by Brianna Crandall — November 21, 2016 — Increasing the energy efficiency of America’s multifamily buildings could save building owners and managers, residents, governments, energy efficiency service providers, and financiers close to $3.4 billion in annual savings, according to a multi-year study from the American Council for an Energy-Efficient Economy (ACEEE). Recognizing this, a new report from the DC-based nonprofit Institute for Market Transformation (IMT), Catalyzing Efficiency: Unlocking Energy Information and Value in Apartment Buildings, explores how governments and energy-efficiency implementers could help these stakeholders better analyze and act upon building performance data to unlock these savings.
Cliff Majersik, executive director of IMT, stated:
Poor-performing buildings waste energy and money for owners, tenants, and cities. In the past, we found that a lack of information about building energy performance deterred many multifamily building owners from implementing cost-effective energy-efficiency improvements. However, while this data has become increasingly available in recent years, it is still vastly underutilized. Working with more than 125 industry stakeholders, we sought to examine why this data remains untapped. Governments and energy-efficiency implementers or service providers can learn from leaders in the field and turn this growing wealth of information into action and tangible savings for all parties.
Close to 38 million people live in multifamily housing in the United States (buildings containing five or more units), composing almost 18.5 million households, according to the report. In recent years, data about how these buildings and units are using energy and water has become more broadly available as 11 cities and the state of California have adopted benchmarking and transparency policies that require multifamily building owners to track and report their buildings’ energy and water usage. These laws are designed to give owners and the market better information on buildings’ energy use while also helping policymakers, energy-efficiency implementers, and lenders craft programs and incentives for energy-efficiency investments. Despite this, many of the country’s multifamily buildings remain inefficient, points out the report.
IMT’s report finds that building performance data is still in its infancy in catalyzing efficiency investments. Most owners and managers comply with benchmarking and transparency laws but do not act upon the data to achieve greater efficiency and improve their bottom line. Residents lack access to this information when apartment shopping, and investors and appraisers lack valuation context, often leading them to undervalue and under-invest in efficient buildings. Until multifamily stakeholders work together to use and value building performance data effectively in consistent, transparent formats, energy and water efficiency opportunities will remain unrealized, concludes the report.
IMT’s report provides concrete recommendations on how governments and energy-efficiency implementers can better engage owners, managers, residents, lenders, and investors in using building performance data to drive energy and water savings. Challenges addressed include data-access issues that prevent multifamily owners and managers from gathering adequate data; market confusion over how benchmarking data can be deployed to spur and track efficiency investments; barriers preventing residents from factoring performance into their apartment decision-making process; and the fact that most lenders and investors do not yet factor building performance data into their standard business practices.
According to Sadie McKeown, executive vice president & COO at the Community Preservation Corporation, a New York State nonprofit affordable housing and community revitalization finance company that has financed more than 170,660 affordable housing units:
The costs savings from energy and water conservation measures can help enable stable ownership for multifamily buildings, preserve affordability, and create more sustainability communities. We believe that our method of integrating these measures into the mortgage underwriting processes could put the lending industry at the forefront of the sustainability movement, and we’re excited to share our process, expertise and lessons learned with IMT and others in the multifamily housing space.
In addition to releasing the report, IMT will be hosting a series of Webinars exploring the findings as they relate to specific stakeholders:
- December 1: Market-Rate Multifamily Owners
- December 8: Affordable Multifamily Owners
- December 15: Multifamily Lenders and Investors
The full Catalyzing Efficiency: Unlocking Energy Information and Value in Apartment Buildings report is available for free download from the IMT Web site.