Green Portfolio Management How to Identify and Prioritize Energy Efficiency Projects. Housing California Conference April 17, :00 AM 10:30 AM

Transcription

1 Green Portfolio Management How to Identify and Prioritize Energy Efficiency Projects Housing California Conference April 17, :00 AM 10:30 AM 1

2 Housing California: 2014 Annual Conference Green Portfolio Management: How to Identify and Prioritize Energy Efficiency Projects Session IV: 9:00 am 10:30 am April 17, 2014 Mary Jane Jagodzinski

3 Nonprofit, 30+ years 31 apartment communities over 1,700 affordable apartments Realty, Lending Learning Centers Classes and Coaching inc Financial Fitness Education, Homebuyer Education

4 4305 University Avenue, Suite 550, San Diego, CA January 2007 Sustainability leader First ZENH SOLARA Policy leader- Virtual Net Metering, PB utility allowances Green Curriculum Green NeighborWorks organization Renewables in asset Specs- performance and product Asset and Developmentcollaborative

5 Opportunities for Energy Retrofits Substantial renovation Acquisition/rehab Recapitalization or resyndication Subsidized renewables Opportunities Limitations Upgrades within portfolio Observations

6 Substantial Renovation Is it acquisition from third party? Baseline info may be difficult to obtain Financing has incentives or requirements for increased energy improvements Energy only one of many competing capital needs depending on prior deferred maintenance May be able to do comprehensive renovation, or may need to defer some renovation to term

7 Substantial Renovation Is it portfolio recapitalization/syndication? Good baseline information Financing has incentives or requirements for increased energy improvements Opportunity for integrated design and upgrades Rebates may supplement renovation capital budget Example: Poway Villas

8 Substantial Renovation: Case Portfolio recapitalization/syndication Visible physical needs

9 Substantial Renovation: Case Portfolio recapitalization /syndication 40% increased energy efficiency $72k/unit (inc new Com Bldg) HVAC, roof, insulation, appliances, lighting Water- fixtures, landscape Solar Thermal Tax credits, Seller Note, EUCA rebates, Loan w HUD subsidy PB Sec 8

10 Substantial Renovation: Case pre rehab post rehab Mar Feb Jan Dec Nov Oct Sep Aug BTU before/after rehab

11 Renewables for Existing Portfolio MASH or CSI Renewables Identification of properties in portfolio May be least energy efficient property-- to reduce utility costs Driven by subsidy Issues with CEC s loading order? Is it lipstick on a pig?

12 Renewables for Existing Portfolio CSI Renewable- Solar Thermal CHW experience CSI or 1603 solar hot water 6 properties, totaling approx 550 units Identification of properties in portfolio Benchmark against each other

13 Renewables for Existing Portfolio MASH grants-- PV CHW experience 5 properties, over 400 units Pre-post retrofit, also benchmark units against each other Example Hillside (Aug 2013 installation)

14 Renewables for Existing Portfolio MASH grants-- PV Park View Terrace new PV w MASH

15 Renewables for Existing Portfolio Is it good policy if only renewable and not energy efficiency? Goal of renewables for climate change Savings in operations for stability Potential savings to residents Allowed CUAC if tax credit during the term???

16 Energy Upgrades of Existing Portfolio Constraints Costs Sources: Capital reserves, rebates, grants, CDBG, etc Logistics: Roof replacements Residents? Energy star lighting and appliances Alabama Manor cool roof, add l insulation, new solar thermal. Used Energy Upgrade CA rebates

17 Energy Upgrades of Existing Portfolio Case- Las Serenas Acq/rehab but insufficient rehab at syndication Grant - NW $475k Window replacement Fixtures (water) Bathroom exhaust Grant City of SD CDBG - $1m ADA, repairs

18 Energy Upgrades of Existing Portfolio CHW in 2014 Comprehensive Portfolio approach, ranking by need, etc Utility provide information for each resident to baseline Tracking complex matrix of age, climate zone, unit size, systems Timing: refi, syndication Sources- always opportunistic

19 Community HousingWorks

20 Housing Portfolio Management: How to Identify and Prioritize Energy Efficiency Projects Housing California April 17, 2014

21 Over 30 years of excellence Since $11 billion invested to build or preserve over 300,000 affordable homes nationwide Our mission drives us to continue finding new, holistic solutions for healthy, sustainable homes in diverse, thriving communities. Environmental sustainability drives all aspects of our activities and operations 2

22 Why is green important? Multifamily buildings house our nation s poorest residents who bear double the energy burden Residential buildings account for more than half of the built environment and 21% of all U.S. carbon emissions Energy reductions of only 20% in federally subsidized buildings could generate $1 billion in savings 3

23 Benefits of Green Property Owners Regulatory compliance and access to financial incentives Reduced utility expenses Risk reduction from fluctuating utility costs Increased durability Improved public perception of their brand Decreased vacancies Residents Reduced utility expenses Improved indoor air quality Reduced health care needs Increased safety Better quality of living and sense of pride Lenders & Investors Higher quality investments (higher and less volatile Net Operating Income = lower risk) Larger loans Green investors 4

24 There are several market barriers to retrofitting Imperfect information Multiple energy audit tools Lack of a comprehensive standards Limited technical capacity Inadequate financing Lender Consent Disaggregated benefits Split incentives 5

25 Balancing Needs and Efforts What a property needs does not always correlate with what is most efficient Investment Return Analysis With over 30 GPNA s/energy Audits commissioned the most common retrofit measures recommended with the highest savings to investment ratio Domestic Hot Water Interior Lighting Thermostats Exit Lights Low Flow Toilets Heating Boiler Air Handling Units Solar Domestic Hot Water 6

26 Green Portfolio Analysis, Sustainability & Support (Green PASS) Help affordable housing owners green their organizations as well as find recapitalization and retrofit opportunities within their portfolios Finance Green PASS fosters a cross departmental green approach Work with each organization to create a green vision that ties into mission Implement tailored strategy to fill gaps in existing green efforts Operations & Services Physical Assets 7

27 Finance Portfolio financial analysis Development of project specific refinance scenarios Connections to financial experts and new funding sources Organizational and portfolio financial benchmarking 8

28 Operations & Services Peer-to-peer learning and support Survey green practices and create responsive trainings Staff and resident engagement activities Cross department coordination 9

29 Physical Assets Utility Benchmarking Portfolio Manager Energy Score Card WEGO Wise Green Capital Needs Assessments & Energy Audits Scope of work review 10

30 Example Portfolio Recapitalization and Retrofit San Francisco Scattered Site Syndication Five SRO properties (246 units) seeking 9% scattered site syndication Built: Last Rehab: Issues: Funding: TCAC waivers of certain SRO requirements and HCD loan assignments Building Design: limits ability to adopt new types of building systems; Seismic upgrades will be costly and ADA waivers are needed 11

31 Our Learning to Date Owners need help with their difficult to refinance properties There is a significant need to address small scattered site buildings A multi-faceted greening approach is organization intensive and requires leadership commitments Financial consultants are not experts on green funding A common green vision is important and motivating 12

32 Ideal Project Characteristics Recapitalization event imminent and/or needed Building is in need of rehabilitation and major systems upgrades Property is stabile Building owners, operators and residents stand to benefit 13

33 William Ho, Program Director Enterprise Northern California Phone:

34 How to Identify and Prioritize Energy Efficiency Projects Zachary Lopez Director of Property Management

35 SAHA Overview Developer Property Manager Service Provider 170 staff 55 properties managed Over 2600 units Family, Senior, Special Needs SAHA is the result of the merger between Satellite Housing and Affordable Housing Associates effective 1/1/2013.

36 Portfolio mix HUD Senior Aging buildings Master metered Tax Credit Family and Special Needs New Construction or rehab Individually metered Satellite Housing Affordable Housing Associates

37 Why is this important? Electricity Water Gas Sewer

38 Utility cost change 2010 to 2013 Electricity: +45% Water: +46% Gas: -5% Sewer: +65% Total: +30%

39 Data Benchmarking software Tracking previous efforts Cost/Benefit Analysis Tracking certifications

40 Case Study: Doh On Yuen Opened in 1969 Renovation/Rehabilitation in 2012 Replace single paned with double paned windows Install Solar Hot Water Replacement of boiler Replacement of Common Area lighting fixtures Owner pays all utilities

41 Case Study: Doh On Yuen Electricity - $16,780 Water - $9,167 Gas - $17,820 Sewer - $3,247 Electricity - $47,549 Water - $13,888 Gas - $15,009 Sewer - $6,904 Costs pre-rehab 2010 Costs post rehab 2013

42 WegoWise

43 Sample Portfolio Year Built Size Previous Upgrades Current Systems Available Capital building 2 stories 10 units Replaced water heater in 2000, Replace refrigerators as needed Gas and electric, original roof, no insulation, 1 large water heater, old furnaces, no AC, old appliances, original windows, gas cooking Some replacement reserves, some financing buildings 2 stories 120 units Replaced roof and added insulation in 2010 Gas and electric, individual water heaters, wall heaters, no AC, older appliances, original windows, gas cooking Some replacement reserves building 6 stories 229 units Retrofitted lighting in 2005 All electric in unit, large gas boiler serving building, electric resistance heating, original appliances, original windows, electric cooking Limited 2

44 Questions? Sophia Hartkopf