New York City is home to plenty of high-density, high-tech residential buildings, including 8 Spruce Street, the spectacular stainless-steel-clad apartment tower in lower Manhattan that was designed by Frank Gehry. The city also is a wonderland of aged apartment buildings. Although these buildings lend the neighborhoods a certain Old New York dignity, they also operate with Old New York inefficiency.
These old buildings are perfect candidates for energy efficiency retrofits. Many landlords, though, have been reluctant to spend money on upgrades whose potential for energy savings has been supported mainly by anecdotal information or by piecemeal analyses of system improvements. Lenders, too, have been reluctant to underwrite such projects.
But hard data is on the way. A study commissioned by Deutsche Bank Americas Foundation, a philanthropic arm of Deutsche Bank, and Living Cities, a nonprofit collaboration of 22 foundations and financial institutions, focused on the effects of energy efficiency retrofits in 19,000 affordable housing units in and near New York City. As a recent story in the New York Times explains, the study, which is scheduled to be released in November, shows that the retrofits reduced fuel bills by an average of 19% and electricity bills by 10%, yielding an annual savings of $240 for fuel and $70 for electricity per apartment.
Finding lenders’ comfort zone
Conducted by New York-based consulting firms Steven Winter Associates and HR&A Advisors, the study zeroed in on a variety of retrofit projects, including one at an 88-unit, two-building complex in Manhattan called Terrific Tenements, where the installation of new boilers and heating controls reduced fuel costs by 50%. Annual savings in one building averaged $551 per apartment, and in the other building $355 per apartment, the Times story notes.
Improvements in another apartment building – this one in the town of Yonkers, just north of the city – included the installation of new windows, energy-efficient lighting, Energy Star refrigerators, and the implementation of an energy savings incentive program for tenants. Taken together, the retrofits and incentive program helped reduce overall electricity usage in the building by more than 25%.
To encourage lenders to underwrite energy efficiency retrofit projects of this sort, the city this year launched a public-private partnership that will provide collateral guarantees to lenders. Funding for the partnership’s guarantee program, called the New York City Energy Efficiency Corporation, will come from a portion of $37.5 million in federal stimulus funds granted to the city.
“We are trying to catalyze a new financing market to satisfy the growing demand for retrofits,” Susan Leeds, the chief executive of the Energy Efficiency Corporation, told the Times.