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California Real Estate Journal: Apartment Owners Struggle with Meeting Green Standards

By Mandy Jackson
 
In the apartment industry where much of the property is 20 or more years old, owners and managers are looking for ways to implement green building practices and conform with at least one set of standards for sustainable real estate.
 
The National Multi Housing Council is involved in an effort to establish the National Green Building Standard in conjunction with the National Association of Home Builders and the International Code Council to address concerns in the apartment industry. Until that standard is adopted, companies are assesang their properties and implementing as many sustainable measures as they can.
 
Paula Cino, director of energy and environment for NMHC in Washington, D.C, said the main green initiative for the apartment industry trade group during the past year has been working on the National Green Building Standard for single-family, multifamily and mixed-use communities.
 
"Unlike a typical building code, this standard will have various options to choose from to comply with the standard," Cino said. "There will be four levels of compliance."
 
With the National Green Building Standard, there is no conflict between what builders have to do to make a house or apartment structurally sound and what they need to do for their projects to be green, she said.
 
Since the National Green Building Standard would be administered through local building codes, a local building official would oversee a developer's compliance versus the U.S. Green Building Council's Leadership in Energy and Environmental Design program, in which certification requires approval from the organization's officials in Washington, D.C.
 
NMHC and its partners in developing the National Green Building Standard intend for the program to be nationally recognized. They are seeking approval from the American National Standards Institute. Once the standard gets that seal of approval, it will be published by the International Code Council, possibly as early as this summer.
 
"It's not something we're looking for cities to adopt proactively," Cino said. "If a city is already considering a green building requirement or standard, instead of having builders comply with a voluntary program like LEED, we'll present this to cities. We'll also present it to our members who are looking for guidance on meaningful things to do for their properties."
 
Cino said various NMHC members have had difficulty using LEED and other rating or certifying systems simply because of the significant cost and complexity involved in doing and submitting the paperwork.
 
The National Green Building Standard does have a renovation component but only for single-family homes. The next version will incorporate apartment renovations.
 
"Many of our members have been doing the kinds of things you would want to see in a green renovation for the past decade, but it hasn't been called 'green,'" Cino said. "They have been putting in more efficient lighting fixtures and better plumbing fixtures. Now that some people are starting to look at some of the bigger-ticket items, they're starting to look at things like solar power and more advanced heating and cooling systems."
 
Adapting the Existing Stock
 
Courtney Baker, manager ofthe USGBC's LEED for homes program, said the council is working on certification criteria for high-rise housing. Right now LEED for homes has a low-rise residential program for single-family homes and one- to three-story multifamily buildings. There also is a LEED pilot program for mid-rise multifamily buildings from four to six stories high. Those pilot projects can be certified under LEED for homes or LEED for new construction.
 
The USGBC has certified 10 low-rise multifamily projects with a total of 164 housing units under LEED for homes. The nonprofit recently began accepting mid-rise projects in its new pilot program, and those developments won't be certified for at least six to 12 months.
 
However, for owners looking to green existing properties built decades before energy efficiency and water conservation were at the forefront of development trends, it can be difficult for properties to meet existing green building standards.
 
The average age of the 3,833 California apartment properties surveyed in Novato-based RealFacts Inc.'s first-quarter report was 28 years. Only 762 properties were built in the 1990s or 2000s while 2,323 were built in the '70s and '80s and 748 were built in the 1960s or earlier.
 
"We work pretty closely with the National Multi Housing Council in recognizing that LEED is a great certification, but for me with existing buildings I can't hope to get that certification because I can't generate enough points," said Brian Keller of Los Angeles-based Oakwood Worldwide, a temporary housing provider.
 
"I can go after the areas that make sense," Keller said. "As I replace windows, I'm looking for double-paned windows because of the energy efficiency as well as sound reflection. I focus on the areas we can control because with existing buildings you are not able to impact lot design, site selection and building plans."
 
In addition to retrofitting light fixtures and replacing incandescent light bulbs with compact fluorescent bulbs, Oakwood has installed Energy Star-rated appliances when replacing old equipment, upgraded air conditioning units, implemented and improved recycling programs, installed low-flow toilets and showerheads, and added more efficient natural gas-fired boilers and water heaters among other efforts.
 
Also, building systems have been reengineered to be more modern and efficient, occupancy sensors have been added to common areas where it makes sense and exterior lights are on photo sensors.
 
Keller said Oakwood began to focus on energy conservation nearly 10 years ago. Since then, the company established the Oakwood Green Initiative to help reduce global warming, raise awareness of the issue and educate clients and associates.
 
The education within Oakwood's green initiative extends to the guests who stay in the company's properties and local communities. Each short-term tenant receives information on the Oakwood's greening efforts and tips for recycling and reducing energy and water consumption during their stay.
 
Oakwood associates also present a program called the Global Warming Crusade at local elementary schools featuring "Polar Cards" with photos taken by Oakwood chairman Howard Rudy.
 
Keller is currently researching solar photovoltaic panels and determining where it would make sense for Oakwood to utilize that technology.
 
"It's a much longer payback and even though there are some rebates and tax credits, it is still a very expensive proposition but Oakwood is committed to considering new methods of energy efficiency and conservation." he said.
 
Across the Oakwood portfolio the company has made an effort to buy some of its electricity from renewable resources, such as wind and hydroelectric power. Those resources represent up to 15 percent of the energy used at any one location.
 
Rebates and Incentives
 
The state's New Solar Homes Partnership began in Jan. 2007 with Senate Bill 1, the California Solar Initiative signed by Gov Arnold Schwarzenegger in Aug. 2006.
 
The goal of the $3.3 billion California Solar Initiative is to create 3,000 new megawatts of electricity generation by 2017; 400 megawatts is expected from 160,000 housing units in the New Solar Homes Partnership.
 
Under Tier 1 of the solar homes program, new housing should be 15 percent more efficient than Title 24, California's energy-efficiency standards for commercial and residential buildings. Tier 2 has an additional goal of 35 percent more efficiency than Tide 24.
 
The program offers two rebates - $2.60 per watt for photovoltaic systems on single-family homes and multifamily buildings and $2.50 per watt for solar panels on small custom homes or projects where builders offer solar panels as an option to homebuyers. Those rebates add up to roughly $7,500 for a typical 2.53 kilowatt system for a single-family home. Mixed-use projects can participate in the solar homes program, but nonresidential space must be less than or equal to 10 percent of the building.
 
As of this month, the New Solar Homes Partnership has more than 4,600 applications for rebates on photovoltaic systems, with 4,373 representing large developments where solar is offered as a standard feature in single-family homes. The balance is for custom homes, mixed-use development and affordable housing.
 
San Diego-based Community HousingWorks completed a 56-unit affordable-housing complex in San Marcos last year called Solara, which is powered almost entirely by solar panels and incorporates several other green building features.
 
"It appears that really our electricity estimates were just about right on, and I think we actually have more savings for water and gas than we estimated," said Mary Jane Jagodzinski, senior project manager at Community HousingWorks.
 
Excluding the cost for solar panels at Solara, the green building strategies at the project cost about $225,000 more than a typical new apartment complex. The $1.1 million cost for the solar panels was almost entirely covered by other sources. More than $1 million was covered by California Energy Commission rebates, a federal investment tax credit and a boost from the Low Income Housing Tax Credit program.
 
Water-conserving features at Solara include dual-flush toilets, drought-tolerant landscaping and recycled storm water for irrigation. Residents have to attend a mandatory green orientation before they move in and sign a provision in their lease recognizing their responsibility to conserve water and electricity and to recycle.
 
"We bought every unit a shopping cart with a Solara sign on it to give people the tools to not use their car and walk to the nearby markets and start thinking that way," Jagodzinski said.
 
Community HousingWorks is currently looking at a handful of acquisition and rehabilitation projects and the nonprofit is considering every possible opportunity to increase energy efficiency and boost water conservation in those projects.
 
"We're working on one now that's 35 years old and it's not energy efficient by any stretch," Jagodzinski said. "Our energy modeler ran the calculations of our baseline and we're looking at things we can do to maximize our energy efficiency, even down to the brand of dual-paned windows. We will be increasing our energy efficiency by 25 percent and reducing gas usage by 50 percent."
 
Community HousingWorks will replace the air conditioning system, adjust the water heaters and install more California-friendly
 
Mark Chi, redevelopment project manager in Irvine for Denver-based Apartment Management and Investment Co., said it is AMCO's goal to integrate green building practices when it renovates assets.
 
"We use energy-efficient fixtures and light bulbs to help out the property and help with expenses," Chi said. "We install energy-efficient appliances and lighting and we have cost savings with efficient water heaters and showerheads."
 
Most of the rehabilitation projects under way at AIMCO's properties have to do with deferred maintenance that needs to be addressed. In some instances, Chi said renovations are ongoing because the market will support a substantial increase in rents with improvements at certain properties. But marketing green improvements, he said, must be strategic to show potential tenants the value that has been added.
 
"People are pretty energy conscious, so the minute you say you have efficient appliances or lights, people know that will save them money," Chi said. "But if you're green and you charge an extra $300 a month, that's not enough for people. Being green isn't necessarily enough to charge more, because people are very price conscious."
 
Greening Our Campuses
 
California State University, Sacramento, is constructing a 210,050-square-foot apartment-style student housing complex with 605 beds for which the school is seeking a Silver LEED certification. The project, which is located close to the main front entrance of campus, is scheduled to open in fall 2009.
 
Overall water use for the facility is expected to be at least 30 percent less than other student housing on the CSU Sacramento campus, mostly through the use of low-flow fixtures. Also, the water-efficient landscaping will use reclaimed water.
 
The university is targeting 42 percent less energy use compared with other student housing. Jim Smith, construction project manager at consulting firm V2CMA, said the university is looking into solar panels and a solar water heating system.
 
It is estimated that photovoitaics will only provide 12 percent to 15 percent of the electricity used at the student housing complex, but Smith said solar energy production would reduce dependence on the state's energy grid during peak-use periods.
 
"The campus, as a whole, has taken the position that they want all projects to meet LEED certification," Smith said. "This is one of die first major projects that will be LEED-certified."
 
He said the added cost isn't necessarily related to using sustainable materials or installing efficient building equipment. Most of the extra cost comes from putting together a plan and engineering a project to meet LEED specifications.
 
"Sometimes the enhancement itself doesn't cost anything, but the engineering to show how it's going to meet the LEED points requirement is costly," Smith said. "We're trying to do it within our budget."
 

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