Project Report:
Recognizing the True Value of Greening Multi-family Affordable Housing: A Case Study and National Model
Purpose
- Investigates the causes of economic imbalances.
- Explores and develops market-based solutions.

Summary

Through a case study approach, this project is a behind-the-scenes look at the decision making process and economics involved in the design and construction of a green, multi-family affordable housing project. We will use the case study to correct a market perception that green approaches cost more and are often inappropriate for affordable housing.

Westover Apartments
Westover Apartments, Arlington VA, a 152 unit garden apartment complex built in the 1940s. In a cooperative project, AHC Affordable Housing Corp. and GreenHome planned to renovate and expand the entire complex to demonstrate cost effective green construction techniques that could be applied to other affordable housing projects. However, difficulties in renovating the complex led to another site being selected for renovation.

Description

GreenHOME's project, Recognizing the True Value of Greening Multi-family Affordable Housing: A Case Study and National Model, addresses two key issues: 1) how to ensure that the long-term benefits of high-performance green design and construction is recognized in the market so that the current undervaluation of green projects can be corrected, and 2) what are the lessons learned regarding the performance of the green building products, materials, appliances, and processes used in the context of the overall costs and benefits of the project. The results of the project will inform affordable housing developers, financiers, assessors, policymakers, architects, mechanical and civil engineers, contractors, and others in the development process. This will also serve as a national model to correct a market perception that green approaches cost more and are often inappropriate for affordable housing.

Purpose

With our partner Tellus Institute, we will assess the long-term economics of the project, including initial capital costs as well as long-term operating costs from the perspectives of the developer, owners, and residents. Using a life-cycle costing approach, we will assess project economics in present value terms. Building on GreenHOME's previous work, the qualitative case study will focus both on the people and the process and include enough detail to enable our target audience to identify with the people and their circumstances.

One of the key barriers to transforming the practices of the affordable housing industry and the professionals involved is the perception that green buildings cost more than conventional buildings and that they have unproven benefits. Given the real budgetary and regulatory constraints developers of affordable housing face, it is essential that we address this issue. To properly consider the economics of a green building (or any building) requires a life-cycle costing approach that assesses not only the initial design and construction costs, but also the operational and maintenance costs over the life of the building.

Our partner Tellus Institute, a non-profit environmental research and consulting organization that has been working on this issue over the past two years, will lead this analysis. Founded in 1976, Tellus has an interdisciplinary staff of 25 professionals. Tellus is a partner in the Green CDCs Initiative in the Boston area, an effort to accelerate the implementation of affordable housing and economic development projects by CDCs that incorporate green design and sustainable development techniques in distressed communities. As part of the Initiative, Tellus recently coauthored a major report on the costs and benefits of green affordable housing, including approximately 15 case studies. A major limitation of this report is that all the data for the case studies was developed after the projects were completed. Thus, it was challenging to get reliable data, it was often in very different and incompatible formats, and there were frequent data gaps. By developing a data collection template at the outset of AHC’s Westover Apartment project, we hope to guide project developers and managers and avoid these shortcomings.

Scope

Developers of projects with a very short ownership horizon, which is frequently the case, are usually not concerned with longer-term operational savings, unless the value of such savings can be reflected in the selling price. In contrast, operational savings should be important to developers with a long-term ownership interest and others who are mission driven such as public housing authorities and community development corporations (CDCs). Unfortunately, given the limited experience with green building, such value has generally not been reflected in the market. As a result, the economic benefits of green building have largely been ignored by project financiers in their assessment of lending and investment opportunities in affordable housing. This lack of market recognition for the long-term value of high-performance green buildings is a significant barrier to developing more sustainable affordable housing.

GreenHOME is close to an agreement to work with AHC, Inc., a private, nonprofit developer of low- and moderate-income housing in the mid-Atlantic region on a case study of their Westover Apartment project. The Westover Apartment project is a great opportunity to study both new construction and rehabilitation in the same project at an ideal scale of rehabilitation of 115 units and constructing 100 new units. We have already begun the process of working with AHC and their development team in an integrated design charrette, early in their design process in September, 2006.

A major focus of our efforts will be to ensure that the development team tracks and reports development and operating data (at least one year) for the project and provides estimates for such data for a comparable conventional building. We have provided the team with a draft of the reporting template to help the development team understand the data requirements and guide them in data collection.

This template can also serve as a model for other projects to collect such data. We will report the results of the costs and benefits on a present value basis to ensure that the lifecycle costs of the Westover Apartment project and a conventional alternative are presented in a meaningful way.

Information Dissemination

This project will serve as a national model for improving market recognition of the value of green affordable housing projects and for creating support among the various stakeholders involved in such projects. In addition to disseminating the results locally, GreenHOME will share the results with affordable housing developers and financiers across the country, including the National Congress for Community Economic Development, an association of more than 700 community development corporations (CDCs) across the U.S.; the national and regional offices of the Local Initiatives Support Corporation and the Enterprise Foundation, both of which provide grants, loans and equity investments to CDCs for neighborhood redevelopment and are the largest funders of CDCs in the country, and others. Our dissemination efforts will be through both printed material and the internet, both our own web site and links with other leaders in the affordable housing development field.

Amount Approved
$15,000.00 on 11/30/2005 (Check sent: 12/12/2005)


  Related Organizations
Recognizing the True Value of Greening Multi-family Affordable Housing: A Case Study and National Model  


Attachments
Westover Apartments
Wheeler Terrace pre-renovation
Wheeler Terrace post renovation.

Address
P. O. Box 42676
Washington, DC 20015


Phone
(202) 544-5336
(301) 229-4022 (fax)

Contacts


Patty Rose
Executive Director

Posted 9/14/2006 11:01 AM
Updated   10/1/2010 3:27 PM

  • Nonprofit


Wheeler Terrace pre-renovation
Wheeler Terrace pre-renovation. The organization, GreenHome, became Greenspace. The new organization selected this Washington, DC project for renovation.

Wheeler Terrace post renovation.
Wheeler Terrace post renovation including energy-saving features. A full description of the completed project is attached at the end of this preliminary report.

 
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