Multifamily Performance TestingBuilding Energy Rating & Disclosure:A Catalyst for EfficiencyAIAMay 16, 2012 Cliff Majersik...
Energy Star Buildings CommandMarket Premiums               Added Value of ENERGY STAR-Labeled              Commercial Buil...
New Guidance for Appraisers                         • Provides real estate                           appraisers with guida...
Benchmarking on the Rise                           4
Existing Buildings                     Projection:                     85% of buildings                     operating in  ...
Building Energy Rating and Disclosure                                        6
A Familiar Concept                     7
A Virtuous Cycle                   “When performance is measured,                   performance improves. When            ...
Small Businesses and Job Creation  Benchmarks Guide Investment                                    Survey of hundreds of fa...
Rating Laws: International Timeline                                                    2004: Norway,                      ...
U.S. Policy LandscapeU.S. Policy Map, State and Local
U.S. Policy Overview  Policy Impact Projections          Annual Building Area                  Annual Number of Buildings ...
Policies by JurisdictionAll U.S. policies leverage the ENERGY STAR Portfolio Manager tool                             Benc...
New York CityNYC Greener Greater Buildings Plan• Requires annual benchmarking and public disclosure,  periodic audits and ...
AustinAustin Energy Conservation and Disclosure Ordinance (ECAD)• Requires time-of-sale audits for single family homes, au...
Small Businesses and Job Creation               Jobs                                    First report documenting job growt...
Jobs       “As a Silicon Valley venture capitalist … I tell our green startup companies to focus on San       Francisco or...
DC Benchmarking: Phase in by size                     Utility      First        % of Covered  % of Total Building Size    ...
DC Benchmarking: Publication ofResults• Benchmark results will be made public in 2nd reporting yr• Results will be reporte...
Target Finder for New DC Buildings• DC Energy Act also requires projects over 50,000 sq. ft. that  submit 1st building per...
The Data Access ChallengeSome owners cannot access tenant energy consumption dataOwners need whole-building energy data to...
Resources    IMT rating policy     www.imt.org/rating    IMT policy implementation framework     www.buildingrating.org/...
• Efficiency Utility• Funded by utility surcharge   • 11 cents per kwh and therm• Created by 2008 Clean and Affordable Ene...
• Create green jobs for District residents• Stimulate the local economy• Reduce energy use throughout the District,  parti...
2012 Multi-Family Initiatives     Market Rate Multifamily       • T12 Lighting Replacement       •   Custom Programs    Lo...
DC Benchmarking Resources• Webinars from U.S. EPA• DC SEU Benchmarking Help Center:  • Technical assistance with ENERGY ST...
Incorporating Energy Efficiency into MortgageUnderwriting  Aligning mortgage policy with energy efficiency      Energy co...
Mortgage Underwriting:• Borrower capacity is adjusted for  energy costs.• Value of the home reflects the  energy cost savi...
•    SAVE Act (S. 1737) introduced by Senators Bennet     (D-CO) and Isakson (R-GA)•    If passed, SAVE Act would create 8...
The SAVE Act: S. 1737      Leading business, industry, and environmental support the proposal.
Thank You
Cliff MajersikExecutive DirectorInstitute for Market TransformationWashington, DCcliff@imt.org202-525-2883www.imt.org/rati...
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Building Energy Rating & Disclosure: A Catalyst for Efficiency

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85% of buildings in operation in 2030 will be buildings we already have today. That means we need to maximize their efficiency. Building energy rating & disclosure--tracking the energy consumption of buildings and comparing it--is an effective way to catalyze greater efficiency.

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  • We know that a homeowner who spends less on energy will have more money to make mortgage payments, yet mortgage lenders largely ignore these costs when qualifying a family for a home because they’re not part of standard mortgage underwriting criteria. The typical U.S. Household spends more than $2,300 in annual energy costs – more than the average cost of property taxes or homeowners insurance, two expenses that are routinely underwritten in a mortgage loan.Over the course of a 30-year mortgage, energy costs can accumulate to over $70,000. This is a huge cost, especially considering the median U.S. home price is around $175,000. The SAVE (Sensible Accounting to Value Energy) Act, a new proposal championed by Senator Michael Bennet (D-CO) with support from efficiency advocates and leading homebuilders, would seek to correct this energy “blind spot” in mortgage underwriting and appraisal.
  • Building Energy Rating & Disclosure: A Catalyst for Efficiency

    1. 1. Multifamily Performance TestingBuilding Energy Rating & Disclosure:A Catalyst for EfficiencyAIAMay 16, 2012 Cliff Majersik Executive Director Institute for Market Transformation Washington, DC www.imt.org www.buildingrating.org cliff@imt.org 202-525-2883
    2. 2. Energy Star Buildings CommandMarket Premiums Added Value of ENERGY STAR-Labeled Commercial Buildings in the U.S. Market 2
    3. 3. New Guidance for Appraisers • Provides real estate appraisers with guidance to analyze the effects of energy performance on the value of commercial and multi-family buildings • Enhances credibility of property valuation by helping appraisers find, understand and use available information • imt.org/commercial-finance
    4. 4. Benchmarking on the Rise 4
    5. 5. Existing Buildings Projection: 85% of buildings operating in 2030 have already been built 5
    6. 6. Building Energy Rating and Disclosure 6
    7. 7. A Familiar Concept 7
    8. 8. A Virtuous Cycle “When performance is measured, performance improves. When performance is measured and reported back, the rate of improvement accelerates.” 8
    9. 9. Small Businesses and Job Creation Benchmarks Guide Investment Survey of hundreds of facility managers . Audin, Lindsay. “Finding Your Best Energy Opportunity.” Building Operating Management. December, 2011. 9
    10. 10. Rating Laws: International Timeline 2004: Norway, 2010: EPBD Recast part of the European The EPBD is recast to Economic Area, formally strengthen the energy agrees to implement the 2007: Brazil adopts voluntary performance EPBD and building 1997: Denmark building rating regulations that requirements for all EU certification requirements requires energy become mandatory in 2012 Member States and to certification for clarify and streamline homes and provisions from the buildings original Directive 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2002: 2008: China Energy Performance adopts a mandatory of Buildings Directive energy rating (EPBD) EU Member program for States are required to government 2010: Australia establish mandatory energy buildings. passes the Building certification schemes Energy Efficiency for all homes and buildings Disclosure Act 2008: Turkey requiring energy adopts a performance mandatory disclosure for certification commercial buildings scheme at point of sale or lease
    11. 11. U.S. Policy LandscapeU.S. Policy Map, State and Local
    12. 12. U.S. Policy Overview Policy Impact Projections Annual Building Area Annual Number of Buildings (in Square Feet)  Approximately 4 billion square feet  More than 3x the floor area of every Walmart, Target, Home Depot, Barnes & Noble and Costco store in America 12
    13. 13. Policies by JurisdictionAll U.S. policies leverage the ENERGY STAR Portfolio Manager tool Benchmarking Jurisdiction Disclosure (Building Type and Size) On To transactional counterparties Non- Multi- To local To public residential family government tenants Sale Lease Financing web site Austin 10k SF+ - -  -  - - California* 1k SF+ - -  -    District of Columbia 50k SF+ 50k SF+   - - - - New York City 50k SF+ 50k SF+   - - - - San Francisco 10k SF+ -    - - - Seattle 10k SF+ 5+ units -      Washington 10k SF+ - - - -    13
    14. 14. New York CityNYC Greener Greater Buildings Plan• Requires annual benchmarking and public disclosure, periodic audits and RCx, lighting retrofits and sub metering in large commercial and multifamily buildings• More than 2,300 city buildings benchmarked and disclosed• Initial analysis of benchmarking data underway• May 1, 2012: Second deadline for private buildings reporting• September 2012: Individual building ratings to be publishedRendering courtesy NYC Mayor’s Office of Long-Term Planning and Sustainability 14
    15. 15. AustinAustin Energy Conservation and Disclosure Ordinance (ECAD)• Requires time-of-sale audits for single family homes, audits and potential upgrades formultifamily properties, and annual benchmarking and time-of-sale disclosure forcommercial facilities• MF requirements:  Conduct audit  Mandatory upgrades for high energy-use properties  Post audit results  Distribute Energy Guide to prospective tenants• 535 MF audits completed• 268 upgrades documented• $1.7M in rebates for FY 2011 15
    16. 16. Small Businesses and Job Creation Jobs First report documenting job growth from energy benchmarking policies  Profiles of small businesses adding staff and increasing client bases  KEY TAKEAWAY: Financing not the key barrier. Primary issue is demand. 16
    17. 17. Jobs “As a Silicon Valley venture capitalist … I tell our green startup companies to focus on San Francisco or New York City. That’s where the action is going to be.” - Elton Sherwin, venture capitalist, senior managing director, Ridgewood Capital “The Greener Greater Buildings Plan has spurred the New York Market to interest and activity around energy efficiency. Over the past year, we have begun working with over 75 million square feet of real estate in New York and over 400 new clients.” - Lindsay Napor McLean, COO, Ecological “When an owner sees a benchmarking score that is lower than expected, they’re a little more receptive to improvements to bring the score up, which in turn lowers their utility costs.” - Kevin Dingle, president, Sustaining Structures 17
    18. 18. DC Benchmarking: Phase in by size Utility First % of Covered % of Total Building Size Year Data Report Buildings Building Area200,000+ sq. ft. 2010 Fall 2012* 36% 66%150,000+ sq. ft. 2011 Fall 2012* 47% 76%100,000+ sq. ft. 2012 April 1, 2013 62% 86% 50,000+ sq. ft. 2013 April 1, 2014 100% 100% •NOTE: No collecting or reporting of data from residential tenant meters until aggregate data service available from utilities * Deadlines still in flux based on the ongoing rulemaking process
    19. 19. DC Benchmarking: Publication ofResults• Benchmark results will be made public in 2nd reporting yr• Results will be reported on the DDOE website (www.ddoe.dc.gov) Address Year Built Energy Performance Rating (1-100) Energy Intensity Electricity Use Natural Gas Use Water Use CO2 Emissions Space Type Gross Building Area
    20. 20. Target Finder for New DC Buildings• DC Energy Act also requires projects over 50,000 sq. ft. that submit 1st building permit after January 1, 2012 to model their energy performance using the ENERGY STAR Target Finder Tool and report results to the District• Results will be made public online along side benchmarks• Submit your Target Finder “Statement of Energy Design Intent” to DCRA with your building permit application either as PDF or hard copy• Future electronic submission directly through Target Finder (2013)
    21. 21. The Data Access ChallengeSome owners cannot access tenant energy consumption dataOwners need whole-building energy data to benchmark • Separate meters often prevent owners from accessing tenant data • Most utilities have not yet provided data due to confidentiality concerns, IT challenges, lack of awareness and inertia • ComEd (in Chicago) is a national leader in providing data o Piloted a data access platform for owners that resulted in thousands of buildings benchmarked in only three years • BOMA, RER, IMT, USGBC form DATA Alliance to work with utilities and regulators • July 2011: National Association of Regulatory Utility Commissioners (NARUC) approves resolution calling on regulators to provide better data access to owners www.energydataalliance.org 21
    22. 22. Resources  IMT rating policy www.imt.org/rating  IMT policy implementation framework www.buildingrating.org/Building_Energy_Transparency_Implementation_Report  CB Richard Ellis/IMT regulatory guide www.cbre.com/USA/Sustainability/Envirometrics  BuildingRating.org (IMT and NRDC) www.buildingrating.org 22
    23. 23. • Efficiency Utility• Funded by utility surcharge • 11 cents per kwh and therm• Created by 2008 Clean and Affordable Energy Act• Contract won by Vermont Energy Investment Corporation (VEIC) and local partners • VEIC started nation’s first and most successful efficiency utility: Efficiency Vermont
    24. 24. • Create green jobs for District residents• Stimulate the local economy• Reduce energy use throughout the District, particularly in housing for low-income residents• Reduce the growth rate of peak electricity demand• Increase renewable energy generating capacity
    25. 25. 2012 Multi-Family Initiatives Market Rate Multifamily • T12 Lighting Replacement • Custom Programs Low-Income Multifamily • Comprehensive Program for New Construction and Substantial Rehab • Property Manager Direct Install • T12 Lighting Replacement • Other custom services
    26. 26. DC Benchmarking Resources• Webinars from U.S. EPA• DC SEU Benchmarking Help Center: • Technical assistance with ENERGY STAR Portfolio Manager and DC benchmarking requirements • FREE • Help Line: 202-525-7036 • Future In-Person training sessions• Consultants can help; 60% of all NYC benchmarking done by consultants
    27. 27. Incorporating Energy Efficiency into MortgageUnderwriting Aligning mortgage policy with energy efficiency  Energy costs now exceed property taxes and insurance, which are accounted for in mortgage underwriting.  A homeowner who spends less on utilities will have more money to make mortgage payments  For a typical house : o Median home price - $175,000 o Average 30-year commitment to energy costs - $70,000
    28. 28. Mortgage Underwriting:• Borrower capacity is adjusted for energy costs.• Value of the home reflects the energy cost savings. The Three C’s of Underwriting Capacity Collateral Borrower’s ability to pay the Appraised value of the Credit monthly mortgage home Debt-to-Income Test Loan to Value Ratio Energy “blind spot”
    29. 29. • SAVE Act (S. 1737) introduced by Senators Bennet (D-CO) and Isakson (R-GA)• If passed, SAVE Act would create 83,000 jobs and $1.1 billion in savings to Americans energy bills in 2020 Annual Annual Energy Year Jobs Bill Savings* 2015 16,000 $95 million 2017 50,000 $380 million 2020 83,000 $1.1 billionSource: 2011 study by the American Council for an Energy-Efficient Economy(ACEEE) and the Institute for Market Transformation (IMT).www.imt.org/SAVE_Act
    30. 30. The SAVE Act: S. 1737  Leading business, industry, and environmental support the proposal.
    31. 31. Thank You
    32. 32. Cliff MajersikExecutive DirectorInstitute for Market TransformationWashington, DCcliff@imt.org202-525-2883www.imt.org/ratingwww.buildingrating.org

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