Nancy Biberman, president of the Women's Housing and Economic Development Corporation, recognized the building’s potential, and a gut rehab produced 132 apartments for low-income and formerly homeless families, with health- and child-care centers, plus a commercial kitchen for small start-up businesses. The 1997 project won accolades, but soon WHEDco faced an unanticipated crisis.
“This building was going to tank the organization,” recalls Biberman, who says tenants routinely opened their windows in the winter to cool down overheated rooms. “We literally saw money blowing out the windows, and it was bleeding us.” Raising rents was out of the question. “But it would be irresponsible to continue to let things go. We would have gone bankrupt.”
The solution was an energy-efficient retrofit of the building, now known as Urban Horizons. But once WHEDco began to realize savings on such measures as low-flow water fixtures, energy-efficient appliances, and compact-fluorescent lightbulbs—and tenants saw their electricity bills decline—the search for green solutions turned into a permanent, evolving process. The organization even hired a sustainability manager.
WHEDco’s experience with Urban Horizons may ultimately be a valuable example in a city with an old housing stock and little available land. It provides one roadmap for existing structures to comply with stricter laws, as the Bloomberg administration implements regulations to make multifamily buildings more energy efficient and to stop the use of the most polluting grades of heating oil. The new rules will reduce energy consumption and bring down costs over the long term, but they also could put a more immediate strain on affordable housing.
New rules for a greener city
The city aims to slash carbon emissions 30 percent by the year 2030, blaming air pollution for 3,000 annual deaths and twice that number of emergency-room visits for asthma. The only way to achieve this goal is by increasing the energy efficiency of buildings, because buildings account for three-quarters of carbon emissions.
About 85 percent of buildings were constructed before the availability of energy-efficient technology, according to the mayor’s Office of Long-term Planning and Sustainability, so the new laws address the process of retrofitting, or the installation of new equipment in older buildings.
Last year, large apartment buildings had to start reporting their annual use of energy and water, forming benchmarks for improvement. Next year they’ll have to pay for energy audits, which will survey buildings and recommend measures to bring down consumption. In July, buildings will begin to eliminate the use of the dirtiest heating oil.
Though the city claims only 1 percent of buildings burn the dirtiest oil—about 9,000 properties citywide—their boilers are blamed for 86 percent of all soot from buildings. Last summer a report by Manhattan Borough President Scott Stringer’s office found 63 percent of the boilers burning dirty oil are in buildings with rent-regulated units.
The city has set a timetable for all apartment buildings to stop burning dirty oil. But the conversion to cleaner fuels is expensive. And soon, tenants may start feeling those costs. The Rent Stabilization Association, which represents 25,000 landlords, has vowed to make the added costs of boiler conversions and compliance with the new laws a major part of its argument for higher rent hikes during this spring’s deliberations of the Rent Guidelines Board.
A roadmap for retrofits
From the day WHEDco opened Urban Horizons, the 70-year-old building was running an operating deficit. “The rents never supported the true costs of building,” says Biberman. “It was an energy guzzler. At the time, we did the best we could, but we were clueless: Green wasn’t in the vocabulary in 1996, other than the color.”
While energy-efficient technology could be found in single-family homes, it remained a rarity in apartment buildings, especially affordable ones, explains Valerie Neng, WHEDco’s sustainability manager. By the time she joined WHEDco in 2007, however, the nonprofit was completing Intervale Green—a brand-new green building in Crotona East. Neneg was drawn by Biderman’s green approach, which not only lowered long-term costs but included nontoxic building materials as well as education and training, all informed by an overriding concern with our relationship to the environment. At Intervale Green, this approach even led to the creation of a rooftop farm, where tenants could grow vegetables.
Money for green technology was readily available for new buildings like Intervale, adding only 2 to 3 percent to the cost of construction, but it was harder to finance the retrofitting of Urban Horizons, says Neng. “We had to cobble together sources.” Funds came from the New York State Energy Research and Development Authority (NYSERDA), the Bronx Borough President, and private foundations, as well as from tapping into the building’s equity. The state’s Weatherization Assistance Program helped with lighting, energy-efficient refrigerators, and low-flow showerheads. Power for Jobs, a program by the New York Power Authority (now called ReCharge New York), provided discounted electricity. Con Edison also gave incentives for equipment upgrades.
“We first picked the low-hanging fruit: Weather stripping, air sealing, lighting, appliances, faucet aerators—the things you can knock out quickly at the lowest cost,” Neng says. Each tenant pays for electricity, and within the first three months, bills declined on average by 6 percent, compared to an 8.3 percent average increase citywide.
Low-hanging fruit also has the shortest payback period, but that doesn’t mean these fixes are all cheap. “Under four years is a good payback period for any building owner,” says Neng. Now WHEDco is looking at longer-term paybacks from more extensive ventilation work, the replacement of 15 old boilers with 4 high-efficiency ones, and the installation of cogeneration equipment for the on-site production of electricity from natural gas.
“Natural gas costs a lot less than electricity,” Neng says. The cogeneration equipment will reduce transmission losses from the power plant and reliance on the grid. “And the electricity’s waste heat is captured and used to heat hot water. We’re going to see huge savings—we’re talking about $100,000 to $150,000 a year. But the investment is close to half a million dollars.”