Massachusetts recently launched the nation’s first green bank focused on developing affordable housing.
The environment and housing are likely the two defining issues for Maryland over the next century. The state is blessed with economic prosperity leading to tremendous growth, and one of its most defining features is its environment (i.e., the Chesapeake Bay). How policymakers today approach those two issues will leave a lasting legacy. Massachusetts is piloting an initiative that marries both areas and, if successful, could see great promise in the Old Line State.
Massachusetts Community Climate Bank
Last week the Governor of Massachusetts announced the formation of the Massachusetts Community Climate Bank (MCCB). The new venture is purported to be the nation’s first green bank dedicated to affordable housing. Important to note that while other green banks deal with affordable housing, MCCB would be the first created solely to address this one issue. The initiative, seeded with $50 million in state funds from the Massachusetts Department of Environmental Protection, is designed to maximize investment in the reduction of greenhouse gas emissions from the building sector.
One of the Climate Bank’s primary goals is to attract private sector capital and federal funds available under the Inflation Reduction Act to finance building retrofits aligned with the state’s long-term climate objectives and new construction of decarbonized buildings. The bank will focus on the affordable housing market, where residents bear a disproportionate burden in energy costs and climate impacts, to promote an equitable energy transition and to meet the needs of environmental justice populations. Over time, the bank will diversify investments to include other decarbonization measures that benefit communities.
According to Governing, green banks normally limit their focus to “solar development, electric transportation, environmental remediation in buildings and electrification.” With a sole focus on climate-friendly affordable housing, Massachusetts is potentially trailblazing a new strategy for dealing with two significant challenges facing the entire United States. Should the venture prove to provide results, policymakers in Annapolis and in county seats may wish to create similar institutions.