Seniors Housing Business

MAY-JUN 2018

Seniors Housing Business is the magazine that helps you navigate the evolution of the seniors housing industry.

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18 www.seniorshousingbusiness.com Seniors Housing Business n May-June 2018 Studio One Eleven designed Long Beach Senior Arts Colony in Long Beach, Calif., for Meta Housing Corp. Located near a variety of public transportation options, the property is an affordable seniors housing community that focuses on green building and neighborhood rejuvenation. By Lynn Peisner Most developers will tell you that sustain- able building is the right thing to do. Even if initial costs are higher than a project without advanced green features, the long-term energy savings should more than make up for the upfront investment. Environmentally responsible construction practices benefit all parties. Sourcing build- ing materials from nearby locations, using less toxic supplies and keeping as much as possible out of landfills is good for the health of the building, its future residents and even the local economy. But does it really pay to build green? That's more of a difficult question. It depends on how your company defines green. Whether it pays to have LEED certification is another matter entirely. LEED, or Leadership in Energy and Envi- ronmental Design, is a rating system devised by the United States Green Building Council (USGBC). Some commercial business owners swear by what LEED can do, but others are critical that the process is costly and ultimately doesn't result in an energy-efficient building. That's important because, according to the EPA, buildings are responsible for 40 percent of energy consumption in the United States. Addi- tionally, 20 percent of the nation's greenhouse gasses come from commercial buildings. The value of LEED isn't always measured in reduced energy consumption. Sometimes the certification communicates positive psycho- logical messages to prospective residents of a seniors community as well as to their adult children. It can also drive up property values. The USGBC published a peer-reviewed study in 2015 that concluded that a LEED certification helps boost competitive prices in the real estate market. According to the study, the certification itself attracts customers who prioritize environ- mental causes. The organization also asserts that 61 percent of corporate leaders believe that sustainability leads to market differentiation and improved financial performance. Property value and science, however, might not be in complete agreement on this issue, depending on whom you ask. John Scofield is a professor of physics at Oberlin College who presented findings about the science of green building systems to the U.S. House of Repre- sentatives in 2012. He asserted that several studies measuring LEED's energy savings painted an inaccurate picture of how LEED led to lower energy use. He concluded that LEED certification doesn't result in more energy savings than a build- ing without the certification. He noted in his written testimony that building efficiency is a "stool supported by three legs: design, con- struction and operation." The "D" in LEED stands for design, thus only hitting one of those legs. The points-based cer- tification is earned before a building is in oper- ation. Other systems, such as the EPA's Energy Star program, measure output once a building is up and running. How do we measure? According to Energy Star, its program for commercial buildings saved businesses and organizations $7.8 billion in energy costs in the United States in 2015. The organization also claims that by the end of 2016, approximately 500,000 properties — representing about 50 percent of the nation's commercial building floor space — were using the EPA's Energy Star Portfolio Manager tool to measure, track, assess and report on their energy and water consumption. Scofield wrote in his testimony to the House: "It is my experience that what LEED design- ers deliver is what most LEED building own- ers want — namely, green publicity, not energy savings." Lakewood, Colorado-based Metro West Housing Solutions (MWHS) is a nonprofit property developer, manager and human ser- vices provider. The company is enrolled in the Energy Star Portfolio Manager program to measure electric, gas and water usage at its CityScape at Belmar property. This community is also certified LEED Platinum. Opened in 2015, the low-income seniors housing community for persons age 62 and older has the largest onsite solar array of any residential building in Colorado. Several solar panels that transform sunlight to electri- cal energy make up a solar array. Currently, CityScape at Belmar's Energy Star score is 89 (out of 100), which means it performs better than 89 percent of comparable commercial buildings. This score enables the company to evaluate its investments. "MWHS invests in green building practices to lower operating costs for tenants and own- ership," says Ryan McCaw, sustainability and grant programs manager for MWHS. "Lower operating costs for tenants — in this case seniors often on fixed incomes — allows them to invest more of their financial resources into items like medical expenses, healthy food and transportation. This helps them age in place more effectively and enjoy a higher quality of life, as opposed to paying the utility companies more of their fixed income." The project was financed by low-income housing tax credits along with energy tax cred- its for the solar insulation. The Colorado Hous- ing and Finance Authority determines which affordable housing developments receive tax credits, and green features are a critical crite- rion in that decision. The total cost of the solar array was $419,610, or $2.62 per watt, before the 30 percent federal solar incentive that reduced the first cost to $293,727. Xcel Energy offers renewable energy credits (RECs), which essentially work as a rebate. The REC for this project is 6 cents per kWh for the first 20 years of the system's opera- tion, and then the RECs expire. During the system's first two years (approxi- mately for the calendar years 2016 and 2017) the system produced roughly 97 percent of what was projected, saving approximately $9,500 on the building's annual electric bill and generating an annual average of $13,849 in REC payments. "Even though the system hasn't produced at 100 percent of what was predicted, it is still Does it Pay to Be Green? n Development There are more ways than one to deliver an environmentally friendly property.

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