Multi-Family Green Case Study

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For the last weeks I was on an east coast tour meeting with clients and working on projects in Pittsburgh, Maryland and Washington, DC.  All of the projects are as different as the cities and clients who own them.  We’re working on a 20-unit multi-family building in Pittsburgh and a few row-houses and semi-detached homes in DC.  The Pittsburgh deal is turning out to be a unique project so I thought you might enjoy learning more about it.

The project is a 20-unit, multi-family brick building in the outskirts of Pittsburgh.  The building is older and the although the units are structurally fine, they still could use some updating.  There are 5 vacant units that have been vacant for a while.

The utility bills are pretty high for the neighborhood, largely due to the structure of the building.  The inner walls are all plaster, there are no thermostats (just radiators) and the building is three stories.  Heat comes from 2 old boilers (circa 1980) that keep the first floor warm and the top floor extremely hot.

After a thorough audit of the building here are some of our recommendations to the client:

  1. Insulate the walls with closed-cell foam insulation.  Shoot it in from the outside by drilling through the mortar in certain areas and injecting the insulation in.  The tenants won’t be bothered because it will done on the outside of the building so no worry there.  Also, the closed cell insulation won’t expand so there is no danger of the walls buckling.  He’ll cut his gas bill in half by doing this.
  2. Insulate the ceiling with fiber wool insulation.  This is a no-brainer cost-effective solution for the client.
  3. Replace all water fixtures (tub, shower-head, faucets) with low-flow models.  We got him a corporate discount at Lowes and after the rebates he’ll save 20-60% on what he would have spent.
  4. We found a loan program in Penn that would allow him to finance all of the energy-efficiency improvements that he completes that result in at least a 25% reduction in energy usage.  It’s a little known Stimulus fund program that would give him up to 15 years to pay the loan back with rates between 4-6.5%.  I spoke with the Director of the program and based on our preliminary discussions, our client would be able to finance almost all of the work he’s scheduled to complete.  Needless to say, he was very happy to hear that.
  5. Replace all common area t-12 tube lights (fluorescent) with t-5’s.  T-5’s are much more energy efficient and there is a rebate for him to replace all of the ballasts, fixtures and lights so that it will effectively cost him nothing to do this.
  6. Audit the energy usage over the next year.  He may be applicable for a program that gives him a cash incentive for the amount of kilowatts he saves over the next 12 months.  The utility company takes the 2010 usage and compares it to the next 12 months immediately following energy-efficiency improvements.  Under this program, he’d get a cash payout based on the amount of kilowatts he’s saved.

Those are just a few of the things we recommend.  As this project progresses I’ll continue to update you on it.

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About Author

I help real estate investors increase profits and property values through a variety of green strategies. I help clients find hidden rebates, tax incentives and credits to maximize returns on any property. www.JimSimcoe.com

2 Comments

  1. Nicely done. There’s not enough written on “going green” in the multifamily / rental housing world these days. The information has largely dried up the last few years while the economy has struggled and a lot of the government incentives have dried up.

    Will Johnson
    Publisher
    The Landlord Times

  2. Thanks, for the kind words, Will. Your market (landlords) should really take advantage of ‘green’- there is so much $$$ available to them in terms of rebates, etc. Call/email me offline if you want more info.
    Thanks..Jim
    jim at jimsimcoe dot com.

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