Green Landlady - Green property management and sustainability solutions for the multi-family housing industry.

Living and Working Smaller in Big America

July 28, 2010 – 7:30 am

Living ‘large’ may be the way we Americans might have described our way of life from the 1950’s to 2008 but the recession has changed not only behavior but our state of mind. The value of individual home ownership is in question and many families have entered a renting lifestyle, often even pooling resources and renting together. Even so, the recession has caused a stubbornly high vacancy rate for properties serving the middle class.

According to Reis, Inc. the good news is that rents appear to be declining in only 10 major markets out of the 82 markets their research team follows. Even factoring in the declines, overall apartment rents gained 0.7 percent from April through June. This may seem a rather small improvement unless you consider it is the biggest quarterly gain in over two years. During the first three months of the year Baltimore and Orlando suffered the biggest rent declines. On a year-over-year basis, Phoenix’s rents declined 2.3 percent and Las Vegas rents 2.9 percent, showing the largest annual drops.

Experts contend that rents in areas with an oversupply of vacant or foreclosed single family homes will have a harder time moving back up. The exceptions have been Affordable and luxury housing, as tenants have continued to absorb these existing supplies. Developers are also continuing to concentrate on these two bookends because financing has been available making the risk lower. Reis, Inc. also reported the first decline in vacancies in the last three years, with the rate moving from 8 percent down to 7.8 percent. According to Reis, researchers believe this reversal reflects improved consumer confidence and the beginning reversal of the trend by families to move in together. Of course, returning to the pre-recession living patterns of singles and pared-down families is not guaranteed and may be a long way off even if it happens.

Commercial landlords are also experiencing some of the same downsizing as the residential rental market. In an article posted by the CoStar Group, several major lease renewals are identified that reveal a substantial decline in the amount of space re-leased. These large companies renewed their leases after casting off square footage amounts ranging from 53,000 to 97,000 - representing a space reduction of 13 to 22 percent.

In another article CoStar reported that institutional quality commercial buildings – for this purpose defined as Class A with a minimum value of $10 million and 100,000 square feet aka luxury buildings – are a resilient hotspot for investors. However, before you get too excited, since January of 2009, 70 percent of the 216 office transactions that have occurred in this category have all been concentrated in just five markets: Boston, New York, D.C., San Francisco and Los Angeles. If you are not located there, commercial vacancies are undoubtedly a concern.

It is well known in the industry that both luxury apartments and luxury office buildings are thriving. In fact almost every luxury building has incorporated green management into its operations and operates energy efficient systems to lessen costs whether or not it has formally obtained a high-level USGBC LEED certification. This excerpt from CoStar Group’s article makes this point well:

“There is a Grand Canyon gap in value disparity between “A” properties and everything else,” said Fred B. Cordova III, senior vice president / CART Western regional director at Colliers International in Los Angeles. “The private REITs are pushing pricing on quality product across all product types, but steering clear of anything below investment grade.”

Regardless of how well these particular markets with select, high-level product are doing, the residential and commercial building sector can still be defined as ‘distressed’. There is heavy competition for all categories of tenants and will continue as such until people are back to work and our economy is believed to have finally stabilized.

The U.S. recession has had some positive results, however. One of them is that many people have discovered an ability to live and work in ’smaller’ spaces and are learning to feel pride about using less energy and water. It is not unprecedented, as our forebearers had large families and managed to live and produce quite successfully in their small, 800 to 1,000 square foot homes.

Apartment managers who recognize the newer needs of residents will be able to improve their own occupancy rates, even if the general market continues to sag. Learning to live and work ’smaller’ can have a very large impact on reducing the amount of carbon each of us produces. If the multifamily community can make a bundled lifestyle more palatable, it’s a social triumph and will help produce a better quality of life for us all.

Other articles of interest:

By Elizabeth Madrigal | Posted in Business | Tagged affordable housing, apartment rents stabilizing, bundling tenants, green apartments, green lifestyles, green property management, green property manager, green renter, living smaller, luxury units, national rent statistics, rental increases, Vacancy Rates | Comments (0)

Going Green During Those Dog Days of Summer

July 27, 2010 – 6:30 am

Regardless of your position on climate change or the whole green movement, going green means savings to the property owner and the renter; therefore, a partnership between the property owner and resident is very important. The property manager or owner needs to provide education and an energy efficient living space and the renter needs to use the space wisely.

Efficient living spaces will give the property an edge over other rentals. Working with residents to reduce a property’s environmental impact will help to reduce operating expenses, keep utility bills low for the renter and help save Mother Earth for future generations. Here are some ‘Going Green’ tips for the dog days of summer so we can stay cool and still save some green.

Dusty air conditioning filters reduce air flow. Examine filters monthly and keep a supply on hand. Better yet, furnish the property with a reusable filter, which can be easily cleaned by vacuuming out or rinsing in water. Tenants often are happy to change them and everyone can save up to 15% on their electric bill. If you allow residents to do basic maintenance, be sure to provide them with a manual or some other type of education.

There are many ways to lower energy use that are low and no cost but they do require modest changes in behavior. For example, a key to reducing air conditioning costs during hot summer days is to limit the amount of heat generated during the day when temperatures are at their highest. This can be accomplished in a number of ways.

Keep lights off when rooms are not in use. Lights generate heat which means your air conditioner will have to work harder to keep the place cool.
Green renters will want to wash and dry clothes, iron and cook in the morning or later in the evening.
Use microwave ovens and patio barbecues for cooking.
Be sure to have ceiling fans available in all the rooms. The air movement helps air circulation and makes it feel cooler without having to lower the thermostat.
Encourage residents to set the thermostat to 78°. This may seem high, but when combined with a fan is quite tolerable.

Also remember to set the temperature in the common areas to 78°. Just by setting the thermostat down to 72° from 78° increases cooling costs by as much as 45%. Remind residents to turn the thermostat up or off when they are not home and back down to be more comfortable at night. Better yet, install a digital thermostat that can be programmed once and never think about it again.

Your staff and tenants may appreciate a gentle reminder not to position heat-producing appliances, such as televisions or lamps, near the thermostat. The heat from the appliances causes the thermostat to read high and causes the air conditioner to run longer than necessary.

Resident comfort will also be enhanced if you install louvers or awnings on the outside of the windows to keep sun out of the units. Indoors it is up to residents to draw draperies, blinds, or shades to keep things cool. Keeping storm windows closed is also like having another layer of insulation on your windows in summer or winter.

Insulation is not only about making sure your attic has some pink stuff, it’s about making sure that you save “green”. When you insulate, make sure that there is insulation in the ceiling rafters, crawl spaces, basement walls and floors and exterior walls, if possible. Insulating inside walls around light switches and wall receptacles will provide big savings because it stops air leaks. Make sure that building air conditioning vents are also well-insulated and sealed. Make sure that doors and windows have weather stripping. By the way, if you see daylight around your doors and windows, then you are wasting energy.

As you can see, green property management is truly a partnership between the property owner and the resident. Keeping cool with these tips will help renters to reduce their utility bills through decreased energy consumption. Proper care and maintenance of all HVAC equipment will benefit owners as it helps ensure longer systems life.

With education everyone wins. . . owner, resident, and Mother Earth. That is what Going Green is all about.

This is a Guest Post by A. W. Warner. He is the Owner of AW Warner Management, located in Palm City, Florida. Warner has thirty-five years experience in managing multiple properties both in domestic and international markets. AW Warner Management is a team of professionals, members of the Institute of Real Estate Management and wants to be part of saving Mother Earth for our children and our children’s children. A portion of all of our profits goes to the American Cancer Society. www.awwarner-management.com

By Kimberly Madrigal | Posted in Energy | Tagged air conditioning filters, awnings, draperies, green management/tenant partnership, green property management, green renters, heat from appliances, insulation, programmable thermostats, reducing energy use in summer, reducing operating expenses in multifamily, resident education, reusable air conditioning filters, shades, weather stripping | Comments (0)

Green Manager Tech Break Out

July 26, 2010 – 6:15 am

Green property managers have a lot of tasks to perform in addition to supervising sub-contractors, maintenance, pest management and move-ins and outs. It is difficult to find time to stay on top of technology that might make the job easier, so we thought we’d throw out a few ideas.

Tech education and training can make anyone using software more efficient at their job. Whether you have an integrated or custom operating platform, understanding it is critical. Even a small investment in training will pay off.

Sprinkler ’smart’ timers work automatically to turn irrigation water on and off based on local weather information received via satelite. It prevents overwatering and underwatering which obviously helps with stormwater management. There are a lot of different manufacturers, but the Department of the Interior’s Bureau of Reclamation did a study on these smart controllers. It is worth reading before you make a decision.

Marketing is a constant challenge, but with the advent of geo-marketing in real time managers can locate prospects through their smart phones. If you are not doing it, be assured that your competition will soon be. In fact, the wise use of this technology makes email for these sub-groups totally passé. Multifamily Executive in reporting on this smart phone phenomenon wrote:

“Geo-location awareness—the science of marketing to consumers by matching up smart phone geographical location with user-identified browsing and purchasing preferences—opens up a virtual door to real-time customer interaction based on a locality.”

Although it feels a little like ‘Big Brother’, that may not always be bad. Managers can ask their IT person or leasing agent to read Multfamily Executive’s link which explains exactly how the technology will work.

Communication between management and residents is always time-consuming, but with a service called Resident C, a manager can blast out an emergency (or general) message from a computer or mobile smart phone. Anyone managing people knows this can literally be a lifesaver, not to mention reductions in negligence and liability potential.

Your Social Media Sites may not be something in which your residents fully participate once they move in, but many rental prospects check these sites while shopping, so maintain and monitor yours!

The iPad, Apple’s new darling, may also streamline the process your sales agents use to make presentations, check applicant’s information and lease your apartments. The potential applications and mobility of the iPad make it a perfect tool for a business in which prospects shop 365 days and nights a year. Some predict smart phone apps will revolutionalize apartment leasing, although that may take a while to filter down. These smart phone apps are already evident in the number of users who use them to check Walkscores, Google Maps and apartment rating services.

On-Line Rating Services can be wonderful lead generators… or not. A quick check for a local city on the site ApartmentGuide.com had several luxury units with recommendations ranging from 77 percent to 88 percent with one exception. One complex showed a horrible 22% recommendation rate!

A Google Alert can be placed by name, address, or any other identifier, simply by going into Google and searching for instructions on how to sign up. Essentially all you will need are the search terms you want to follow and how often you want to be notified.

If you really want to get fancy, here are a few high-tech innovations in the news and others we reported on:

Solimipeks, a Turkish company, has created a hybrid solar collector that uses water to cool the photovoltaic panels to increase their efficiency and then takes the hot water for building use. If you are not familiar with solar tech, it might interest you to know that when the air temperature is cooler the solar panels are actually more efficient. The manufacturer describes it this way in a pdf.:

“As well as increasing PV module performance, the PV-T hybrid collectors mean that less roof space is required for the same output of electricity and hot water, since only one system is needed as opposed to a solar thermal array and PV array side-by-side. Furthermore, Solimpeks reports that the hybrid PV-T system’s ROI is shorter than the PV systems, and because PV cell temperature is reduced, the lifetime of cells is lengthened.

If you have been told your roof is too small for solar, you might want to take a good look at this hybrid system. Its high efficiency reduces the amount of space you need for the panels because it increases their efficiency.

Fuel Cells are now being used in residential tower applications, as UTC Power installed the first in June. With grants and government assistance they can have as little as a five-year payback (ten without). This first 400kW application was installed at 360 State Street in New Haven, Connecticut and will generate all the electricity needed for the mixed-use developement’s 25 residential floors. It will also sell off-peak power generated back to the standard grid at retail rates, which should be a nice money-maker. If you are not familiar with the technology, a simplified explanation is that the fuel cells operate like a battery but the fuel they use is on the outside so there is no re-charging necessary. It is a virtually pollution free energy source as the natural gas used is never combusted.

Energy production on-site is the new black gold for multifamily, incidentally. A solar energy installation for common area energy production was completed last year at Princeton Properties in Lowell, Massachusetts, with an amazing payback after grants and incentives of under a year. If you have not checked out this possibility with your local utility company or looked at the DSIRE site (a searchable database by state for tax incentives, credits and rebates), do it today.

With the competiveness of the multifamily industry, using technology to make our buildings more sustainable and more profitable is just common sense.

Other articles of interest:

By Elizabeth Madrigal | Posted in Business | Tagged apartment technology, ApartmentGuide.com, Fuel Cells, geo-location marketing, Google Alerts, green property management, green property manager, green renters, iPad, managing apartment reputations, multifamily tech, multifamilyexecutive, on-line apartment ratings, Princeton Properties Solar Installation, ResidentC, satelite tech in irrigation, smart controllers, smart phones, smart sprinkler timers, smartphones, solar energy, UTC Power, UTC Power Fuel Cells | Comments (0)

A Coffee Break Confession

July 23, 2010 – 6:43 am

Today I dumped a pound of carbon into the atmosphere without even thinking about it. I didn’t mean to. I got distracted and left the coffee maker on for an hour. It’s that simple. Most of us wouldn’t think of leaving a coffee pot on as an act of pollution, but it is when we’re careless or ignorant of the ramifications of our energy consumption.

Technology can only take us so far. We will have to change our behavior as well. At the National Apartment Association Educational Sessions, three eminent and committed multifamily professionals agreed that you need to have committed leadership to get a sustainability program off the ground. I don’t necessarily disagree, but I will say this:

YOU need to be committed. If you’re a parent, then you need to show your commitment every day in every way. Not only because this will help ensure a healthy environment in which your children can grow and thrive, but also because it’s you duty as a parent to prepare your children for the future. They need to know the simple things like not to leave the coffee pot on and to use a carafe!

YOU need to take that commitment to work with you and be an example for your co-workers. Will you annoy them? Probably. Sometimes. But if you can maintain a sense of humor about things, they may eventually come around.

In the meantime, you can contribute a carafe to the break room, bring your own utensils and coffee mug and strategize about how to start a sustainability committee.

UPDATE:

Upon receiving my monthly utility bill, I can conclusively and unequivocally state that the simple act of consistently using a coffee carafe instead of allowing the coffee pot to sit on the warmer, reduced energy consumption by 4%! In addition, I saved at least 60 pounds of carbon from entering the atmosphere, even with my one distracted morning!

Other articles of interest:

By Kimberly Madrigal | Posted in Energy | Tagged behavioral change, carbon emissions, Carbon Reduction, coffee carafe, National Apartment Association | Comments (2)

NAA 2010: Reducing Multifamily’s Carbon Footprint

July 22, 2010 – 7:00 am

At the 2010 National Apartment Association Education Summit, Dimitris Kapsis of American Utility Management and Louis Schotsky of Equity Residential presented a seminar titled, ‘Reducing Your Property’s Carbon Footprint’.

The term carbon footprint is used to express the total set of greenhouse gas emissions (GHGs) caused by an activity, organization, event or person. To make things simple, the term standardizes the measurement of these emissions by expressing them in terms of carbon dioxide emitted, or its equivalent of other GHGs.

The majority of energy used in commercial and multifamily buildings is for heating, lighting, ventilation and air conditioning (HVAC). Domestic water heating – which includes household needs and outdoor sources like pools and spas – also comprises a good percentage of building electrical consumption.

Schotsky and Kapsis indicated that the three main ways to reduce a commercial property’s carbon footprint are energy efficiency or conservation, purchasing Renewable Energy Credits (RECs) and developing on-site generating capacity.

They suggested that managers research their needs before an emergency and then focus their attention on the following as budgets allow:

Preventative maintenance including cleaning coils, changing filters regularly and maintenance of motors
Gear equipment upgrades toward high efficiency factors
Stage boiler times
Insulate all accessible piping
Adjust thermostats according to time of day and day of week
Install an Energy Management Control System – Equity Residential has developed their own in conjunction with AUM
Reduce domestic hot water temperatures
Take advantage of free cooling

The presenters also recommended a lighting evaluation of the property be performed. Items to consider are over-lighting and under-lighting, lighting run times and light fixture efficiency. In addition to installing CFLs, LEDs and solar powered lights to replace incandescents, a multifamily lighting retrofit should include an investment in timers, motion and daylight sensors. These measures help shave additional kilowatts off your bill, cut back on maintenance requirements (longer lives of higher efficiency lamps) and reduce greenhouse gas emissions.

Have a pool? Where municipal regulations allow, cover it. Reduce the water temperature to 78° and seriously consider installing a solar pool heater. Although these small changes seem insignificant, a TIAA-CREF case study revealed one property achieved an annual savings of $14,000 just by reducing the pool temperature from 82 to 78°!

Beyond the immediate utility savings, reducing your asset’s carbon footprint may have a positive affect on its resale and long term value, particularly as the cost of grid-produced power escalates. Green property management professionals may also want to consider purchasing RECs or investing in a program of on-site generation in the form of solar, wind, geothermal or fuel cell technology. (There are many government credit and tax incentives, rebates and private grants available to finance a portion of these systems.)

There has not been a a great deal of emphasis on the concept of carbon reduction in multifamily, but the same steps suggested for energy reduction and water conservation will reduce greenhouse gas emissions. In addition to lowering the expenses of managing the property, these practices will help green property managers proactively address the climate crisis.

Guest post by Monica Jean, a student at Columbia University in New York City. She enjoys writing and wants to make the global community greener.

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By Kimberly Madrigal | Posted in Energy | Tagged adjustable thermostats, American Utility Management, carbon reduction in multifamily, definition of carbon footprint, Dimitris Kapsis, domestic hot water energy reduction, energy efficiency in multifamily, energy management control systems, Equity Residential, fuel cells for multifamily, geothermal, green property management, HVAC preventative maintenenace, insulating pipe and water heaters, lighting retrofits for multifamily, Louis Schotsky, Monica Jean, National Apartment Association, on-site energy generation for multi-family, pool covers, reducing energy used by HVAC, reducing greenhouse gas emissions, reducing pool temperature, Renewable Energy Credits, solar energy, TIAA-CREF, water conservation in multifamily | Comments (0)

NAA 2010 Green: Lower the Flow

July 21, 2010 – 6:00 am

According to a report released on July 20, 2010 by the NRDC:

‘More than 1,100 U.S. counties — a full one-third of all counties in the lower 48 states — now face higher risks of water shortages by mid-century as the result of global warming, and more than 400 of these counties will be at extremely high risk for water shortages.’

For most of us this prediction presents some major concerns. Good access to clean, fresh drinking water is critical to apartment living and the price of water and sewage directly affects both profitability and asset value.

At the National Apartment Association’s Annual Education Summit, John Klein of JDM Associates offered sage advice on multifamily focused on the best sustainable operations and maintenance practices that will increase operation income through reduced water consumption. As the NRDC report suggests and Klein posited, rates for potable water and the concomitant sewage charges are already climbing. Sewer charges in some areas are exceeding water fees by a factor of four.

Technically we do not pay for water. Water fees are billed for the pumping, transportation, heating and other services associated with its delivery to our properties. However, according to the DOE, almost 4% of all electricity used in the U.S. is associated with our fresh water consumption. Therefore, reducing water consumption is closely correlated to reducing energy consumption.

So what can green property managers do? Klein offered the following approaches:

Organizational commitment & communication
Benchmark using Portfolio Manager
Assess & Prioritize opportunities
Set goals
Institute no and low-cost measures first, including timely responses to leaks and reducing over-watering of landscapes
Investigate & initiate cost-effective equipment retrofits & upgrades, including dishwashers, washing machines, HVAC and sub-meters for residents and for landscaping
Leverage partnerships where possible

Even a modest 10% reduction on a 30-unit complex can total a $1,500 savings annually. At 30%, total annual savings would be $4,500. If you manage more units, do the math. These savings can be significant, particularly when potential rate hikes are taken into consideration.

The City of Santa Monica, California – where I own property - is planning to double water and sewer charges over the course of the next five years. Each time I refurbish a unit I methodically install low-flow showerheads, dual flush toilets and aerators in all the sink faucets. Even now the water and energy savings are valuable enough to warrant these small annual investments. As my residents understand green management is for their health and economically sound for both landlord and renter, they value the effort.

EPA's WaterSense labeled products can save you money.

For help guiding purchasing decisions for new water-efficient appliances and products, the EPA’s website has great information and detail in its WaterSense program. However, bear in mind, that WaterSense flow rates are a minimum standard. For example, the recommended flow rate for bath or lav faucets is 1.5gpm (gallons per minute), but, according to Klein, 0.5gpm is sufficient for bathroom faucets.

Klein noted that 1.6gpf (gallons per flush) commodes are no longer considered high efficiency. 1.28gpf, dual flush and retrofit kits are required to receive significant savings. In the shower, WaterSense recommends flows no greater than 2.0gpm. To meet this demand, Green Landlady recommends the Niagra Earth Massage 1.75gpm showerhead. (No, we are not an affiliate.)

Klein finished his presentation by focusing on landscaping and reminding owners that most landscape damage is cause by over watering! Following are Klein’s tips for conserving water in the landscape:

Reduce watering times & adjust watering schedules
Be sure sprinklers are in good working order & are watering your foliage not your hardscape
Replace lawns with drought tolerant native vegetation
Take advantage of rebates that may be available for rain sensors or smart irrigation systems
Use drip irrigation
Educate maintenance staff and outside contractors

These are all practical steps to reduce your properties’ demands on the environment and ensure the long-term value of your assets.

Other Articles of Interest:

By Kimberly Madrigal | Posted in Water | Tagged benchmarking for water, damage from overwatering landscape, dual flush toilets, green property management, high efficiency toilets, John Klein JDM Associates, NAA, National Apartment Association Education Summit, National Resources Defence Council, Niagra Earth Massage Showerhead, NRDC, Portfolio Manager, rising sewer charges, sustainable multifamily operations and management, toilet retrofit kits, water conservation, water shortages by 2050, WaterSense, WaterSense minimum flow rates | Comments (0)

NAA 2010 Green: Efficiency Is a Fiduciary Duty

July 20, 2010 – 7:30 am

The theme behind the “green” property management track at the National Apartment Association 2010 Education Conference seemed to be benchmark, benchmark, benchmark then reduce, reduce, reduce = $ave, $ave, $ave!

The DOE’s Alyssa Quarforth reminded participants that utilities are the largest controllable cost, whether the property is master or directly-metered and that, among other things, benchmarking your assets through Portfolio Manager enables property managers to:

Make more informed decisions
Identify under-performing assets
Set investment priorities
Assess effectiveness of operations practices
Track water consumption and costs

Improving energy efficiency can:

Increase net operating income
Raise asset value
Provide a cushion against rising utility rates
Keep your properties ahead of the curve with regard to legislation, competition and public demand

Scott Anderson, Director of Asset Management for TIAA-CREF Global Real Estate, offered a brief, yet compelling account of what can be achieved through benchmarking using Portfolio Manager and then instituting energy and water conservation measures.

Case Study #1: Garden Style, Phoenix, AZ

Reducing the pool temperature from 82-78° saved $14,000/year
Used CFLs and lighting controls such as motion sensors
Where possible, installed programmable thermostats in common areas, leasing offices and model units
Trained staff to look for inefficiencies

RESULT: 28% reduction in common area energy consumption
ANNUAL SAVINGS: over $50,000!!!

Case Study #2: High Rise, Chicago, IL

Common area thermostats set 5° higher during the summer months
Vacant units left unconditioned (no A/C)
All staff trained to look for inefficiencies such as lights being left on

RESULT: 13% reduction in common area energy consumption
ANNUAL SAVINGS: over $60,000!!!

The managers of TIAA-CREF’s portfolio feel it is their fiduciary duty to operate their building as efficiently as possible. Think about that: their fiduciary duty.

Other Articles of Interest:

By Kimberly Madrigal | Posted in Energy | Tagged Alyssa Quarforth, Asset Management, benchmark water, benchmarking using Portfolio Manager, CFLs, CFLs. training personnel, common area improvements, Diector, energy efficiency, garden style apartment building, green property management, high rise apartment building, increase NOI, investment priorities in multifamily, model units, motion sensors, pool temperature, Portfolio Manager, programmable thermostats, rising utility rates, Scott Anderson, TIAA-CREF Global Real Estate Fund, under-performing multifamily assets, vacant units, water conservation | Comments (3)

Top 10 Tools For Green Property Management (that Might Be Good for Green Renters Too)

July 19, 2010 – 7:05 am

Beyond the fun stuff I find online, I often discover interesting new tools, calculators and guides that help me understand my environmental impact, find resources I need and manage or market my assets better. A few of my best finds are outlined below.

1. ENERGY STAR’S PORTFOLIO MANAGER Of course, no green property management professional is truly green until they’ve benchmarked their building. I recommend Energy Star’s Portfolio Manger because it’s free, easy to use, robust and allows you to set goals based on percent or dollar savings. What are you waiting for?

2. DSIRE (DATABASE OF STATE INCENTIVES FOR RENEWABLES AND EFFICIENCY) Rebates. Rebates. Rebates. Green property managers and operations personnel should take advantage of every rebate and incentive available to them. Things to remember:

Be persistent.
If you are working on large project, ask to speak to someone who can customize an incentive package.

Funds are released at different times of the year, so incentives can come and go and come back again. This is why regular phone calls and persistence will pay off.

3. CARBON FOOTPRINT CALCULATOR There are many carbon calculators online and I would love to hear if you find one you like better. The aspect that attracted me to this particular calculator is that users can adjust the period of time, their utility data, the make and models of their cars and so forth. Carbon offsets are also available for purchase as they are on many other carbon calculation sites such as TerraPass. If you are already benchmarking your assets, then you will already have a fair bit of this information; however, travel and secondary factors ‘caused through the manufacture, delivery and disposal of products and services we buy’ are a good reminder that the choices we make throughout the day can contribute to the climate crisis.

4. HOW CLEAN IS THE ENERGY I USE? – POWER PROFILER Curious about the percentage of coal or nuclear power used to generate your electricity? This tool will allow you to see the mix of fuels used in your region and to compare your region’s fuel mix to the national average. Just input your zip code and click on you utility provider and voila! Apartment dwellers who pay or have access to twelve months of electric bills, can input their kilowatts each month and determine their annual greenhouse gas emissions – it’s like a single unit benchmarking tool. Have fun!

5. WATER FOOTPRINT NETWORK CALCULATOR This particular calculator is rather extensive and was developed overseas, so you will need to bear in mind that 1kg = 2.2lbs. Most multifamily professionals know what the water usage is for their assets because, generally speaking, water is a master-metered utility and is often the sole responsibility of property owners. But you personal water footprint is tied to more than your tap, toilet and landscaping. Your footprint is closely tied to what and how much you eat! For a quick, visual comparison that illustrates the amount of water embedded in our food, National Geographic has put together a wonderful graphic that allows you to compare products.

6. WALK SCORE This tool is a lot of fun and – assuming your property’s score is high – should definitely be incorporated into your marketing efforts. Maps pinpoint nearby amenities and there is a feature which allows you to copy and paste badges onto your marketing materials. Whether you are searching for an eco-friendly apartment or a sustainable acquisition, the property’s Walk Score can seriously affect both cost of living and asset value.

7. EARTH911 Got stuff? Don’t know what to do with it? Earth911 will help you find the nearest recycling center in the country for just about anything you can think of! Their Recyclo-pedia includes electronics, hazardous materials, plastic, paper, household, garden, automotive, metal, glass and construction waste. Their listings also include resources such as re-sale shops and haulers who’ll guarantee items are recycled.

8. ORGANIC.ORG This site lists every farmers’ markets and organic food store in the country! A farmers’ market, in particular, can be a draw for green renters and a nearby Whole Foods should definitely be highlighted as features when advertising your property. The seasonal shopping guide provides a wealth of information on how to pick the best fruits and vegetables, including cooking and serving suggestions.

9. THE DEAL MAP As a Sustainable Building Advisor and green property management advocate, I rarely recommend retail consumption for the sake of it, so you may be scratching your head in wonder as I recommend a coupon site. Sustainability is often a trade-off and if we advocate for vibrant, walkable neighborhoods, we must admit to the need for reasonable, if not robust, patronage of neighborhood shops, restaurants and services. As its name suggests, The Deal Map offers various discounts that can be purchased online and used at your neighborhood restaurants, retailers and venues.

10. BEST OF BUILDING SCIENCE Forget Johnny Depp! Forget George Clooney! Give me a bag of popcorn and Bruce Harley in an online video discussing insulation installation any night of the week! Best of Building Science provides how-to videos and pertinent reading recommendations for most residential building systems. Unfortunately there doesn’t seem to be a search feature, but the site is moderately sized and manageable.

What tools or guides have you found helpful?

Other Articles of Interest:

By Kimberly Madrigal | Posted in Business | Tagged apartment unit benchmarking, benchmarking apartment buildings, Best of building Science, Bruce Harley, Carbon Footprint, carbon footprint calculator, coupons, Daatabase of State Incentives for Renewables and Efficiency, Deal Map, dietary consideration and water footprint, Discounts, DSIRE, DSIRE rebates, DSIRE State Rebates & Tax Incentives, Earth911, Energy Star Portfolio Manager, fuel mix, green property management, green property manager, green renter, Greenhouse Gas Emissions, how-to videos, lists of farmers markets, master-metered utility, on-line video instruction in building science, Organic.org, paper, percentage of coal in fuel mix, Power Profiler, re-sale shops, recycling, recycling automotive, recycling construction waste, recycling glass, recycling haulers, recycling haxardous materials, recycling materials, recycling metal, recycling plastic, seasonal Farmers' Markets, Sustainable Building Advisor, terrapass, Walk Score, walkability, walkability calculator, water footprint, water footprint calculator, Water Footprint Network Calculator | Comments (2)

FHA Mortgage Insurance Revisions for Multifamily

July 18, 2010 – 8:00 am

Many projects currently in construction scrambled to locate financing over the last few years, inspiring some developers and principals to get creative. They included sustainable features to qualify for additional federal or state grants or tax incentives and they stopped shirking the FHA mortgage insurance programs. As the financial crisis loomed, the only reliable financing of market rate or affordable housing has been through the GSEs, Fannie and Freddie, and the FHA.

The good news is that in HUD-subsidized housing, better energy efficiencies and healthier indoor environmental quality have become standard requirements. These improvements are tested post construction and must meet or exceed the original design, but even this kind of requirement hasn’t deterred the rate of applications. In fact, the extra interest in FHA insurance has been one of the factors that pressured the U.S. Department of Housing and Urban Development (HUD) into developing its new FHA mortgage insurance rules.

Announced on July 7th, 2010, the revisions will become effective 60 days from that date, but applicants can expect underwriters to begin implementing them immediately. HUD published the announcement as Mortgage Letter 2010-21 and specifically named multifamily risk mitigation as a lead motivation. In other words, HUD wants the FHA to tighten up, but not shut off the faucet, inspiring us to call this the ‘aerator’ underwriting method.

The mortgagee letter revisions of underwriting standards will assist in strengthening the program and lowering its risk, but it will not be easy in the current market for the multifamily sector to adjust even to these small changes. It should be noted that it has been 40 years since the last major overhaul of FHA’s multifamily insurance program, which has been in need of updating. The following is our analysis of those revisions.

Principals on the Hotseat: First a principal must pass a terrorism check. Any principal with more than $250 million in outstanding FHA insured debt will need pre-approval from HUD before they can apply for additional insurance commitments. A much more comprehensive analysis of borrowers’ financials will be undertaken. This type of scrutiny will evaluate even contingent liabilities – like an impending balloon payment on another property – that could undermine a borrower’s stability. Three years of tax returns for the project or borrowing entity will be required, as well as a CPA-prepared property financial statement with copies of insurance and property tax bills.

Before, during and after funding: Developers and principals will no longer be able to get cash out from land equity until project completion. Photos of the surrounding area will be required in addition to project photos. Details that relate to community, sustainability, environmental issues and market conditions will now be required. Physical site inspections by staff will be performed as a standard procedure.

Tougher underwriting: Pre-screening of all proposals will reject weak or non-feasible transactions quickly. Proposals that make it past the initial pre-screening will be deeply and thoroughly analyzed by staff – which will probably result in many of these proposals being culled from the herd as well. Market rate applications will become more complicated, as they will be submitted under two-stage processing with a pre-application submittal.

Increased Debt Service Ratios: Although these are not being increased substantially and some loan programs are not affected, any increase might have an impact.

Changes to Debt Service Coverage Ratio (HUD 92264-A, Criterion 5)
Section of the Act	Current DSCR	New DSCR	Current Criterion 5 LR	New Criterion 5 LR
221(d)(4) with 90% or greater rental assistance- no change	1.11	1.11	90.0%	90.0%
221(d)(4): affordable	1.11	1.15	90.0%	87.0%
221(d)(4): market rate	1.11	1.20	90.0%	83.3%
221(d)(3) affordable transactions	1.05	1.11	95.0%	90.0%
223(f) refinance of a Section 202 property	1.11	1.11	90.0%	90.0%
223(f) with 90% or greater rental assistance	1.176	1.15	85.0%	87.0%
223(f) affordable	1.176	1.176	85.0%	85.0%
223(f) market rate refinance or acquisition	1.176	1.20	85.0%	83.3%

Higher Reserve Requirements: New requirements will include higher working capital escrow accounts (generally 4% of the mortgage loan amount). Break-even occupancy has been re-defined as 1.0 debt service coverage. Amounts required for operating deficit escrows - in which the monies will be used to supplement net income during initial lease up – will be increased. Substantial Rehabs will require 10 to 15 percent of construction costs be set aside as contingency escrow funds. Notoriously underfunded in the past, reserves for replacement of improvements have been increased. Allowed absorption periods have also been lowered from 24 to 18 months, reflecting concerns about volatility and weakness in the real estate market.

People will matter: Projects with substantial tenant displacement will generally require market and appraisal studies be performed by independent firms to gain greater insight and analysis of the project and avoid possible conflicts of interest. More complete financial and credit information will be required for the developer, principals, management company and general contractor. Special emphasis will be paid to any participant in the project “with adverse credit actions like bankruptcies, foreclosures or a pattern of renegotiating debt.”

Greater sophistication: The site’s sustainability will be considered, as well as consideration of how the proposed development will impact other neighboring developments within the FHA pipeline. If it is perceived as a competitive project that might lower an existing development’s asset value, it is probably not going to be approved under any circumstances. In refinancing or acquisition proposals, current physical and economic occupancy rates will have much greater weight than they previously have.

Condominium Ownership Regimes: Projects that were initially built as condominiums, but are now being operated as rentals, may be considered as eligible for multifamily mortgage insurance if certain conditions are met with regard to ownership. There may be some tolerance for a limited number of individually owned units if they are located in a separate building or separated from the rental units. The Multifamily Hub Director may consider waivers, but not if ownership units and rental units are mixed together.

Frankly, many of these procedures should have been performed in depth previously. They are good, solid underwriting practices and only seemingly Draconian by comparison to the loose underwriting often practiced before the recession.

Other Articles of Interest:

By Elizabeth Madrigal | Posted in Business | Tagged affordable housing, business and finance, Fannie, FHA insurance, FHA insurance for multifamily housing, FHA Insurance Revisions, FHA mortgage insurance rules, FHA multifamily regulations for insurance, Freddie, grants or tax incentives for multifamily, green property management, green property manager, green renters, HUD, HUD changes in debt-to-coverage ratio, HUD reserve requirements, Hud-subsidized housing, market rate applications, Mortgage Letter 2010-21, Multifamily Hub Director, Multifamily risk mitigation, multifamily underwritng standards, pre-screening of loan proposals | Comments (0)

Levi’s, Goodwill and Where to Put the Clothesline

July 17, 2010 – 7:56 am

Clotheslines are back in fashion thanks to Levi Strauss.

My generation does not refer to dungarees as anything other than Levi’s. which I might add was a source of deep entertainment when my children were teenagers. They also enjoyed referring to me as “Lucy” and their father as “Desi”, so you can imagine what kind of family we have.

In spite of their razzing, I was proud to call my threads Levi’s, and now I have something new to be brag about when it comes to the name of Levi, Strauss & Company (LSC) . In a phrase, LSC’s corporate social responsibility is being catapulted into action in their new partnership with Goodwill. The effort will focus on improving donations of goods and clothing as a way to be environmentally responsible and reduce landfill additions. In the spirit of collaboration, it is encouraging to see these types of partnerships take form. All of us making minor adjustments in lifestyle choices can make a big difference.

The duo are asking us to take their Care for Our Planet Pledge and make a very small sacrifice by promising to:

Wash in cold water
Line dry
Donate to Goodwill when no longer needed

If you thought washing in cold water was intended to avoid shrinking, that’s true. However, it is also a very sustainable behavior that Levi-Strauss has been recommending forever. (Kudos, Levi-Strauss.)

Donating old clothes and products to Goodwill - or handing them down to a family, another charity or thrift store – is a good sustainable practice. In fact, whatever we can do to avoid dumping more stuff into a landfill helps reduce the methane gas produced by general decay in the absence of oxygen.

So how can this fit into the multifamily community? Here are a few ideas:

1. If you have a large complex with on-site management, consider offering donation boxes on the premises near the recycling and regular dumpsters. (Contact Goodwill or a local charity and they may provide these and empty them for you too.)

2. Host a community event such as a Spring Clear It Out or complex-wide garage sale.

3. When tenants are moving out, give them contact information for local non-profits along with Earth911.com, a searchable database for locating second hand stores, nonprofits and recycling centers.

4. For about $50 per washing machine green property managers can re-set all washing machines to ‘cold rinse’ and encourage tenants to use a cold wash cycle too. This can be easily done by posting the Pledge information in your laundry area.

5. Consider putting up an outdoor clothesline.* With the proper resident education and notice you can avoid a mutiny and enlist green renters in the charitable effort.

6. When I was younger, hotel rooms had a retractable clothesline feature in unit bathrooms. It may be time to resurrect this minor amenity as it is relatively inexpensive and will be appreciated by tenants who handwash delicates.

Ancillary benefits might be that as you extend the lives of your dryers (another sustainable perk), you polish your green property management ‘credentials’ and set a great example.

If you have any other ideas on how the multifamily community can push this pledge drive or any other sustainable operations and behaviors along, please post a comment or send us an email.

* Of course, check with local zoning officials as some communities actually have bans on clotheslines. Certainly in green cities like Portland, San Francisco, Seattle and Santa Monica, this shouldn’t be an issue, right? Most people now realize that line-drying is more sustainable because it uses solar energy, but others are not moved by ‘nostalgia’.

Other Articles of Interest:

By Elizabeth Madrigal | Posted in Business | Tagged Care for Our Planet Pledge, cold water clothes washing, donations to reuse, Earth911.com, garage sale, Goodwill Industries, green property management, green property manager, green renter, Levi Strauss & Company, line drying clothes, outdoor clotheslines, recycling, recycling centers, retractable clotheslines, spring clean up, sustainable operations | Comments (2)