Payback Time

There's no doubt about it: Green building is red-hot today. But despite all the hype, the reality of "going green" is still confusing for many. "Developers want to know if green building is a far-out utopian dream with waterless toilets and solar heating, or if there is a practical application that makes sense and may even offer economic and marketing advantages," says Tom Baum, president of Greenbelt, Md.-based Bozzuto Development Co.

TAKE CONTROL: Spray-foam insulations can help reduce heating and cooling costs by up to 50 percent. This soy-based product from BioBased Systems is installed in liquid form and expands in seconds.

The answer: Green building is a little of both. While some green products, such as photovoltaic solar cells, are generally still too high-priced to make financial sense for multifamily applications (unless grant money offsets the cost), there are a host of green solutions that can help developers achieve both short- and long-term operational savings. From simple energy-efficient light fixtures to the more elaborate geothermal heat pump systems, both affordable and conventional multifamily developers and renovators are successfully greening their properties–and saving some green dollars of their own.

PERFECT AIM: Corbond Corp.'s spray-in-place polyurethane insulation helps reduce energy costs for buildings such as Washington Park, an affordable Chicago rental community.

With energy and heating costs expected to soar by 50 percent or more this winter, it's worth the time to take a closer look at these solutions. "Financially, it's getting to the point where we need to start think about green building," says Ed Hord, principal of Hord Coplan Macht, a Baltimore, Md.-based architecture firm. "With increased energy costs this winter, this [efficient building] can really could improve the bottom line of operations."

To help you demystify the crazy world of green, here's a look at some of the more popular green building practices and the payback time you can expect if you choose to use them at your properties.

Payback time: Two to three years

A well-insulated building can go a long way toward reducing monthly utility bills. The developer of Washington Park, an affordable 63-unit single room occupancy project in Chicago, expects this green strategy to pay off big. "Since it was a gut rehab, and we were already spending money to insulate [it], why not take it to the next level and basically create a low-energy building by increasing the insulation value?" asks James Bess, a principal at Chicago-based Building Engineering Systems, which served as a green consultant on the project.

Bess and his team selected Corbond–a spray-in-place polyure-thane insulation manufactured by Bozeman, Mont.-based Corbond Corp. This insulation material has been used for years in products such as thermal bottles and commercial refrigerators and freezers. The product offers an extremely high R-value in a 3.5-inch stud cavity, which keeps construction costs lower (because many spray-ons require thicker walls), says Bess. The developer paid a $100,000 premium for the upgrade, but the extra insulation resulted in a reduction of the base mechanical systems by about $60,000. Bess expects to reduce annual energy costs by more than 40 percent.

Energy-efficient windows also can play a big role in reducing energy costs. Jeff Ross-Bain, an associate at Smith Dalia Architects, an Atlanta-based architecture firm, recommends using energy simulation software to analyze utility bill savings based on the use of various energy-saving glazings. "Sometimes there is no need to increase the window quality over code minimum," says Ross-Bain. "Other times, it makes all the difference in the world." If you have a building with a significant amount of south-facing glass, he says, going up one or two grades from the code minimum should pay for itself within two to three years.

Fluorescent Lighting

Payback time: Three years or less

Credit: Courtesy Progress Lighting

SEE THE LIGHT: Compact fluorescent lighting, such as the above offering from Progress Lighting, uses one-fourth of the energy consumption of incandescent lights.

If you are looking for a quick and easy green tactic, simply glance upward at your building's lighting system.

"In the energy efficiency world, lighting is considered what they call low-hanging fruit," says Ross-Bain. "Lighting paybacks are really short."

Wherever possible in common areas and units alike, choose compact fluorescent lights, which use one-fourth of the energy consumption of incandescent lights. While the upgraded lighting option typically costs around $10 more per fixture, the extra upfront cost is quickly recouped in yearly energy savings. Plus, lower lighting watts also lead to lower cooling costs, adds Ross-Bain. Fluorescent lighting produces between 50 lumens and 100 lumens per watt, while incandescent lights emit more heat than light–only about 15 lumens per watt.

Ross-Bain also recommends adding occupancy lighting sensors to stairwells, which provides dimmer lights when there is no traffic. "Stairways do not get used that much, but the lights are on 24-7," he says. "In a large multifamily project, the savings can be in the tens of thousands [of dollars] per year."

Green Roofs

Payback time: Four to 13 years

Credit: Courtesy homeWORD

ROOF WITH A VIEW: Gold Dust Apartments, an affordable community in Missoula, Mont., has a rooftop garden with a mix of permanent landscaping and vegetable gardening boxes.

Going green can be beautiful. Just look at the rooftop garden atop Gold Dust Apartments, a 70-unit low-income housing community in Missoula, Mont. The 2,550-square-foot garden incorporates permanent landscaping with vegetable gardening boxes. But this garden does more for the property than just present a pretty face: The green roof helps ensure that the building doesn't generate stormwater runoff–a leading source of water pollution.

Green roofs, which are used for both stormwater management and energy savings, basically consist of vegetation and soil planted over a waterproofing membrane on a rooftop, with additional layers such as a root barrier or irrigation and drainage systems. "Green roofs are actually very simple," says Gregg Lewis, a principal at SmithLewis Architecture, a Roanoke, Va.-based firm. "It's basically a standard membrane roof with a couple extra layers."

Green roofs typically cost anywhere from 30 percent to 40 percent more than a traditional roof (with a quality membrane), estimates Mike Perry, president of Building Logics, a Virginia Beach, Va.-based green roof provider. And the payback time can vary greatly, depending on the roof's size, location, and configuration. The quickest payback Perry has seen: A New York City condo developer recouped the extra costs in less than four years by charging a premium for units that overlook the green roof, he says.

These vegetated roofs are sprouting up across the country, especially in big cities such as Chicago, Portland, Ore., Seattle, and New York. And in an effort to conserve water, many cities are beginning to require green roofs or offer incentives to encourage developers to go green on top.

In addition to mitigating stormwater runoff, green roofs provide a number of other benefits including: a reduction in noise levels from nearby traffic and airplanes; a prolonged life of the underlying roof membrane by protecting it from direct ultraviolet rays, and extra insulation for the building, which in turn reduces air conditioning costs by as much as 25 percent.

Plus, any rain that exceeds the capacity of a green roof can be tied into rainwater harvesting systems, which is especially important given the scarcity of water in many parts of the country. "Using reclaimed rainwater to irrigate landscapes, flush toilets, wash cars, and even to use for drinking water is going to be essential before long," says Lewis.

Geothermal Heat Pump

Payback time: Eight to 12 years

For sites with space to dig underground, geothermal heat pumps are quickly gaining popularity as an efficient way to dramatically lower both heating and cooling costs–while reducing the building's dependence on fossil fuels. These underground pumps use the thermal properties of the soil to either heat or cool a building. Here's how the system works: A series of pipes, often called a "loop," are buried in the ground next to the building. These pipes circulate a fluid that absorbs heat from–or relinquishes heat to–the surrounding soil. The geothermal pump then removes the heat and transfers it to the building. (The process is reversed for cooling.) This system can also be used to provide hot water.

Such a system can reduce cooling costs by up to 40 percent and heating costs by up to 70 percent, estimates architect Ross-Bain. Be prepared, however, to pay a hefty price tag for these heat pumps. "A geothermal system is an extremely efficient way to heat/cool a space, but it can cost twice as much as a typical air conditioning system," says Ross-Bain.

While a geothermal system is typically found in suburban and rural areas because of space requirements, urban applications are possible. You'll soon find such a system at Washington Park, the redevelopment of a YMCA into a 63-unit residential project in Chicago. "I believe we are the only non-government urban development that has used this system," says Wyllys Mann, a project manager for Chicago-based East Lake Management & Development Corp. The developer is adding the system beneath a large parking lot that was already on the site. The system (including the costs of repaving the lot) cost about $440,000, but the developer secured a grant from the Illinois Clean Energy Community Foundation to cover one-third of the price and reduce the payback time by three to four years.

Photovoltaic Panels

Payback time: 10-plus years

Credit: Courtesy homeWORD

SOLAR POWER: Thanks to a large grant from a local utility company, Gold Dust Apartments in Missoula, Mont., installed a 15-kilowatt photovoltaic array, which

While many green strategies are making more and more financial sense for multifamily application, there are still a few items with a significantly high payback time. What's at the top of this list? Photovoltaic panels. These panels, typically mounted on the roof of a building, consist of photovoltaic cells made of semi-conducting materials to directly convert sunlight into electricity.

Photovoltaics range anywhere from $6.50 per watt to $8 per watt to install (and keep in mind it takes about 2,000 watts to supply an average sized single-family home with half of its energy supply). "Photovoltaics don't seem to work at all right now, unless somebody is willing to grant you the money to pay for it," says Hord of Hord Coplan Macht. "Every time I have looked into it, it's an unbelievably long payback."

Industry experts do expect prices to eventually drop, especially as other countries aggressively pursue solar systems as a sustainable development strategy. "With the Chinese looking to dramatically expand their use of photovoltaics, I think what we're going to see is that the prices for these systems are going to drop significantly in the next couple of years," predicts Lewis of SmithLewis Architecture. He also hopes to see increased governmental incentives, such as those currently offered in Germany, in the United States to offset the high costs of solar systems.

For multifamily firms interested in photovoltaics (but not the cost), utility companies represent one of the best places to find grants to supplement the high price tags, advises Betsy Hands, program manager for homeWORD, a nonprofit affordable housing developer based in Missoula, Mont. The company was able to secure a $120,000 grant from Northwestern Energy, its local utility company, to cover the entire cost of a photovoltaic system for one of its properties. Today, Gold Dust Apartments boasts a 15-kilowatt photovoltaic array which produces about 25 percent to 50 percent of the total power needed for the apartment units. Based on today's utility costs, the system saves the building about $1,900 per year in energy costs, which would have translated into an extremely long payback for the developer had it not obtained the Northwestern Energy grant.

For developers determined to take advantage of the sun, solar/thermal hot water systems are a more cost-effective option. These systems use the sun to heat a building's water supply. At Washington Park, such a product cost about $15,000 more than a typical system and is projected to save up to $2,500 a year, according to Mann, the project manager.

Green Support

Deciding to go green is one thing. Paying for it is quite another. But there's good news: On a state-by-state basis, a growing number of public and private groups are providing incentives to help developers (particularly in the affordable sector) pay for many of the upfront costs of green building. Just ask Wyllys Mann, a project manager for Chicago-based East Lake Management & Development Corp.

Thanks to his savvy research skills, Mann is well on the way to finding grants and other financial incentives to completely cover the $600,000 additional cost to bring green features to Washington Park, an affordable 63-unit single room occupancy project in Chicago costing a total of $10.26 million. "I said to my boss, can we make this [building] green, and she said you can hug trees all you want as long as it doesn't cost me anything," says Mann.

The project's funding sources include grants from such diverse places as the Illinois Department of Commerce and Economic Opportunity, the Illinois Clean Energy Community Foundation, and Enterprise's Green Communities initiative. "With the joys of the Internet, it's not that hard to spend some time on Google and find some [options]," says Mann. "Every time you open one door, you tend to find a few more." Greg Kats, the founding principal of a Washington, D.C.-based green consulting firm called Capital E, estimates that more than 100 cities, states, and counties either require or provide incentives for green building.

Many jurisdictions also are awarding extra points in the low-income housing tax credit application to developers who incorporate a green design. The growing list of states that offer such an incentive include Pennsylvania, Virginia, Ohio, and Nevada. And something as small as a few extra points can give a project the edge it needs in the competitive tax credit arena. Going green helped Park View at Snowden River, a 100-unit affordable community in Columbia, Md., secure low-income tax credits. "The four extra points you got for being green differentiated winners and losers," says Ed Hord, principal of Hord Coplan Macht, a Baltimore, Md.-based architecture firm which designed the project.

Green Bargains

These products offer an easy, affordable way to make your property more eco-friendly.

Want a green property without busting your budget? Here are a handful of eco-friendly products that cost the same (or minimally more) than their traditional counterpart. And some of these will even score you points in green rating systems such as LEED.

Window Treatment

For maximum energy efficiency, try Wausau's 2250 Series of windows. The product is certified by the National Fenestration Rating Council for energy performance. The complete product line (called Advantage) also includes standard double-hung, rolling, and projected windows available with multiple configurations, glass options, accessories, and finishes. For more information, contact Wausau Window and Wall Systems at 877-678-2983 or visit www.wausauwindow.com.

Color Your World

Don't let paint fumes invade your space. Duration Home Interior Latex Coating carries the company's GreenSure designation for its low-VOC formula, low odor, and resistance to mildew. Plus, the product offers superior washability and burnish resistance, the company says. The paint is available in matte and satin finishes in a wide array of colors. For more information, contact Sherwin-Williams at 800-474-3794 or visit www.sherwin-williams.com.

Natural Step

Get creative with Marmoluem Click, a click-into-place system with a wide assortment of colorful panels and squares. This linoleum product is made primarily from linseed oil, wood flour (a finely ground wood cellulose) and pine rosins. The flooring option is ideal for people with asthmatic allergies and other respiratory disorders as it is easily kept dust-free. For more information, contact Forbo Flooring at 866-627-6653 or visit www.themarmoleumstore.com.

Get Your Wheaties

You can't tell by looking, but these cabinets are made from formaldehyde-free wheatboard, an annually renewable product made from wheat straw. All veneers offered by the company are made of a soy protein-based resin that offers no off-gassing. Plus, all glues, adhesives, and finishes used are made with water-based low-VOC products. For more information, contact Neil Kelly Cabinets at 503-288-6345 or visit www.neilkellycabinets.com.

Get With The Program

Three initiatives encourage green building.

• Program: Leadership in Energy and Environmental Design (LEED)
• Sponsor: U.S. Green Building Council Launched: 1999
• Facts: A voluntary national standard for rating the sustainability of com- mercial, institutional, and high-rise residential buildings. Currently test- ing a new program designed for garden-style apartments/condos and single-family homes. For more info: www.usgbc.org

• Program: EarthCraft House
• Sponsor: Southface Energy Institute and the Greater Atlanta Home Builders Association Launched: 2000
• Facts: Provides a framework for builders in the Atlantic market to build healthy homes (single-family and multifamily) that reduce utility bills and protect the environment. The program, now being tested in other Southern markets, offers builders the option of also seeking LEED certification. For more info: www.southface.org

• Program: Green Communities
• Sponsor: Enterprise and the National Resources Defense Council Launched: 2004
• Facts: A $555 million investment to build 8,500 affordable green homes over five years. More than 70 devel- opments are underway in 21 states. For more info: www.greencommunitiesonline.org