From Horse-and-Buggy to Spaceship: Decarbonizing Shore Hill Apartments

Shore Hill Apartments, a 558-unit multifamily building owned by Jonathan Rose Companies, is already an outstanding citizen compared with most affordable housing projects. In the last few years, the company has completed air sealing, switched to LEDs, and installed rooftop photovoltaics. “We were feeling pretty good about our energy-efficiency project,” said Lauren Zullo, director of environmental impact at Jonathan Rose. But things are changing at the company: it’s not just about occupant health and energy efficiency anymore. Shore Hill is now part of the Empire Building Challenge, a New York State initiative providing financial and technical assistance for existing building decarbonization. “It’s a different lens from energy efficiency,” said Zullo. “With this lens of ‘how do we reduce carbon the most,’ we had to take a different approach. Energy-efficiency improvements are helpful but not enough.”

Also in the mix: fiscal responsibility. As part of the Empire Building Challenge, the state has developed a strategic decarbonization assessment tool, which emphasizes “resource-efficient electrification” to help owners phase decarbonization projects in a way that makes economic sense. “It’s a method where you marry the technical information alongside the asset management and business plan information,” explained Zullo.

From energy to carbon

The Shore Hill project, which is still in the planning stages, started with an electrification feasibility study, which Zullo says helped the team understand all the energy-using systems in the building, including heating equipment that burns fossil gas.

“There are a lot of options at this point,” Zullo said. Those include “slow electrification,” which would start with a hybrid system—switching space heating but not water heating or vice versa. “What we aimed to do was optimize for carbon reductions with the smallest impact on our operating expenses,” she told BuildingGreen. “In a market like New York, in a building heating primarily using gas, it’s economically tricky to electrify your systems.” That’s not typically the case if you’re on electric-resistance heat or oil, but “switching from a gas boiler to a heat-pump system is trickier. Much of the analysis was pointing to [higher] operating costs, which is difficult for an affordable housing facility to bear.”

Timing electrification

That’s when the team started thinking about capital improvements—window replacements and roofing—that were already on their radar to be completed in conjunction with the sale of a land parcel to help fund them. “We shifted focus to phase one, really emphasizing envelope improvements so we can reduce the demand and downsize the amount of heating and cooling needed,” Zullo continued. With these improvements, “we can keep our operating expenses potentially neutral—or potentially see some savings.”

This also buys time for cold-climate heat-pump technologies to get better, Zullo pointed out. “It’s interesting to see how heat-pump technology improves over the next couple years. It’s okay to implement today, but I think there is going to be a pretty rapid pace of change.”

A complex process

Zullo says there are a lot of parties involved in the project. “Decarbonization is complex,” she said. The technical team includes energy consultants, an architect looking at façade work, engineers who are advising about and will eventually design electrified space and domestic hot water systems, and an in-house construction team advising on constructability. There’s also the facilities team to think of, and city and state agencies have a hand in the project as well.

Complicating things further, “It’s an occupied building with residents who live there and will be impacted by any changes that we make to the way they heat and cool their space,” Zullo said. What’s more, there’s a strange situation in New York particularly because here, landlords typically pay for heating, while tenants typically pay for cooling. “The technical transitions are as big as the financial transitions that are happening.”

With all that said, Zullo added, “We’re excited about the path that we’re on, and we think this will be a really impactful project.”

Lessons learned so far

With this one project, Jonathan Rose Companies is already learning a lot, according to Zullo. Here are her key takeaways.

1. It’s about asset management—not just technology

“You cannot just focus on the technical aspect” of decarbonization, Zullo cautions. “You have to marry that with your asset management team.”

That means understanding how much the project will cost and when it’s time to make changes to “best leverage capital events at the property,” said Zullo, as well as ideal timing for acquiring additional financing through green banks or carbon-focused loans. “It’s as much of a financial transformation as a technical transformation—and not just upfront costs but also operating costs.”

2. You’ll need a champion

“Electrification will get more complicated and more complex before it gets easier,” warns Zullo. When it comes to “replacing pieces of equipment,” she says, “you can run into a lot of problems around your electrical infrastructure.” Maybe an electrical panel needs to be larger. Maybe there’s asbestos in the building. Costs are piling up. Team members might be on a learning curve—engineers out of their comfort zone or contractors that haven’t installed a particular type of equipment before—and it’s the job of a champion to “continue to push people and push the project team through hurdles and hesitations.”

3. Your facilities team has to be part of the project

It’s vital to think about staff education and training, Zullo notes. The mechanical systems in multifamily affordable housing “are traditionally not that complex.” When you switch from fossil gas to heat pumps, “I’ve heard it compared to [the change from] driving a horse-and-buggy to driving a spaceship,” she said.

Ensure you have a training plan before the equipment is in place, Zullo advised, and get the right service providers and vendors lined up to support the people on the front lines. “There will probably be fits and starts and quirks in the startup,” she said. “It’s not going to be the same phone call that the site team has been making for 30 years.”

Scaling Existing Building Decarbonization

If one project is that complicated, how are we going to decarbonize every existing building by 2050? Various initiatives are moving forward to help that happen.

A decarbonization roadmap: Jonathan Rose Companies

Shore Hill is a first step, but Jonathan Rose Companies is thinking big, working toward decarbonizing its entire portfolio of about 90 properties.

To help, the company has partnered with WSP Built Ecology to develop a portfolio-wide decarbonization roadmap. The goal is “a decision-making framework that includes financial- and climate-impact decisions of electrification, efficiency, and supply-side renewables” alongside social co-benefits, says Narada Golden, Assoc. AIA, national director, Built Ecology, at WSP. “We are taking the data they have to help prioritize which properties they could invest in for electrification, which they could invest in for energy efficiency, and the cost- and impact-related decisions there.” The analysis considers grid decarbonization projections, cost impacts of going all electric, and other factors designed to help the company decide when to invest “to maximize the environmental and social impacts of the program,” he explained.

Zullo pointed to the flurry of net-zero-carbon commitments coming out of the real estate industry in 2021 as the impetus for developing the roadmap.

“There was a lot of momentum from others in the industry … declaring net-zero goals and targets,” Zullo said. Rather than just putting a commitment out there without knowing whether they could meet it, though, Jonathan Rose decided to take it slow. “We appreciate the sentiment,” she said. “We need to make big commitments as an industry. But we wanted to make sure we had the plans and the strategies to back that up.”

The first step with WSP was to provide energy data and building characteristics like heating and cooling technologies and building configuration. The team then analyzed a list of variables that included the energy performance of each property, potential for electrification, the impact of building performance standards in certain jurisdictions, and the availability of incentives and grants in each property’s location.

“What we’re getting from this strategic planning is a sense of our priority properties,” Zullo said. “Time matters when it comes to carbon savings. The more we can save today, the better.” A few properties rose to the top of the pile, like the seven buildings in one fund that were contributing 40% of the fund’s carbon emissions. “We’re not letting the other [buildings] fall by the wayside, but we are focused on where we can have the biggest impact for the most focused amount of effort,” she explained. Although each property will need its own strategy and business plan, “going through this analysis stage is helping us prioritize properties for the biggest impact today,” Zullo said. The company is also getting “a sense of what the plans look like and what the cost implications are so we can position the properties financially to achieve their goals.” With all this information, the company can start integrating carbon goals into the financial planning for every single property. “What we’re trying to do is synthesize our learning and our experience—because every building is unique, but that doesn’t mean we go into every building fresh,” Zullo said.

Golden says WSP Built Ecology is working with five other companies on portfolio-wide decarbonization planning. “We’ve used a top-down approach,” he said, meaning they take the data clients have and develop customized metrics and key performance indicators to help clients prioritize investments. “We can’t make the change we need to make by just having bottom-up ASHRAE audits for every building,” argues Golden. “There are not enough engineers and professionals who can actually do that work,” so the top-down approach will “help accelerate those investments.”

Jonathan Rose plans to finalize and announce its decarbonization commitment by the end of 2022.