Massachusetts Launches Green Bank to Battle 'Compounding Housing and Climate Crises'

In a move heralded as a model for others to follow, Democratic Gov. Maura Healey announced Tuesday that the state is "launching the Massachusetts Community Climate Bank—a financial engine for cutting emissions and improving health, equity, and economic security."

"This first-of-its-kind initiative is going to make our state more competitive, affordable, and equitable—and it's going to show that in Massachusetts, we can lead the world by leading with our values and leaving no community behind," Healey said of the country's only green bank focused on affordable housing.

The initiative is located within MassHousing, the state's affordable housing finance and investment bank. While it is seeded with $50 million from the Massachusetts Department of Environmental Protection, the Healey administration hopes 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."

Massachusetts' climate plan calls for nearly halving planet-heating emissions from residential heating during this decade and achieving a 95% reduction by 2050.

To help reach those targets, the governor's office explained, the bank "aims to take advantage of the periodic cycle of affordable housing refinance to finance heat pumps, building envelopes (i.e., efficiency upgrades to windows and walls), heat pump water heaters, high-efficiency appliances, and solar panels as a part of the same process as other affordable housing renovation measures."

Climate, housing, labor, and political leaders across the state applauded the initiative—including Massachusetts AFL-CIO secretary-treasurer Chrissy Lynch, who said that the bank "will help our state tackle the dual crises of climate change and inequality, allowing us to harness federal investments under the Inflation Reduction Act to invest in our communities, cut pollution, and create high-quality union jobs throughout Massachusetts."

Democratic Boston Mayor Michelle Wu stressed that "this work is critical and will complement our efforts in Boston to retrofit our housing stock and create opportunities for small property owners to build and renovate greener, healthier buildings for residents to thrive."

The bank's creation also won praise beyond Massachusetts. Author and climate campaigner Bill McKibben said that "we need more homes, and we need efficient homes—here's a way of getting at two of our most important goals at once. It's the kind of innovative thinking and doing that sets the Healey administration apart."

University of California, Santa Barbara associate professor and Rewiring America senior policy counsel Leah Stokes declared that "Massachusetts has a visionary plan to lead the country on electrifying affordable housing."

"The Massachusetts Community Climate Bank will be a model nationwide for making sure that climate action and equity go hand-in-hand," she said, adding that "it's thrilling" to see the state's leadership with bank and expressing hope that it will secure more funding.

U.S. Sen. Ed Markey (D-Mass.), a leading climate champion in Congress and author of the National Climate Bank Act, also celebrated the move to establish "a one-of-a-kind engine that will serve on the frontlines of our state's compounding housing and climate crises by empowering communities to build affordable, climate-resilient, and energy-efficient housing and improvement projects all across the commonwealth."

"I've been fighting for national climate bank funding for years, and now that we've secured billions in funding in the Inflation Reduction Act, we can supercharge a clean energy revolution and unlock billions in federal dollars for Massachusetts and other states to leverage," Markey said.

The bank "will ensure public and private investment reach frontline and environmental justice communities," he added, "and I thank Gov. Healey and her administration for bringing this investment to life and building a brighter, more livable, and more affordable future."