This answer was contributed by a friend, Dave P, who has expertise in green buildings:

Hmmm...well the short answer is cost. Budgets for building low-income housing dropped drastically under Nixon and even further under Reagan and never really recovered. The system innovated under Nixon (which essentially killed public housing as we previously knew it) was the community block grant system. The federal government decided it would no longer fund public housing directly -- it would give municipalities and states "block grants" which could be spent on a variety of projects. Those state and local governments could build housing with that money or do other things with it. And we more or less have that system in place today.

But the main point is that the money coming into any given city is very low and local governments (to the degree that they care about low income housing at all) will usually opt to build more units the cheap and dirty way rather using building materials that are renewable. (Less cost per unit = more units = less homeless people, etc.) Sometimes the cost of using sustainable building materials can be offset by federal, state or local subsidies but usually such programs will focus on energy efficiency (insulation, efficient heating and cooling systems, appliances and fixtures) rather than renewable flooring materials.

However, to me this question opens up larger questions about low-income housing and sustainable building materials...

Low-income housing is not really built in the U.S. any more. What we typically have built from that trickle coming from the feds and whatever cities and states raise on their own is mixed-income housing (aka "affordable housing"). As such, housing that is built that is affordable to low-income people is usually a subset of a larger project of middle or
even “market rate” housing. While this mix means that even LESS truly low–income housing is built with those funds the flipside is that some mixed-income housing developers will build an entire building using some portion of sustainable and renewable materials, using rents or sales from the middle and high priced units to “compensate” for the lower rents or purchase prices in the same building. An example of that is this building in Brooklyn built by the Fifth Avenue Committee:
http://www.AtlanticTerraceLiving.com,
http://www.nytimes.com/2011/08/07/realestate/in-brooklyn-blurring-the-wealth-boundary.html

My main point is that whenever we hear the terms “low-income”, “mixed-income” or “affordable” housing we have to ask developers and government: 1) what are the percentages of units in a given development being set aside for each of these categories; 2) what are the income levels which define these terms?

In New York, often private developers get a subsidy to set aside 20% of their units for “affordable housing” which can include households making above $150,000 a year! So beware…

Sustainable and renewable are also terms which have various meanings. I’m not familiar with hemp or straw as a building material. But I know, for example that bamboo can come to the U.S. on a slow diesel boat from China, which in my mind might make it technically renewable but not sustainable. Or bamboo (or similar materials) can be grown in your region according to strict forestry guidelines…it all depends.