15 Ways To Prepare Properties For Climate Change Regulations
Once again, Garratt Hasenstab weighs in with his fellow Forbes Real Estate Council members on how climate change is affecting real estate and property-related regulations, and what real estate owners, managers and investors can do to “future-proof” their investments in property from the seemingly inevitable impacts of climate change.
As seen in Forbes on Feb 26th, 2020.
As the impact of climate change becomes more and more evident, many organizations are attempting to take greater regulatory and environmental action. For real estate industry players, these regulations might eventually affect your properties’ energy and water usage—and you don’t want to be caught by surprise.
We asked members of Forbes Real Estate Council to share some preventative measures you can take now to “future-proof” your property and its environmental impact. Their best answers are below.
1. Educate Yourself On Green Building Conversions
Sustainable buildings (think LEED) have shown to be less expensive to operate than non-green buildings. Most value-add investors are looking for ways to reduce energy and water consumption across their portfolios as these two items drive the most cost. Education across the industry on green building conversions and the potential cost savings for operators is a big step in pushing sustainability. – Matt Motil, The Marie Paul Companies
2. Invest In Smart Home Technology
Smart technology has come so far in the past few years in the multifamily real estate industry. Going far beyond lights, locks and thermostats (which can address energy concerns), we are now seeing utility metering, leak detection and other “first-line” technology that heads concerns off before they become an issue and allows for easy energy monitoring property-wide. – Sce Pike, IOTAS, Inc.
3. Add Solar And WiFi Utility Meters
Solar energy has become increasingly affordable over the past 10 years. Investing in solar energy will decrease your monthly expenses and increase property value. There are also many smart WiFi-enabled water and electric meters that give clear insight into what devices and appliances are using the most energy and resources. Having this information can help target usage and encourage conservation. – Adam Mahfouda, Oxford Property Group
4. Adopt A ‘Conscious Capitalism’ Approach
The future is about conscious capitalism and environmental responsibility. Limit your carbon footprint, install solar panels and use reserve tanks to capture and reuse rainwater. Be conscious of the trees, the surrounding agriculture and make sure that the land is treated with the same type of care. Shelter some front-loaded costs to create longer value and maximize the use of space. – Ari Rastegar, Rastegar Property Company
5. Think About Year-Round Advantages
We’re seeing buyers add solar panels, rainwater harvesting systems and energy-efficient windows to their list of priorities when searching for a new home. Although these are an investment up front, they pay off amidst the ever-changing environmental regulations. It is important to showcase the property’s year-round advantages and the value they can bring to the investment. – Cody Vichinsky, Bespoke Real Estate
6. Find Ways To Control Waste And Go Green
It is economically responsible for all of us to consider ways to reduce costs by controlling waste and finding ways to go green. Artificial grass, LED lighting, green material flooring, smart technologies to detect leaks and control HVAC systems and lights on the property are all good things to consider. Even though they are more expensive up front, they pay for themselves quickly. – Jorge Abreu, Elevate Commercial Investment Group
7. Make Small Changes To Retrofit Your Property
With advancements in building materials and technology, the smallest of changes can have a positive long-term impact. Thermal windows, living roofs, energy-efficient appliances, solar panels and geothermal heating are just some of the ways you can retrofit a home to be more green. One small step today can help benefit the future of tomorrow. – Michelle Risi, Royal LePage Connect Realty
8. Highlight The Benefits Of Eco-Friendly Housing To Renters
Eco-friendly housing has a positive effect on climate change while adding benefits to quality of life, health and finances. Green homes have better air quality and are energy-efficient, saving money while conserving valuable resources. Demand for green housing will continue to rise and sustain higher rents and a more valuable asset. – Joe Houghton, RE/MAX Results/The Minnesota Property Group Team
9. Address Climate-Related Issues Head On
Very few locations are enacting measures to mitigate potential future risk. Developers and the government must work together to address the potential issues head-on. As the old saying goes, “a failure to plan is a plan to fail.” Location selection, elevation and infrastructure resilience are all primary considerations as the coasts continue to cluster the bulk of development. – Blake Plumley, BluWater Capital LLC
10. Study The Money Suckers
Study energy and money suckers and point them out. Tenants appreciate good design and projects that use energy-efficient technology, especially if it is designed well and also provides a good experience. Start with lighting and end with smart tools and apps that help tenants do what’s right, but also save money, too. – Jason Duff, Small Nation
11. Identify A Tangible Incentive
If the property owner is to move toward sustainability, they should have incentives and not just product rebates and social credit. Of course, conservation makes sense but obligations with no known future results seem taxing. Evolving regulations being formed by thought collectives are nice, but real metrics are needed as the science is evolving. – Michael J. Polk, Polk Properties / Matrix Properties
12. Explore PropTech And Smart Design
Climate change is the defining issue of our generation. Enter PropTech and GreenTech—emerging technology that can be embedded into all types of real estate assets. They have been shown to dramatically reduce energy, maintenance costs and management costs while increasing internal returns. The other major factor currently is smart design, whereby developments are built with a primary focus on conservation. – Garratt Hasenstab, The Mountain Life Companies™
13. Plan To Reduce Utility Usage
As value-add multifamily investors, we inject capital into all of the assets we buy. This allows us to spend capital upfront to help reduce costs, improve efficiencies and boost our Net-Operating-Income (NOI). The biggest expense on any property is utilities and putting a plan in place to move to low-flow water fixtures, LED lighting and smart thermostats will reduce costs and create immediate equity in a deal! – Feras Moussa, Disrupt Equity
14. Know How You’ll Gather Benchmark Data
We can only manage what we can measure. Benchmark data is the first step in any good environmental or resource management program. Once we determine our water, energy and resource data, technology and equipment can be utilized. Assess what ROI can be expected from efficiency and circular-use strategies. This approach can create a major competitive advantage for efficient operators. – Bryan McLaren, Zoned Properties, Inc.
15. Invest In Solutions To Appeal To Climate-Conscious Consumers
In this environmental age, consumers are careful about how they might affect the climate crisis. Many renters are climate-conscious and would pay for smart home tech, appliances and energy-efficient buildings. Some states have passed laws requiring new construction to have solar panels. Investing in energy-efficient solutions will future-proof your home for tomorrow’s consumer. – Chuck Hattemer, Onerent