SUL paper published in Cambridge Journal of Regions, Economy and Society

“Aligning climate and housing goals: a data-driven approach to support equitable decarbonisation policy design" published in Cambridge Journal of Regions, Economy and Society.

In this paper we examine the distributional consequences of stringent building energy codes in single-family housing markets. Using the staggered, municipal-level adoption of the Massachusetts Stretch Energy Code as a quasi-natural experiment, we estimate the policy’s causal effects on single-family housing prices and new construction. On average, adopting a more stringent energy code leads to only a modest increase in housing prices and reduction in new housing supply. Critically, these effects are concentrated in low/median-income municipalities with low property values, exacerbating affordability pressures.

This means, while energy codes are an efficient and fundamental tool to reduce carbon emissions at a low cost, their benefits and burdens are not equally distributed. The policy implication is clear: Achieving a just energy transition requires pairing these standards with zoning reform, targeted financial incentives, expedited permitting and workforce training to mitigate regressive effects on lower-income households in the near term; with careful policy design, climate and housing equity goals are not irreconcilable.

Thank our guest editors and those who provided very helpful comments during our research process! Meric Gertler, Betsy Donald, Amy Glasmeier, Kate Redman (U. of Cambridge).

-Professor Siqi Zheng