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Building Resiliency with Tools, Trends & Energy Strategies

Building resilience
December 2019

How resilient is your apartment community? That’s a question the rental housing industry increasingly asks as climate-related hazards take a larger toll on their buildings.

For context, 2017 served as a record-setting year with $300 billion of claimed insurance-related losses in the commercial and residential sector. That’s the result of hurricanes, floods, tornadoes and other climate-related events. The average amount of such claimed losses had been about $19 billion per year since 1980.

The recent spike underscores the need to assess climate-related risks throughout a portfolio and explore the latest energy strategies that can help curtail any future damages. A panel of experts shared their thoughts at the session “Building Resilience with Tools, Trends & Energy Strategies” at NAA’s Apartmentalize.

“These events are occurring more frequently and with more intensity, and they’re really costing the U.S. economy a lot,” said Deborah Cloutier, President of RE Tech Advisors. “With that, they are really costing the real estate owners, along with multifamily owners, significant amounts of insured losses.”

Apartment owners and operators can counteract this trend by building more resilient communities, spurred by energy initiatives. Resilience refers to a building’s ability to resist being affected by an event, or the ability to return to an acceptable level of performance in an acceptable level of time after temporarily closing.

According to the U.S. Department of Energy (DOE), energy efficiency increases a building’s ability to maintain habitable conditions in the event of heating or cooling loss. For example, green roofs and passive solar heating allow buildings to remain warmer in the winter months and cooler in the summer. Energy efficiency initiatives can also team with onsite energy generation to create long-lasting backup power in the case of an outage.

“From the perspective of the U.S. Department of Energy, the problem we’re trying to solve is that the U.S. spends on average $600 billion each year to power our homes, industrial plants and commercial residential buildings,” said Cindy Zhu, Fellow of the DOE. “However, we know there are great opportunities in energy efficiencies across all of these sectors. Each could experience 20 percent or more in cost savings by using technologies or strategies that are cost-effective.”

Zhu noted that the DOE unveils several grant opportunities each year, and that rental housing operators should take advantage by applying. This will help counteract the trend of businesses either failing to prioritize energy efficiency or leaning on federal bailouts to avoid using pre-insurance or building resilient communities.

“There are a lot of perceived risks in adopting new technology or new strategies for operations,” Zhu said. “But there are many options with various energy efficient service providers and technology providers.”

According to the panel, apartment operators should be aware of rising sea levels and other significant weather patterns as they pertain to major markets.

They should also be able to distinguish between acute risk (hurricanes, tornadoes, etc.) and chronic risk (water scarcity, rising sea levels, etc.).

The energy efficiency trend is catching on, as 32 of the Fortune 100 companies and 12 of the U.S.’s top 25 employers now partner with the DOE’s Better Buildings initiative, which is designed to drive leadership in energy innovation. As disasters and climate events become more common, expect many in the rental housing industry to follow suit.