Lenders are making programs like Green Rewards work for all of the borrowers, not just the few that have made green building a mission. “We are looking to be easier for the smaller owner,” says Chrissa Pagitsas, director of the green financing business for Fannie Mae. “The people that haven’t done green yet are going to be the harder ones to reach.”
Apartment Renters Now Expect Sustainable Design Features in Their Units
Sustainable design features including energy efficiency and good indoor air quality are now becoming so common that they are almost taken for granted.
“What used to be exceptional is now everyday,” says Dave Borsos, vice president of capital markets for the National Multifamily Housing Council (NMHC), a multifamily industry advocacy group.
Today, new apartment units almost always include some green features. And the owners of older buildings often incorporate sustainable design component in their plans to renovate and refinance existing properties. For example, nearly half (42 percent) of overall multifamily financing provided by Fannie Mae in 2017 qualified for its Green Rewards program, which offers lower interest rates to apartment properties that have earned green building certifications or pledge to cut their energy use by 25 percent or more through renovations.
At the same time, apartment renters have come to expect green building features like good indoor air quality and energy efficiency, making them more of a requirement in many markets. “For new buildings, it’s kind of what people do today,” says Borsos.
Renters take green features for granted
Apartment renters’ interest in sustainable design is still strong enough to translate into real money for property owners. They are willing to pay an extra $27.21 a month in rent to live in buildings that have green certifications—that works out to more than $300 a year per apartment in extra income, according to the “2017 NMHC/Kingsley Renter Preferences Report.” The report uses surveys of 269,000 renters about which factors guide their decisions on where they want to live.