Operations: Sustainable sites lead to simpler life

San Marco, a Walking Oasis in Jacksonville, FL. Every neighborhood has some walkability or simple mobility element.

In the prior post on LEED v3 changes, I touched on the sustainable sites requirement. Essentially LEED is attempting to encourage a bit of smart growth by reducing the number of vehicle trips generated by development (and separately develop in areas with existing infrastructure or minimally disturbed greenfields). For this post, I’m focusing on existing communities that either are not actually or do not consider themselves sustainable sites.

Operationally, you can create a sustainable site by studying your neighborhood, using resources such as Yelp, Urban Spoon, and other location-based web services to help residents find their way. For those exploring social media, culling local event listings provides great fodder for resident-focused Twitter feeds.

Celebrating or publicizing neighborhood based events, services, or vendors enables managers to serve as (apartment) community resources, local economic generators, and pushes the apartment community into the center of a resident’s life, rather than simply a place to sleep. Understanding and sharing information about locally-based resources puts a little more meat to the notion of “Life made simple.”

Focusing on your immediate surroundings improves your local outreach efforts by showing businesses 1) your property is a part of the neighborhood, not just a parcel; 2) better acquaints you with the employers and employees of the neighborhood. Finding potential residents within your local surroundings greatly improves the chances of renewal, and I strongly believe reduces your overall marketing costs.

As an operationally-focused asset manager with a portfolio of over 50 properties nationwide, I consistently found that 35-50% of my new resident prospects came through drive-by. When added to the number of resident referrals, that number was consistently between 40-65% of total applications. Signage, landscaping, and general appearance (all of which affect existing residents as well) is a far stronger indicator of the living environment than a static print ad. Reaching prospects while in the context of searching for a new home and residents while in the context of their daily life is a better use of marketing efforts because it provides something of use to your customers. Very few management companies do this well and with such a low hurdle, any sustained effort is appreciated.

At every property visit, in every conversation with managers and leasing agents, I asked some variation of the following questions, my keys to a ‘sustainable site’:
1. Do you know where you are? Do you know how to get here?
2. Who lives here and why?
3. Where do your residents work?
4. What is there to do around here?
5. Where is the nearest park, house of worship, child care center, grocery store, and school?
6. How do you involve the property with the surrounding community?

If you can’t identify your property as part of a larger community and explain that role to a resident, you’re not trying to improve sustainability, you’re not looking beyond your property line, but most damning, you’re not trying to make life simpler for your residents.

News: WBJ summarizes LEED v3

The Washington Business Journal provides a quick summary of changes in the new LEED 3.0 standard.

The standard implements and expands upon a few items I’ve written about before, specifically “sustainable sites” as part of a post, “Where does your life take place?” and “Needs more data”.

From an operational perspective energy tracking and reporting requirement (LEED requires reporting to the USGBC for 3-5 years) is the most important improvement from prior versions. Tracking and analyzing energy usage, comparing to baseline, and looking for additional efficiencies should be the most lasting legacy of this LEED version. While the reporting requirements have invited animated discussions, using energy analysis to improve LEED and all building science provides the path toward cost savings and greater loan proceeds (two items close to any developer’s heart).

I’ll have a short post on additional operational implications shortly.

Operations: Live monitoring of electricity use works

Since Earth Day, I’ve been following Energy Circle’s energy monitoring experiment. With the combined resources of a household electricity monitor and Twitter (plus an assist from some Google-fied graphics) they are nearly 90 days into a fascinating experiment.

With a reasonable passage of time, it was appropriate to provide an update. In this case, Energy Circle advocates that real-time monitoring works (24 hours later doesn’t).

You really should follow through for the full story, but here are the main reasons:

1. Spikes Hurt.
2. Baseload Matters.
3. Our house has a heart beat.
4. Humans screw up.
5. The right tools are critical.
6. Data=Action.
7. Some bulbs really cost you.
8. Efficiency is a family matter.
9. The little shifts count.
10. Real-time leads to a real map of action.

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:

Grand Unifying Theory of Sustainability (pt. 1)

Over the next few weeks, scattered amongst posts on GAO and HUD, the latest upheaval with LIHTC, and hopefully some more tales from the trenches, I’ll be attempting to outline my thoughts on what it will take for building sustainability and sustainable operations to become part of the vernacular. I’m starting with the aspect I’m actually least familiar with, insurance.

Insurance, by popular understanding, hedges against the risk of contingent loss. By varying pricing based on operations, materials, and design, insurance serves as a nudge to encourage lower risk profiles. In theory at least. We’ll leave unresolved questions about whether this risk reduction is always well reasoned or if you really get better pricing through these changes.

So it was unsurprising to read in Ceres’ new report “Risk to Opportunity” that insurers are moving from superficial PR “towards [thinking] more deeply and strategically institutionalized and embedded in the operations of companies.”

Climate change is becoming recognized as an issue of Enterprise Risk Management, spanning underwriting, asset management, and corporate governance.

One of the most constructive developments is more products and services focused on ensuring the quality of the customer’s energy or carbon savings efforts. These include performance insurance for renewable energy systems, coverage for green buildings that don’t deliver promised performance, and products that apply to carbon offset and trading activities. In all cases, loss-prevention takes the form of due-diligence, scrutiny of engineering assumptions, preventive maintenance, commissioning, measurement and verification, and other constructive interventions to help ensure project integrity and success.

Although released in April 2009, the report covers products existing or introduced in 2008. In many ways, the finding that some insurers were moving much faster than others led to the March 2009 action by state insurance commissioners to require that insurers reveal exposures and responses to climate change. How this will be enforced and what the ‘right’ answers are will be revealed when the responses are provided in March 2010.

[Note: The quote above was taken from an interview with study author Evan Mills with Climate and Insurance.org, an arm of industry advocate NAMIC, which does not like (really doesn't like) the new climate exposure mandate. Ceres retorts that "Insurance trade organizations remain relatively disengaged on climate change." Plus ça change, I suppose.]

Why does this matter? Because outside of government and its multiple layers, insurers and financial firms are best positioned to promote the systemic change in the built environment needed to achieve goals like Net Zero Energy, Architecture 2030, or multi-family specific programs like Greener Communities.

Insurers are perfectly placed to make the case for unifying “green” and “disaster-resilient”
practices across many domains (construction, energy, agriculture, land use), yet scant effort has
been exerted in this regard. It will become increasingly incumbent on insurers to demonstrate
the loss-reducing benefits of the green technologies and services that they reward. Loss-prone
infrastructure cannot be truly “sustainable”.

It’s worth recalling this recommendation from “Resilient Coasts”:

“Wise investing will involve asset managers understanding the impacts of climate change on their investments and managing that risk, especially in real estate, infrastructure and other financial instruments. Responsible banks will need to understand the levels of exposure within their investment and lending portfolios by incorporating climate risks into their due diligence.”

Change is coming in a thousand different ways from code changes, insurance, finance, builders, housing agencies, governments, and most importantly, residents. We’ll start addressing the financial world in short order.