Daniel Neiditch is the CEO of River 2 River Realty, Daniel has grown his family’s business into a multi-billion dollar real estate empire.
The Empire State Building has become a shining symbol of sustainability in New York City — literally. At night, the lights that define the building’s skyline silhouette are powered exclusively by green energy. Given the landmark’s status as a global-recognized icon, its switch to sustainability is a clear sign of New York City’s quiet evolution into an eco-friendly hub for innovation.
In January, the Empire State Realty Trust (ESRT), which owns the skyscraper and 13 other office buildings in the city, became the nation’s largest real estate user of fully renewable energy when it signed multi-year wind power contracts with Green Mountain Energy and Direct Energy. In total, these contracts are expected to provide 300 million kilowatt-hours of electricity across 10 million square feet of New York real estate — enough to light every home in New York State for a month.
The ecological impact will be remarkable. As the Washington Post noted, “By expanding its renewable energy commitments to its entire portfolio, ESRT will avoid the production of some 450 million pounds of carbon dioxide, the equivalent of removing all New York City taxis from the road for an entire year.”
The Empire State Building is lighting the way to New York City’s sustainable future. But will the rest of the city — and its residential real estate providers, in particular — follow?
It’s not overly optimistic to believe that, yes, they will.
Understanding NYC Residential Real Estate’s Transition Into Sustainability
Making a green transition offers considerable cost benefits. One research brief from the MacArthur Foundation noted that retrofitting all the multifamily housing stock in the U.S. could save up to $8 billion annually and slash electricity consumption by 15%. Switching to renewable energy could particularly help multifamily property owners who serve low-income families lower unpredictable utility costs and reduce their contribution to climate change.
Moreover, multifamily buildings arguably benefit more from sustainable upgrades than single-family homes.
As writers for the MacArthur Foundation brief explained, “Multifamily buildings are a prime target for retrofits because they are typically older buildings and have less efficient cooling and heating systems, older windows, and other energy-consuming features. Yet relatively few such buildings are updated, often because owners — and the banks that lend to them for upgrades — lack hard evidence on the cost-effectiveness of investments.”
But in recent years, NYC-based real estate investors have a real impetus to leap sustainability: regulation.
Regulation Is Kickstarting Sustainability In NYC’s Multifamily Sector
In 2019, New York passed the Climate Mobilization Act, which put forward a suite of policies intended to make the city’s skyline one of the most sustainable in the world. Two of those policies — local laws 92 and 94 — require all new buildings and those that undergo substantial renovations to add either a solar panel system or a green roof. The option owners choose depends on their preferences and logistics; if their building’s design precludes a green roof, builders must install solar panels.
These laws aren’t quite universal — some public properties and affordable housing complexes were explicitly exempted from the requirements. But some property managers are choosing to retrofit anyway to lessen emissions and save residents on their utilities. Some affordable housing providers led the charge toward sustainability even before the Climate Mobilization Act took effect.
In 2016, the Manhattan-based organization WE ACT for Environmental Justice collaborated with Solar One, a nonprofit that provides technical support for solar projects in New York, to start Solar Uptown Now (SUN) — an initiative that empowers affordable housing co-ops to collectively purchase solar power. To date, SUN has brought solar panels to 11 buildings in Manhattan and trained more than 100 residents in solar installations. Co-ops often have high energy costs due to the amount of power generated in shared spaces such as laundry rooms, boiler rooms, elevators and lit hallways.
“Solar for single-family homes is very straightforward — you could do it in a day if you wanted to,” Anika Wistar-Jones, the affordable solar program manager at Solar One, told Next City. “Installing solar in New York is more complicated, and installing solar in multifamily buildings in the city is more complicated still. And solar for multifamily affordable housing in New York City is the most complicated, and that’s why we do what we do.”
Solar is on the rise in New York City, not only because sustainability has become a requirement for new buildings but also because residential real estate investors recognize that embracing sustainability can increase cost savings and improve experiences.
What Multifamily Real Estate Owners Can Do To Facilitate Retrofits
Today, making the shift into sustainability is easier than ever. Property owners in New York who are interested in solar power can make an initial assessment of whether their property is suitable for solar energy by checking the NY Solar Map.
Owners can also turn to local government for support and financial assistance when conducting sustainable retrofits. The New York State Energy Research & Development Authority (NYSERDA), for example, partners with energy experts who can guide qualifying multifamily property owners through every step of installing energy-saving upgrades and green power systems. NYSERDA also organizes incentives for specific construction projects and heat pump upgrades through its Multifamily Performance Program (MPP).
Community solar groups are also an option. Under this arrangement, New Yorkers who live in a building without solar panels can draw power from panels located away from their dwelling. Co-op organizers can use this model to install solar panels on the building and enroll residents into an affordable solar plan. This model can help co-op managers recoup investment costs quickly and provide value for residents.
A renewable future for New York isn’t far out of reach. The Empire State Building has already proved that relying on fully sustainable power is a possibility — now, real estate investors and property owners simply need to follow the example it provides.
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