Cost effective smart rehab FOR multifamily 12/31/2017 Cost effective smart rehab FOR multifamily

Multifamily Housing 20%-30% of residential market Subsidized Affordable – HUD, LIHTC, USDA-RD Non-Subsidized Affordable / Market Rate Underserved and difficult market segment Commercial Property but Residential Use Complex Ownership / Management Structure Split-Incentive hurdle Utility Rebate programs driven by Meter/Utility Account Holders

Why Smart Rehab? Reduce operating costs => Increase NOI Reduce Energy, Water, and O&M costs for the next 20 years Increase Revenues from: Increased occupancy* Lower turn-over rate** Higher Rent*** Increase value of property due to Rehab Increase comfort, health and safety for occupants Social and Environmental benefits Reduced Emissions, Creation of Local Jobs, Economic Development

By the Numbers Current Annual Utility Cost: $100,000 Potential Avg. Annual Savings from Smart Rehab (eliminate waste) $25,000 Potential Annual Reduction in O&M Costs from Smart Rehab $5,000 Total Savings/Yr. i.e. Increase in NOI/Cash Flow $30,000 Likely Life Cycle of Smart Rehab (in years) 15 Total Savings from Smart Rehab $450,000 If Cost of Capital is: 5% Potential Increase in Value of Property $600,000

Multifamily Housing Why MF Owners are not signing up? Time Constraint Complex Process Knowledge Regulatory Requirements Optimal Solutions Pace of Technology Change Financing Does not meet ROI threshold Lack of Reserves

Fix Issues if Project did not Pan Out Decide to Explore Smart Rehab Options Select Vendor & Schedule PCNA + Energy Audit Compile options into a plan that best fits your needs Finalize Scope of Work and Budget Hire A&E firm to Develop Specifications for bids Find the Money: Long term debt? Equity? Utility Rebates? Grants? Obtain Approval(s) from pertinent agencies, owners, etc. Follow Procurement Process to Select contractor(s) Regular Inspection to ensure quality, schedule & budget Close-Out: Pay Invoices, complete reports, Rebate paperwork, etc. Track Results to make sure rehab met expectations Fix Issues if Project did not Pan Out

Successful Programs Free to MF owner One-Stop-Shop Utility Direct Install - Quick and Hassle-Free Grant Funded – WAP, State, Foundation, etc. One-Stop-Shop Make it hassle-free Oversees entire rehab Provide relevant information Cost effective ECMs Access to financing options Rebates, Incentives, Grants Debt, EPC, PACE, etc.

One-Stop-Shop Portfolio & Property Assessments Design and Development Access to Financing Smart Retrofit: Energy Efficiency and DSM Renewable Energy Water Conservation Traditional Rehab O&M Training

Whole is Greater than Sum of Parts Lessons Learned Service Providers Perspective: Financial viability of Smart Retrofit is important But take a Holistic approach Leverage utility rebates, grants and incentives But owner “buy-in” is essential for sustainability Offer a comprehensive, hassle-free, and cost-effective program Keep it simple and Make it easy, for the owner/manager Whole is Greater than Sum of Parts

Case Study I Green Retrofit : Funding: Attic Insulation Loan - $500K 12/31/2017 Case Study I Funding: Loan - $500K Rebates & Grants - $100K Green Retrofit : Attic Insulation Lighting Furnaces Water Conservation Evap. Coolers Appliances Rehab : Roof replacement Repave Parking Lot Rehab Stairs Replace Flooring and Subflooring ADA compliance 20 unit Cibola Apts, Socorro, NM

Case Study II Green Retrofit : Funding: Insulation Loan - $356K 12/31/2017 Case Study II Funding: Loan - $356K Rebates & Grants - $74K Green Retrofit : Insulation Lighting HVAC Water Conservation Window replacement Appliances Rehab : Roof replacement Children’s Playground Exterior Doors Gutters Flooring and Subflooring 4-story 55 unit low-income property

Thanks Mattn@icastusa.org 505- 12/31/2017 Questions? Thanks Mattn@icastusa.org 505-