July 16-18, 2017 WYNN LAS VEGAS Learn More

Strategies for Cutting Energy and Water Usage in Multifamily Housing

multifamily housing

ENERGY STAR® opens new opportunities for multifamily housing

The multifamily industry has long questioned whether a stamp of approval from the Environmental Protection Agency (EPA) is worthwhile. ENERGY STAR®, a voluntary energy efficiency program, shows some degree of success; however, some in the industry equate this certification as more of a merit badge than a necessity. These insiders cite the need to capture whole-building (i.e., resident) energy consumption data as a challenging hindrance to receive this certification.

“It’s interesting we’re still having dialogue around whether or not investments in energy efficiency and water efficiency have returns,” said Deb Cloutier, Principal and COO of JDM Associates, an energy management and sustainability-consulting firm, at the National Multifamily Housing Council’s OpTech 2016 Conference & Exposition.

Cloutier indicated that energy-efficient features do more than save a meager sum on the electricity bill in common areas and the front office. While operating expenses do see a reduction, energy efficiency garners desirable benefits that include higher asset values, competitive advantages and better retention rates of quality management and residents.

Apartments should promote energy efficiency to existing, prospective residents

Energy consumption and its impact on the environment ranks high as a public concern. According to the Pew Center for Research, 66 percent of Americans say that significant changes in their everyday lifestyle is the first step in reducing the effects of global climate change.

Multifamily participation in the EPA’s ENERGY STAR program is headed in the right direction, but there is room for improvement. Michael Zatz, who has overseen ENERGY STAR’s commercial buildings program for the past 11 years, says apartment owners and operators who are taking the energy-efficiency leap should promote it. When prospective renters inquire about a community, the leasing staff should emphasize the value of energy savings as a big selling point beyond the rent price.

However, as the property manager, you can only do so much.

“At some point, you’re going to have to engage with the residents,” Zatz said. “The residents control most of the energy use on your property.”

Over the years, ENERGY STAR has become a recognizable brand. Zatz says about 90 percent of consumers know ENERGY STAR, and while they may not understand exactly what it means, they do know it represents something good about energy efficiency.

“Affiliating your company and properties with ENERGY STAR is really going to help build your brand recognition [in addition to saving energy],” he said.

To help, ENERGY STAR offers collateral that properties can use to promote their energy-efficiency initiatives and how those initiative may save residents money. One piece is a customizable brochure that promotes a property’s ENERGY STAR certification and energy-efficient practices; another shows the difference between utilities in apartments outfitted with ENERGY STAR and Water Sense® equipment versus those without.

multifamily housing

Swift growth in EPA’s program since 2012

The ENERGY STAR score allows a multifamily property owner or manager to compare the energy performance of their property with those of similar properties across the United States. It starts with benchmarking the property’s energy use in the ENERGY STAR Portfolio Manager® tool, a repository for recording energy usage (and water usage and waste generation) over months and years.

Zatz said that nearly 500,000 buildings use the tool, representing more than 40 billion square feet of commercial space in the U.S. (about 45 percent of the market). As of June 2016, more than 35,000 multifamily properties totaling 4.3 billion square feet were benchmarking, and as of January 2017 over 200 communities have earned the ENERGY STAR certification.

The growth in multifamily has been swift the past five years. In 2012, a voluntary energy and water research survey issued by Fannie Mae piqued the curiosity of many of the 6,500 property owners who were asked to offer feedback.

The following year, talk surfaced that mandatory benchmarking already in place in the commercial sector would soon be standard across U.S. multifamily communities. Ordinances requiring the reporting in Seattle, Austin, Chicago, San Francisco and New York City were already in place.

In late 2014, the EPA rolled out an ENERGY STAR benchmarking system for multifamily properties, culminating a three-year effort to create an equitable, energy-efficiency scoring system for multifamily properties. For the first time, apartments of all shapes and sizes could get a ranking with the aim to save money and impress prospective and existing residents.

In addition to spearheading the data collection process, Fannie Mae added momentum two years ago with its Green Rewards program. The program offers lower interest rates for multifamily properties with a recognized Green Building Certification (e.g. ENERGY STAR).

Program adds water, and trash hauling benchmarking

ENERGY STAR’s success has opened further opportunities for properties to conserve and reduce the cost of utilities and other services.

Several years ago, at the request of Portfolio Manager users, the EPA added the ability to track water consumption and cost. A few months ago, the program was expanded to include a waste-tracking feature to help properties better assess and manage hauling and disposal costs. Later this year, the EPA will launch its first 1-100 water scoring system for multifamily that works much like the energy score.

Zatz says the rating system should fit nicely with multifamily needs as whole-property water usage data is more readily available to owners and managers than whole-property energy use.

“We think in multifamily many more people are going to be able to use the water score than are going to be able to use the energy score,” Zatz said. “But we see that changing…as more and more utilities are beginning to provide whole-property energy data upon request.”

In short, advances in energy and water conservation efforts will add value to properties that managers and owners can pass along to their residents. .


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

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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.

  • Lauren

    I’m interested in how you’d suggest we get the resident utility information for Portfolio Manager. It definitely does take a lot of education to tenants on how to be more efficient at home, but how can we get that info into Portfolio Manager in the many many buildings of which tenants pay for their own utility bills? It’s not something that the property manager can provide. Do we work with the tenants to get permission, or work with local utility companies to share with E-STAR?

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