No matter how beloved, should anyone be allowed to waste energy without taking responsibility for the suffering (and the accompanying guilt) we will experience if we do not reverse climate change? We all know the answer, but perhaps a better approach than wagging fingers at inadvertent energy hogs is to make the right choices easier. For instance, “Would you rather have solar energy or wind for your entree?  How about a side of low-flow dual flush toilets and a faucet aerator with your order?”

Of course, in the real world it is not that simple. Even the choir has a difficult time incorporating green features into their existing buildings because of the difficulty of documenting their value. Real estate appraisers are in the same pickle jar.  They must examine the cost to build, replacement value, income (if any) and use comparable sales to support the final value.  Except there aren’t any comparable sales in most neighborhoods.  At least, not yet.

Green Feature Comparable Sales

Appraisers assigned the task of ‘attempting to support the sales value’ or determine a market value for refinance or retrofit financing do this through a very thorough regimen with very explicitly defined standards.  These standards have also become less and less flexible in practice as the lending community retracts and plays its safer.  (Where is an influential mortgage broker when you need one, right guys? Oh wait, they are no longer allowed to even email an appraiser, never mind help them document green features.) Unfortunately, until we firmly establish there is a market for green home operations and standards for innovation become acceptable, appraisers cannot fully value green improvements.  Green home building and major retrofits of existing structures will eventually have a history, but we first need a functioning mortgage market and standards to substitute for the lack of ‘comparable’ sales.

Higher Energy Costs & Carbon Taxes

CNN reported that, “In Seattle, a hotbed of green-building activity, new homes with green certification sell for 8.5% more per square foot than comparable non-green ones, according to a report from GreenWorks Realty. They also sell 22% quicker.” This may be true in Portland, Oregon, or Eugene, or even Greenwich, Connecticut, but what about the rest of the country? It may be a while for the majority of the market to catch up unless energy costs – or carbon taxes – escalate to the point where staying the same is much more painful than changing.

However, while valuation issues are in flux, homeowners and commercial residential developments should take full advantage of benchmarking. Documenting energy and water usage with Energy Star’s free Portfolio Manager Software can produce hard data that may be helpful for resale, refinancing and renting. There are many ways to educate the public, but ‘keeping it simple’ is probably the best tactic.

Benchmarking

Although we have a very sophisticated population and people can certainly understand architectural and builder lingo, why should they have to?  The value of benchmarking (measuring) a home or commercial building’s energy use is that it is an objective system that normalizes for weather and produces a transferable statement that can be used in real estate transactions. This gives the consumer incredibly valuable information.  When apartment or house shopping, not only can they compare the rent or mortgage, but understand the impact of the full cost including utilities while occupying that residence.

A renter may not be aware that apartments can even be benchmarked, so promote this feature in your rental listings and educate your prospects to your advantage. Of course, you will first need to benchmark your building and perhaps do a bit of recommissioning, but it will pay big dividends.  A solid recommissioning job often saves 15% to 30% in energy costs, generally making a return on those costs possible in under a year.  Don’t assume because your building is older that it won’t fare well when its functions are measured. Well maintained and managed properties – regardless of age – can have a positive benchmark rating.  Why not use this rating to attract new tenants? Of course, energy-awareness is the first step in creating demand for a low-energy apartment – which is where property managers can be innovative.  Prepare a simple chart showing monthly energy savings, plug in your costs per kilowatt hour and multiply it out for a year.  Even a small $30 monthly savings may not seem like much, but a $360 savings sure does.  Don’t forget to post your chart someplace so that your residents and their guests can see it along with your Green Management Operations Promise.

Proposed & Latest Green Standards

The International Code Council will release the International Green Construction Code (IGCC) for public comment on March 15 which covers apartment properties.  The IGCC will reference the National Green Building Standard (NGBS) and multifamily buildings can comply with the IGCC by following the new IGCC provisions or by simply complying with the NGBS. The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) also recently published a new green building standard, Standard 189.1.

Flat Screens & Consumer Education

The developers of ecoFLATS, a net-zero energy residential building – currently in the groundbreaking stage in Portland, Oregon – intend to provide residents with a real-time energy consumption monitoring system. A flat screen will be visible to all residents and guests as they enter the building’s common area.  It will simultaneously show the building’s energy consumption and production (using a solar photovoltaic system), so that residents can monitor in real time the achievement of the net-zero goal.

There are many green features that can be highlighted that already exist in a property and others that are relatively inexpensive to implement like tuning up your HVAC systems and insulating around building equipment like elevators and plumbing fixtures. Flaunting your green materials and products usage is also a big plus to residents. Eventually consumers will be savvy, however, and window-dressing will not cut it.  In other words, get ahead of the curve while you still have time.