Resources: Novo’s Tax Credit Tuesday

For anyone working with tax credits, the Novogradac podcast “Tax Credit Tuesday” are a useful way to learn about Federal and state initiatives in the tax credit sphere. I’ve always subscribed via iTunes, so I had no idea there was a PDF transcript available.

In this week’s podcast, Novo reports on Rep. Frank’s “TARP for Main Street” proposal, which would direct $1B of dividends from banks that received TARP funding to the Affordable Housing Trust Fund, established last year in the Housing and Economic Recovery Act.

Also covered is a letter from the Affordable Housing Tax Credit Coalition expressing concern about the potential sale of tax credits held by Fannie and Freddie. The AHTCC, providing Congress with a short lesson in supply and demand, is concerned that the sale of tax credits on the secondary market will further depress prices that currently languish between $0.68-0.78 per $1 of tax credit. Instead of selling the credits, AHTCC advocates for the Treasury to accept GSE-held LIHTC as part of the dividend payments owed. Alternatively, AHTCC suggests that credits be sold to LIHTC investors who have been inactive for 10+ years and that the GSEs should immediately reinvest those proceeds back into LIHTC.

Operations: Capturing rainwater, reusing graywater

Way out West, water use issues are much more pertinent than they are in the East. Well, maybe. [National view from Drought Impact Reporter.]

Regardless of location, water usage will be reduced through legislation, co-option, construction, or consumer choice.

To help us along, Multifamily Water Systems appears in the May issue of Builder News to provide definitions, discuss existing technology, and identify current and proposed legislation. It’s a strong article that covers a lot of ground.

Where should you look for this reusable water? On your structure, upon undeveloped land, and within the units:

GAO and HUD: What does HUD get for $5B a year? (pt. 1 Summary)

I’m finally beginning a series on GAO’s “Green Affordable Housing” evaluation of HUD’s sustainability efforts.

[Among the many recommendations GAO makes is that HUD collect more and better data about operational costs. The GAO recommendation does not highlight specific data to be collected, but using the LEED v3 "Whole Building Energy and Water Use" requirement: per page 19, it looks like it's just 5 years for LEED-CI. More to come on that.]

GAO wrote the report in part because “[HUD] spends an estimated $5 billion—more than 10 percent of its budget—on energy costs, either directly in the form of public housing operating subsidies or indirectly through utility allowances and contracts for assisted multifamily housing. [HUD] does not have the data necessary to understand the breakdown of these costs or the potential savings opportunities of green building for
many of its programs.”

HUD already provides resources and training and a very, very modest financial incentive to pursue energy efficiency. What I like about the GAO report is its emphasis on using NGO, regional and national sustainability measurements and cribbing the state-level LIHTC incentives for use in HUD projects. This would encompass water use reductions, sustainable material use, and indoor air quality improvement in addition to promoting energy efficiency.

GAO also reminds us that HUD can exercise financial levers: directly through debt financing, Community Development Block Grants, HOPE VI; and indirectly through its support for PHAs and Housing Assistance Vouchers. In addition, HUD’s Office of Policy Development and Research promotes building science and the advancement of durability, energy efficiency, and affordability of housing.

Unfortunately, standard who-pays-for-what conflicts arise in HUD’s relationships with local Public Housing Agencies (PHAs). Writes the GAO:

Some HUD programs offer incentives for energy conservation measures. PHAs receive funds from HUD’s capital fund that may be spent on energy conservation measures, but HUD officials told us that these funds are generally insufficient to cover both the up-front cost of many energy improvements and ongoing repair needs.5 HUD’s operating fund standard rules provide a disincentive to implementing high-cost energy improvements. According to HUD officials, a PHA’s annual operating subsidy is based in part on the prior 3 years of utility consumption, which would be expected to fall in the years following such improvements. This “3-year rolling base” policy allows PHAs to retain 75 percent of savings from reducing utility consumption over a 3-year period, but according to HUD officials, PHAs cannot retain enough savings over this short time to recoup the up-front cost of many large energy efficiency improvements such as high-energy-efficiency boilers.6

It should be noted that these large-scale sustainability initiatives can be met through the use of an energy services company (ESCO) such as Honeywell. Recent regulatory revisions by HUD have improved the processing of these contracts, allowing faster review and longer payback periods. Per the GAO, 195 ESCO contracts were in place in 2007, saving an estimated $50mm annually.

Overall, GAO provides sensible, affordable recommendations for further action. HUD should use third party mechanisms for efficiency benchmarking, collect sufficient information from Section 8 projects and residents, and emphasize (and reward) energy efficiency when awarding grants or in its various lending programs.

These recommendations could have a welcome and systemic impact upon all of multifamily construction, portfolio operation, and lending. We’ll talk more about this in subsequent posts.

Can’t Make It? Follow It

UPDATE Presentations from the 2009 Apartment Internet Marketing Conference are now posted.

The conference season is well underway and I, among many others, am not traveling frequently. Nevertheless, I am very interested in tracking the sessions at the ACI/American Comfort conference, the Apartment Internet Marketing Conference, and the American Planning Association’s National Conference.

Thanks to the hashtag (#) feature of Twitter, I can follow conversations, receive session highlights, and find blog posts that provide even greater detail. You don’t need a Twitter account, just visit search.twitter.com and type in the event name. A search will usually reveal the #hashtag being used for a particular event.

Once you know the #hashtag, you can type it in and pull up all posts (aka Tweets) related to that event. In this case, I’ve searched for #aci09, or the Affordable Comfort conference.

If you have a Twitter client for your desktop (such as Tweetie, Tweetdeck, or others) you can usually search from within the client for events like the Apartment Internet Marketing conference.

Perhaps the greatest benefit is that by identifying attendees at conferences of interest, you can then follow them in Twitter, email them for additional information, or just call them up.

Resources: New Design Resources (and a plug for low flow showerheads)

This post just calls attention to a few housing design resources:

Image courtesy Tom Phillips, Seattle Housing Authority

Energy Circle’s “Interconnected House” (many good resources here)

Affordable Housing Design Advisor

Green Communities Projects

Seattle Housing Authority provides summaries of projects, including a presentation on their financial model and urban design.

Finally, I purchased ($12 at Target) and installed Waterpik’s EcoFlow 1.5 gpm showerhead this weekend. It took about 3 minutes to install from start to finish and provides excellent pressure by using outside air to improve water flow. I can certainly recommend these for multifamily installation.

PD&R Periodicals: ResearchWorks – Volume 5 Number 10

I’ve written before about Energy Efficient Mortgages. The folks I spoke with at HUD felt the product was not particularly successful for reasons such as lender acceptance, difficulty of estimating savings, and general disinterest.

Now comes HUD ResearchWorks to highlight a renewed push via the Housing and Economic Recovery Act of 2008. In addition to the usual ‘tasking of HUD’ laundry list, HERA 2008 increases the approved cost of the energy efficiency upgrades to 5% of the property value from the previous cap of $8000.

I am hoping to catch up with some more HUD folks either at NBM or at December’s EcoBuild and provide additional information.

Know what you have

Buildings.com has a good entry in Mychele Lord’s multi-part series on sustainable issues in real estate, “It’s a Bigger Deal than You Think, Part 3: Operations”. One of the recommendations I found thought provoking was her admonition to plan before purchasing.

“Start thinking about waste disposal at acquisition. When negotiating purchasing contracts, address end-of-life recycling.”

This is useful not only for everyday items, but also for the waste-generating items like appliances, paints, and carpets. The tremendous number of carpets — we annually replace about 20% in my LIHTC portfolio — generate a stunning amount of waste. There are a couple of ways to recycle carpets, but so far, the network is very patchwork. You can learn more at CARE.

Green Matrix

Ratcliff Architecture of Emeryville, CA and Alameda County (via Build Green Now/Stopwaste.org) jointly sponsor Green Matrix, a well-designed and researched website for sustainable decision making throughout the design and construction process.

After selecting an area of interest from the eponymous matrix, the site then serves up a summary of the concept with direct links to other resources. Many of the links can be found on stopwaste.org but others lead to IFMA (International Facilities Maintenance Association), USGBC, and other industrial resources.

Spreading and Refining Sustainable Guidelines

Lots of discussion about the increasing use of sustainable guidelines and controversy over the refinement of these same guidelines. There’s also plenty of anecdotal comments about what the current real estate recession might mean for green building here in the US. Better and more complete coverage can be found at:

1. Jetson Green

2. Building Sustainability

3. Building Green

4. Green Building Law Update

So while others talk about spreading, revising, and postponing, here are two ways to keep track:

1. The new AIA white paper, “Local Leaders in Sustainability”

2. The original clearinghouse, Database of State Incentives for Renewables & Efficiency (DSIRE)

HT: Facilities Net

Praise for The Cooperator

I’ll be posting links to The Cooperator periodically. The Cooperator is a free publication from Yale-Robbins and targets managers and residents of condos and co-ops. Information includes guides to hiring building staff, insurance coverage for co-op boards and directors, and building retrofits. Information is well presented, provides additional resources, and is applicable to all types of multi-family housing types. The archives are free and I highly recommend it.

The Cooperator

Writing a Green Lease (BOMA Guide)

For non-residential readers, a new lease guide with language specific to green building incentives was released by BOMA (Building Owners and Managers Association), an international organization of landlords and commercial property managers BOMA’s Lease Guide, including green lease language. Much like leases from an apartment association, BOMA leases are the boilerplate upon which many landlords rely. When language likes this makes the industry boilerplate, the concepts have gone mainstream.

I no longer do enough commercial leasing to justify the $70 for this guide, but I found it interesting that the guide specifically identifies the contradictory incentives inherent in most sustainable efforts. Per BOMA:

“The BOMA Green Lease Guide offers an alternative to the typical triple net lease, where the landlord pays for capital improvements but the tenants, who pay the utility bills, reap the benefits of energy savings. The language included in this document gives owners the right as standard procedure to pass through to tenants any capital costs that result in lower total operating costs. The new green language ensures that maintaining, managing, reporting, commissioning and re-commissioning the building to conform to a green certification or rating program is included in the pass through costs.”

(Via FacilitiesNet.com.)

Residential recycling programs

This is not something that has popped up on my radar because none of my markets have new recycling programs. The write up from Multi-Housing News doesn’t provide much information, but a quick Google search was able to find these additional resources:

Tailoring Recycling Programs to Reach Diverse Populations
(California Integrated Waste Management Board)

Setting up a Multi-Family or Apartment Building Recycling Program (document file from Massachusetts Department of Environmental Protection)

Recycling Program for Apartment Buildings
(Cooperator)

Recycling: Multi-family Properties and Recycling for Apartments and Condominiums (28-page guide from Arlington County, Virginia)

New York City’s Apartment Building Recycling Initiative (nyc.gov)

Talking Trash: Launch a Multifamily Recycling Program
(Multifamily Executive)

Panelists Explain How to Properly Run a First-Class Recycling Program (Multi-Housing News)

Multifamily projects typically have a difficult time promoting recycling because of resident turnover (inconsistent resident education), inconvenience (inadequate space within the unit or the building), resident anonymity and incomplete participation, and inability of cities to provide public recycling haulage. There are some very good pointers in these links that discuss how to reach diverse populations, identify areas of probable success, and how to education on-site staff.

Befitting its industry focus, the article from MFE identifies the costs for a company like Post.

“Post pays the waste removal company Conex Recycling a $150 flat-rate fee per property per month. Regardless of the size of the property, that service fee covers pickup and disposal of the recyclables, as well as labor and tipping fees. Post saves an estimated $100 per ton recycled, or about $120,000 a year on landfill costs, explains Shannon Sibbitt, the development director of Atlanta-based Conex.”

(Via Multi-Housing News.)

Flex your power: Hotel Energy Efficiency

Good sustainability resources for multifamily were once so hard to find that I spent much of my time immersed in the hotel world. I still wander through it periodically to see what new developments might be co-opted for longer-term residents.

Flex your power, a project created by the California Public Utilities Commission, has a multi-page summary of efficiency and conservation practices. The ideas aren’t all new and they’re not particularly detailed, but as something to give your site and service managers, it works very well.

In the DC area, many of our best service managers came from the hotel world and were already familiar with these ideas when we started to introduce them to multifamily projects.

Greener Buildings: Water saving tips

I’m still reviewing some of the data on a major efficiency drive at one of my properties, but the initial read is that we may have reduced water use by 30%+ after a six week program. Once I’ve confirmed the initial results I’ll share them in greater detail.

In the meantime, I’m happy to highlight an article from a company I really admire, Melaver of Savannah.

I encourage everyone to read the entire article, but two overlooked items really jumped out.

The first is placing irrigation on a separate meter where your water utility will allow it. The reason for doing so is to remove water used for non-potable purposes from the sewer bill. In a place like Knoxville, where we’ve encountered astonishing increases in sewage rates, this kind of separation can provide a payback in under 2 years.

The second idea is looking at aerators. Changing the aerators from the usual 2 gpf to ones that reduce flow to 0.5 gpf makes a real difference. We use conical aerators, which allows sediment to settle at the bottom but not impede water flow.

Water Savings 101: Top 10 Tips for Commercial Buildings | GreenerBuildings: “”

(Via Greener Buildings.)

ROI table from Green and Save

Green and Save, written by the wife and husband team Cynthia and Charlie Szoradi, provides a handy ROI table for various efficiency initiatives. They split the ideas into three tables, tune up, remodel, and advance, and provide information on initial investment, anticipated savings, payback period, and ROI. I can’t vouch for all the math yet, but it is a very handy checklist for residential owners.

More here: Home Remodeling ROI.

(HT: Green Building Elements)