1. The Green of Green: 25 Ideas to Cut Costs and Turn a Profit with Sustainable Design Moderator: Rachel Azoff, Multifamily Executive Speakers: Dori Eden, KBKG Fred Schreiber, AMLI Residential Doug Walker, UDR

2. Multifamily housing accounts for 18% of nations housing stock. Rental housing accounts for 83% of all multifamily housing. Energy prices are rising faster than overall rate of housing costs in U.S. Between 2003 to 2006, housing costs increased by 110%, while energy costs rose by 126%. Retrofits can improve energy efficiency by 30-75% depending on the initial state of the building. Wasteful energy use poses a threat to maintaining affordable rental housing. Key Sustainability Facts

3. www.energystar.gov for benchmarking tools > Gather electric bills for past 12 months > Several analytical tools to see baseline energy usage Members of Building Owners & Managers Association > Compare your buildings performance with other members buildingswww.energystar.gov Idea #1 – Evaluate Your Buildings Performance

4. Idea #2 – Conduct an Energy Audit Make sure to use a trained auditor. Several national programs that utilize whole-building approach: HERS (Home Energy Rating System) BPI (Building Performance Institute)

5. Idea #3 – Know Expected Utility Inflation

6. What gets measured, gets focused on Enable (and reward) property managers who can effectively manage utility usage Cant drink water out of a fire hose – must make the utility data actionable Idea #4 – Measure and Communicate Energy Usage

7. Idea #5 – Resident Education Provide residents with context to understand their relative energy usage Share tips and best practices to reduce resident usage Effectively communicating is critical when implementing energy-saving or water-conserving strategies

8. Idea #6 – Partner With Your Residents Partner with your residents by coupling capital improvements with usage reductions

9. Streamline the permitting process for building, plan, and site permits on projects that achieve a certain level of sustainability Cities waive or reimburse application, building, or permit fees for specific levels of LEED & other green building rating systems – excellent for the party funding the construction Idea #7 – Expedite Permitting

10. Apartment developers and homebuilders can obtain 45L Federal Tax Credit of $2,000 per energy-efficient dwelling unit Less stringent $1,000 tax credit available for manufactured homes Heating and cooling energy consumption must be at least 50% below that of a reference dwelling designed according to 2004 energy standards Building envelope must provide a level of heating and cooling that is at least 10% below reference unit. Idea #8 – 45L Federal Tax Credit Reduces Liability

11. 100% of the Units Passed $412,000 Tax Credits Key specs include: > HVAC13 SEER A/C 7.7 HSPF Heat Pump > Insulation R-13 wall > R-30 attic Windows U-Factor 0.45, SHGC 0.35 45L Tax Credit Case Study: 206-Unit Apartment Complex in Columbus, GA

12. 100% units passed $110,000 tax credits Barely passed 2005 T24 Key specs include: > HVAC13.0 SEER A/C Hydronic Heat > Insulation R-13 wall > R-38 attic windows U-Factor 0.39, SHGC 0.38 45L Tax Credit Case Study: 55-Unit Apartment Complex in Danville, CA

13. 100% units passed $410,000 Tax Credits Key specs include: > HVAC 9.4 SEER A/C Hydronic Heat > Insulation R-19 wall > R-49 attic windows U-Factor 0.32, SHGC 0.32 45L Tax Credit Case Study: 205-Unit Apartment Complex in Plover, WI

14. IRC Section 179D allows for an immediate depreciation deduction of up to $1.80/sf for commercial buildings that achieve a 50% reduction in total energy and power costs Building Envelope - HVAC - Interior Lighting Multiple paths to deduction: > Whole $1.80/sf for 50% reduction in total annual energy cost related to HVAC and interior lighting in comparison to 2001 energy standard > Partially-qualifying property: $0.60/sf for building envelope $0.60/sf for HVAC $0.30 to $0.60/sf for interior lighting > Fractional deduction through interim rule Idea #9 – 179D Energy-Efficient Building Deduction

15. The Energy Independence Act of 2007 and its Energy Efficiency & Conservation Block Grant of 2007 authorizes $2 billion in grant money to communities and states Grants for energy audits & other technical assistance Idea #10 – Grants Offset Development Costs

16. Grants and loans : Two ways to help small businesses build green and can be especially effective in jurisdictions that do not have established green building programs ESCO : Energy Service Companies are performance-based contractors; compensation and financing are linked to amount of energy saved Mortgage lenders : Finance affordable multifamily housing via institutions, pension funds, government, and other low-interest subsidy providers Special programs : Finance the retrofit of older apartment buildings in low-, moderate-, and middle-income communities Idea #11 – Loans for Green Improvements

17. Weatherization Assistance Program (WAP) The rule expressly indicates that income-qualified public housing, assisted housing, and LIHTC properties may be eligible recipients of WAP funds. The rule does not, however, require states or local WAP service providers to set aside WAP funds for these properties. In 2006, states used WAP funds to provide energy efficiency improvements to approximately 16,000 multifamily units. U.S. D.O.E.s State Energy Program (SEP) Funding for energy-related projects including energy audits, retrofits, education, training, and new financing mechanisms to promote energy efficiency and renewable energy. State can create grant or low interest loan programs. Special Programs Continued …

18. Rebates from cities: Example: Pasadena, CA Water & Power High Performance Building Program – Developers who exceed the minimum certification will receive one months electricity savings for each percent efficiency better than code the building performs up to $100K. Example: Elizabeth, NJ offers up to $5,000 in rebates for documented energy saving expenses in low-income housing developments. Idea #12 – Rebates and Incentives

19. State Income Tax Credit Example: NY State Energy Research and Development Authority: This program offers rebates on certain Energy Star products. Rebates range from $75 - $150 DOEs State Energy Program invests $328.5 million to 12 states and territories to support energy-efficiency projects that will lower energy bills Rebates from utility companies for energy-efficiency Counties offer rebates Example: City of Santa Clara, CA water heating program; city offers solar water heaters and lease out Rebates and Incentives Continued …

20. Municipalities can purchase energy-efficient appliances in bulk and offer discounted prices City can provide a rebate for water conservation or energy use Idea #13 – Discount on Environmental Products

21. Idea #14 – Install High-Efficiency Lighting Every 3-watt reduction in lighting power results in roughly a 1-watt reduction in HVAC. Lighting Strategies: More efficient luminaries, ballasts, and lamps, Bi-level switching Interior and Exterior Lighting Case Study: Retrofit Property > Lighting Investment: $64,000 > Reduction in Energy: $1,000 per month > Annual Savings: $12,000 > Payback in approximately 5 years

22. The application of super insulating panels wrapped around the exterior of the building will increase the thermal insulation of the concrete. Idea # 15 – Apply Super Insulating Panels to Exterior

23. 30% tax credit for solar energy property PIS by December 31, 2016 Equipment which uses solar energy to generate electricity, to heat or cool a structure, provide hot water in a structure, or to provide solar process heat Equipment which uses solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight Solar energy property also has a 5-years MACRS tax life; depreciable basis is reduced by half of the credit Potential to apply for grants in lieu of credit in 2009 and 2010 Solar water heaters Idea #16 – Install Solar Panels and Obtain Section 48 Tax Credit

24. Pool heaters Parking lot areas Water heaters Solar Panels Continued …

25. Idea #17 – Windows & Openings Doors and windows often causes significant heating/cooling losses: Install glazing Caulk and properly seal Replace w/ low-e windows

26. Dimmer settings Bi-level switching Motion sensors Timers Idea # 18 – Lighting Controls

27. Idea # 19 – Envelope Upgrades Caulking/Improve air sealing Add insulation Improve duct sealing

28. Idea # 20 – Preventative Maintenance Develop green maintenance program with best practices approach to sustainability of building and systems: Regular cleaning of evaporative coil Regular filter replacement Check water heater temperature settings

29. Install New: Shower heads Low-flow toilets Aerators Flush valves Dual flush Idea # 21 – Low-Flow Plumbing Fixtures Leak detection is also critical!!

30. Water and drought-resistant landscaping Reclaimed water Irrigation sensors Timers Pest control, landscape & pool vendors use green products Idea # 22 – Landscaping

31. Idea # 23 – Reflective Roofing Reduces Heat Island Effect Cool roofs are one of the quickest and lowest cost ways we can reduce our global carbon emissions… Dr. Steven Chu US Secretary of Energy

32. Idea # 24 – Programmable Thermostats Put Residents in Control of their Energy Use ENERGY STAR programmable thermostats can save up to 33% in annual electric bills Precise, accurate control results in greater comfort

33. Sullivan Place Energy-Efficiency Experiment

34. Idea #25 – Increase Recycling In many municipalities, recycling is either subsidized or collected at a flat fee

35. The Green of Green: 25 Ideas to Cut Costs and Turn a Profit with Sustainable Design Questions? E-mail us! Dori Eden, KBKG: dori.eden@kbkg.com Fred Schreiber, AMLI Residential: fschreiber@amli.com Doug Walker, UDR: dwalker@udr.com