The following post is authored by Harley Stokes, BlueGreen Alliance Policy Advisor.
America is facing three ongoing and interconnected crises: climate change, racial inequality, and economic inequality. The BlueGreen Alliance works with its environmental and labor union partners to address all three, guided by our Solidarity for Climate Action platform. This Wonk Wednesday, we’re going to look at how investments in the buildings sector can and must contribute to addressing all three crises and moreover how the American Jobs Plan (AJP) can help get us there.
Why buildings matter
Climate change: According to the U.S. Environmental Protection Agency (EPA), the buildings sector (commercial and residential) account for the largest emitting sector when accounting for direct and indirect emissions. In 2019, 13% of US greenhouse gas emissions came from direct emissions of the buildings sector mostly from heating and cooking. When electricity consumed by the end user (indirect emissions) is factored in, buildings account for a whopping 31% of total US greenhouse gas emissions. These figures do not reflect the embodied carbon, otherwise known as the carbon footprint of a building which factors in the processing, manufacturing, and construction of a building. Globally, embodied carbon accounts for approximately a quarter of the buildings sector emissions. While this post will focus on the energy use of buildings with end users, it is worth noting that the BlueGreen Alliance has a Buy Clean strategy to address the embodied carbon piece of the pie. Because the buildings sector is such a significant emitter, the Biden administration has included it as a key part of the U.S. strategy to achieve the new, ambitious targets for the Paris Agreement.
Racial inequality: In the U.S., people of color are disproportionately impacted by unsafe, hazardous and inefficient housing and schools. People of color who are more likely than their white counterparts to live in low-income households and to live in high-poverty communities spend three times as much on energy as their white counterparts and up to half their income on rent. This is in part because they are more likely to live in older, less efficient housing resulting in energy inefficiency. Older housing also equals worse health outcomes stemming from poor indoor air quality and ventilation, lead and other legacy exposures and unsafe drinking water. This is all compounded by a lack of control in building maintenance decisions in rental units. Similarly, the majority of public schools that are run down, unsafe and pose health risks are in lower-income areas and communities of color.
Economic inequality: The energy efficiency sector currently employs over 2.3 million workers and has the potential to create tens of thousands more good jobs with prevailing wages in American manufacturing, construction and professional services. Targeting MUSH (Municipal Buildings, Universities, Schools, Hospitals) buildings for retrofits, in particular has the potential to significantly reduce carbon emissions since they represent a large portion of the commercial building stock with roughly 912,000 in the US. MUSH buildings also tend to be the most energy intensive because they tend to be older or historic or have high electricity demand (such as the hospital sector). One BGA study, done by UC Berkeley Labor Center, found that in Minnesota alone, reducing energy use just 20 percent through improved efficiency in the MUSH sector would create 15,000 jobs and save $3.1 billion in energy bills. The same analysis was done for the Michigan MUSH sector and found 20% improved energy efficiency would create 24,000 jobs and save $4.5 billion for municipalities. A separate analysis by the Political Economy Research Institute found that for every $1 million invested in MUSH, 13.5 jobs were created.
American Jobs Plan
The American Jobs Plan addresses many of BGA’s buildings sector priorities including affordable housing, MUSH and using federal buildings as an innovator and accelerator of the energy efficiency market. Let’s dig in to where AJP shines and where it can be made even better to help address climate change and racial and economic inequalities:
|Build/Retrofit Affordable Housing||$445B||$213B|
|Public Housing Capital Fund||$70B||$40B|
|School retrofits||$100B grants
|Schools, PCB removal||$52B||No mention|
|MUSH grants||$18B||No mention|
The AJP designates $213B for the construction or retrofitting of one million affordable housing rental units that are energy efficient and resilient plus an additional half million for low to middle income homebuyers. This is a great start and makes a play at addressing the racial wealth gap that stems in part from restricted access to homeownership for black and brown families. The reality, however, is that there is a seven million unit deficit for affordable housing. Which means for every low-income household eligible and in need of affordable housing, only one in four receive assistance. Current legislation to fund the building, rehabilitation and operation of affordable housing for 3 million plus units designate a total of $445B for the Housing Trust Fund.
The AJP also calls for $40B towards capital funds for addressing a backlog of critical safety and health hazards and improving energy efficiency in public housing. Of the limited affordable housing stock available, thirty million units are considered substandard due to health and safety hazards. Additionally, the longer repairs and hazards go unchecked the more expensive it becomes to fix them. Human Rights Watch notes that at least $70 billion is needed for the Public Housing Capital Fund to address the entire backlog and to prevent additional units from falling into disrepair. Majority Leader Schumer and a host of other New York lawmakers are upping the ante and calling for $80 billion for public housing capital repairs pointing out that the capital funds needed in NY alone total $40B.
Schools: The American Jobs Plan proposes $50 billion in grants and $50 billion in bonds for school infrastructure that improves the health and well-being of occupants and the energy efficiency and resilience of the infrastructure. Meanwhile, public school buildings are estimated to have a cumulative $270 billion in deferred maintenance costs. As pointed out in the AJP, “these conditions are dangerous for our kids and exist disproportionately in schools with a high percentage of low-income students and students of color”. The Reopen and Rebuild America’s Schools Act calls for $100B in grants and $30B in bonds, recognizing that higher grant funding is needed because bonds, which are heavily reliant on local property values, put low-income areas at a disadvantage for this funding stream. This $100 billion in grant funding is absolutely necessary for the low-income schools that need it the most to afford infrastructure repair.
In addition to the backlog of capital repairs in many public schools, additional funding is needed specifically to remove PCBs, a chemical all too often found in schools and a known human carcinogen, from tens of thousands of older school buildings. A study done by Senator Markey’s office in 2015 found that between 12,000 and 26,000 school facilities contained PCBs, the majority of which were in low-income and communities of color. PCB removal for schools averages $2 million requiring an additional $52 billion in funding to conduct testing and removal. This can be done with an amendment to the Toxic Substances Control Act (TSCA), which funds the Healthy High Performance Schools program and by prioritizing high-poverty schools.
Hospitals: The AJP calls for $18B for upgrading veterans hospitals. Additional funding is needed to better serve communities in need. The Leading Infrastructure for Tomorrow’s (LIFT) America Act (HR 1848) calls for $10B to reauthorize the Hill-Burton act which will increase capacity and update hospitals and other medical facilities in low-income communities.
MUSH grants: In addition to identifying the needs of schools and hospitals, there are additional opportunities to leverage MUSH buildings. There are close to a million MUSH buildings in the U.S., which are good targets for energy efficiency because of the massive amounts of energy that they use which translates to energy expenditures representing up to 10% of municipal budgets. Due to the energy usage and inefficiencies in these facilities, retrofits have the potential to make a huge impact on emissions as well as bottom lines. Therefore, we propose utilizing a centralized mechanism for states and municipalities to easily access funding for retrofitting MUSH to be greener and healthier. This could be implemented under a new Department of Energy (DOE) program or administered through existing DOE programs such as the State Energy Program (Open Back Better Act (S531/HR 1485). or Energy Efficiency Community Block Grants (LIFT America Act).
As the owner of 306,000 buildings and landlord to an additional 55,000 buildings AND as the world’s biggest consumer, the U.S. government has the potential to create a powerful market signal to influence energy efficiency standards. The AJP allots $10B towards this end to retrofit federal buildings. Federal agencies allocated money for high-performance green buildings, which are those that reduce energy use and enhance indoor environmental quality, occupant health and performance, and organizational effectiveness, should be tracking performance indicators such as cost savings, health benefits and emissions reductions. GSA budgets should include reporting, analysis and dissemination of buildings performance indicators to accelerate uptake of best practices. There are a handful of bills that support increased funding for high-performance federal buildings including the Open Back Better Act.
To optimize this once-in-a-generation investment, and the numerous societal and community benefits that come with investing in greener, healthier, more resilient buildings, we have laid out below the key elements needed for all buildings legislation.
- Davis Bacon: Enforce Davis Bacon provisions to ensure workers are paid prevailing wages
- Utilize project labor agreements (PLAs), community benefit agreements, local and targeted hire, and other provisions and practices that prioritize improving training, working conditions, and project benefits
- Maintain and grow jobs in the public sector necessary to maintain and operate assets, and ensure compliance and project quality
- Buy America: Ensure all projects build with public resources are subject to Buy America standards that maximize return to taxpayers and the U.S. economy
- Healthy and efficient buildings: Ensure use of the most energy efficient, climate resilient, and cleanest materials and products with the lowest toxicity footprints
- Climate resilient: Ensure investments build or retrofit resilient buildings that can remain functional throughout a climate disaster and bounce back to normal operations quickly afterward
- Enhance and enforce workforce training and development programs to expand the number of skilled workers in new and existing industries
- Target investments in Environmental Justice communities: Ensure investments benefit targeted communities, including low-income communities, communities of color, and communities impacted by energy transition. For example, President Biden’s Justice 40 initiative would designate a minimum of 40% of federal investments to directly benefit disadvantaged communities
- Data or it didn’t happen: Require data collection and reporting from government agencies on buildings performance indicators such as energy cost savings, health outcomes and emissions reductions.
When it comes to buildings, the American Jobs Plan charts a strong path forward by highlighting the key areas within the buildings sector (affordable housing, MUSH, federal buildings) that can make a significant impact in addressing all three intersecting crises: climate change, racial inequality and economic equality.