coming years, putting additional strain on the grid. The resulting increases hit hardest for families in older, inefficient homes with outdated heating and cooling systems that make it impossible for residents to reduce their usage and for housing providers to sustain skyrocketing operating costs.
At the same time, Congress is advancing what could become the most substantive housing legislation in decades to address our nation’s massive unmet need for affordable housing. Across aisles and the housing ecosystem, there is a broad agreement not only about the need for more housing, but about the urgency of the crisis.
In conversations with developers, lenders, insurers and community leaders, we’ve been hearing the same message: we need to build more and build smarter.
The unprecedented national focus on housing affordability gives us a window of opportunity. As we seek to maintain aging housing stock and add new supply, energy efficiency and sustainability must be built in.
Green communities
For too long, the phrase “building green” carried undue social and political baggage. Sustainable construction was dismissed either as a luxury or a political device. In reality, it is an absolute necessity—and a smart financial investment.
The surge in energy costs is only the latest issue to underscore the value of effective green building. Last year alone, the US experienced 23 separate billion-dollar weather and climate disasters – including catastrophic wildfires, severe storms, deadly flooding, and drought. These increasingly frequent events make homes more expensive to operate over time, driving up energy use, repair costs, and ultimately the monthly bills families already struggle to afford.
Many families can’t simply move to find better energy prices or rebuild after disasters. The solution is building in ways that reduce energy demand and withstand extreme conditions from the start. Homes designed for efficiency and resilience can help stabilize utility costs and protect households from the growing volatility of both energy and insurance markets.
The affordable housing sector has been quietly doing this for two decades.
Twenty-nine states—plus Washington, DC; Puerto Rico; and cities like Chicago and New York—require or incentivize housing providers to meet Enterprise Green Communities standards when awarding Low-Income Housing Tax Credits, the nation’s largest source of affordable housing funding.
Green Communities is the only national green building framework designed specifically for affordable housing. It establishes cost-effective requirements for creating and preserving healthy, energy-efficient, and climate-resilient homes. Projects must meet mandatory criteria related to building performance, water conservation, indoor air quality, climate resilience, and integrative design. Projects can earn additional points through measures such as all-electric systems, sustainable materials, resilient construction strategies, and community health planning.
Enterprise Community Partners, the national affordable housing organization we serve, launched this national green building standard 20 years ago. The criteria embody two decades of green building innovation informed by engineers, architects, designers, and practitioners, and grounded in resident experience. To date, more than 240,000 homes across 2,600 developments in 44 states, from dense developments in the Bronx to rural communities in Michigan and growing suburbs in Colorado, have been certified nationwide.
Energy, health and resiliency
Now, after two decades of proven impact and more than $3.9 billion invested in green affordable housing, we have launched the 2026 Criteria, centered on three priorities: energy, health, and resiliency. The update reflects 18 months of collaboration with technical experts, housing providers, policymakers, and residents, including input from nearly 250 stakeholders, more than 1,000 public comments, and dozens of agency recommendations.
The economics are straightforward. Criteria-certified homes typically cost about 2% more to build but recover those upfront costs through utility savings in less than seven years. The economics will only get better with rising utility costs. For long-term owners, lower operating costs translate into stronger net operating income over the lifetime of the home. One Georgia-based developer told us: The standards “give us a script of what we need to do to reach the next level of quality for our residents. We’re long-term holders of properties. So we need these standards to be sure that our projects will stand the test of time.”
Low-income households already spend nearly three times more of their income on energy than other families, leaving them especially vulnerable to price spikes and utility debt. Investing in energy efficiency can permanently lower residents’ monthly costs.
For residents, the savings show up immediately in lower monthly bills. Alberta Davis, a disabled retiree in Louisiana, saw her monthly utility bills fall by 25% after moving into the Woodring Apartments, a Green Communities-certified development. At a moment when utility costs are surging, that kind of savings can be life changing, now and going forward. In the past two decades, the Criteria has saved $332 million dollars in water and energy costs.
With programs like Solar for All and Low Income Home Energy Assistance under threat, alongside broader rollbacks to climate and resilience initiatives, the case for embedding efficiency and resilience directly into the housing stock becomes even stronger. Federal incentives alone cannot insulate households from rising energy and insurance costs, especially when critical investments are vulnerable to shifting political priorities. Smarter construction and retrofits can. Each year, Green Communities-certified homes save owners and residents more than $60.7 million in combined energy and water utility costs.
We’ve spent years measuring the housing crisis in units. We need to start measuring it in total household costs — and energy belongs in that equation. This is an opportunity for rare bipartisan ground. Lower energy bills. Less household financial strain. More housing supply. More affordability. These outcomes cut across the political divide and show up where it matters most in people’s lives: at home.
Shaun Donovan is CEO of Enterprise Community Partners and former HUD Secretary under President Obama. Krista Egger is VP of Building Resilient Futures at Enterprise.
Guest posts on ImpactAlpha represent the opinions of their authors and do not necessarily reflect the views of ImpactAlpha.
