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Multifamily Building Developers Are increasingly Implementing LEED Green Certified Apartments


There is a strong demand for green building features by both renters and local governments. Healthy fundamentals, particularly strong occupancy and rising rents are encouraging developers to build green, but there are other factors also at work. “On one hand, there’s a request for sustainable building,” said Paula Cino, vice president for construction, development and land use policy at the National Multifamily Housing Council (NMHC). “Green building features are something that residents, as well as jurisdictions are asking for from the builders and developers in their communities.”

Developers are realizing that there are long term savings in both energy and water costs in the long term by implementing green building features.  Renters have increasingly been interested in communities with green building designs and Energy Star-certified appliances.  The cost of LEED Certified Green apartments will likely cost renters $250 to $300 more per year in rent, but there have been surveys that have been completed that support the demand.

Green buildings could provide savings in energy and water usage by as much as 30% to 50% and increase a project’s NOI significantly.  Many developers are including these changes in their design and construction costs at the beginning, in order to prevent them from being higher down the road in the building process.

In 2008, there were 11,200 LEED-certified apartments nationwide, with that number reaching 42,900 just a decade later. This means that the number of units in the marketplace that are either certified or pending certification has quadrupled in just over 10 years.

While this data indicates that the present is greener than the past, it would be misleading to say that the industry has seen a consistent, year-over-year increase in the availability of energy-efficient housing.*

*Source: Based on Yardi Matrix apartment data in USGBC LEED-certified large-scale multifamily buildings of 50 units or more, as of Dec.2018.

It is commonly known that apartment developers spend countless hours attempting to determine the features and amenities that will contribute most to the value of their buildings and consequently, the amount they can charge to rent units in them.

A recent study by Property and Portfolio Research (PPR), a subsidiary of CoStar, took a deep dive into this issue and evaluated what attributes people would be willing to pay a premium for with regard to their monthly rent costs. After analyzing nearly half a million data points, PPR concluded that LEED certification was the second most important feature to the apartment renter, second only to being located near a central business district. This puts the importance of LEED certification above other popular attributes, such as transit oriented developments, fitness centers, finishes and the age of a building.   

There are various methods to improve water conservation and efficiency, waste diversion and energy savings, including both electricity and gas.  The following areas can be focused on to implement green technology into existing multifamily apartment buildings.

Water Heating offers the largest single opportunity to save energy in multifamily housing. Strategies to accomplish this include increasing the thermal efficiency of water heaters, as well as installing solar hot water systems.

Heating, Ventilation and Air Conditioning (HVAC)- energy savings can be achieved by replacing outdated boiler and furnace systems.

Waste Diversion- By installing mechanized diverters in existing waste chutes that sort trash, recyclables and compost, building owners can achieve a notable ROI in less than one year by reducing trash volume, as well as the number of garbage collection days.

Appliances - Cooking and refrigeration make up a large portion of the energy used in multifamily housing units. Efficient dishwashers and washing machines will save both water and energy.

Common Area Lighting - Creates a significant energy load that can be reduced through photocells or timers (for exterior lights) and occupancy sensors (for garage and laundry areas).

Water Fixtures -With a typical payback period of less than two years, aerators, high-efficiency faucets and showerheads are some of the best ways to conserve water. Free audits can help to prioritize improvements.

Toilets- In a typical household, toilets use more water than any other fixture. Those installed before 1994 use over twice as much water as units being manufactured today.

Weatherization – Shared walls greatly reduce the amount of heat and cooling that is lost to the exterior of multifamily unit buildings. Older structures however can still benefit from new windows, cool roofing technology and better insulation.

Small Fixtures within individual units —Smart, programmable thermostats, compact fluorescent lighting and efficient ceiling fans can reduce both electricity and gas consumption.

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