A Better City Celebrates the Launch of the Massachusetts Community Climate Bank
June 21, 2023
By Isabella Gambill, Assistant Director of Climate, Energy and Resilience
Healey-Driscoll Administration Forms First Climate Bank to Focus on Decarbonizing Affordable Housing
On Tuesday, June 13th, Governor Maura Healey and Mayor Michelle Wu, with a delegation of state lawmakers, city officials, private sector partners, and community advocates, officially announced the first-ever Massachusetts Community Climate Bank in the State House Library. With $50M in seed funding committed from the Massachusetts Department of Environmental Protection, this green bank will operate like a revolving loan fund, with an initial prioritization of making low-risk and low-interest loans available to developers and stakeholders that are decarbonizing affordable housing. At a time of heightened interest rates, skyrocketing housing prices, and challenging real estate market dynamics, the MA Community Climate Bank will help to catalyze investment in energy efficient, safe, and affordable housing throughout the state, in a win-win for communities, affordable housing developers, and the planet.
As the largest source of emissions in Boston and the second largest source statewide, existing buildings remain a challenge for Massachusetts in meeting our statutory climate commitments and keeping our communities safe. Decarbonizing existing housing, particularly affordable housing, will help to make progress towards equitable emissions reduction while also protecting our residents, businesses, and critical infrastructure. To ensure that the Community Climate Bank remains grounded in affordable housing and climate, the Bank will operate out of MassHousing, the Commonwealth’s affordable housing financing office and investment bank, and will operate in partnership with the Massachusetts Clean Energy Center (MassCEC) and Mass Development.
While the $50M in seed funding is a fantastic start, the Community Climate Bank will need to continue to grow its capital stack in both private and public funding to be able to effectively meet demand for decarbonizing all existing buildings, among other climate initiatives like climate adaptation and resilience. In addition to continuing to attract investment from private sector actors like Bank of America and others, the State is also exploring opportunities to leverage federal funding, combined with green bank dollars, to maximize and accelerate investment in building decarbonization. Once the Bank is operationalized and staffed up later this year, the state may leverage Bank funds and Bank infrastructure to apply for federal funding like the National Clean Investment Fund (approximately $14B available), the Greenhouse Gas Reduction Fund (approximately $27B available) and the Clean Communities Investment Accelerator (approximately $6B available).
Background Context
Prior to last week’s announcement, A Better City sat on the Steering Committee for a MA/Boston Climate Bank, an initiative led by the Boston Green Ribbon Commission, the City of Boston, the State, Bank of America, and others to build out a two-year pilot and business plan for a climate bank in Massachusetts. Since the Steering Committee was first formed in 2021, the group discussed opportunities to establish a climate or green bank in Massachusetts that would help to equitably fund compliance with BERDO 2.0 in Boston, among other anticipated city and state climate policies. Thanks to the Steering Committee and partnering consultants with deep climate bank expertise in other jurisdictions, this group was able to deliver a business plan for a climate bank to the Healey-Driscoll administration upon the gubernatorial transition in early 2023. While the Massachusetts Community Climate Bank is narrower in scope than what was first envisioned, A Better City is thrilled to have played a role in helping to establish the first climate bank for Massachusetts. Even though the Bank’s initial scope will be to help equitably fund the decarbonization of affordable housing, A Better City anticipates that its focus may expand with time and additional funding.
In addition to serving on the Steering Committee for a MA/Boston Climate Bank, A Better City was a longstanding advocate to the Baker administration for establishing a climate bank, recommended as early as our American Rescue Plan Act (ARPA) comment letter in October 2021, in addition to our comments on the 2050 Clean Energy and Climate Plan, and multiple other comment letters regarding how to leverage federal funding for climate bank seed money. Furthermore, establishing a climate bank was a key recommendation of A Better City’s gubernatorial transition document for the Healey-Driscoll administration in December 2022, which was affirmed as a key part of the Healey-Driscoll climate platform. Finally, in response to emerging dynamics in city, state, and federal policy, A Better City’s Energy & Environment Unit committed to supporting the establishment and expansion of equitable funding and financing opportunities, including a climate bank, as part of our 2023-2024 E+E Policy Agenda.
Next Steps
More information is needed regarding eligibility for Bank funding and financing, timelines for Bank disbursement, governance structure, and community engagement/oversight into Bank disbursement. However, once the Bank hires an Executive Director and supporting staff later this year, we anticipate learning more about opportunities to stay involved (for example, we anticipate stakeholder engagement sessions that A Better City will participate in). Since many federal funding opportunities are time-sensitive, it will be imperative for the State to get the MA Community Climate Bank up and running as soon as possible.
For more information on the Massachusetts Community Climate Bank and other climate funding and financing opportunities, please contact Isabella Gambill.
