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Can sustainable investing help the housing crunch?

There’s a lack of affordable housing in America. Is sustainable investing a way for you to help?

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Finding affordable housing is harder than ever, and that applies whether you’re looking to rent an apartment or hoping to buy a home. According to the Pew Research Center, single-family home prices in the United States jumped 25% between the end of 2019 and the end of 2021, with the median sale price averaging around $408,100. Meanwhile, the vacancy rate for rental apartments dropped to 5.6%. That means more people, with fewer options, spending more money.

Not only do houses cost more than they used to, but mortgage interest rates have also gone up. This makes homeownership even more expensive, overall—and while opting for an adjustable-rate mortgage could save you a little bit of cash right now, your ARM could end up costing you a lot more money than you expect.

Now that you understand the bad news, here’s the good news. Some people believe that sustainable investing could help us solve not only the energy, climate and food crises that are threatening to destabilize our planet, but also the housing issues that are preventing many people from finding an affordable home.

Here’s what you need to know.

In this article:

What is sustainable investing?

Sustainable investing, in its simplest form, is an investment strategy that considers the long-term health of the planet. More specifically, sustainable investing means investing in companies that are working directly towards solving some of today’s biggest issues—renewable energy and sustainable farming, for example, as well as permaculture, biotecture, and other large-scale efforts to stabilize our climate and improve our future.

Sustainable investing is not necessarily the same thing as ESG investing, which is a type of socially responsible investing that focuses not only on environmental protections, but also social justice issues and well-managed corporate governance.

By choosing sustainable investments, you are putting your money directly towards companies that are working towards near-term solutions and long-term sustainability. Sustainable investing can benefit the entire ecosystem—and it might even be able to help address the housing crisis.

How can sustainable investing help the housing crunch?

Companies that focus on sustainability understand that we need more than clean air and clean water. We also need clean, comfortable, safe places to live. This could be as game-changing as building an eco-architecture apartment complex integrated with vertical farming, or as simple as retrofitting existing structures with solar panels and heat pumps.

There are many ways to improve the state of housing in the United States, whether that includes refurbishing old hotels into apartments for people who are temporarily unhoused, or turning resorts and retirement communities into mini-villages with schools and vegetable gardens.

“I really like the idea of companies that reinvest into the local economy, especially if you’re repurposing, renovating, or refurbishing older buildings rather than knocking them down and building a completely new building in its place,” says Jim Wang, founder of WalletHacks. “It’s often more expensive to do that than demolish and rebuild, but keeping the history and keeping the materials out of the landfill are commendable.”

By investing in companies that are directly supporting sustainable housing efforts, you have the opportunity to put your money towards better homes for everyone. And as the demand for this type of housing continues to grow, you may even see a return on your investment.

How can sustainable investing help the economy?

Every time you contribute to your 401(k), put money in an IRA or transfer your extra cash to your roboadvisor app, you’re investing not only in yourself but also in the larger global economy—and when the economy is in a period of growth, we’re more likely to see the kind of innovation that can result in affordable homes.

This means that even if your sustainable investments are in agriculture instead of architecture, the money you invest could still end up boosting the larger economy and leading to lower-priced housing.

“For many investors, the bulk of our investing is done in retirement accounts,” Wang explains. “If you wanted to vote with your dollars and had the option, it’s not unreasonable for folks to redirect those investment dollars towards funds or companies that have mission statements that focus on or touch on sustainability. You would still be doing the responsible thing, investing in your retirement, while also making sure those dollars are put into companies that match your vision.”

When you think of investing as “voting with your dollars,” then every investment you make is a vote for a particular company to succeed. With that in mind, you can pick the companies you think are going to do the most to help the causes you want to support—and if you need help, you can use resources like Beyond Investing, Adasina or Impax Asset Management to find sustainable investment options.

Some of these options could lead directly towards lower-priced homes. Others could strengthen the economy, lower carbon emissions, reduce the strain on the energy grid, help us transition away from factory farming or keep our freshwater resources clean.

All of this will lead to a better world, overall—which means better housing, too.

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About Nicole Dieker

Nicole Dieker has been a full-time freelance writer since 2012, with a focus on personal finance and habit formation. In addition to Haven Life, her work regularly appears at Lifehacker, Bankrate,, and Vox. Dieker spent five years as a writer and editor for The Billfold, a personal finance blog where people had honest conversations about money, and is the author of Frugal and the Beast: And Other Financial Fairy Tales.

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Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

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