The economy has left a number of companies in the red, but Enterprise Community Partners is clearly in the green. Last week, the Columbia, Md.-based nonprofit committed $4 billion to accelerate green affordable housing through the launch of the next generation of its Green Communities Initiative. Enterprise’s funding will help create, preserve, or retrofit 75,000 green homes and community and commercial buildings within the next five years.
The Green Communities Initiative, launched in 2004, is a five-year, $555 million commitment by Enterprise to build more than 8,500 healthy, efficient homes for low-income people. Homes are built according to Enterprise’s Green Communities Criteria, the first national framework for healthy, efficient, environmentally smart affordable homes. The goal? To make environmentally sustainable development the mainstream in the affordable housing industry.
The goal is becoming a reality, says Dana Bourland, vice president of green initiatives for Enterprise Community Partners. “The biggest impact we have had is offering a framework,” she says. “There has been a deep interest in wanting to engage in a green affordable housing program, and with the green communities criteria we were able to offer a ‘how do we get this done’ approach versus just engaging in long discussions.”
A $1.5 million grant from The Home Depot Foundation and $1 million grants from both The Kresge Foundation and The Kendeda Fund helped kick off Enterprise’s fundraising efforts. To ensure a lasting future for the program, Enterprise is developing new tools for greening affordable housing, including a national retrofit protocol for building performance audits and an industry-wide data management platform to track building performance and offer green asset management and policy guidance.
In conjunction with the launch, Enterprise released “Incremental Cost, Measurable Savings: Enterprise Green Communities Criteria,” a three-year study showing that building according to its green criteria adds, on average, 2 percent to upfront, one-time total development costs, with the additional investment recouped within eight years, while simultaneously reducing long-term operating costs. The study also highlights the program’s considerable economic, health, and environmental benefits, including reducing energy consumption by 30 percent on average; CO2 emissions by 2 tons per home annually; and water usage for irrigation alone by 30 percent.
Call to Action
Enterprise hopes that its work in the green arena will be a catalyst for dramatic change across the country. The company boldly issued a national call to action to public, private, and nonprofit sectors to make all affordable housing—new and existing—green by 2020.
But how realistic is that goal? “Greening new development? Absolutely,” says Jonathan Rose, CEO of New York-based Jonathan Rose Cos., an affordable housing firm that had financed a number of projects through the Green Communities Initiative. “It will happen quicker [than greening existing product] because so many states are requiring Enterprise’s guidelines for LIHTC funding. The bigger issue is going to be on existing developments. America only builds 1 percent of its multifamily stock a year; 99 percent of it exists. So we really have to figure out how to green the existing stock if we are going to reduce our carbon impact.”
Just last month, The Community Preservation Corp. (CPC), a New York-based nonprofit affordable housing lender, launched a program geared toward greening existing stock. The CPC Green Initiative will demonstrate how the mortgage finance system can be adapted to make energy-efficient retrofitting a fundamental part of the multifamily lending process. The public/private partnership will provide $1 billion in construction and mortgage loans to multifamily housing owners for energy-efficient upgrades and property retrofits. The $1 billion includes $500 million available from Freddie Mac; $300 million from the New York State and New York City public employee pension funds; $150 million from private lenders—with initial investments of $15 million from Deutsche Bank; $10 million from HSBC; plus additional investments from other major institutions such as Morgan Stanley—and $50 million from CPC-participating lending institutions.
“Our realistic goal is to increase fuel- and electrical-efficiency of existing apartment buildings by 20 percent or more, reducing a prime source of greenhouse gas emissions in our cities,” says Michael Lappin, president and CEO of CPC. “We anticipate financing retrofits for up to 15,000 apartments over the next few years. But to change the urban landscape, we will also need to adjust the financing landscape.”