Multifamily ENERGY STAR® Rating System Set to Debut This Year

Image of Sample ENERGY STAR Scorecard Report

The multifamily housing industry likely won’t have to wait much longer for properties, no matter their age and type, to get an ENERGY STAR® score.

What has only been available to new multifamily construction, the Environmental Protection Agency’s (EPA) ENERGY STAR energy rating system will soon include existing installations within the ENERGY STAR® Portfolio Manager® tool by late summer or early fall this year.

EPA and Fannie Mae Collaborate on Energy Rating System

The roll out follows about three years of collaboration between EPA and Fannie Mae to create an equitable scoring system for properties to receive an ENERGY STAR rating.

The scoring system will enable owners and managers to compare the energy performance of their multifamily housing properties against similar properties nationwide. The data comparisons should provide information to help prioritize energy efficiency efforts and track improvements.

In March, EPA said it will release more details of the technical methodology and requirements for use of the score with the industry in the coming months.

Currently, ENERGY STAR ratings are available for most new apartment units in multifamily buildings. All dwellings three stories or less, as well as some four- and five-story buildings, may qualify for ENERGY STAR as long as the structure is permitted as residential by local building departments and each unit has its own heating, cooling and hot water systems.

Multifamily-Specific Energy Rating System is “Step in the Right Direction”

The system began taking root in 2012 when Fannie Mae co-sponsored the Multifamily Energy and Water Research survey to collect data from over 1,000 participating multifamily properties, including affordable housing properties.

In January 2013, Fannie Mae provided the collected survey data to EPA, which began running the information through models to create the scoring system. ENERGY STAR’s Portfolio Manager will be the repository for participants to input data and achieve a score that determines the energy efficiency of a property.

While the details have yet to be released, the new system likely won’t produce a rating based on a true apples-to-apples comparison of energy and utility data for similar properties. However, it’s a step in the right direction, says Dan Gaddis, RealPage, Inc.’s director of sustainability and energy management.

“This news is good,” he said. “Building the EPA database is very important. In lieu of our industry creating a multifamily owned database, having a multifamily specific version will be helpful in comparison to the current, nonspecific version.

An ENERGY STAR-rated property is attractive to both residents and property owners, according to industry data. Energy-efficient units enable tenants potentially lower operating costs and are good sales tools for resident retention.

Setting Apartment Energy Performance Benchmarks Still Tricky

Gaddis said that multifamily assets should benchmark energy and utility usage data against previous performance or against immediate portfolio peers in regard to energy and utility costs.

“It is imperative that the multifamily industry understand its energy use and document it in data base,” he said. “Still, even a multifamily specific dataset is not benchmarking nirvana. There is almost no such thing as community-to-community apples-to-apples in multifamily.” The process can get tricky when comparing properties that have different metrics. Sub-metered properties that potentially lack correct performance data, for example, won’t easily compare to master metered properties. Also, each site within a portfolio essentially has a life of its own.

“I don’t know of many portfolios out there that have even one site so similar to another that they can be compared to each other as completely valid peer case,” Gaddis said.

Nonetheless, the new program enables the multifamily industry to reach for a goal and get a rating certificate based on a more comparative process than has been previously available.

Energy Star Portfolio Manager Fertilizes Fannie Mae’s Green Initiative

Donna Varner, who is senior project manager for Fannie Mae’s Multifamily Green Initiative, encourages properties to begin inputting data into the Portfolio Manager so that they will be ready to be scored when the final product arrives.

The rating system’s expansion falls in line with Fannie Mae’s Multifamily Green Initiative, which was launched in 2010 to create energy efficiencies and affordability to tenants in the buildings that the organization finances.

As part of the program, qualifying properties can seek funding for green energy renovations through two Fannie Mae loan programs – Green Preservation Plus and Multifamily Property Improvements to Reduce Energy (M-PIRE).

Getting the ENERGY STAR rating score is a first step.

“We’re really excited that we will have a score and we’re looking at ways to utilize the score.” Varner said. “We know that it’s going to be a big benefit to the industry.”

 

Image Source: Sample ENERGY STAR Scorecard (PDF)

 


Contributing Editor, Property Management Insider
President, Ballpark Impressions, LLC

author photo two

Tim Blackwell is a long-time publishing and printing executive in the Dallas/Fort Worth area who writes about the multifamily housing and transportation industries. He has contributed numerous articles to Property Management Insider, and worked as a newspaper reporter in the D/FW area. Blackwell is president of Ballpark Impressions, and publishes the Cowcatcher Magazine. He is a member of the Fort Worth Chapter/Society of Professional Journalists.

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