Benchmarking the energy used by our nation’s apartments has far reaching importance and the EPA’s new ENERGY STAR® 1-100 score for multifamily scheduled to launch September 16 may be a pivotal shift in gathering and analyzing this valuable data.
Many believe that energy efficiency will be where renters are won and lost in battle to remain competitive in the future. With rising energy prices across the board, as well as the changing landscape of energy supply, conservation is the most predictable means of navigating this wild new terrain.
ENERGY STAR’s name recognition among consumers may lend more credence to their benchmarking program with renters. Even if renters do not consciously seek out this information when they are looking for an apartment, landlords that have buildings with higher scores and ENERGY STAR certifications will actively market these features to prospects as a competitive advantage. This in turn may translate into higher rents, which combined with lower operating costs, will have a significant impact on property market values.
One direct line of sight to the fiscal value of benchmarking is the way lenders view the energy efficiency of apartment buildings. Commercial appraisals that include green technology and utility cost containment are a growing trend as lenders discern the value of efficiency within their portfolio, as well as the relief of operational risk that elevated performance brings. On the other side of the coin, costs associated with green construction have come down, and local initiatives such as New York City’s local laws 84 (energy benchmarking), 85 (conservation), 87 (energy audits) and 88 (lighting upgrades and submetering) have ushered in new awareness in major markets.
Since these laws have launched into effect, Mayor De Blasio has expanded his “carbon challenge” program by incentivizing multifamily owners to cut their energy use. Currently there are 38 million sq. ft. of building space enrolled in the challenge, says Daniel Zarrilli, head of the city’s new Office of Recovery and Resiliency and acting director of the Office of Long Term Planning and Sustainability.
Following New York City’s lead, the District of Columbia was the first to require private buildings to measure their energy performance. Through analysis of its data, D.C. buildings scored an average of 77 out of 100 on the ENERGY STAR scale placing it well above the mean of 50. With 83 percent of the city’s buildings participating, data show that the age of structures had no discernible impact on their energy performance. However, there was a huge span of scale: The least efficient buildings used over 235 percent the energy of the most efficient.
On a national level, multifamily operators are just beginning to realize the revenue benefits of energy and utility efficiency. This makes EPA’s initiative well positioned to bring this big data back to apartment developers and operators.
Georgetown University has thrown its hat in the ring hoping to accelerate the sustainability of cities and their urban core apartments with its first-time Energy Prize of $5 million to the city that saves more than $1 billion in energy costs. Thus far the event has generated 52 quarterfinalist cities that will rally through more qualifying rounds before the winner is announced in 2017.
The city of Takoma Park, Md., one of the semifinalists, is pushing hard to educate its apartment residents to adjust their thermostats and unplug appliances when not in use, as well as collaborating with electric and natural gas utilities, and other community organizations in quelling energy consumption in its town.
Still, benchmarking remains the catalyst in gauging the success or failure of these contests and initiatives and the EPA Portfolio Manager remains at the forefront of potential in benchmarking progress.
For its part, the EPA has recently added new details for multifamily properties to its Portfolio Manager. Owners and operators can now enter all the needed information for an accurate energy score on their existing multifamily properties and its results will go live September 16.
Those properties with a score of 75 or higher may be ENERGY STAR certified signifying that they’re among America’s top energy performers. The EPA is expected to recognize the first in ENERGY STAR certified multifamily properties with a national press release in November. The EPA requires the following for an accurate score:
- 12 months of complete energy data for all fuels and meters on the property (including all common areas as well as resident units)
- Gross floor area for all buildings on the property
- Total number of units: specify number of low-rise units (1-4 stories), mid-rise (5-9 stories) and high-rise (10+ stories)
- Total number of bedrooms
To qualify for EPA’s ENERGY STAR properties must have 20 units or more. Smaller communities may participate but will use different standards more appropriate to their size.
Multifamily properties, missing data
What if I don’t have all that data? You may still participate if you have complete energy data and gross floor area. Owners and operators can derive an estimated ENERGY STAR score by entering just those values. Portfolio Manager assigns default values for the other details.
Properties without whole building data can still benchmark property performance using just the data available. Still, the results will be limited. Without whole-property energy data the property isn’t eligible for ENERGY STAR certification.
Benchmarking is the path to competitive apartments. As we move toward the future, technology tools like Portfolio Manager will level the playing field, equipping more players to make better decisions.