Peabody Properties has realized an estimated energy savings throughout its rental housing portfolio of more than $2 million annually.
While many homeowners have been taking advantage of greener energy initiatives for years — whether it be by replacing outdated lightbulbs and showerheads or installing solar roof panels and tankless water heaters — property management firms have recognized that the initial expenses in undertaking energy upgrade or retrofit projects are far outweighed by the potential return on investment. Sustainability initiatives do require an organization to devote a certain amount of time, coordination and energy, but the multiplication factor of one project impacting several units is hard to ignore.
For property management firms that have decided to commit to incorporating sustainability initiatives but aren’t sure how to begin, a great place to start is with the U.S. Department of Energy by signing on as a Better Buildings Challenge partner and make a 20 percent energy reduction commitment across your portfolio within 10 years. Or, sign on as an Alliance Partner, where you make your own internal commitment.
During the past several years, Peabody Properties Inc. has been able to secure more than $14.5 million in zero-cost property upgrades by researching and capitalizing on various utility- and state-funded energy conservation programs. To continue to stay on top of their energy saving initiatives, they joined the Better Buildings Challenge in 2014. At that time, the organization committed to a 20 percent reduction in energy use by 2022, with over 10 million square feet in housing participating and 281 utility property accounts (using the baseline year of 2012).
Peabody Properties has additionally realized an estimated energy savings throughout the portfolio of more than $2 million annually, and has improved more than 7,500 units of affordable residential housing through energy retrofits. While $14.5 million is a large number with an undeniably significant impact on the company’s bottom line, it’s important to keep in mind that the figure comprises many smaller numbers that combine to multiply their impact over time. Here are just a few examples:
Julia Martin House (Jamaica Plain, Mass.):
In September 2015, this 56-unit community underwent a gas retrofit. The Action for Boston Community Development (ABCD), which locally administers the Massachusetts-offered LEAN (Low Income Multi Family Energy Retrofit) Program, provided 100 percent of the cost for a new boiler ($102,963), resulting in a total gas consumption reduction of 34 percent and an annual gas bill reduction of $6,086.
Blue Elm United Estates (Dorchester, Mass.):
This 285-unit community underwent an electric retrofit in February 2013. This project realized $413,679 in no-cost funding through the LEAN program, with $16,751 in initial savings realized in the first year and an overall energy reduction of 22 percent.
Borden Place West (Fall River, Mass.):
The 110 units at Borden Place West underwent a gas upgrade in January 2014, and realized an initial first-year savings of $22,175.50 after receiving $164,730 in no-cost funding through Citizen for Energy. Overall energy usage was reduced by 37 percent.
Congregational Retirement Homes (Melrose, Mass.):
Toilet upgrades were put in place at the Congregational Retirement Homes (made up of three buildings: Levi Gould, Fuller House, and Jonathan Cochrane) in September 2014. Overall, water usage was improved on a per-toilet-basis from 3.5 gpf to 0.8 gpf. Specifically, Levi Gould received a $45,198 investment from RR, with an anticipated ROI timeframe of 1.6 years, and savings of $23,942 (or 32 percent). Fuller House ($51,015 RR investment) and Jonathan Cochrane ($44,750 RR investment) both have anticipated ROI timeframes of 1.8 years, with realized annual savings of $19,662 or 24 percent and $19,583 or 25 percent, respectively.
Pynchon Apartments (Springfield, Mass.):
December 2015 boiler and DHW upgrades took place because of a partnership with the Center for EcoTechnology and Columbia Gas, which combined covered 50 percent of the total project cost. The anticipated savings include 120 tons of CO² annually, which is the equivalent of powering almost 10 homes every year.
Braintree Village Apartments (Braintree, Mass.):
A 2015 heating retrofit project for this 1972 property benefited from $990,000 in funding through RISE Engineering & National Grid. As part of this project, 47-year-old equipment was brought inside the buildings and off rooftops, and 27 new high-efficiency Lochinvar® boilers (wall-mounted, 285,000 BTU/hour) were installed. Additionally, new indirect water heaters were placed at each location, high-efficiency pumps replaced outdated ones and separate domestic hot water was added. These improvements resulted in a site energy reduction of 42 percent (and a happier Service Manager who no longer had to climb on rooftops to service the equipment).
In addition to these savings, a program dedicated to sustainability initiatives is also a great marketing tool for property managers. Homeowners looking to downsize may be drawn to a property that shares the same commitments to green energy practices that they themselves implemented in their own homes.
Property managers looking to make changes should explore local and state funding programs; develop relationships with overseers of these programs and ask lots of questions. Be ready to move forward right away, even if the timing isn’t ideal — make it work now, rather than delay because of weather or other outside factors. Be sure to engage with residents about upgrades and communicate plans and potential benefits, but also be ready to ride out the complaints of a new system. Change can be hard for anyone, but most residents come around to appreciating the upgraded systems and their ability to improve their homes. Finally, if a property is going through a refinancing event, calculations can be performed to further improve both the net operating income and cash flow by funding additional conservation projects that will keep the savings coming!
Elizabeth Merzigian, LEED Green Associate, CGPM is Facilities Manager–Sustainability Initiatives for Peabody Properties Inc.