In a post from April 2011 titled The Business Case for LEED, the Tenant Advisor discussed the potential return on investment for green real estate. In today’s post, Noelle Hirsch advances that discussion with an article that remarks upon the trend for multi-family apartment dwellings to be retrofitted with energy-efficient inputs like window treatments in order to save money for tenants and landlords alike.
The Potentially Profitable Union Between Landlords, Tenants and Construction Management
In recent years, both environmentalists and construction managers have touted various ‘green’ efforts to make buildings more cost-effective and less wasteful. Today, apartment tenants have joined this ever-growing group of green citizens, citing the relatively lower costs of living in a building that has been optimized for efficiency.
In the 1990s, the push for eco-friendly construction techniques yielded the Leadership in Energy and Environmental Design (LEED)– a set of standards for green construction that were developed by the US Green Building Council (USGBC). The four certifications (Certified, Silver, Gold and Platinum) are awarded to single units – or, in some cases, entire communities – based on criteria such as water and energy efficiency, materials used during construction, sustainable site development and indoor environmental quality. In the beginning, LEED certificates were primarily popular with house builders; office buildings and other business-related facilities followed shortly thereafter. Today, the USGBC estimates that 1.6 million square feet of land are LEED-certified worldwide each day – and many of the newly accredited properties are apartment buildings.
Though society today is much greener than in the past, the appeal of LEED certifications extends beyond current trends as far as apartment owners are concerned. According to a 2012 article in Forbes, efficiency upgrades in ‘multifamily buildings’ (structures with at least five rental units) could reduce energy bills nationwide by as much as $3.4 billion. This decrease is equivalent to a savings of 15-30 percent per apartment. Considering that multifamily buildings accounted for roughly 15 percent of US energy consumption in 2005 – and energy bills for these units totaled more than $18 billion – these savings are quite significant. And while apartment owners have historically struggled to secure financing for environmentally friendly inputs, utility companies may be able to aid them in the coming years; according to the American Council for an Energy-Efficient Economy, U.S. utilities companies intend to spend between $7.5 and $12 billion per year on electricity and natural gas efficiency programs by 2020 (up from $4.3 billion three years ago).
Thanks to the green technology advances of recent years, apartment owners can retrofit their buildings with a variety of energy-efficient inputs. According to a recent article in National Geographic titled How to Make Rental Apartments Energy Efficient, the first step is to check windows and doorways for drafts. Air leaks are inefficient and costly, and can be prevented by applying caulk or weather stripping to the unwanted openings. Window treatments can also be used to improve the way heat is transferred throughout the unit. During summer months, curtains and shades can reduce energy and costs related to air conditioners; likewise during colder months, drapes should be closed at night to reduce heat loss. In order to make lighting more energy-efficient, incandescent bulbs should be replaced with either fluorescent bulbs or light-emitting diodes (LEDs). Finally, landlords can reduce energy and costs by imparting some energy-efficiency advice to each tenant. When residents set their thermostat for energy savings, use electric appliances sparingly and vent excess heat, they too can play a role in helping the environment – and lowering their monthly bill payments.
Going green is no longer just a trend among the eco-friendly crowd. For apartment owners, it is a proven sound investment. And as more efficiency strategies are developed, both landlords and tenants stand to save a great deal of money on an annual basis.