Climate and Resilience
Here is an AI generated picture of a hurricane.? The picture is not real.?
Below are three facts about climate change.? They are all very, very real.
Now, there may still be some folks who don’t see these three facts as being true. So be it. Frankly, I don’t care if a person thinks the moon is made of cheese so long as we can all agree that making our properties more efficient and resilience is good business.? Any owner or investor who has managed to stay afloat long enough to read this sentence knows that there is financial value to be gained by making properties more energy and water efficient and less likely to be destroyed or severely damaged in a storm.??
?HOW DOES IT BENEFIT THE ENVIRONMENT AND RENTERS?
When property owners incorporate sustainability and resiliency measures at buildings, they are doing more than just practicing good business.?? They are also combatting climate change and making their buildings more resilient and safer for the people who live there.??
HOW DOES IT IMPROVE FINANCIAL PERFORMANCE FOR INVESTORS?
Making multifamily properties more resilient and sustainable can have a significant and quantifiable impact on financial performance as well.
?WHAT IS THE MINIMUM THRESHOLD FOR IMPACT?
Establishing a consistent industry minimum standard for climate and resilience helps property owners set clear impact-driven goals across their portfolio and makes it easier for investors to assess affordable multifamily housing investment opportunities.
The Multifamily Impact Framework? minimum impact threshold for climate and resilience requires that property owners and investors have impact plans and investment strategies that include specific commitments to reduce greenhouse gas (GHG) emissions and achieve utility efficiencies at their properties. ?These plans should also include an assessment of climate-related risk and resiliency features at the property and portfolio level.
Property owners should also commit to utilizing Energy Star Portfolio Manager, GRESB, or an equivalent service for benchmarking and performance tracking at their properties and portfolios.
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HOW DO YOU MEASURE CLIMATE AND RESILIENCE AT A MULTIFAMILY PROPERTY?
To quantify and assess the impact and outcomes of their climate and resilience strategy, the Multifamily Impact Framework? recommends that investors and property owners include the following measures in their impact reporting and due diligence.
The Disproportionate Impact of Climate Change on Multifamily Properties
Today, 36% of all greenhouse gas (GHF) emissions in the United States come from residential and commercial buildings, and a significant portion of those emissions come from multifamily properties.?? 40% of all multifamily properties in the United States are in high density urban areas and nearly 2/3s of those high-density urban areas are in areas at high risk of natural disasters and severe weather events.???
Multifamily buildings not only contribute a larger share of GHG emissions that cause climate change, but they are also most likely to be damaged or destroyed by the more severe weather that climate change is creating.???
The sliver lining to this vicious cycle is that while the multifamily sector may be disproportionally impacted by climate change, it also has a disproportionate opportunity to make things better.
And that is why any multifamily impact investment strategy must include actions to lessen the impact of climate change in the future and protect property owners and renters from the rising threat of severe -related damage and destruction that we are facing
Not only can this be done. In many communities, the work has already started. And, it is incumbent upon all of us to do more.
If you are interested in learning more about climate and resilience and other multifamily impact investing standards, please feel free to download the Multifamily Impact Framework?.
Bob Simpson is a nationally recognized expert in affordable, green and healthy housing with more than 25 years of experience working at the highest levels of housing finance and public policy. He is the CEO and Founder of the Multifamily Impact Council, a non-profit organization focused on creating industry standards for impact investing that help increase the flow of capital to support affordable and sustainable multifamily rental housing properties in the United States.