New resources are required to take advantage of the energy savings potential in our nation’s multifamily housing stock.
Billions of dollars of energy savings potential are sitting in our nation’s multifamily buildings. A 2009 study by McKinsey and Company estimated that the capital required to unlock energy efficiency opportunities in our nation’s low-income residential buildings between 2009 and 2020 is approximately $46 billion, and would provide a present value of $80 billion in savings. Almost a quarter of this energy efficiency potential is in multifamily buildings, accounting for approximately $16 billion in savings.
Energy efficiency retrofits provide a reliable and achievable means to reduce greenhouse gas emissions, generate economic activity, and improve the long-term viability of affordable housing. Amidst efforts to curb climate degradation – and capitalize on sound opportunities for operational savings in our building stock - affordable housing regulators have begun to tighten energy efficiency requirements. For instance, New York City’s Department of Housing Preservation and Development now require compliance with Enterprise’s Green Communities criteria for new construction and gut rehab projects it helps finance. Furthermore, New York City has recently mandated tracking and assessing energy efficiency opportunities in local building stock.
The capital to unlock these improvements, however, is not always readily available. In response to this challenge, Deutsche Bank Americas Foundation and Living Cities engaged Steven Winter Associates and HR&A Advisors to aggregate and analyze a dataset of multifamily housing projects – totaling over 21,000 units – that had undergone energy efficiency retrofits in New York City. The dataset allows for insights into three key areas:
- Assessing trends in pre- and post-retrofit building performance;
- Analyzing the reliability of savings projections; and
- Utilizing findings to frame an approach for incorporating energy savings projections into underwriting.
As part of this effort, HR&A Advisors conducted a study of the wide ranging benefits of energy efficiency retrofits that accrue to building owners, tenants, and their communities. This document summarizes those benefits.