We do have lots of time to notice what’s wrong inside our buildings. Although outdoor air pollution is of concern, we spend 85% to 90% of our time indoors. Unfortunately indoor air can be ten times more polluted than outdoor air. Of course most of us know how to open a window, turn on an exhaust fan, open a fireplace flue and avoid breathing off-gassing paints and chemicals. Some materials and products, however, may off-gas for their lifetime, even if the odor is gone. An amazing paint stripper or bathroom cleanser loses much of its allure if we know that exposure can cause heart or liver damage. (We only have one of each, remember?)   

So, on this gory note, what are we going to do about it?  Quite a bit, actually. The Environmental Protection Agency (EPA), home remodelers, contractors, medical providers, Medicaid and Medicare officials, the VA and Big Insurance all realize that an integrated approach to better home environmental quality serves everyone. It certainly serves the property owner, as the greater the environmental quality of a property, the greater its asset value.   

Our ’new’ economy virtually guarantees that federal and state budget offices will be cash-strapped for now and recovering for years. The concept of budget balancing through citizen service reduction is already evident through court closings on Fridays, limited library hours and reduced police and fire departments. Finding ways to reduce our need for medical care, rather than cutting our access to it, could improve the quality of life for many.    

Tighter Building Codes    

Building codes require commercial and residential property owners to maintain minimal levels of air flow to allow buildings to ‘breathe’. Today’s emphasis on tighter building envelopes has made adequate air ventilation a critical element of a green home. However, more intense regulation in residential buildings is surely in formation. Why? We can blame better health awareness, the poor economy and its negative affect on government revenues. Fewer revenues are pushing budget officers to try to devise ways to create budget improvements without incurring expense. With an aging population, planners are hoping to inspire us to become healthier old people who will require fewer medical care expenses. It may seem like a novel idea, but why not include healthier young people as well? It is logical to assume that whatever helps older people stay healthier may help any age resident. Cleaning up and improving the ‘invironment’ is a great start.   

The EPA is developing voluntary “Healthy Indoor Environment Protocols for Home Energy Upgrades” (PDF, 22 pp., 827 K), in conjunction with the Department of Energy (DOE) Workforce Guidelines for Home Energy Upgrades (DOE Webpage on the Guidelines.). Here is their outline of the reasoning for these protocols:   

The EPA protocols and DOE guidelines are intended for voluntary adoption by weatherization assistance programs, federally funded housing programs, private sector home performance contracting organizations, and others working on residential retrofit or remodeling efforts. Together, the complementary documents will: provide a robust and practical set of resources for retrofit contractors, trainers, and program administrators; help improve the quality of the work performed in this expanding industry; promote occupant health and safety; and drive consumer demand for energy efficiency retrofit services.   

The EPA states that these guidelines and protocols are intended for single family, condominium and three story and under residential apartment buildings. One group that will be dramatically helped by these types of thoughtful retrofits and remodels will be asthmatics. Currently about 12.8% of Americans 18 and over have lifetime asthma with 8.2% with what is called ‘current’ asthma, or an active episode at any one time. If you live in New England these percentages are the highest, at 14.4% and 9.7% respectively. (For New England women these percentages are even worse at 16.2% and 11.7%, as women develop asthma more often than men. Go here if you would like to see the full study by the Asthma Regional Council.)   

Both my parents were asthmatics but I assumed I would never develop it.  Then I was 40 – which was bad enough by itself – and after drinking an ice cold soda on a 98 degree day, I began to wheeze and gasp for breath.  Of course, I guessed what was happening, but I had never been diagnosed. Male athmatics are generally diagnosed by 12 but women not until they are adults. My asthma is well managed luckily, but I also have health insurance, hardwood floors, garage rather than house cats and a terrific home air filtration system. I also live in the Pacific Northwest in an area with relatively clean outdoor air. Aware of the value of  ’fresh’ air, I have learned to regularly open windows and use fans.   

In fact, the Kresge Foundation on December 28, 2010 posted these viewpoints derived from a study they helped fund on the importance of indoor environmental quality:    

Supplementing primary and specialized care with asthma education and home-based environmental intervention can be beneficial for patients and cost-effective for health-care insurers.   

This combined nonclinical approach – teaching people how to manage their asthma more effectively and addressing harmful environmental factors in the home that trigger the onset or severity of the disease – has been shown to lower medical costs by reducing expensive urgent-care visits and hospitalization.   

However, expanded insurance coverage policies will be needed to pay for additional health services and supplies, such as home assessments, pest-control products, and the removal of mold and other allergens.   

The 2010 policy and practice report was prepared on behalf of the Asthma Regional Council of New England (ARCNE), a program of Boston-based Health Resources in Action (HRA). The major emphasis of the ARCNE’s report is to encourage all parties to improve the indoor environment for asthmatics as (1) a better business practice and (2) to lower health care events and expenses.  The suffering that can be alleviated by better indoor environmental practices is a priceless benefit not just to an asthmatic but also that person’s family. 

Who has asthma?

Who has asthma? Lots of people, but the highest asthma risk was attributed by the ARCNE’s report to younger adults, lower-income adults, the unemployed, the obese and smokers.  Although many asthmatics do not fit into these categories, the disease affects a disproportionate number of people at lower income levels. Of course lower incomes can also be the result of being unable to work because of chronic illness.   

How Important is Tenant Education?   

Residential property managers can wait for future HUD and building code regulations to address indoor environmental quality or take a more pro-active approach.  Education can  improve residents’ health by providing strategies and information on best home cleaning and living practices.  Most medical care is delivered post-symptom, therefore helping to disseminate prevention information to building residents can be an invaluable service. There are family privacy issues that must be maintained, however, so property managers may want to review the U.S. Department of Education’s Family Educational Rights and Privacy Act (FERPA) and the Health Information Privacy Act (HIPAA) to avoid (1) breaking the law or (2) invading residents’ privacy.   

Management Decisions   

How can management help tenants live healthier indoor lives? Here are a few ideas:   

Cut down on exposure to second hand smoke: Property managers can help residents by converting buildings to non-smoking. This will generally need to be done over time as residents who moved into a building that allowed smoking will undoubtedly be grandfathered.   

Calender building service for the HVAC system: Whether a property has a master heating system or individual units in each apartment, something as seemingly simple as changing air filters and vacuuming and cleaning air vents pays big dividends for asthmatics and other residents with suppressed immune systems or lung disease. (It also prolongs equipment life.)    

Convert all building repairs and maintenance to non-VOC and non-toxic products: Whether building maintenance is done in-house or contracted out, convert to green products and materials that have been certified by a reputable organization like GreenSeal.   

Replace carpeting with more sustainable flooring options: Although many owners factor in the cost of replacing carpeting after just a few years, consider that next turnover as an opportunity to install a non-allergenic type of flooring with a longer life expectancy. Carpeting not only traps dirt and grime but is a favorite habitat of dust mites, which sicken many asthmatics. (Carpeting also may make it more difficult to identify and exterminate bed bugs.)   

Service stove, oven and bathroom fans and make sure air vents are not covered by equipment, waste receptacles or blocked in any way. Of course, an exhaust fan is useless if no one uses it. Fans can be loud, which is why it is important to impress residents with their value. As noise is often the reason we don’t use these fans, consider replacing an old clunker with one of the new, quiet fans on the market.  The decibel difference is remarkable and they are highly energy efficient.   

Landscape, pest control and waste contractors: Require all vendors and sub-contractors to sign and adhere to a strictly green maintenance policy to eliminate toxic chemicals, poor practices and chemical fertilizers.   

Develop a pet policy: Just as you might have ’smoking’ and ‘non-smoking’ units, consider having pet and no-pet units.  Although ’pets-allowed’ buildings are popular with some residents, those with allergies may appreciate a unit designated as a lifetime pet-free zone.     

Take mold prevention and eradication seriously: There are several types of mold but only some are highly toxic to everyone.  The more benign molds, however, can make some asthmatics quite ill.   

Institute a home hazard assessment policy: Many of the hazards in homes that affect asthmatics are not regulated and enforcement is non-existent. Unlike lead paint and asbestos, there are no required assessments, no legal reporting requirements and very little legal liability. A professional property manager, however, will want to protect the health of residents because it is the right thing to do. Taking an integrated approach to unit inspections may take a little planning but a checklist beyond smoke alarms and plumbing seals is critical.   

However you decide to create a better ‘invironment’ for your residents, remember to de-tox your own home too!

As utilities in most apartments are paid by tenants directly, usage varies widely making obtaining meaningful information challenging. A methodology will certainly be included in the draft ordinance with most bets leaning toward some reliance on EnergyStar’s Portfolio Manager.

Portfolio Manager is a free site that anyone can access on-line. Using the building’s utility bills as entry data, the system compares the property’s actual energy and water use to a peer group of buildings based on age, size, location and other similar operating characteristics. The comparison data used evaluates the owner-provided information against that compiled during a survey conducted by the DOE’s Energy Information Administration. Known as the Commercial Building Energy Consumption Survey (CBECS), it is conducted every four years and gathers information from thousands of buildings across the United States.

Portfolio Manager commercial building ratings are based on a scale of 0 to 100. A rating of 50 identifies the building as performing better than 50% of similar buildings nationally. Obviously a 75 rating indicates the building performs more energy-efficiently than 75% of similar buildings. Unfortunately, the segregation of commercial and residential commercial creates some issues for owners of smaller buildings, but it is hoped that eventually the DOE will have collected enough data through voluntary entry to provide comprehensive analysis for all buildings.

Columbia’s Environment and Energy Commission Chairman, Dan Goldstein, told the Columbia Missourian newspaper that the proposed ordinance will create an incentive for owners to improve energy efficiency on their properties.  Commission member Lawrence Lile - who is also a landlord – supports the ordinance and focused on the competitive advantage lower utility expenses would provide owners of energy efficient properties. Others in the apartment sector were not as thrilled with the idea of more regulation. The local apartment associations and their realtors were concerned there would be pressure and expense for owners to replace working equipment in order to compete for tenants. The public has not fully weighed in on the proposed draft, but it seems likely to gain their approval too.

While there has been some general benchmarking resistance expressed by the apartment industry nationally, it seems to be more of a political reaction to the regulatory aspect than the concept of measuring building performance. In fact, many large apartment management companies already track their energy and water efficiencies and consider it a valuable management tool. As utilities for common areas are a building expense and the majority of buildings use a master water meter, any way these expenses can be reduced will boost building profitability.

CoStar studies have repeatedly shown that EnergyStar and LEED certified buildings achieve higher per square foot rentals and occupancy rates an average 5% higher than the competition. As commercial tenants frequently reflect future public sentiment and vice-versa, it is interesting to note the latest changes in leasing patterns. Mid to large corporations are approaching the viability of their facilities based on whether they conform to the corporation’s sustainability policy.  As the public gains more understanding and demands greater accountability and performance both at work and home, a building’s rating will matter. The volatility of energy prices coupled with rising costs for water delivery have created a newly aware consumer. No matter how attractive a property it is, prospective tenants will increasingly focus on energy efficiency, better water utilization policies and waste management practices.

In other words, you can wait for the Green Hoard to knock on your door - and watch them move next door after your HVAC tour -  or you can hire an energy auditor to assess your property and be prepared. A good certified residential energy auditor will be able to see where you could save the most energy and water but start you off with the least expensive improvements – like faucet aerators, irrigation sensors and programmable thermostats. Once you start to reap these savings, re-investing back into the more expensive improvements is relatively painless. Your local public utility may also help you calculate the payback period for an improvement – often only two or three years - or have an easy-to-use payback calculator on its website. Developing the attitude that every repair is a wonderful opportunity to create another green feature can help you retrofit your building within a manageable timetable.

Putting a plan into action will give you control and make you feel like your efforts matter, because the truth is that they do.

Other Articles of Interest:

Living and Working Smaller in Big America

Building a Green Resume

Team Up to Prevent Apartment Pollution

Professor Michael Grätzel

While the majority of us are busy trying to survive an uncomfortable economy, brilliant minds are solving the challenges of clean and renewable energy. One of these is Professor Michael Grätzel of the Lausanne Federal Technology Institute. Like most of us, you may have never heard of him, but if his technology is adopted worldwide, his name will be as well-known as Albert Einstein’s.  In fact, Professor Grätzel’s discovery is so potentially world-changing that he was just awarded the 800,000 Euro Millenium Technology prize.  The winning invention is a dye-sensitized, ultra-efficient photovoltaic cell that is so small it doesn’t scatter light.

How small is that? Smaller than anything most of us can even imagine as it falls into the nano range.  It will be employed through the use of nanotechnology, generally defined as a manufacturing process that builds electronic circuitry and other mechanical devices at the molecular level of matter. Scientists discuss these sizes in nanometers, which makes our concepts of  ‘microscopic’ huge by comparison.  To help your imagination form a visual, these nano particles can be the size of individual atoms and less. (The Institute of Nanotechnology in the United Kingdom is a wonderful educational source for those interested in the subject.)

The potential applications of  Grätzel’s discovery are mind-boggling. For instance, if these ’sun-collecting’ cells could be installed in high-rise glass window panes, we would have all the clean, renewable energy we needed. In fact, these amazing nanocollectors could make the heavy solar roof panels obsolete as Grätzel cells can capture sunlight from any angle.  Imagining even 10% of the windowpanes of our buildings as photovoltaic panels gives one an idea of how powerful an invention these nanocells are.

The promise of Grätzel’s new PV cells, however, is that these might reduce not only the cost of clean, renewable energy but also make it possible to reduce the materials needed to manufacture power-generating systems.  The future looks very exciting but can we afford to wait? No one can accurately predict how long it might take to bring these Grätzel cells from the laboratory to commercial production and use. We also do not yet understand what kinds of limitations they may present. In the interim, most green property managers will still need to use existing technology to reduce energy and water consumption today.  The eye toward the future, however, should be employed when weighing options.

If the return on investment derived from energy and water savings with today’s technology and systems is greater than the anticipated length of time required until better technologies are practical, why would anyone be crazy enough to wait? It is important to keep in mind that the history of green energy is actually quite long and although progress has been made in leaps and bounds, mostly it has been baby steps. Today’s sustainable buildings and technologies are fully capable of producing enough energy to power their occupants full needs and then some. We can all hope that Grätzel cells take over the world… but in the meantime? Visit the EnergyStar, the EPA and the USGBC sites, keep reading GreenLandlady.com and start saving money right now. If you don’t know where to start, here are some articles to help you on your way:

Multifamily Tech Break Out

Emerging Government Trends Shortlist

Green Property Management on a Budget

Added to economic constraints are the public, municipal and corporate expectations newly focused on incorporating more sustainable management practices. Property managers are also charged with increasing revenues and cutting expenses without short-changing operations or residents. We don’t claim to offer a magic wand, but there are many ways to enhance building performance and tenant satisfaction through greener property management.

For any program, solid initial planning will maximize results, particularly if you plan to accomplish more with less. In fact, the Department of Energy (DOE) wants to help you get started.

Benchmark your building: The DOE provides a wonderful site, Portfolio Manager, that allows you to enter in general building information – age, systems, utility bill information, etc. – and get a measurement of how efficiently your building operates compared to others that share similar characteristics.  If you think your building is already operating as efficiently as possible, benchmark it anyway and use the documentation to impress the owner with what a great job you are doing. However, for the rest of you, if your building is ‘challenged’ and under-performing, consider getting serious about reducing energy and water usage.  Cost of DOE Portfolio Manager software: free

Recommissioning: Whether it is a bathroom fan or an HVAC system, any mechanical apparatus works better if it is regularly cleaned and serviced. Even something as simple as a clogged air filter will slow down the operation of a system and shorten its life.  Make the investment in a tune up where needed and repair the heating and/or cooling units and other systems.  Unless you are experienced, hire a professional. Whether or not your principals require it, maintain a journal of completed maintenance tasks. This will help you track when the next maintenance tune-up should be scheduled.  Another benefit of regular maintenance is that manufacturers’ guarantees for expensive equipment are usually only valid with documentation that verifies regular servicing and maintenance were performed. (Read that fine print!) Cost: staff time or professional repairman hours

Weather stripping: Outside of the sustainability community very few people worship weather stripping, but it is truly a godsend. Weather stripping takes some time and labor to install, but it needs little more than general maintenance. It is amazing how much more comfortable a home is when conditioned air has been prevented from exiting around windows and doors.  Whether expensive or inexpensive, all the products offered will work. Choices include V-strips (V-shape tension seals), adhesive-backed tapes (foams, felts), gaskets (tubular silicone, sponge rubber and tubular vinyl), magnetic weatherstrips (similar to door gaskets for fridges) or fin seals. Cost: Varies but it is cheaper if you buy the materials separately in bulk amounts or rolls.  Kits for specific tasks like addressing windows will run $15  for enough material to insulate only three or four windows as you pay for the assembly and instructions. If you are doing bulk work, read a manual (or the kit ingredients) and purchase what you need individually.

Insulation: Insulation can improve resident comfort and improve retention, so don’t skimp. Insulate the attic, walls, floor, water heater, and exposed pipes and repair any insulation that may have torn or fallen away from its intended position. The higher the insulating properties, the more expensive the material. If you live in a moderate climate, insulation materials quality can be moderate. If you live in a place that gets very cold or very hot, go for the best quality and you (and your residents) will save enormous amounts on utility bills. Cost: Do-it-yourself materials for roll-out batting in an open attic can run $100 -$500, depending on R-values, attic size and other factors. A contractor will charge $0.50 -$2.25 per square foot ($400 to $1800) with a typical attic costing $750 to $1100.

Installing ventilation fans: Although this involves an initial capital expense, including the purchase of electric, attic, ceiling or whole house fans in your maintenance budget will lower expenses for cooling and heating the building’s common areas as well as individual units. If tenants pay utilities they will be excited about fans, so mention them in your vacancy listings.  Go on-line and check out the newest fans. Products like solar attic fans are installed on the roof and draw heat up and out of the building.  The panels produce all the electricity needed to operate them, so they do not require any wiring for an electrical outlet. In a building without air conditioning units, installing sitting area and bedroom ceiling fans is a great amenity and will not only appeal to green renters but help retain your existing tenants. Cost: A solar attic fan starts at about $200. Ceiling fans can be as little as $20 to $90 for the basic unit itself, but if you want something more stylish and durable, $200 to $600 is the range. If you need to add electrical work to install the fan, your one-time cost will be higher.  Unlike other cooling systems, fans seem to need very little on-going maintenance.

Minor building repairs: There is nothing that screams “I don’t care” to renters and owners more than obvious deferred maintenance. One of the cheapest things to fix are holes or cracks in the building envelope. Seal and caulk cracks in the building foundation, the walls, and the holes around plumbing throughout the building.  This cuts down on heat and cold transfer to reduce energy waste. An important side benefit is that it prevents pests from entering the building or migrating from one apartment unit to another. This in turn reduces pests and related management costs. Caulking used to repair cracks in siding and wood shingles can also extend the life of these materials. Cost: A big tube of caulking material runs around $10.

Fix the Drips: Running toilets – which often need only minor adjustment or a kit to replace worn out seals – waste enormous amounts of water. Whether or not the building pays the water bill, make sure your residents know how much you ‘like’ to fix this problem for their peace of mind.

Aerators, aerators, aerators: To sustainability advocates, this is as important as location, location, location. If aerators are installed between apartment vacancies, there is nothing for residents to ‘get used to’. Incidentally, if water is not sub-metered but paid by the landlord, this is a strategy that will probably pay for itself in a month. Don’t assume that yesterday’s aerators are adequate, however. If an aerator is already installed on a faucet, it will have its rated flow imprinted on the side. Replace it if it is over 2.75gpm with an aerator that uses no more than 0.5 to 1.0gpm. If there is no aerator installed, check to see if there are threads. If not, replace the faucet with a modern fixture. Cost: Faucet aerators run between $3 and $10. Faucets start at $19 at places like Home Depot, but pop for the WaterSense versions and you will reduce water usage by 30%.

Low flow showerheads: If you installed low-flow showerheads last year, check again. Tenants have been known to replace these. (Make sure your lease specifically probihits this, by the way.) To test the flow, set a 2qt. saucepan on the floor of the shower stall, positioned in the middle of the shower stream. With the shower on full, count how many seconds it takes to fill the pan. If it takes fewer than 12 seconds, you could use a low-flow shower head. If you have a low-flow shower head installed, it should read 2.5 gpm or less, preferably in the 1.5-1.75gpm range. There are two types of low-flow showerheads, the most popular being the standard aerator which mixes air with water to reduce flow. The water tends to cool at the bottom of the shower, so for the rare complaint, consider installing the non-air flow type. This uses a pulsating shower head that is more like a shower massage, but still controls flow and retains heat better. Cost: Low-flow showerheads run between $8 to $50 depending on how ‘designer’ you want to go.

Dual Flush Toilets & Retrofit Kits: If your existing toilets are in great condition and there is no budget for replacing them with the new dual flush, water-saving fixtures, try one of the dual flush retrofit kits. Cost: Including shipping and handling, the kits cost between $20 to $30.

Switch out incandescent bulbs: Compact Fluorescent Lamps (CFLs) are available for just about any incandescent-lamp light fixture. The initial cost is more, but they last up to ten times longer than incandescents and reduce energy usage by about 75%. At least start phasing them into your maintenance schedule in all your common areas. Cost: The U.S. Department of Energy provides comprehensive cost versus savings info on this site.

Offer a Shared Cost Upgrade Program: If you have attracted green residents – and we hope you have - make it possible for them to assist you in upgrading their apartments. If residents pay their own utilities, they may be interested in paying part of the cost of the efficiency upgrades. For instance, if the smart programmable thermostats are not in the budget, the owner may still consider a 50% contribution if a tenant pays the other 50%. The tenant will reap the reduced utility expense “reward” while they live in the apartment and the owner has a selling amenity for the next resident.  As a side benefit, the more  invested residents become the less likely they are to consider moving, so retention is also enhanced.

Promote Your Green Management: Let your residents know you are implementing a green property management program to improve the quality of the building, reduce waste, improve indoor environmental (and air) quality and protect their family’s health.  Ask them to help you by taking shorter showers, turning off lights when they leave the apartment, reducing waste and recycling. After a few months, let your residents know what kind of success the community’s combined efforts have achieved. If it has been a winner, sponsor some sort of pizza or donut-a-thon as a thank you. Cost: under your control.

Other articles of interest:

• NAA 2010 Green: Lower the Flow
• Dreading Summer? Install a Solar Attic Fan
• Jimbo & the Dual Flush Retrofit Kit
• Improving Your Property’s MPG

Energy consumption per person has declined sharply during the recent economic recession, and the 2009 level of 310 million Btu per person was the lowest since 1968. In the AEO2010 Reference case, energy use per capita increases slightly as the economy rebounds, then begins declining in 2013 as higher efficiency standards for vehicles and lighting begin to take effect. From 2013 to 2035, energy use per capita declines by 0.3 percent per year on average, to 293 million Btu in 2035.

No recession is pretty, but the very deep recession we are now experiencing just might be powerful enough to change some of our consumption habits permanently. Although our motivation  may have started on a dark note, there is hope that these improved living habits will stick.  The real challenge, of course, will be when the economy improves.  With the current makeup of industries, innovation and the Internet, we should be able to reduce our energy consumption even more effectively.  According to the EIA, growth in U.S. energy use is linked to “increases in demand for housing, commercial floorspace, transportation, manufacturing, and services”, all fueled by population growth.  Unfortunately, our consumerism is not selective.  It is also evident in our energy and water habits.

The majority of our economy is service-based which means we do not produce much in the way of goods ourselves. When we compare the gross domestic output of recent years a trend emerges.  It is carried through by the EIA into their 2035 projections.

In 1990:

• 74 percent of the total value of output came from services,
• 6 percent from energy intensive manufacturing industries,
• 20 percent from non-energy-intensive manufacturing industries (e.g., agriculture, mining, and construction)

By contrast, in 2008:

• Services accounted for 78 percent of total output
• Energy-intensive manufacturing was 5 percent.

Projections for 2035 output expect:

• Services will account for 82 percent of total output
• Energy-intensive manufacturing will account for less than 4 percent.

How will consumers behave in the future?  Sadly, the government’s projections do not give us much credit.  All of the energy savings projected after the recession ends are based on improved fuel and energy efficiencies, not consumer behavior.  Our pocketbooks may soon allow us to waste again, but do we really want to do that? If you are interested in the full Annual Energy Outlook, you can find the pdf file here.

Other articles of interest:

How to Improve Your Fahrenheit Factor

The Technical Aspects of Comfort Control

The EPA and Multifamily Mid-rise and Highrise

Our Editor-in-chief, Kimberly Madrigal, recently had the pleasure of interviewing Will with regard to sustainability and profitability. Together they endeavored to explore one question: Can the two actually co-exist?

GreenLandlady: Right now multifamily sustainability improvements are still in the voluntary mode, but you do think mandates or legislation requiring better efficiencies will work?

Clark: A carbon tax or a building-efficiency score is one way to have owners make the required upgrades. You can see that there is a penalty you’ll be facing if your property isn’t utility efficient. That penalty may come from the regulator or from the rental market. So I think it’s one way to bridge that gap and I think not having clarity here has been holding a lot of people back.  They don’t really understand how to value it.  Instead it is more like, “What difference does it make?” “Why should I replace all the windows if I’m not going to see the benefit because the benefit goes to my residents in lower utility bills?” However, I think there are many ways to bridge that gap. Motivation may also come in the form of financing or insurance being harder or more expensive to secure for inefficient buildings.

GLL: What about tax credits as a sustainability incentive?

Clark: I would say that on the tax credit side, it’s very obvious why you would do that if you are speaking of tax credits an owner can receive for improving sustainability; you need something to bridge the gap between current costs and projected lifetime savings. Moving into a different area of tax credits, I don’t know how much you know about the low income housing tax credit program [on affordable housing], but essentially there’s a maximum rent that you’re allowed to charge. If you’re a 60% property that means that your residents can make no more than 60% of the area median income and of that no more than 30% of the area median income can be charged for rent. Furthermore, there is a deduction for utilities expenses, if it is resident-paid utilities. So, if let’s say, $500 is your maximum rent and the local public housing authority determines that utility costs for a family of four is $100, your utility credit should be $100.  So if I was the landlord I could collect no more than $400 per month from a unit. Well, if I make improvements to my building systems and show that my utility bills per unit are not $100 but $25, then I can charge $75 more in rent – which obviously has a direct bearing on my NOI [net operating income]. The total paid by the resident is the same, but the allocation moves $75 from the utility company to me. Rents for affordable housing only increase by the amount of the MSA’s CPI [Consumer Price Index], so most rents have not increased in several years, which make this a likely area of improvement. Prior to the collapse of the tax credit system (which is a completely separate issue), the state housing authorities were strongly pushing sustainability in project applications. Enterprises’ Green Community Initiative, which started a little slowly and amorphously, has really become a leader in best practices for sustainable affordable housing. Along with the equally impressive LISC, Enterprise takes a more practical, and honestly, less expensive approach than pioneers like Jonathan Rose. These groups are much more focused on the challenge of improving existing stock, not just building new. Because these financial incentives motivate owners to improve energy efficiency, we should continue to see a lot of the interest in building ratings and carbon taxes on the affordable housing side.

GLL: Would this also work at market-rate properties?

Clark: If you’re in market-rate rentals, it doesn’t really matter or most owners don’t see this as relevant.  The affordable housing maximum rent calculation doesn’t apply as their rental amounts are not restricted by the utility company expenses.  It’s much more a function of the local market and how an owner feels about a split incentive; if the residents pay for utilities, saving money on your electric bill can be a bit nebulous. Where owners pay part or all of the utilities, your motivation to improve efficiency rapidly increases. Properly understood and implemented, it becomes a differentiator, but only if sustainability is deeper than using CFLs and using bamboo flooring in your leasing office.

GLL: What do you think is important for the future of multifamily housing management?

Clark: I think it’s vital to understand your costs and where you can reduce them or pick up additional revenues.  This sounds like general business advice, but what we’re seeing in special servicing is that there are a lot of properties unable to get off their loans when they mature. It’s very hard to get good financing right now and it’s especially hard to sell a developer’s dream.  Now more than ever owners need to be able to state that expenses have been reduced over the last twelve months by implementing whatever steps they took. They will also need to document that the improvements include upgrades made to the physical structure, building envelope, systems, management and regular operations.  Then they can state to potential buyers and lenders, “Here’s what I did and here’s the effect that it has had.”

GLL: Have you seen this process happening anywhere?

Clark: I think we’re seeing piecemeal effects across the country. Obviously California, as usual, is at the forefront.  We’re all seeing much more attention being paid to the concept of sustainability and we’re finally getting to the point where building scientists, managers and financiers are discussing what it means on a day-to-day level for a property.  Of course, a lot of it is being driven by the big question, “How do we improve revenues?”

GLL: How would you suggest multifamily try to answer that question?

Clark: Well, there are things you can do. If you can’t raise rents, you’ve got to cut expenses.  You look at the four things that are essentially fixed: taxes, insurance, personnel and utilities.  Utilities are the only one that I can positively affect right now, so that’s an obvious place to start.  For instance, cutting marketing by one ‘For Rent’ magazine a month can save me about $800 a month: it’s measurable, but doesn’t change my valuation all that much.  When I’m paying thirty, forty or fifty grand a year in utilities, that’s where I really need to focus my attention.  By necessity, smart owners are going to be looking at everything on their profit and loss statement, but they’re going to be looking at utilities in particular.  Again, it’s usually a big number you can actually do something about.

GLL: I couldn’t agree more, but what’s taking owners so long to get there?

Clark: This is absolutely anecdotal, but although there seems to be a desire to be more sustainable, people just don’t know how.  Very few of the green certification programs address multifamily in a meaningful way so there’s long been a dearth of good research. That is changing as organizations like LISC, Enterprise, Green Building Advisor, DOE/EnergyStar, national labs like Berkeley or Oak Ridge, and others release longitudinal analyses and best practice guidelines. Some things can be adopted from the single family or commercial worlds, but many things are unique to multifamily. At the same time, I remind my management companies that changes they make in my portfolio can be multiplied across all of their properties. I have about 15,000 units in my portfolio, but the companies I work with own or manage about 150,000. All of a sudden, you realize you can make a substantial improvement far beyond your own portfolio. Over the next couple of years, those who understand and successfully sell sustainability to their financiers and residents will do particularly well.  Anybody who doesn’t will be lagging behind, but eventually they’ll get with the program.  In the interim, of course, they’ll certainly be disadvantaged.

GLL: There’s a lot of talk about Fannie Mae and Freddie Mac since their government take-over and their role with regard to multifamily housing.  What are your thoughts?

Clark: I think there are enormous ways to influence the multifamily lending world through Fannie and Freddie. Nothing gets built if you can’t pay for it and Fannie and Freddie are the only ones lending right now. If you look at the things that are in the works between the capital markets and Freddie to create a sustainable multifamily fund, it looks promising. I don’t know when that’s going to be rolling out, if it’s active or if it’s waiting for sufficient volume, but the initial one was going to be about $500 million. But the idea here is let’s support the refinancing and construction of multifamily buildings that adhere to some kind of sustainable framework.  If Fannie and Freddie push sustainability in their lending requirements, you’ll get sustainability everywhere. The ability of finance and insurance to influence building practices cannot be understated.

GLL: Is there any kind of leadership on the horizon that you find inspiring?

Clark: The FreddieMac /Capital Markets Partnership is an effort spearheaded Mike Italiano of MTS who was one of the founders of the U.S. Green Building Council (USGBC). He understands the sustainability world but more importantly he understands the business world and the economics of finance.  I believe he was one of the original instigators for including Phase 1 Environmental Site Assessments as a standard due diligence item for loans, so he understands how effectively lenders can reshape behavior. We have a groundswell of public opinion, but the actual effects are not going to be realized until finance and insurance are pushing the borrowers and property owners to act more sustainably.

Other Articles of Interest:

• Wednesdays With Will Clark: Begin With A Focus On NOI
• Wednesdays With Will Clark: Carbon, Corporate Insight & Uncommon Sense

No matter how energy efficient high performance systems are, energy usage will always be decided by the occupants.  Whether your city has begun requiring the benchmarking (measuring ) of buildings or is already drawing up energy reduction mandates, apartment managers need to reduce energy and water use to protect profitability. Tenant cooperation can make that happen.

Property managers can all use the Department of Energy’s (DOE)  Portfolio Manager software for free.  It creates a comparison between a building’s energy and water usage and other similar buildings and produces a baseline for performance analysis.  Once systems have been recommissioned and are operating at their highest level, the next logical step is the human component.  Making a comprehensive effort to understand the needs and requirements of  the residents first requires an understanding of occupancy comfort.

Tenant surveys can produce some interesting results, but not all tenants are comfortable ‘complaining’.  If you are not getting the data you need, create a  forum that does not require a name.  This could be on-line, a suggestion box, etc. The more residents who cooperate, the easier it will be for the manager to determine what needs to happen to create that  appealing comfort zone.

Human Comfort Lowering the thermostat by one degree is sufficient to save 3% in energy costs for the average system (Source: Nelson and MacArthur). However, because humans have lost sight of our aboriginal pasts - in which our ‘traditional’ clothing was suited to the environment – modern comfort has a very short range.  Again, the challenge for any building manager is to determine how to efficiently heat (or cool) the residents, not the building.

Focusing on the user is a radical departure in thinking, but a logical and necessary one. Even with smart thermostats, top insulation and efficient HVAC systems, the human brain is clearly capable of sabotaging or implementing the best energy conservation efforts. Without meaningful education after energy improvements are made, studies show occupants often create a rebound effect.  Their utility bill is lower so they celebrate by turning up the thermostat!

Clothing People can be taught to tolerate less perfect temperature control through simple things like wearing or removing clothing based on seasonal variation.   This sort of ‘management’ obviously requires great diplomacy.  No owner or resident wants a manager to respond to a heating complaint by suggesting the resident ‘just put on a sweater’.  Rather the challenge is to make people feel comfortable -so that they don’t want or need to change the thermostat - or alternatively, patriotic enough to wear that sweater. Of course, sensible clothing suggestions can be proposed and perhaps more gracefully accepted if the tenant pays the utilities directly.

What is comfortable? Not surprisingly there are individual and cultural differences.  The British, for example, don’t mind a bathroom at 60 degrees Fahrenheit, but Americans prefer 73 to 75 degrees.  The household temperature range for Germans is somewhere in the middle, hovering at around 68 degrees.  Different continents, different cultures, different indigenous clothing all can affect preferences.

How Experts Define Human Comfort

Most of us are only cognizant of air temperature, but a green manager who uses a more comprehensive approach achieves better results.  According to the American Society of Heating, Refrigerating and Air-conditioning Engineers’ (ASHRAE 55) – the  thermal comfort standards experts -  most Americans feel comfortable when four components are in balance:

• The air temperature is between 73 to 75% Fahrenheit
• Relative humidity is in the range of 20% to 60%
• Air velocity is from 10 to 45 feet per minute
• Mean radiant temperature equals air temperature

Body temperature can be affected by someone’s weight, metabolism, level of activity, medications they are taking, type of food they eat and other factors beyond the control of a property manager.  However there are ways for a manager to optimize resident comfort.

• Create a zonal heating and cooling policy for any common areas.  For instance, keeping the temperature higher makes sense in a lounge or dining room occupied by sedentary people.  Conversely, a warm recreation room full of exercise equipment makes no sense at all, as occupants can be expected to be active and generating body heat.
• Identify areas that might need a dehumidifier – such as a unit over a laundry room or pool as these areas can grow molds and mildews - and add one.  According to Consumer Reports (CR), a dehumidifier will lower air conditioner use as it removes that sticky or clammy feeling people experience with higher humidity levels.  This will add life to your A/C units. Incidentally, according to CR, the most expensive dehumidifiers are not necessarily the best models.
• People who grow up with cross ventilation and screened windows and doors often prefer natural ventilation, but may have security concerns.  Adding security quality screen doors can greatly enhance residents’ thermal and psychological comfort.  Again, the lower use of the A/C units will prolong their life, and the better ventilated air is healthier for your residents.
• Fans are not meant to cool rooms but they do cool people. If you are installing ceiling fans, locate them in areas where people will be spending larger amounts of time sitting.

Understanding the thermal dynamics of comfort can also make you respond more appropriately to your residents’ complaints.  Rather than trying to guess why they are too cold or too hot, ask them to describe what they mean.  If that doesn’t produce anything, ask a few simple questions such as:

• Does it feel clammy?
• Is it drafty?
• Are the interior walls too cold/too warm?
• Are the vents pushing too much air?
• Does it feel humid?
• Is it too dry?

Once you have more detail it will be easier  to determine which of the four comfort components are out of balance.

Other Articles of Interest:

• How to Improve Your Fahrenheit Factor
• The Latest Greatest Ductless Heat Pump
• 5 Ways Renters Can Go Green

• All  residential units in multifamily buildings three stories and under.
• Units in four- and five-story multi-family buildings may qualify for ENERGY STAR if: 1) The structure is permitted as residential by the local building department; and 2) each residential unit has its own heating, cooling, and hot water systems, separate from other units.
• Multi-family units that are located on top of commercial spaces if 1) the entire structure is five stories or less; and 2) each residential unit has its own heating, cooling, and hot water systems, separate from other units.

What you will not find is any reference to those units categorized as ‘multifamily residential high rises’, or simply those buildings over five stories.  This has been unfortunate as vertical development is much more desirable and sustainable when considering things like heat island effects, development footprints, open space and urban quality of life issues. Good news may be on the horizon, or at least we can hope for the best.

ENERGY STAR Pilot for MFHR

The pilot phase of a potential Multifamily High-Rise program began in 2006 and is still underway, but the EPA has not indicated when it will make a determination about whether or not to continue the program.  The issues revolve around the difficulties of procuring energy consumption comparison data for highrise buildings and the resulting inadequacies of current modeling tools. The EPA has additional concerns about what it calls the ’split incentive’, or the imbalance created when the owner makes the financial investment in  energy improvements but the tenant reaps the energy savings rewards.  As tenant education is one of the pillars in the non-highrise multifamily ENERGY STAR New Homes rating system, the traditionally higher tenant turnover in highrises is also perceived as a negative.  Education would be more costly and difficult to provide and equipment, systems and design can only achieve so much without strong occupant cooperation and participation.

To qualify for the new ENERGY STAR rating, the pilot MFHR buildings are required to exceed ASHRAE 90.1 2004, Appendix G’s minimum requirements for energy efficiency by at least 20 percent.  They must also be designed to obtain a score of 75 or better on the EPA’s MFHR benchmark tool, which would place them in the top 25% of similar buildings nationally for performance. (The Energy Information Administration of the U.S. DOE collects the benchmarking data that is used with the Residential Energy Consumption Survey of home energy use and costs.)

The EPA indicated to its pilot partners that it will use the following criteria to decide whether to expand the highrise pilot program nationally:

1. Performance specifications must be cost-effective.
2. The program must represent true energy savings over standard construction.
3. MFHR stakeholders must receive value in the marketplace.
4. The program must be easy to implement and understand, including energy modeling and verification methods.

Intervale Green Garden, Photo Courtesy of WHEDCo

Is Green Worth the Cost without ENERGY STAR Certification?

Five story mid-rise multifamily and five stories of residential in mixed use buildings have been very successful in achieving the ENERGY STAR New Homes Certification.  In Guide to Green Building Rating Systems, (published by John Wiley & Sons in 2010), architect and author Linda Reeder elaborates on a case study of one of the ENERGY STAR mid-rise buildings, Intervale Green.  This is a 128 unit highrise of 140,800 square feet completed in 2008 by the Women’s Housing and Economic Development Corporation (WHEDCo).  The project has amenities not normally found in affordable housing which include 3 green roofs totalling 20,000 square feet, an entry courtyard with a public sculpture garden and a private backyard. Traditional Bronx building features such as red brick, decorative cornices, stone and ironwork, and multiple courtyards are reflected in the design making the highly efficient building green and beautiful on the inside and outside. They have added 40 street trees to the neighborhood, making the development even more appealing. The building also has high-speed Internet access for its residents.

The total development costs associated with the residential portion of the building were over $29.3 million with hard costs for energy reduction measures at $437,750, or about 1.5% .  The building is expected to use 33.4 percent less energy than a baseline building, creating a projected energy cost savings annually of $82,492.  The simple payback period is estimated to be about 5.3 years.  With a building life of at least 75 to 100 years, the savings would appear to be well worth the small upfront investment.

How Much Energy Efficiency is Enough?

According to WHEDCo’s website:

“Energy efficiency consultants from Steven Winter Associates collaborated with WHEDCo’s development team to design high efficiency heating, ventilation, and insulation that will reduce fuel usage for heat and hot water by 43%, save over $82,000 in utility costs in the first year, and reduce greenhouse gas emissions by the equivalent of 33 cars. The apartments were built with healthy materials, free of the volatile organic compounds that exacerbate respiratory illnesses. With homes that are 33% more efficient than conventional apartments, residents living in Intervale Green are expected to spend 30% less on utility bills, easing the burden on low income families already struggling during difficult economic times.”

The building used recycled content flooring, low-flow faucets and showerheads and low-VOC sealants, adhesives and paints.  As the Bronx statistically has twice as many asthmatics as any other part of New York city, many of the residents living in the building are now enjoying relief from their previous symptoms.

Call to Action

The status of the ENERGY STAR rating can be a motivational factor in the planning decisions for new mid-rise residential buildings and would be expected to have the same positive effect on new highrise developments.  In light of the benefits to the environment, the residents and the short payback period required for investors, it makes sense for the industry to encourage and even lobby the EPA for a permanent MFHR ENERGY STAR for New Homes Program.

Other Articles of Interest:

• EPA Extends Lead-Safe Education Deadline
• Tech Rescue for Multifamily Crisis Situations
• Multifamily Trending: Small is Good

According to CNETnews.com’s Martin LaMonica, however, experienced personnel are a rare commodity within the alternative energy sector.  This is broadly true across most other industries as well, including property management.  When most people lack training and experience in sustainable practices, those with the background, the education or a few savvy connections are highly valued.

In a competitive employment and rental market, property managers have been struggling to prove their worth.  Hampered by the challenges presented by a deep recession, professional managers are being under-valued. The numbers do not reflect the extent of their hard work as even the best managers may not be reaching desirable leasing goals.

Occupancy rates may have enhanced careers just three years ago, but to distinguish oneself, a good employee needs to focus on where success is possible.  Reducing expenses without compromising asset value is possible, but after a certain point there are no more easy fixes. Professional development in sustainable building and maintenance practices can provide a whole new set of options.

Property managers, maintenance personnel, pest control and cleaning staff can also build better resumes in a variety of ways. More importantly, green education can help managers do their jobs better as energy and water usage are systematically lowered through management and tenant education. Sustainable building management also means  happier and healthier residents with the additional benefit of better tenant retention.

Green education courses or credentials can go a long way toward creating an image of an employee who thinks ahead.  If you are older it may also counteract some of the negative assumptions potential employers make.  A resume that shows you are eager to learn new techniques and procedures also shows that you are teachable and have additional potential.

There are many off and on-line resources for sustainable property management and systems operation that can help improve appeal as an employment candidate.  Here are a few resources and suggestions for enhancing your green resume:

Property Managers: Whether you are a realtor in need of continuing education credits or an on-site manager of a complex, consider classes in sustainability that can include on-line leasing, social networking, web page design and development, drip irrigation, hydro-zoning,  green landscaping, HVAC systems maintenance and operation and green cleaning.  The National Association of Realtors is a good place to start, but there are many credentials available to add to your real estate education.

Union Members: If you are a member of a union, check with your local for classes, training, apprenticeships or home study materials that may be available to increase your green knowledge.  The SEIU local chapter in New York City has funding for training residential building superintendents.  The program is called 1000supers.com and is a combination of union-negotiated employer paid training and a large grant recently received from the Department of Energy (DOE).

Local Utilities: Many local utilities will do a certified energy audit for free.  Others have weatherization programs that may be free or available for both multifamily and single family housing.  Learning from these experts may help you improve your systems management and lower energy bills, even if it is not something you can add to your resume.

Community Education: Community colleges offer many inexpensive courses for upgrading vocational and technology skills.  There are many community education classes available throughout the country through local school departments that can advance your education on specific topics.  Non-profits interested in teaching energy and water conservation, green building maintenance and operations and other sustainable practices can be searched on-line for free training.

Conferences:  Every major metropolitan area holds green conferences throughout the year.  Generally the trade show part of the conference is open to the public, so even if you cannot afford the time or fees for full attendance, you will find many helpful people willing to educate you on their products and services.  If you do some advance research, your employer may even agree to pay for the conference if you can demonstrate it has value.

Government Resources: The Department of Energy (DOE) has free software for property managers to aid them in managing in a sustainable way.  The Portfolio Manager is a program that allows a multifamily manager to benchmark (measure) a property’s energy and water usage against other similar properties.  Many other government entities, both local and national, schedule free trainings of all types.

Websites and Certifications:

Energy Star for Buildings and Plants was created by the DOE in 1992 and is a great resource for greening homes and buildings.

The Green, BOMA International’s green resource page is targeted to building owners and managers.

Green Lede offers green building news from CoStar, a commercial real estate information company.

Green Resource Council, the website for NAR’s Green designation, is owned and operated by the National Association of Realtors.

IREM First: Sustainability, the Institute of Real Estate Management (IREM) is dedicated to supporting real estate management strategies that advance an environmentally sustainable and economically prosperous future.

LEED Rating Systems, is the leading commercial building certification standard in the United States which is sponsored by the U.S. Green Building Council.

Other Articles of Interest:

• Top 10 Tools for Green Property Management (That Might Be Good for Green Renters Too)
• WaterSense is Common Sense
• Utility Cost Takeout: A Model for Energy Efficiency
• Renters, Get Set, Go Green!

The following links to the actual language and the Building Lists are from the DOE’s website, but if you have any difficulty accessing them, click on this link.

Final Rule on Amending Eligibility Provisions to Multifamily Buildings for the Weatherization Assistance Program (PDF 181 KB) Download Adobe Reader. Weatherization Program Notice 10-15 is in effect since March 2, 2010.

• List 1: Eligible Multifamily Buildings 10-CFR-440.22(b)(4)(i) (Excel 1.6 MB)
• List 2: Eligible Multifamily Buildings 10-CFR-440.22(b)(4)(ii) (Excel 266 KB)

The DOE’s income eligibility requirement is currently set at 200% of the federal poverty level.  In order for a property to be included on this list, at least two-thirds of building residents – or 50% for 2 to 4 unit complexes – must be in this income category.

It is important to note, however, that not being on the list does not preclude a public housing, assisted housing or LIHTC building from qualifying for the WAP.  However, it becomes ‘the long road’, as it will require that eligibility be determined on an individual basis by the local WAP service provider that implements the Program. In this case, as in the past, the WAP servicer will base the determination on the collected income information supplied by property owners and the residents.

State & WAP Service Providers

The key words in this ruling are that properties “may be eligible” recipients of WAP funds.  However, no state or local WAP service provider is required to set aside WAP funds for these properties. The states and servicers retain the authority to set priorities for the use of WAP funds within their service areas.

During the recession funds are certainly under restraint and may be quite limited (or even not be available in some states) so act quickly if you’re interested.

You can find WAP information and contacts in your state with an interactive map the DOE provides.

Other Articles of Interest:

• Leverage Your Tenancy with 9 Upgrades
• Government Subsidizing Warmth via Weatherization
• Free Weatherization Offered to Low Income Households, Renters Included