Rob DeGrasse knows all too well the difficulty of integrating sustainability into the typical multifamily executive's business model. “I had to go before senior management to ask for seed money for our energy savings project in 2006,” says the AIMCO senior vice president of service and technical standards. “And by seed money, I mean $5 million. Quite a few jaws dropped to the floor.”
To help gain approval for the pilot program, DeGrasse promised AIMCO brass a 20 percent ROI. By targeting common area lighting retrofits—and, to a lesser extent, central mechanical upgrades and weatherization projects—the newly minted energy team delivered to the tune of 28-plus percent. “That is pure utility cost reduction,” DeGrasse says, noting that there is also the opportunity to boast a larger ROI on the additional service, repair, and maintenance savings.
“We might include those moving forward, but [we] wanted to first establish the program by not including savings that could be seen as less tangible. Migrating to a program like this in a company requires a lot of confidence,” DeGrasse says. “You can't approach the lofty and elusive goals of sustainability without targeting the business side first.”
AIMCO execs apparently were won over, tripling the energy team's 2007 budget to $15 million. “That will likely double again in 2008,” DeGrasse says. Next up for the team: promoting conservation to AIMCO's residents, who themselves spend an estimated $300 million to $400 million on their own energy across AIMCO's portfolio. “We think we can bundle energy conservation with other types of amenities targeted toward our residents that we then integrate with marketing for an incremental rental hike,” says DeGrasse. That program pilots this year.