Sustainability

on common ground REALTORSÂŽ & Smart Growth

Adaptability and Resilience: Planning for an Uncertain Future Financing Home Energy Retrofits Green Infrastructure

Sustainability SUMMER 2017

Planning for a Sustainable Future According to the U. S. Environmental Protection Agency, “Sustainability is based on a simple principle: Everything that we need for our survival and well-being depends, either directly or indirectly, on our natural environment. To pursue sustainability is to create and maintain the conditions under which humans and nature can exist in productive harmony to support present and future generations.” 1 The NATIONAL ASSOCIATION OF REALTORS® is positioning itself as a leader in the field of real estate sustainability. NAR Members crafted this Vision Statement: “REALTORS® thrive in a culture of sustainability that promotes viability, resiliency, adaptability, and resource efficiency.”

NAR has been supporting sustainability efforts for years in several ways, including through its Green Designation for REALTORS® who have completed training on sustainability and green homes; and its Smart Growth Program, which assists state and local REALTOR® associations in becoming leaders in sustainable land use and transportation.

NAR showed its leadership in sustainability by building the first new certified LEED green building in Washington, D.C., in 2004, and has just achieved LEED Platinum certification for the building (as described on page 40). Furthermore, LEEDEB and IREM Sustainable Property Certifications have been earned for NAR’s Chicago headquarters building as well.

NAR’s recent “REALTORS® and Sustainability Report” included the results of a member survey taken in early 2017 (reported in detail on page 4) that found that REALTORS® Editor

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https://www.epa.gove/sustainability/learn-about-sustainability 4/25/2017

On Common Ground is published twice a year by the Community and Political Affairs division of the NATIONAL ASSOCIATION OF REALTORS® (NAR), and is distributed free of charge. The publication presents a wide range of views on smart growth issues, with the goal of encouraging a dialogue among REALTORS®, elected officials and other interested citizens. The opinions expressed in On Common Ground are those of the authors and do not necessarily reflect the opinions or policy of the NATIONAL ASSOCIATION OF REALTORS®, its members or affiliate organizations.

Assistant Editor Hugh Morris Manager, Smart Growth Program hmorris@realtors.org

Distribution

Special Issue Co-Editor

To order additional copies of On Common Ground, please e-mail us at OCG@realtors.org or contact Laura Pedro at lpedro@realtors.org or 202-383-1108.

Amanda Stinton Director, Sustainability & Green Designation astinton@realtors.org NATIONAL ASSOCIATION OF REALTORS 500 New Jersey Avenue, NW Washington, DC 20001 ®

On Common Ground is available online at www.nar.realtor/publications/on-common-ground On Common Ground is now also available in a new digital format optimized for tablets and smartphones. Download the free app from the Apple iTunes store or the Google Play store. ©

ON COMMON GROUND

are embracing sustainability in their own business practices and many are learning about green features and the energy performance of homes that they sell. Forty-three percent of the respondents reported that their Multiple Listing Service (MLS) includes data fields on green features of homes.

While the REALTORS® surveyed reported that only a small minority of clients make sustainability a high priority in their home search, they report that more than 50 percent of consumers have some interest in sustainability factors. NAR is committed to providing new resources to its members and REALTOR® associations so they can become a greater asset to their clients and their communities as we plan together for a sustainable future.

For more information on NAR, smart growth and housing opportunity, please visit www.nar.realtor/smartgrowth or www.nar.realtor/housingopportunity

Joseph R. Molinaro Managing Director, Community and Political Affairs jmolinaro@realtors.org

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Photo by Prakash Patel Photography, courtesy of SmithGroupJJR

SUMMER 2017

2017 National Association of Realtors®

On Common Ground

Summer 2017 Sustainability Buying a Home with Sustainable Features: Consumer Preferences

4

Selling Green: Marketing the Sustainable Home

8

by Brad Broberg

Reducing Barriers to Solar

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by Tracey C. Velt

Financing Energy Efficiency

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by Bobby L. Hickman

Water Availability and Infrastructure

20

by Brian E. Clark

Container Homes

Can “Upcycling” cargo containers produce affordable housing?

by Kurt Buss

How LEED Has Rocked the Built Environment

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34

by G.M. Filisko

Repurposing Our Nation’s Malls 42

by Brian E. Clark

Resilient Planning for the Future 48

by John Van Gieson

The Greening of Stormwater Infrastructure

How some cities are adding green space throughout the urban area to capture rainwater 54

by Joan Mooney

Achieving an Equitable Future with Smart Growth Principles 60

by Brad Broberg

NAR Community Outreach Awards 64 REALTORS® Take Action Making smart growth happen

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Courtesy of Green Energy Futures; Photo by David Dodge On Common Ground thanks the following contributors and organizations for photographs, illustrations and artist renderings reprinted in this issue: Greg Cannito, Corvias; Christina Chase, Corvias; Bradley K. Clark, Cushman & Wakefield; Tonya Daniels, City of Miami Beach; Derek Hackett, City of Minot; Jeff Holmes, SKDKnickerbocker; Theresa Lehman, Miron Construction Co., Inc.; Christa Montgomery, SmithGroupJJR; Chief Albert White Buffalo Naquin; Stephanie Reichin, SKDKnickerbocker; and Gayle Zalduondo, Little River Box Company.

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SUSTAINABILITY PART 1:

Buying a Home with Sustainable Features:

Consumer Preferences

Photo by Chrys Rynearson

By Brad Broberg

A

fter buying a home with solar panels and other green goodies, Diego Villar has become the envy of his foursome.

“I golf every Sunday. The people I golf with thought I was crazy at first, but now they’re talking about getting solar panels themselves,” Villar said.

Courtesy of the U.S. Department of Energy

Courtesy of Green Energy Futures; Photo by David Dodge

Villar lives with his wife and twin toddlers in the Chicago suburb of LaGrange. Sustainability “factored in a lot” during the search for a new home, Villar said. Going green was a matter of principle — “I’ve always been pro-green” — but also a matter of money and comfort.

Villar’s home is nearly 3,600 square feet, yet he spends 30 percent less for electricity and 40 percent less for natural gas than he spent when living in a 2,000-squarefoot-condo — all thanks to energy-efficient design and construction.

Built by Bright Leaf Homes in LaGrange, the house’s sustainable components include (besides solar panels) staggered studs that allow for a continuous blanket of insulation, smart fans with humidity indicators that sense when to turn themselves on and off and a tankless water heater.

“I wish we would have done even more,” Villar said.

“I’d love to get to a point where I buy another house and have a roof garden.”

Courtesy of Green Energy Futures; Photo by David Dodge

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SUMMER 2017

Not everyone is as all in with sustainability — a.k.a. going green — as Villar. Only nine percent of REALTORS® find consumers are “very interested in sustainability,” according to a new REALTORS® and Sustainability

Sustainability is a conservation-based approach to supporting the permanent economic, environmental and social health of communities as they grow and evolve. report published in April by the NATIONAL ASSOCIATION OF REALTORS® (NAR).

• E fficient lighting — 12 percent very important; 38 percent somewhat important.

While that’s a distinct minority, 51 percent of REALTORS® surveyed in the report find consumers are “somewhat interested” in sustainability. A green stampede? No. But it does indicate that most homebuyers have sustainability on their radar when looking for a place to live.

• S mart/connected home — 8 percent very important; 32 percent somewhat important.

Sustainability is a conservation-based approach to supporting the permanent economic, environmental and social health of communities as they grow and evolve.

Energy efficiency is a key component as it reduces reliance on fossil fuels, cuts carbon emissions and trims utility bills. Another pillar is walkable development, which not only addresses the fossil fuel/carbon emissions conundrum, but also lowers transportation costs.

Measuring demand for sustainability can be tricky because homebuyers don’t usually say they want “sustainability” even though they value features consistent with sustainability, said Daniel Geddis, a broker’s assistant with One Mission Realty in San Diego and a REALTOR® with NAR’s Green Designation.

• G reen community features (bike lanes, green spaces, etc.) — 8 percent very important; 29 percent somewhat important.

• L andscaping for water conservation — 8 percent very important; 24 percent somewhat important.

• R enewable energy systems — 3 percent very important; 20 percent somewhat important.

Home builders and remodelers expect sustainability to become an increasingly prevalent feature in construction, according to the “Green and Healthier Homes” study published in 2015 by the National Association of Home Builders (NAHB).

“They’re not thinking about it in those terms, but it’s what they want,” he said.

In sharing their perception of consumer preferences related to sustainability, REALTORS® said that a comfortable living space is by far the most wanted home feature with 71 percent saying clients consider it very important and 24 percent saying clients consider it somewhat important.

Forty percent of REALTORS® said clients consider proximity to frequently visited places (grocery store, school, etc.) very important while 47 percent said clients consider it somewhat important. Twenty-eight percent of agents and buyers said a home’s utility bills/operation costs are very important to clients and 51 percent said they are somewhat important.

Courtesy of Green Energy Futures; Photo by David Dodge

Other responses include: • C ommuting costs — 18 percent very important; 40 percent somewhat important.

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The greatest demand for green homes comes from consumers aged 55 plus.

The study found that more than half of home builders (54 percent) used green practices and products in 16 percent or more of their new homes while 39 percent of remodelers used green practices and products in at least 16 percent of their work.

Nearly all home builders (81 percent) said they will utilize green practices and products in at least 16 percent of the homes they build by 2020 — with 51 percent going green in at least 60 percent of their projects.

Three-quarters of remodelers (74 percent) said that at least 16 percent of their work will involve green practices and products by 2020 — with 36 percent going green in more than 60 percent of their work.

While green homes can cost less to operate, they can cost more to build, which builders and remodelers named as the chief challenge to the growth of the green real estate market.

Three-quarters of home builders and remodelers reported building green has an incremental cost of 5 percent or more over traditional construction.

However, a solid majority reported that customers are willing to pay more for green features.

The study found the greatest demand for green homes comes from consumers aged 55 plus, not millennials as might be expected. One possible takeaway is that greater familiarity with home features leads to a greater emphasis on home performance.

As sustainability-minded millennials become home owners, they could generate even greater green demand in the future.

When asked to name the green benefits customers care about most, home builders and remodelers said energy efficiency was mentioned most frequently by every age group — 18-35 (70 percent), 36-54 (81 percent) and 55 plus (81 percent). Healthier indoor living environments and durability/resilience were either second or third depending on the group.

Five of the six green products and practices considered most important by home builders and

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ON COMMON GROUND

Courtesy of Green Energy Futures; Photos by David Dodge

Builders and remodelers are playing catch-up with the demand for green homes. remodelers involve energy efficiency. Properly sized and installed HVAC systems topped the list. Durable materials were number two followed by highly efficient HVAC/water heating systems, code-exceeding insulation, energy efficient appliances and code-exceeding windows. Other green products and practices listed were increased moisture control/ventilation, water-conserving appliances, efficient lighting and water-conserving plumbing fixtures.

something to make their home more energy efficient in the next three years, according to the study.

A study by the nonprofit Demand Institute in New York suggests builders and remodelers are playing catchup with the demand for green homes. “The Housing Satisfaction Gap” looked at 52 different housing characteristics — everything from updated kitchens to more storage — and found that energy efficiency was the biggest unmet housing desire among those surveyed.

While monthly savings can amount to $100 or more, consumers are more focused on comfort and health, Miller said. The bulk of energy performance improvements — be they high-performance HVAC systems, tighter building envelopes or increased levels of insulation — contribute to comfort and health by maintaining desired temperatures, dampening outside noise and/or reducing moisture problems that aggravate asthma and allergy symptoms, Miller said.

The 2014 study found that 71 percent of households described energy efficiency as very important, but only 35 percent described their home as energy efficient.

As a result, consumers are looking for ways to be more efficient — 76 percent said they planned to do

Consumers are looking for ways to be more efficient.

“Energy performance ties in well with ... meeting demand for healthy and comfortable homes, demonstrating a person’s values and improving month-to-month affordability,” said Doug Miller, a senior associate with the Rocky Mountain Institute (RMI), a nonprofit based in Basalt, Colo., that promotes energy efficiency and renewable energy.

Current demand for sustainability comes against a backdrop of stable energy prices. “Buyers haven’t felt the pain point of energy costs yet,” said Rick Thompson, a REALTOR®, an NAR Green Designee and co-owner of Bright Leaf Homes. When energy costs do reach their pain point, look for sustainability to become an even bigger factor in home construction and home buying.

SUMMER 2017

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SUSTAINABILITY PART 2:

Selling Green:

Marketing the Sustainable Home

Photo by Chrys Rynearson

W

ith consumers showing growing interest in green living, REALTORS® are striving to support the green real estate market by capturing and conveying the benefits of sustainability in more meaningful and measurable ways.

“One of the things I’ve learned is you just can’t keep throwing around the word green,” said Rick Thompson, a REALTOR® and co-owner of Bright Leaf Homes, a home builder specializing in sustainable construction in the Chicago suburb of LaGrange. “If everything is considered green, nobody thinks anything is green. It becomes a hollow claim.”

Photos courtesy of Green Energy Futures; Photos by David Dodge

Thompson is one of nearly 3,500 REALTORS® who hold NAR’s Green Designation through a NATIONAL ASSOCIATION OF REALTORS® (NAR) program that provides advanced training to help REALTORS® seek, understand and market green properties — skills that can unlock the value of sustainability and provide a competitive edge in the marketplace.

Marketing a high-performance home takes more than targeting people who bleed green. It also means translating sustainability into desirability for the masses.

“One out of 10 buyers might be really into green and buy a green home because ... they’re environmental enthusiasts,” Thompson said. Most buyers look at environmentalism as the cherry on top, he said, so it’s important to sell them on the meat-and-potatoes benefits of green homeownership.

Marketing a high-performance home means translating sustainability into desirability for the masses.

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ON COMMON GROUND

Energy efficiency is the most marketable benefit of sustainability.

Energy efficiency is the most marketable benefit of sustainability.

“That’s something that can be quantified and people can wrap their heads around,” Thompson said.

The Home Energy Rating System (HERS) Index and the Home Energy Score (HES) are recognized by the Department of Energy, the Environmental Protection Agency (EPA) and the Department of Housing and Urban Development (HUD) as a gold standard for quantifying a home’s energy efficiency.

The HERS Index was created by the Residential Energy Services Network (RESNET), a nonprofit organization that helps homeowners make their homes more energy

efficient through a variety of services. It generates a score relative to the size, shape and type of any given home. The lower the HERS score the more energy efficient the home is. A score below 100 means a home is more energy efficient than a comparable home built in 2006 and a score above 100 means it’s less energy efficient.

A certified RESNET energy rater uses special equipment to test the amount and location of air leaks in the building envelope, the amount of leakage from HVAC distribution ducts and the effectiveness of insulation inside walls and ceilings. The results are combined with other variables such as the performance of HVAC and water heating systems to calculate the home’s HERS Index Score.

“I compare it to a miles-per-gallon sticker on a car,” Thompson said. “If you’re buying a car, you can see how efficient the car is. Why not try to [evaluate energy efficiency] when you’re looking for a home?”

Providing a HERS Index Score can make a green home more sellable if it shows the home is less expensive to live in, Thompson said.

Even if energy costs are bearable now, they can spike at any time. Thompson touts energy efficiency as a way to

Courtesy of Green Energy Futures; Photos by David Dodge

SUMMER 2017

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Photos courtesy of Green Energy Futures; Photos by David Dodge

“future-proof homes” against the threat of rising prices.

“The other thing about green homes is that they’re built to be more comfortable,” he said. “You don’t need to buy space heaters or rearrange furniture just to deal with drafty doors or windows.”

Energy efficiency and other green selling points need more visibility at every step in the sales and marketing process, Thompson said.

“A big part of NAR’s Green Designation is to help [REALTORS®] push education about green homes to consumers, appraisers, lenders and other real estate professionals and get green information at the forefront MLS listings where all the great features and benefits” are plain to see, Thompson said.

MLS listings come in various shades of green. NAR developed a template to help REALTORS® encourage more multiple listing services to include a wider range of green features in their standard data fields.

REALTORS® in San Diego are working to green their local MLS with fields for drought-tolerant landscapes — increasingly coveted in parched California — owned

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versus leased solar panels and other sustainable features, said Daniel Geddis, a broker’s assistant and green designated REALTOR® with One Mission Realty.

Such information can be included in a listing’s remarks section, but inconsistent terminology, spelling and abbreviations can leave holes in online search results. The standardized fields mentioned previously can help to change all that through data consistency and the ability to search by a specific feature, like the solar panels Geddis mentioned.

“Remarks are very subjective in how they’re written,” Geddis said. “The fields allow you to have yes or no answers.

We think [green fields] will help increase the exposure and marketability of green homes and their value.”

A HERS Index Score , LEED (Leadership in Energy and Environmental Design) certification, Energy Star certification and other sustainable designations carry a lot of weight with buyers, but formal certifications remain the exception for most homes. Geddis makes a point to question the sellers he works with about all of the green features in their home to generate an informal report card.

Integrating lower utility bills, reduced transportation costs and other sustainability savings into the loan qualification process is another opportunity to support the green real estate market.

“They may not even realize they have a green feature in their home like a whole house fan that helps keep the house cool in the summer and reduces how often you have to run your air conditioner,” he said.

The Appraisal Institute, a professional association in Chicago, offers a Residential Green and Energy Efficient Addendum that sellers can use to document green features and improvements.

One green metric that is already ubiquitous across the MLS ecosystem is WalkScore, an online easy button that rates homes on their proximity to stores, restaurants and parks and the ease of walking to them.

“I don’t know that every buyer is looking for that [but] if they are, that’s a tool that’s easily available to us,” Geddis said.

“It’s a proxy for transparency that demonstrates the seller doesn’t have anything to hide ... and that you’re telling them everything you know about the home.”

REALTORS® could even pay for an energy audit — either on behalf of a seller to market their home or a buyer to shed light on the total cost of ownership. “Maybe [the audit] costs $300, but if that’s what they need to seal a deal with a client, it might be worth it,” Miller said.

Brad Broberg is a Seattle-based freelance writer specializing in business and development issues.

His work appears regularly in the Puget Sound Business Journal and the Seattle Daily Journal of Commerce.

Some listing sites are already incorporating scores or information that inform buyers about a property’s readiness for solar panels. Other sites are including home performance data through scoring. As the demand for energy information continues to grow as an asset in the home buying process, it is possible that an ‘easy button’ for energy ratings could appear on listing platforms in the future.

Integrating lower utility bills, reduced transportation costs and other sustainability savings into the loan qualification process is another opportunity to support the green real estate market. Through its new Residential Energy+ program, RMI is working with “one or two” groups in the mortgage underwriting field to factor in energy savings when qualifying buyers for loans, Miller said.

“It’s not just the physical asset of the home that lenders [should consider],” he said. “It’s the cost to operate the home and to get to and from the home — the total cost of ownership.”

Miller advises REALTORS® to build a network of greencertified contractors, appraisers and other real estate professionals to help them provide clients with the advice and services they need to maximize the benefits, valuation and marketability of a sustainably built home.

Photo by Chrys Rynearson

REALTORS® should also encourage sellers to disclose their utility bills even if the bills are high, Miller said.

SUMMER 2017 11

Re duc i ng Bar r i er s to

Solar

Courtesy of Black Rock Solar

Solar energy for homes has become more affordable and is being used by more homeowners. However, there are still barriers to overcome.

By Tracey C. Velt

J

ust five years ago, installing a solar energy system to heat your pool or to power your whole home was out of the question for most homeowners. Hard costs, meaning the cost of the equipment and installation, were sky high.

Things have changed.

“About two-thirds of the cost of going solar are soft costs — permitting, zoning, inspections,” says James Scholl, project manager for The Solar Foundation in Washington, D.C. That can add significantly to the cost for residents.

“Costs have come down so much that [they are] equal to or cheaper than the alternative [electric],” says Tom Kimbis, executive vice president of the Solar Energy Industries Association (SEIA) in Washington, D.C.

“It’s not as much an issue of dollars; it’s an issue of educating homeowners on what it means to go solar,” says Kimbis.

Education is another barrier.

While costs are coming down, there are still impediments to going solar.

In addition, according to Amit Ronen, director of the George Washington University Solar Institute in Washington, D.C., technical challenges affect at least half of all homes in America. “Is the home suitable for solar?

Some roofs may face the wrong way, others are in shady areas, and still others need maintenance or are close to the end of its life, which means the roof must be replaced before solar is installed.”

“Soft costs and red tape are currently barriers to solar at the homeowner level,” says Jack Morgan, program manager at the National Association of Counties. “There is a lengthy process to get a system permitted and inspected, let alone determining whether it’s allowable per zoning.”

New ownership and financing models allow more Americans than ever to choose solar.

Kimbis notes that solar hard costs have fallen 67 percent over the past five years — 29 percent over the past year!

In addition, new ownership and financing models allow more Americans than ever to choose solar.

Barriers to Going Solar

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SUMMER 2017

Finding Solutions The good news is that for all the barriers, there are solutions. Concerning technical challenges, Google recently expanded Project Sunroof, where you can type in your home address, and it will show you via satellite your home’s solar potential. The site offers valuable information about potential ownership and financing costs as well as whether lease options are available in your state.

SEIA produces a downloadable PDF, called “Residential Consumer Guide to Solar Power,” available at http://www. seia.org/research-resources/residential-consumer-guidesolar-power, outlining frequently asked questions about solar, financing options and more.

“We are a national trade association for solar, and we launched a consumer protection initiative 10 years ago,” says Kimbis. “Solar adoption is increasing. We went from several hundred installations a couple of years ago to passing 1 million home installations last year. With that rate, we wanted to make sure that consumers understood the benefits and the transaction.”

Also, the Interstate Renewable Energy Council (IREC) offers a checklist for residential consumers considering solar solutions as well as a downloadable Clean Energy Consumer Bill of Rights that covers consumer relationships with utilities, third-party providers and sellers, access to the utility grid and access to electricity consumption data. (Available at http://www.irecusa.org/)

“Regardless,” says Ronen, “you must calculate whether you want to pay a lump sum capital expenditure and get free electric for 25 years (the average life of the PV solar panels), or amortize it over 25 years.”

SunShot Initiative In addition to tax credits, there are other programs centered around affordability. The U.S. Department of Energy SunShot Initiative is a national effort to make solar energy affordable for all Americans through research and development efforts, in collaboration with public and private partners. According to energy.gov, when SunShot was launched in 2011, it set a goal for solar energy to become cost-competitive with traditional forms of electricity by 2020 without subsidies. In May 2016, SunShot released “On the Path to SunShot,” which found that just five years into the initiative, the solar industry had achieved 70 percent of the progress toward the 2020 goals.

Part of making systems more affordable is offering financing options to homeowners, including purchasing a system with cash or a loan where the homeowner owns both the system and all the power it produces; leasing

Solar energy tax credits can be more valuable than the electricity itself.

Courtesy of Patrick Lien

Financial Solutions Not all barriers to solar have quick-fix or easy solutions.

Take the cost of a system, for example. While costs have gone down, the cost to install photovoltaic (PV) solar panels on a house to generate one’s own electrical energy is between $7 to $9 per watt. A 5kW system costs around $25,000 to $35,000 to install, according to the Solar Power Authority, which offers a free calculator at https:// www.solarpowerauthority.com/calculator.

Of course, says Ronen, “Almost anywhere in the country, if you install a solar system, you’ll be making money.

Solar energy tax credits can be more valuable than the electricity itself.”

In fact, federal tax credits due to expire last year have been extended through 2017. Homeowners who meet certain criteria when installing PV systems can receive a tax credit of 30 percent of the cost with no upper limit.

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Courtesy of U.S. Department of the Interior

Courtesy of the U.S. Department of Energy

a system where the homeowner only owns the power it produces for the home; or a power-purchase agreement (PPA), where you buy power from a system owned by a solar company at an agreed-upon rate.

A community solar model allows members of a community to share the benefits of solar power.

“Until last year, leasing was the most popular financing model,” says Ronen. However, he says, “there’s been a shift to ownership of the system so that the homeowner gets to keep a bigger chunk of the revenue stream.”

from the electricity generated by the community solar farm, which costs less than the price they would ordinarily pay to their utility.

Green Banks According to a whitepaper called, “Growing Clean Energy Markets with Green Bank Financing” by the Coalition for Green Capital, several states have established green banks to attract and leverage private sector capital to accelerate clean energy deployment. A Green Bank is a public or quasi-public institution that finances the deployment of renewable energy, energy efficiency, and other clean energy projects in partnership with private lenders. Connecticut and New York are two states that developed Green Banks to address specific financing gaps.

Community Solar Model A new model that is gaining traction is the community solar model, which allows members of a community to share the benefits of solar power even if they can’t install solar panels on their property. Project participants benefit

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“A large system is put in a community, and the solar power is shared which is beneficial to lower income persons or renters, along with those who live in shady areas, condos or have older roofs,” says Kimbis.

According to Navigant Research’s “Utility Technology Disruption Report, “Community solar is enabled by virtual net metering, which allows consumers to offset part or all of their electricity bills with the electricity produced by the solar project.” By the end of 2015, says the report, 88.6 MW of capacity was deployed under community solar programs across the United States, representing an estimated $175 million in revenue from those installations.

Programs Helping with Regulatory Costs As you can see, there are several solutions for hard costs. However, the soft costs of permitting, zoning

and inspection are proving more difficult to resolve as they are within the scope of the local government’s purview.

“Streamlining local regulatory processes can decrease the cost of installing a typical system by approximately $2,500,” says Scholl. “Permitting backlogs, which in some areas can take weeks or even a month to get a permit, can add costs.”

Scholl works with the SolSmart program, a national solar designation program that recognizes communities for their efforts to make it faster, easier and cheaper for residents to go solar.

“We’re working with cities, counties and towns on reducing those soft costs,” says Scholl. That means, helping communities identify the ways in which zoning codes can be more solar friendly, having online permitting requests (rather than requiring a trip to the office) and more.

Real estate professionals need to know how solar can benefit home sales and resale values.

In fact, in a study limited to California, the National Renewable Energy Laboratory (NREL) found that solar homes sold 20 percent faster and for 17 percent more than the equivalent non-solar homes, across several subdivisions built by different California builders.

With a growing number of homeowners interested in solar, lower prices on hard costs and help with soft costs, the move to solar has never been more attainable.

Tracey C. Velt is Florida-based freelance real estate and business writer.

“We’re empowering counties to become more solarfriendly and energy efficient,” Morgan said. “By removing barriers and lowering costs to go solar, counties can promote economic development and be better stewards of taxpayer resources.”

PACE Model

Courtesy of Minnesota Solar Challenge

There’s also the Property Assessed Clean Energy (PACE) model from the U.S. Department of Energy.

It’s an innovative mechanism for financing energy efficiency and renewable energy improvements on private property. PACE programs allow local and state governments or other inter-jurisdictional authorities, when authorized by state law, to fund the upfront cost of energy improvements on commercial and residential properties, which are paid back over time by the property owners.

“Essentially, the PACE model allows homeowners to purchase a system and involves a lien on the property paid via property taxes,” says Kimbis. (See article on page 16 for additional information.)

“There’s very strong support for solar energy right now,” says Ronen. “It’s a non-partisan issue. People aren’t aware of how affordable it is right now. Real estate professionals need to know how solar can benefit home sales and resale values.”

Emma Gilchrist, DeSmog Canada

SUMMER 2017 15

financing energy efficiency

By Bobby L. Hickman

M

aking their homes more energy efficient is a top priority for many homeowners. However, financing those upgrades can be a challenge, as it can take many years for the energy savings to pay for the improvements. Fortunately, two recent options are helping homeowners fund energy-related improvements: Home Style Energy Loans and PACE loans.

Fannie Mae and Freddie Mac introduced the Home Style Loan and the Home Style Energy Loan in 2016.

The first program covers general renovations, while the second addresses energy- and water-efficiency upgrades.

Eligible work includes electric and water systems improvements, new insulation, programmable thermostats and weather stripping.

Home Style Energy allows those purchasing or refinancing a home to borrow up to 15 percent of their home’s appraised value for energy upgrades. Existing high-interest

loans for energy improvements can also be rolled into a refinanced mortgage. Loan costs are added to the mortgage, eliminating the need for a separate loan. Home Style loans are available through all approved Fannie Mae and Freddie Mac lenders across the country.

In some communities, another program is available: PACE (“Property Assessed Clean Energy”) loans. PACE is a national initiative to provide new financing options for energy-related improvements to both residential and commercial properties. Unlike a traditional loan, the principal and interest for the energy improvement loan are added to the owner’s property tax payment and typically repaid over 20 years.

PACE began in California in 2007. While PACE is expected to grow rapidly in coming years, its availability remains limited, particularly for residential properties. It has also become controversial in some areas due to consumer protection challenges. In addition, the tax lien’s priority over an existing mortgage can cause problems buying and selling homes with a PACE loan.

PACE is a national initiative to provide new financing options for energy-related improvements.

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SUMMER 2017

PACE helps eliminate many barriers to doing energy efficiency projects.

Corvidae agreed some problems emerged early on in the residential market, which is less mature than the commercial sector. Now PACENation has issued “strong” residential guidelines, and additional standards and consumer protections are being developed.

Each state legislature must pass measures enabling cities and counties to offer PACE programs. Then, city and/or county governments in that state vote to make PACE active within their jurisdictions.

Many of those issues surfaced in California, the earliest and most robust market. In fact, some communities are considering dropping PACE.

By the end of 2016, PACE programs were enabled in 33 states plus the District of Columbia, according to PACENation, an industry association. Commercial PACE programs are active in 17 states and enabled in 11 more, providing $340 million since the late 2000s and improving 1,200 buildings. Residential PACE is active in three states (California, Florida and Missouri) and enabled in 15 others.

Residential PACE financing totaled $3.7 billion and funded improvements at 148,000 homes, PACENation statistics show.

While PACE is growing dramatically, there have been some issues. “In any new market, there are always some bugs to work out,” said Jacob Corvidae, who manages the residential energy program for the Rocky Mountain Institute. The institute is an independent nonprofit that works with groups across the country to use market approaches such as PACE to drive clean energy transition.

“PACE does vary a fair amount from state to state,” Corvidae said, “which we feel is appropriate. It is a public-private partnership that always has a local element.” While PACE is enabled by states, “We are seeing a need for — and increasing movement towards — some national standardized guidelines.”

One issue is the tax lien’s priority over mortgages. “PACE was completely on hold for most of the country when Freddie Mac and Fannie Mae said it was not going to work for them [several years ago],” Corvidae noted. “Then FHA released guidance last year on how it can make sense for both primary and secondary loans as a functional financing tool.”

Residential PACE has “been a hugely useful tool in California, where it has grown dramatically,” Corvidae said.

“For many people, when their furnace breaks down — but they don’t have the means to pay out-of-pocket — they replace it with a cheaper model that is less energy-efficient.

PACE helps put them in the right state-of-the-art equipment when they need it. That’s not easy to come by using other solutions.”

Courtesy of Greens MPs

17

Kim Schaefer, government affairs director for the Bakersfield Association of REALTORS®, said Kern County implemented PACE three years ago and Bakersfield about 18 months later. Kern is “a huge FHA market,” Schaefer noted. During its three-year span, some 3,000 Kern homes received PACE financing totaling $70 million in a market where the average home price is $225,000.

“We started seeing a lot of folks who thought they were getting into a government program,” Schaefer said. Those homeowners were surprised when a new tax lien appeared on their assessment or house payments jumped. There are no credit checks, so some people end up with improvements they cannot afford, she continued. “We have one man who is unemployed and got a $54,000 PACE loan.”

Delays in adding PACE liens to county assessments compounded the problems. “We’ve had people buy homes where PACE was not disclosed because the seller had no idea what they’d done, and it was not on the assessment yet,” Shaefer added. “Now they are paying hundreds each month that they didn’t expect.”

How PACE is marketed can also be problematic. The contractors providing energy upgrades are also the loan originators, Shaefer said. “There is no approval process,

and no limit on what they can charge.” Some people have paid two to three times the market price for air conditioners under PACE. “It’s easy for people to get ripped off,” she added.

PACE loans can also cause problems for people buying and selling homes. “Nobody wants a property with a lien that takes priority over the mortgage — especially if the improvements cost more than the market value,” Schaefer noted.

Schafer and other California REALTOR® association government affairs directors are urging local governments to rescind PACE. The Bakersfield association received an NAR Issues Mobilization Grant that helped it run an effective media campaign.

She added the campaign has encountered “a lot of pushback,” particularly from companies that benefit from PACE. A 2016 proposal by the California Association of REALTORS® to make the PACE tax lien subordinate to mortgage failed to advance in the legislature. Stalled in Sacramento, opposition has moved from the state capital to municipalities. Shafer added, “I think you’ll see a domino effect of more local areas getting rid of it.”

Some problems have arisen in the residential PACE market.

Courtesy of the U.S. Department of Energy

18 ON COMMON GROUND

The NATIONAL ASSOCIATION OF REALTORS® is supporting a bill in Congress that would provide consumer protections for Property Assessed Clean Energy loans, known as PACE loans.

The bill (S. 838 and H.R. 1958) would require PACE loans to provide the same Truth in Lending Act consumer protections as mortgages, including the Consumer Financial Protection Bureau's “Ability-to-Repay” and “Know Before you Owe” rules and Home Ownership and Equity Protection Act standards. The bill has the support of many groups in the fields of real estate and financial services.

Photo by Jon Callas

Meanwhile in Texas, “Commercial PACE is a great tool for property owners to make improvements,” said Tim Crockett, president of PACE Houston, which consults with companies on energy efficiency projects. Crockett said PACE allows property owners to access a new capital stream for energy updates. Tenants benefit from lower utility bills. The program helps the environment; creates jobs; boosts economic development; and makes cities healthier.

“It’s an ingenious idea,” the commercial real estate veteran added. “I wish I’d thought of it 30 years ago!”

Crockett said Texas introduced its program a few years ago. “We benefitted by not being the first, and Texas has a pretty good system,” he said. For example, Texas is an open market with free competition, while some states set up a lender as the PACE administrator, which can bring higher fees. Texas also requires PACE projects to be reviewed by an outside engineer to ensure that the energy savings will pay for themselves over the life of the project.

Texas also chose not to offer residential PACE, partly because of issues in other states. Crockett also noted that lower electricity rates in Texas make it more difficult for residential projects to be economically feasible.

The state also requires a property’s first mortgage holder to be involved in the PACE process. “By definition, a tax

Commercial PACE is a great tool for property owners to make improvements.

lien takes priority over a mortgage,” Crockett explained.

“So if you’re a lender with a $30-million lien against a $50-million building, and I do a $1-million PACE project, I just jumped ahead of you in the mortgage order.” Crockett added more lenders are realizing PACE upgrades bring more benefits than risk to them. Some 120 banks have agreed to consider PACE projects on a case-by-case basis.

“PACE helps eliminate many barriers to doing energy efficiency projects,” Crockett concluded. “PACE projects in Texas save more energy dollars than it costs to install and finance improvements. It’s a win-win scenario.”

Corvidae added. “There’s a real need and PACE is solving a financial problem.” He pointed to the Demand Institute’s recent Housing Satisfaction study that found the greatest unmet desire among homeowners is improving energy efficiency. “People know they want it but are having a hard time figuring out how to do it,” he said. “Programs like NAR’s Green Designation [which educates REALTORS® on energy efficiency] are fantastic. There is a growing need for the real estate industry to help buyers and sellers understand what they can do around energy efficiency.”

The FHA guidance in 2016 also reflects national interest in making PACE work, Corvidae added. “While there are concerns out there that need to be addressed, PACE is poised for rapid growth across the country in the next couple of years. We think we’ll see a lot more state programs emerging.”

Bobby L. Hickman is a freelance business journalist based in Atlanta.

SUMMER 2017 19

Water Availability AND

Infrastructure Many parts of the country have major water issues.

Courtesy of USFWS; Photo by Steve Martarano

Courtesy of USFWS; Photo by Joanna Gilkeson

Courtesy of U.S. Army Corps of Engineers

By Brian E. Clark

I

t rained and snowed with a vengeance in California this winter, bringing an end to the state’s six-year drought.

But just because nearly all of the Golden State’s reservoirs are now filled to the brim — with some even spilling — that doesn’t mean conservation efforts that worked well are being abandoned. Far from it, in fact.

“Water conservation is a way of California life from now on,” Steven Moore, a member of the state’s Water Resources Control Board said after a recent meeting.

Elsewhere around the country, from Texas to Georgia and Florida, saving water has become the norm as whole regions adapt to periodic droughts while their populations grow rapidly. Even in states with abundant rainfall, water infrastructure problems — such as Flint, Michigan’s lead pipe contamination — have grabbed national headlines.

Gov. Jerry Brown officially declared California’s drought over for most areas of the state on April 7.

However, regulators said they’ll continue to punish wasteful water practices such as hosing down sidewalks or watering lawns during or directly after rains. The state will also establish multi-year programs that mandate conservation, officials said.

Brown, while praising urban residents for reducing water use by 25 percent in February of this year over the same month in 2016, also warned that groundwater levels are still dangerously low in some areas and

California will establish multi-year programs that mandate conservation.

20 ON COMMON GROUND

SUMMER 2017

Additional water demands will have to be made up by investment in conservation, water recycling and cleaning up our groundwater basins. reminded Californians that the next drought could be right around the corner.

Jeffrey Kightlinger, general manager of the huge Metropolitan Water District of Southern California, echoed Brown and said that although this drought emergency has ended, the need to conserve continues.

“Southern Californians learned a lot about water conservation during the latest drought,” he said in a statement.

“We cannot afford to forget those lessons.”

Bob Muir, a spokesman for the district — which provides up to 2 billion gallons of water daily to 19 million people in its 5,200-square-mile service area — said saving water will play a “fundamental role, not only in responding to dry times, but more importantly making life in Southern California more sustainable.

Because the main sources of the district’s water — Northern California streams and the Colorado River — are limited, he said the district may partner with Los Angeles County sanitation districts to build a large regional water recycling project in the Carson suburb that would purify waste water and then pump it into groundwater basins in Orange and Los Angeles counties for later use.

Dubbed “direct potable reuse,” he said this is a successful system that’s been employed for a decade in Orange County and is considered “state-of-the-art.”

Muir said desalinization could also play a role in providing more water, as could several new off-stream reservoirs in Northern California.

“When you look to the future and the way Southern California may grow and prosper, additional water demands will have to be made up by investment in conservation, water recycling and cleaning up our groundwater basins. We are reaching an era of limits on our supplies that we get from the Colorado River and from Northern California.”

He said while Southern California’s population has grown by 4 million people over the past 25 years, its water use has declined.

“We’re doing that because of the changes we’ve made in conserving water and managing our demands,” he said.

Because 30 percent of district water use goes for irrigating lawns and shrubs, he said his agency began encouraging homeowners to switch their grass turf yards to native plants about a decade ago.

Photo by Jon Myatt

Photos courtesy of USFWS

“We also asked them to use timers and get (self-programming) smart irrigation controllers, which are considered pretty conventional now,” he added.

Muir said a 1992 dry spell got most Californians to drought-proof the insides of their homes by replacing water-wasting toilets and shower heads with high-efficiency models.

“Now when homes are sold, they have to be brought up to water-efficiency codes, so that’s become part of the business norm,” he noted.

Photo by Ian Shive

21

However, he said desalinization isn’t a “silver bullet,” though it can provide water on a more local level, like it’s doing now in Carlsbad. In that town north of San Diego, the aptly named Poseidon plant — which opened in 2015 — has a capacity of 50 million gallons of water a day.

Most Golden State residents have embraced conservation efforts.

Jim Thorne, an environmental research scientist at the University of California, Davis, agreed that most Golden State residents have embraced conservation efforts. But he warned that the effects of the drought aren’t over. More than 100 million trees — most of them in the Sierra Mountain Range — died during the drought and others were so weakened that they may be susceptible to disease and predators in coming years.

“So it’s not just a water-accounting thing, though that’s certainly a huge part of it,” he said.

Though the reservoirs may be full, he said heavy pumping of water from underground aquifers in the Central Valley has caused the ground to subside. That’s made irrigation canals crack and roads buckle in some places.

Scientists say it also may have permanently depleted storage space in the huge aquifer under California’s Sacramento and San Joaquin valleys.

USDA photo by Bob Nichols

Over-pumping from groundwater basins along the Pacific coast has allowed seawater to infiltrate aquifers in places such as the Pajaro Valley near Santa Cruz — which is three miles from the ocean.

“Agriculture uses 80 percent of the water in California,” he said. “And when allotments to farmers were cut because of the drought, they sunk deep wells. But for the most part, those withdrawals aren’t monitored, so we don’t know how much remains. However, the deeper you go, the saltier and the lower quality the water gets.”

In Texas, Daniel Rodriguez, legislative director for the Texas Association of REALTORS®, said conservation is playing an important part in planning for his state, too. Texas went through a major drought earlier this century that led to the passage of a $2-billion state water bond in 2013 that earmarked at least 20 percent of the funds for conservation efforts. The state already has some of the strictest rules in the country for highefficiency plumbing.

“Right now, we’re trying to figure out from a long-term standpoint what Texas can do when we enter our next drought — which we know will be coming — and what we can do to mitigate water shortages,” he said.

22 ON COMMON GROUND

USDA photo by Alice Welch

Texas has some of the strictest rules in the country for high-efficiency plumbing.

He said Lyle Larson, the chairman of the House Natural Resources Committee, is working on ways to capture storm water runoff.

“We’ve been told more than 100 million acre feet of water flows into the Gulf of Mexico each year, but that we only use about 10 million acre feet,” he said. “So if we can capture some of that and put it in underground storage for future use, that would be a great benefit.”

He said Texas is blessed with around a dozen rivers and seven aquifers from which to draw water. But when drought hits, parts of the Lone Star State — particularly in the west — can get mighty dry, he added.

“And we’re getting more and more people moving to Texas — upwards of 1,000 — every day,” he added. “So we have to be better stewards of the water we have.”

In the east, Florida last year created the Central Florida Water Initiative (CFWI), a water-supply planning endeavor that calls for setting water-flow rates from springs and coordinates the State Department of Environmental Protection, the State Agriculture Department and regional utilities and water authorities.

The legislation — which was opposed by environmental groups as too weak — also would establish management plans for farming around Lake Okeechobee, the Caloosahatchee Estuary and inland portions of the Caloosahatchee River watershed, as well as the St. Lucie River and Estuary.

Andrew Rutledge, a public policy representative for Florida REALTORS®, said the northern part of the state has abundant water supplies from rivers and springs. In the central and southern portions of the state, however, it’s a different story.

“There have been water wars in Florida over that resource that have gone to the courts,” he said. “We don’t want to go that way again, so the CWFI was created to bring together management districts to make sure they don’t run out of water, fund new water-treatment plants and work on conservation measures.”

He said one of the other major water issues facing the state is the health of Lake Okeechobee and the Florida Everglades, both of which have suffered from pollution and other problems.

The quality and clarity of Florida’s waterways have also hit homeowners in the pocketbooks. A 2015 study done for Florida REALTORS® showed that property values

Courtesy of Florida Sea Harvest

There is a direct relationship between water quality and home prices. declined when the water fronting property in Lee and Martin counties in southern Florida was murky from algal blooms caused by water being released from Lake Okeechobee. There is a direct relationship between water quality and home prices, the report said.

To the north in Georgia, the rapidly growing Atlanta area has also been hit with drought in recent years. The region has limited groundwater supplies — around 1 percent — because of its granite geology. It gets roughly 70 percent of its water from the Chattahoochee River, which originates in the southern Appalachian Mountains and flows southwesterly through the Atlanta metropolitan area before ending in Lake Seminole, at the Georgia-Florida border. The major reservoir on the river is Lake Lanier.

For the past two decades, Georgia, Alabama and Florida have been in the so-called Tri-State Water Wars, fighting over access to stream flows from two shared river basins, the Chatahoochee-Flint-Apalachicola and the

SUMMER 2017 23

An installation of a biodetention pond at Phoenix Park on Martin Street in Atlanta

Courtesy of City of Atlanta Department of Watershed Management

USDA photo by Bob Nichols

Atlanta’s Metro Water District has adopted numerous water conservation measures since it was created in 2001.

Alabama-Coosa-Tallapoosa — both of which are critical to meeting Atlanta’s water needs. The three states continue to battle in the courts, with Alabama and Florida arguing that Georgia takes too much water. Florida, for its part, says the environment supporting oyster beds in its Apalachicola Bay in the Panhandle Region have been severely damaged by removal of water by Georgia.

Regardless of the outcome of those cases, Atlanta’s Metro Water District — which has a “My Drop Counts” motto — has adopted numerous water conservation measures since it was created in 2001. Over the past 16 years, the region has grown by more than 1 million people, while water use has dropped by 10 percent, officials said.

The population continues to grow, however, so in order to keep up with demand, the District has pledged to work “with local, regional and state governments, as well as water utilities and a host of stakeholders to promote some of the most aggressive water supply and conservation efforts in the country.”

24 ON COMMON GROUND

In early April, the region remained in Level 2 drought status, which — among other things — prohibits washing streets, sidewalks and driveways, and limits outdoor watering of lawns, gardens and trees to the hours of 4 p.m. to 10 a.m., a maximum of twice a week. The drought designation covered 52 counties in North and Middle Georgia, including all 15 counties and 93 cities in the Metro Water District.

“At this stage, we should assume that this will be a multiyear drought,” said Boyd Austin, chair of the Metro Water District. “We must be responsible stewards of our water resources. That means watering only when it’s necessary, not twice a week just because that’s allowed. I’m confident that our region, its local governments and its residents will take the necessary steps during this drought to conserve water.”

Even with an adequate supply of water, in Michigan, which is bordered by the Great Lakes of Erie, Huron and Michigan, the current infrastructure and the delivery of quality water to residents have failed. Residents of

Courtesy of USFWS; Photo by Steve Martarano

Courtesy of U.S. Army Corps of Engineers

Flint got good news in late March when a federal judge approved a settlement requiring the state to pay up to $97 million to the city to identify and replace up to 18,000 unsafe water lines by 2020.

The deal comes three years after Flint’s water supply was contaminated with lead when the city — which had been taken over by a state emergency manager after falling more than $25 million in debt — switched from receiving water from Detroit Water and Sewerage to the Flint River. Detroit Water draws its supplies from Lake Huron and the Detroit River.

The Flint water crisis began when dangerous amounts of lead leached out of the city’s pipes and into the drinking water of Flint’s homes and schools following a decision by Flint and Michigan officials to use the Flint River as the city’s primary drinking water source without first treating the water to prevent corrosion.

Flint River water that was treated improperly to control corrosion caused potentially dangerous lead from aging pipes to leach into the city’s water supply. More than 100,000 residents were exposed to high levels of lead in their drinking water. That figure includes as many as 12,000 children, some of whom were found to have high lead-levels in their blood by medical researchers. Thirteen

Courtesy of USFWS; Photo by Steve Martarano

criminal cases against state and local officials were ultimately filed as a result of the crisis.

Civic and environmental groups praised the settlement.

Dimple Chaudhry, a senior attorney for the Natural Resources Defense Council, called it a “hard-fought victory that means safer water for Flint.

“For the first time, there will be an enforceable commitment to get the lead pipes out of the ground,” she said.

“The people of Flint are owed at least this much.”

Brian E. Clark is a Wisconsin-based journalist and a former staff writer on the business desk of The San Diego Union-Tribune. He is a contributor to the Los Angeles Times, Chicago Sun-Times, Milwaukee Journal Sentinel, Dallas Morning News and other publications.

SUMMER 2017 25

REA LTOR S ® : An opp o rt u n it y to b e a s ourc e f or wat er k n ow l ed g e Whether a property has an adequate and clean water source, how much the monthly water bill runs, what kinds of conservation programs a utility has and whether a home or building has any possible problems with aged plumbing are all questions that can come up in a real estate transaction.

A REALTOR® can be a good resource for finding the answers to those queries, says David Etzhold, a former chairman of the El Paso Planning Commission who has been in the real estate business for more than three decades.

“REALTORS® aren’t required to do that sort of due diligence for clients, but if they are good and adept, they can point a buyer in the right direction to get the answers to their questions,” said Etzhold, who is a licensed real estate broker, REALTOR® and has researched those issues for clients for a separate fee.

26 ON COMMON GROUND

“It all depends on the scope of the work to be performed,” he said.

“Properties within a city are most likely on a municipal utility system and have a water meter and have testing and other requirements,” he said. “So getting the utility bill for the customer should provide basic answers and tell you who to contact with additional questions.”

That agency should also be able to provide information on conservation programs. In El Paso, which Etzhold said has one of the best water-saving efforts in the country, he said the local utility provides financial incentives for installing high-efficiency toilets and shower heads, as well as replacing turf grass yards with plants native to the desert terrain on which the community was built.

If a property is in the countryside outside a utility service area and has a well, Etzhold said, wise buyers should

make sure the drinking water is safe and isolated from the septic system.

“You don’t want to be sipping out of the toilet, so to speak,” he said. “That sounds kinda gross, but that’s what can happen. The buyer might want to hire an expert to verify that the systems are working properly and the groundwater coming from the well is clean. Sometimes people bring in their cousin to drill a well and then their brother puts in the septic too close to the well, which could be a problem.”

Etzhold said he’d like to see more public education on the subject of water quality.

“I haven’t seen a lot of discussion at the REALTOR® level about that aspect of residential properties,” he said. “I’ve never seen a seminar offered or any kind of educational material talking about that. I’ve picked it up myself over the years because of my involvement in real estate transactions.”

Though city utilities generally provide clean and safe water to their customers, he said the recent scandal in Flint, Mich., showed that’s not always the case. In that situation, state officials — in a money-saving move — failed to add the proper chemicals needed to prevent corrosion of lead pipes and that led to possible lead poisoning of thousands of Flint residents.

“Obviously, you can’t overstate the importance of the availability of clean water and the infrastructure that provides it,” Etzhold said. “That’s why conservation programs like the El Paso Water Utility has are so important because we certainly have a finite amount of water around here.”

SUMMER 2017 27

Photo by Nicolas Boullosa

Photo by Harbinger Prefab

Container Homes: Can “Upcycling” cargo containers produce affordable housing?

By Kurt Buss

A

ffordable housing is becoming an expanding issue for cities and towns across the country, as population and urbanization growth outpaces income growth for increasingly more Americans. Monthly rental rates now compete with mortgage payments in many parts of the country. Homeless populations are swelling.

Housing authorities struggle to meet demand for working class families, who can’t always afford to live in the cities where they work, and must commute from outlying areas and sleeper towns of trailer parks and cheaper housing. One notion for dealing with this issue is building affordable housing with shipping containers, which are stockpiled at ports and distribution centers throughout the country. It seems like a good idea, but is it?

These corrugated metal boxes are ubiquitous. We see them on truck trailers and trains, and if you live near a seaport you’ve probably seen them stacked a dozen high

28 ON COMMON GROUND

SUMMER 2017

Cargo container homes have really gained popularity this century. at the shipyards. They look sturdy, and they are. When loaded with cargo the containers can weigh over 33 tons each, yet they can be stacked eight to nine high on a freighter ship and sent from Shanghai to Seattle. They’ve been the major method of global shipping and distribution since the late 1950s.

Now, there are estimated to be 17 million of these containers all over the globe. There have been many reports of a glut of containers, bottling up harbors and clogging the landscape. But getting an accurate inventory on these units is like counting birds — they’re always flying around, and it’s hard to know if you’ve tallied them already.

The Intermodal Steel Building Units Association (ISBU) estimates the number of surplus containers in the United States to be in the lower tens of thousands, as opposed to media reports of up to 2 million, because most containers at ports are waiting to be used, and represent a seasonal surplus of the movement of goods. China manufactures most of the containers in the world, and when they basically stopped production in 2008 in anticipation of a slowdown in export growth it created a subsequent shortage in some markets. Yet our trade surplus with China has resulted in a growing inventory. There are plenty of used shipping containers available for sale. But that’s just the beginning of turning them into housing.

Photo by Miami Fabrication

Photo by Harbinger Prefab

Cargo container homes started getting attention in the late 1980s, but have really gained popularity this century, when the term “cargotecture” was coined in 2003.

The strength of the structures and universal design leant itself to modular construction that could be stacked and laid out like Lego blocks. The sky was the limit to what could be done, and there are plenty of million-dollar mansions to illustrate. The containers were cheap, but making them habitable wasn’t. It is estimated that with the framing, plumbing, wiring, insulating, door and window installation, and finishing (interior and exterior), using a container only saves about 5-10 percent of material costs (primarily in floor and ceiling joists) compared to traditional stick framing.

A container home can be finished within a month.

Photo by Miami Fabrication

29

But what is not gained in material savings is most definitely made up for with time. A container home can be finished within a month, while a traditional home of the same size might take several months. The process can be expedited by pre-fabricating the container as much as possible before placing it on site, similar to what is done with modular wood housing. A clear span warehouse with a concrete floor can serve as a fabrication facility, since the empty containers can be handled with forklifts. Transportation of the units to their destination is a matter of trucking, although a crane or forklift would need to assist with the offload and placement of the containers, especially if they are being set on foundation walls, piers or each other.

Another major cost savings cargo housing can afford is in low maintenance. Used containers come in several grades, with Cargo Worthy (CW) being the best.

Many of these containers are “single-use” and don’t make it back to the exporting country. These are the best containers for housing. Those classified as Wind and Water Tight (WWT) might have more ocean trips

Photo by Miami Fabrication

Photo by Paul Bartlett

Photo by Miami Fabrication

30 ON COMMON GROUND

and damage. Rust is a limited issue, because shipping containers are made with a steel alloy trademarked as COR-TEN, also known as weathering steel because it creates a thin layer of rust that protects against further corrosion. This light, orange layer is referred to as its patina, giving it shabby-chic cachet.

But what about the interior? What needs to be done so it doesn’t feel like you’re living in a …well, a shipping container? The first item to inspect is the floor, which is most likely marine-grade plywood treated with an insecticide. It needs to be removed, if damaged, or encapsulated with a resin, epoxy sealant or underlayment and flooring. Any evidence of liquid spills should also be treated proactively. Door and window openings can be cut with hand grinders or plasma cutters and reinforced with structural steel. Then, the interior would be framed, wired and plumbed so it can be insulated and finished just like traditional housing.

Spray foam insulation works best because it creates a vapor seal with the metal and prevents condensation, which is referred to as “container sweat”. Not good.

Ventilation, either passive or mechanical, is critical to container home design.

All of this is very doable, as evidenced by the growing popularity of not just container houses, but communities that provide affordable housing for students, low-income workers and others seeking shelter from the storm. Amsterdam has Keetwonen, a student housing complex utilizing one thousand containers; London has Container City, a company that fabricates containers for affordable housing projects; and Mumbai, India, is proposing two towers with 2,400 containers, dubbed the Containerscraper.

Here in the United States, container housing projects cover the landscape from the “LEGO Apartments” in New Haven, Conn., to a recent development for veterans in Los Angeles called Potters Lane, where containers are turned into housing on an assembly line and delivered to the site ready to be stacked and clad with a contemporary facade. It’s modular design with options for appearance.

What are the major pros and cons of using shipping containers for housing? The initial issue with turning shipping containers into housing is that shipping containers weren’t designed to be turned into housing. They were meant to be airtight, extremely sturdy, and withstand salt water spray. Door and window penetrations require welded support; floors need sealing; walls need framing for insulation, utilities and finishing; and the unit must breathe to prevent condensation. This is all a matter of tooling and training, however.

Bigger issues come into play during the permitting processes. Container homes suffer the stigma of other tiny homes, in that they haven’t been around long enough to have found their place in structure classification, building and fire codes, and zoning regulations. A container community in Oakland, called Containeropia, is testing the waters of municipal building and zoning laws, while offering monthly rentals at a fraction of the cost of other Bay Area housing options. They’ve even mounted the homes on trailers for greater mobility, and to make them a DMV issue and not a building department concern.

Communities that provide affordable housing are using container homes.

Courtesy of Beyond DC

Photo by Paul Bartlett

Photo by Miami Fabrication

The benefits of using shipping containers for housing are more numerous, particularly in their availability. Online sites, such as ContainerAuction.com, list sales yards across the country. A decent 40’ length unit will cost about $1,500-$4,000, depending upon proximity to the source.

Having it trucked will cost about $1.50-$2.00/mile. Surplus containers will be available so long as they remain the primary method for the global distribution of goods.

Units get cycled out and replaced when they’re no longer seaworthy; many containers are single use; and our trade imbalance all contribute to a healthy used-container inventory. They don’t weigh enough to make them cost effective to recycle or even return to China, where it’s cheaper to make a new one.

Container homes haven’t been around long enough to have found their place in zoning regulations.

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Containers can be pre-fabricated and sited quickly and cost effectively through savings in labor and maintenance.

Photo by Harbinger Prefab

Photo by Nicolas Boullosa

In terms of smart growth options for affordable housing, the primary advantage of containers is that they can be pre-fabricated and sited quickly and cost effectively through savings in labor and maintenance. The exterior can be given a coat of marine grade paint if located along coastal areas; ceramic paints are also being used because of their purported insulating qualities; and exterior finishes from concrete or vinyl siding to adobe offer aesthetic and insulation enhancements that require very little upkeep.

Their modular design and stackability give them vertical opportunities for infill development beyond wood framing options. They can be placed on four piers as a foundation because all the weight is transferred to the corner posts. If properly attached with twist-locks (which hold them together at sea) or welds they can

withstand 100 mph winds. They’re resistant to earthquakes, fire, mold and termites; and if steel studs are used for framing, the structure will be primarily wood-free and made from the most recycled material on the planet — metal. Upcycling materials extends the embodied energy that went into their production, increasing their sustainability and reducing the need to harvest or extract natural resources.

When incorporated into a housing complex, further cost efficiencies can be achieved by having each unit open to a shared, central atrium that could provide laundry facilities, central heating and cooling systems, utility access and distribution, as well as stairways, mezzanines and elevators for multiple level projects. This design concept also alleviates the feeling of living in a box and offers an architectural contrast to the modular containers.

Shipping containers’ modular design and stackability give them vertical opportunities for infill development.

32 ON COMMON GROUND

In Miami, the rising popularity of building with containers could offer a solution for addressing affordable housing needs.

In Miami, finding affordable housing is difficult, but finding surplus shipping containers isn’t. Danielle Blake is the Senior Vice President of Housing & Government Affairs for the MIAMI Association of REALTORS®. She drives past an area she refers to as “The Container Graveyard,” a privately owned lot of excess containers from Port Miami.

The rising popularity of building with containers could offer a solution for addressing affordable housing needs.

Miami-Dade County had surplus lots to donate for affordable housing projects, but no one had tried this before.

that container-homes can be cost effective, functional and aesthetically pleasing.”

“I know it’s a solution. We have plenty of containers, but we just don’t have that model in Miami,” Blake says.

So, they’re creating one.

The model established in Miami will be an example for other communities, and can hopefully become an integral solution to the larger issue of affordable housing here in the United States, as it is in other countries.

The MIAMI Association of REALTORS® has partnered with the county, along with coalition partners including a nonprofit property management organization and forprofit companies to pre-manufacture and site a model housing unit made from two 40’ shipping containers.

They propose to “build a prototype to identify any challenges to container home building and homeownership in our market, and to demonstrate to the community

The biggest hurdle was getting through the zoning process, because container housing wasn’t addressed in the code. But it wasn’t prohibited, so the project moved forward, and now the pieces are in place to prefabricate and place the prototype on site. It’s been a learning process.

“We have come so far since an idea last October to the point where we’re ready to break ground,” Blake states.

Kurt Buss is a freelance writer who lives in Loveland, Colorado, with over 25 years of experience managing recycling programs along Colorado’s Front Range. He writes about resource conservation, being a Baby Boomer, and enjoying the Rocky Mountains.

You can visit his website at www.kurtbusscoloradofreelancewriter.com

Container housing can hopefully become an integral solution to the larger issue of affordable housing in the United States.

Photo by Potter’s Lane

Potter’s Lane is an energy-efficient and sustainable housing site in Midway City, Calif., that will fulfill one of the community’s greatest needs for permanent housing for chronically homeless veterans.

Photo by Potter’s Lane

SUMMER 2017 33

LEED

The sustainability certification has

How Has Rocked the Built Environment

triggered a tectonic shift in how buildings are imagined and built and led to even newer green-building systems that are envisioning tomorrow’s spaces.

Lake Mills Elementary School in Wisconsin is certified as LEED V4 Platinum.

Photos by C&N Photography, courtesy of Miron and EUA.

By G.M. Filisko

T

heresa Lehman was among the pioneers in the building sustainability movement that began to take hold in the mid to late 1990s. While studying for her bachelor degree in construction management, which she completed in 1998, she heard of this new program called LEED, or Leadership in Energy and Environmental Design, created to inspire construction teams to plan and build more sustainable spaces.

Lehman was hooked then, and she’s still hooked, insisting that she’s “passionate about making a difference” today in her role as the director of sustainable services at Miron Construction Co. Inc. in Neenah, Wis. But even Lehman admits it was a slog to get the sustainability ball rolling in her construction world. “I’m not going to lie,” she confesses. “It was an uphill battle to educate people on what sustainability was and why it was important to minimize waste in the building process.”

Lehman, who today is a LEED fellow and holds the LEED AP BD+C, ID+C, and WELL AP designations, was practically the lone voice in the Wisconsin wilderness because “everyone” in the building industry was oblivious to the need for and the specifics of sustainability. “In Wisconsin, anytime you drive past a landfill, statistically 60 percent of what’s in there is construction waste,” contends Lehman. “That’s pretty sad. There were no recycling programs — none. To even set up a recycling program on a construction site before you started construction was hell.

“I’d call or go visit material suppliers, and I’d ask them the recycled content in their products,” Lehman adds.

“They’d give me that blank, deer-in-the-headlights look like, ‘I don’t even know what you’re talking about.’ LEED was groundbreaking, holy cow, totally-shaking-up-theconstruction industry stuff.”

Nearly 20 years later, LEED is embedded in the industry and sought after by many pursuing construction projects.

LEED was groundbreaking, totally shaking up the construction industry.

34 ON COMMON GROUND

SUMMER 2017

It’s still also continuing to push leaders to break new ground in building sustainability.

In case you missed it LEED was launched as a beta program in the late 1990s but formally introduced in 2001, according to Brendan Owens, chief of engineering at the Washington, D.C.-based U.S. Green Buildings Council (USGBC); it originated and still operates LEED. The program is a rating system that grants building owners points for actions they take to increase sustainability in their properties; based on points awarded, buildings can be designated as certified, silver, gold or platinum. LEED is available for the building design and construction process (BD+C), the interior design and construction process (ID+C), operations and maintenance (O+M), neighborhood development (ND), and homes (its shorthand is its name: homes). The USGBC regularly tightens standards to continue to make additional advances in sustainability.

Admittedly, LEED has had less of an effect on the residential than commercial building industry, says Owens.

LEED is a rating system that grants building owners points for actions they take to increase sustainability.

LEED-certified buildings are expected to create $12 billion in energy savings from 2015 to 2018.

He believes a variety of factors have made it more difficult for LEED to penetrate the homes market, and the biggest may be that it’s hard to communicate the value of green construction to consumers.

That said, the USGBC has certified more than 28,700 commercial projects in the United States, according to a spokesperson. They’re spread out across sectors and located in all 50 states. Internationally, LEED buildings are in 164 countries and territories, and more than 25,000 commercial projects outside of the U.S. participate in LEED. Additional numbers tell a dramatic story of LEED’s effect on sustainability. According to a 2015 study for the USGBC by Booz Allen Hamilton [http://go.usgbc. org/2015-Green-Building-Economic-Impact-Study. html], from 2015 to 2018, LEED-certified buildings are expected to create as much as: • $12 billion in energy savings • $149.5 million in water savings • $715.3 million in maintenance savings • $54.2 million in waste savings

Courtesy of USGBC; Photo by Eric Laignel

Natural light and an open floorplan encourages collaboration within the USGBC headquarters.

35

Those numbers should continue to expand considering that today, reports Owens, the USGBC is designating almost 2 million square feet of property as some level of LEED per day.

Beyond the numbers Though the cold, hard facts show that LEED has helped the planet, LEED’s effect on the built environment may be even greater.

“But there wasn’t really a consensus on how you define success,” he adds. “So we created LEED. It consists of lots of different parts, and to the extent that some of those ideas, tools and metrics are totally embedded and baked into everybody’s work every day, LEED has been a massive success everywhere.”

“Up until LEED was created, some people were involved in trying to create more sustainable buildings and landscapes,” recalls Russell Perry, who’s both an American Institute of Architects fellow and a LEED fellow; he also holds the LEED AP BD+C designation and is director of sustainable design at SmithGroup JJR in Washington, D.C.

Here’s just one example of a LEED-influenced shift.

“There was no consensus about how to do energy modeling … and what the measures of success would be,” recalls Perry. “Now everybody does energy modeling, and everybody does commissioning. It’s the same for low-volatile organic compounds in finished materials.

There are any number of aspects of LEED that weren’t at all prevalent back then — that were very much fringe activities — that are totally common in that everybody does them today.”

LEED has shifted paradigms inside and well beyond the building world.

Owens also believes LEED has shifted paradigms inside and well beyond the building world. “You could probably make a very compelling argument that the ripples have

Pickford House, Culver City, Calif.

Photo by Gizara Arts - Lisa Gizara

Photo by C&N Photography, courtesy of Miron and EUA.

Photo by C&N Photography, courtesy of Miron and EUA.

Courtesy of USGBC; Photo by Dan Chung

+2edison7 is Arlington County Virginia’s Green Home Choice first Gold Certified project

36 ON COMMON GROUND

been bigger than the stone with LEED,” he contends.

“I think about the fact that when my friends go buy paint, they’re buying low-VOC paint not because I’m telling them to, but because paint manufacturers responded to the incentives to create paints that offgas less. They completely shifted their industry from the traditional solvents they were using to much more healthy formulations.

“You can find those types of fingerprints throughout the building industry,” notes Owens. “They’re the indirect result of all that happened because the green building movement rewarded manufacturers that took leadership positions with their business.”

That process has touched many more aspects of everyday life than most people realize. “The way LEED handles materials and resources has changed over time, but it has essentially done the same thing for the products marketplace that it did for the building marketplace,” reports Aurora Sharrard, who holds the LEED AP BD+C designation and is executive director of the Green Building Alliance in Pittsburgh. “It’s creating the framework that helps somebody figure out what is a green product. Whether it’s carpets, external lighting, or toilets, what does it mean, and what should I be considering at the single-attribute level and when it comes to life-cycle impacts?”

LEED certified building at Cornell University’s Ithaca campus.

(Human Ecology Building, Cornell University)

Perry says LEED will continue to question the acceptable definitions of green. “What we thought were front-line things 20 years ago are now standard and common,” he asserts. “For example, we’re now having deep discussions about material toxicity. We knew it was an issue, but now we’re discussing how to measure it.”

Case in point: Halogenated flame retardants. They’re often added to petrochemical-based foams, which are extremely flammable, that are then used as insulating materials or in such products as chair seats. “There’s a legitimate question of how much exposure there is from that,” says Perry. “It’s a complicated question. It has to do with how much is used, the age and health of the person using the material, how much air flow there is

The market for green buildings and our understanding of what is a green building is evolving.

Courtesy of USGBC

SUMMER 2017 37

The market for green buildings and our understanding of what is a green building is evolving. in the room, and so on. If it’s safe for a middle-aged man, is it also safe for a nursing mother? We’re now saying, ‘Let’s identify those hazards, and where we can, let’s use something else.’”

Photo by Prakash Patel Photography, courtesy of SmithGroupJJR

The Chesapeake Bay Brock Environmental Center in Virginia Beach, Va., has achieved net-zero energy, water and waste.

The USGBC has also been doing “quite a bit of work,” says Owens, to influence building codes with sustainability in mind, both in the United States and, with its partners, internationally. But what impresses Owens most is research showing that green buildings aren’t just good investments for their owners but are also broad economic drivers.

According to the 2015 Booz Allen Hamilton study, LEED will directly contribute $29.8 billion to the nation’s gross domestic product in 2018. By 2014, the green building industry had supported more than 2 million workers. In 2018, it will contribute $75.6 billion in wages nationwide.

Success begets success The very public accomplishments of the LEED program have prompted other organizations to create programs to further promote sustainability and green building.

“The sheer number of green and measured-performance labels and certifications for buildings and products that have cascaded from LEED in the past 20 years is indicative that LEED has more than influenced a market — it has moved it,” reports Sharrard.

Photo by C&N Photography, courtesy of Miron and EUA.

38 ON COMMON GROUND

“It indicates that the market for green buildings and our understanding of what is a green building is evolving,” she says. “There are different evaluation measures for different types of buildings and spaces and at different time points. This increase in third-party national

WELL building standard pushes building designers to consider users’ health, happiness, mindfulness and productivity. certification is indicative of different aspects of the built environment. What we see with these other certifications — that aren’t LEED — in Pittsburgh for the thought-leading buildings is that they’re very often LEED-certified and certified as something else, too.”

One of the most prominent of the new programs is the WELL building standard created by the International WELL Building Institute. It pushes building designers to consider users’ health, happiness, mindfulness and productivity.

“To me, LEED is primarily about decreasing quantity,” says Lehman. “How much water is used? How much energy is used? How much material is used? WELL is about increasing quality. What is the water quality like?

What is the lighting quality? One of the things that’s coming is the ability to have your LEED project data flow into the WELL data. That’s just one example of what the next level of sustainability is.”

Lehman has worked on a building that incorporated the goals of improving its occupants’ health and wellness, the Lake Mills Elementary School outside of Madison, Wis., which is LEED v4 Platinum. “The idea was to create a high-performing, healthy environment,” explains Lehman. “One of the results that was surprising was that the shop teacher moved into the new portion of the school and was able to stop taking five tablets of Zyrtec a day.

The most challenging program today is the Living Building Challenge created by architect, designer and environmentalist Jason McLennan. “It’s a monster,” says Perry. “It’s fabulous. LEED is a system that acknowledges there will be negative consequences of everything we do in building, but let us minimize those and push toward zero consequences as quickly as we can.

“The Living Building Challenge says, ‘Forget that; let’s imagine what the perfect building looks like and do that,’” adds Perry. “The prerequisites are net-zero energy, water and waste, and no materials from the toxic red list.”

Perry’s own firm has completed the challenge with the Chesapeake Bay Brock Environmental Center in Virginia Beach, Va. “It’s a remarkable thing,” boasts Perry. “It creates all its own energy, uses only water captured from the sky, and was built without toxic chemicals. There will be a time when we can do that for a typical building.”

G.M. Filisko is an attorney and freelance writer who writes frequently on real estate, business and legal issues. Ms. Filisko served as an editor at NAR’s REALTOR© Magazine for 10 years.

“We also looked at the metrics for the previous five years, and in the first year after it opened, there was a 75 percent reduction in distributed allergy and asthma medication in the school and a 15 percent reduction in absenteeism,” says Lehman. “There was also a drop in communicable illness from 136 to 32 in the first year.

The health metrics were crazy off the charts, and the whole sustainable community was like, ‘Wow!’”

The Living Building Challenge prerequisites are net-zero energy, water and waste.

Photo by C&N Photography, courtesy of Miron and EUA.

SUMMER 2017 39

NAR’s Washington, D.C. Building: LEEDing the way from Silver to Gold to Pl atinum Just 12 years after the NATIONAL ASSOCIATION OF REALTORS® Washington, D.C., headquarters opened in 2004 with its LEED Silver BD+C rating for new construction, in 2016, it achieved LEED Platinum certification for existing buildings O+M. “We’ve consumed 13 percent less energy in the past five years working to meet the LEED Platinum criteria,” reports Bradley Clark, senior property manager at Cushman & Wakefield, which manages the building. At the time it opened, the building was the first in the District of Columbia to receive LEED designation for new construction.

The certification, however, represents much, much more than that. “This shows our concern for the environment in providing a giveback to the community and

40 ON COMMON GROUND

the environment as well,” states Mike Brodie of Keller Williams Realty in Plano, Texas, an NAR Building Committee member.

“I was treasurer of NAR in 2004 and signed the papers on the building,” recalls Brodie. “It was a rather large closing, and at that point, we were the first, and we were silver certification. So it’s been a process — a diligent, purposeful, goal-setted process to get to platinum.

“We’re very proud of this,” he adds. “It’s been a lot of work by a lot of people. We think it’s exemplary for us to kind of lead the way with this important certification. It’s giving back to the community, setting the standards, and being a role model for the rest of the building owners in the area.”

When it was still a hole in the ground, notes Clark, NAR committed that its building would be constructed in a sustainable manner, and that commitment hasn’t changed.

“We applied for and received LEED certification for new construction,” says Clark. “That can never be taken away.

It’s ours. It’s great. It’s forever. But if you want to continue to be known as a green building, you later need to certify under the existing buildings operations and maintenance program, or EB O+M program.”

The building first earned LEED Gold EB O+M in 2009, but the designation expires after so many years. “It’s an ongoing thing,” says Clark. “We had to recertify last year, or at least start the process last year because gold was expiring. We were awarded in February 2017 the platinum designation, the highest level.”

That achievement is the result of things like 100 percent participation in recycling in the building. “We actually do an audit of the waste stream,” says Clark. “There’s a guy who jumps in the trash container and determines how much paper got in there and didn’t get recycled. We also

survey anybody who comes to the building: How did you get here? Carpool? Ride a bike? Take a train? We have an 80 percent alternative transportation credit, meaning that’s the percentage of people who don’t drive by themselves to get to work.”

The biggest challenge, says Clark, is the requirement to perform in the top 25 percent of the office buildings in the country on energy use. “For a while, we were below 75, and we struggled with that,” he says. “Because of our size and floor plate, it gets tough to heat and cool the building in an energy-efficient manner. But we managed to get back to that 75, and we’re now Energy Star certified.”

Still, Clark isn’t resting on his laurels. This platinum certification will vaporize if NAR doesn’t maintain it, and LEED certification programs continue to get harder and harder. “The version of LEED we received our platinum certification under has now been upgraded,” says Clark.

“Five years from now, it’s going to be much more challenging to maintain that platinum. But we’re thinking ahead because we know it’ll be more difficult.”

SUMMER 2017 41

REPURPOSING

Our Nation’s Malls

By Brian E. Clark

W

hen the Highland Mall in Austin, Texas, opened 46 years ago with 1.2 million square feet of interior shopping space, people flocked to what was the city’s first large-scale, enclosed shopping center. For decades, it did well.

But time, competition, neglect, changes in neighborhood demographics and buying habits took its toll.

By 2009, U.S. News & World Report had dubbed it one of the country’s “most endangered malls.” A year later, all but a few of its stores were vacant.

Photo by Jef Nickerson

The Arcade mall In Providence, R.I. was repurposed into mixed-use development which includes lofts, retail, restaurants and entertainment.

The 81-acre Highland Mall didn’t die, however.

Austin Community College (ACC), which had its administration offices on the edge of the mall, stepped in. Working with a developer who is building apartments and offices in former parking lots, it is turning the shopping center into a new ACC campus — its eighth in the rapidly growing Austin area.

As malls of all kinds around the country are shuttered, the Highland repurposing story is a bright spot on the national scene. But it’s not alone: In Nashville, Tenn., the Vanderbilt Medical Center has taken over much of the 100 Oaks Mall, while the Denver suburb of Englewood replaced the Cinderella City mall with a mixed-use, transit-oriented development called CityCenter Englewood that includes retail, residential, and office space and open-space elements with a light-rail focal point.

Courtesy of Grow Smart Rhode Island; Photo by Ben Jacobsen

42 ON COMMON GROUND

SUMMER 2017

Not all malls are suffering, however, and some of the more upscale ones are doing quite well. But economists and other urban experts say the underlying problem is that developers overbuilt malls in the

Courtesy of Massachusetts Office of Travel and Tourism

20th century. There are now about 1,200 of them and roughly a third are closed or dying. According to Ellen Dunham-Jones, an architect and professor at Georgia Tech, the United States has twice the square footage in shopping centers per capita than the rest of the world, and six times as many as countries in Europe.

The demise of many malls may only pick up speed as department store anchors such as Macy’s, Sears and JC Penney continue to close and shoppers do more of their buying online. According to CMO.com, internet retail sales are predicted to grow steadily to $370 billion in 2017, up from $231 billion five years ago. CMO also reported that 72 percent of millennials research and shop their options online before going to a store or mall — if they go at all.

Photo by Michael Ocampo

Not all malls are suffering and some of the more upscale ones are doing quite well. the fundamental notion was that these department stores were the source of the traffic generation and that is no longer the case.

“You now find everything from bowling alleys to community centers to kids’ gyms to churches and grocery stores in malls. A few years ago, that would have been unthinkable. So the jury is still out on what constitutes the best practice for repurposing a mall.”

Leonard Schlesinger, a Harvard Business School professor, said that over the past decade, “many good malls have stayed really good and even gotten better, while everything else has deteriorated.

“There is still a portfolio of what I’d call class A malls that remain extraordinary shopping destinations, create excellent amounts of traffic and have incredibly high productivity per square foot. Those malls’ landlords have made huge investments in keeping their sites upto-date and managed the mix of retail concepts to make sure that there is actually a reason for the customer to go there. So it’s a ‘rich get richer’ scenario.

“For the remainder, the big question is ‘What do you do when your department stores go away?’ That’s because

Photo by Michael Ocampo

43

Amanda Weinstein, an assistant economics professor at Akron University in Ohio, agreed with Schlesinger. She said that the future of the site of the Rolling Acres Mall in Akron — which opened in 1975 and was demolished this past fall after it failed — remains uncertain.

“It was once a big deal to go to ‘the mall’ to shop or even just hang out if you were a teenager,” she said.

“People all over northeast Ohio flocked to it. Malls replaced the downtowns of inner cities, which many people felt were no longer convenient or safe.”

She said Rolling Acres had to compete with the nearby Summit Mall and the two chose different approaches, she said.

“It became a race to the bottom for Rolling Acres and a race to the top with Summit and now Summit is doing great because it has restaurants and entertainment and other things to attract the whole family. Rolling Acres chose the basement route and it died.”

But even the currently successful malls may have difficulties in the future because teens, who once thronged to these enclosed shopping districts, now do much of their “hanging out” and shopping online.

“That’s a harder one to figure out,” she said. “I don’t know if even the fancier malls will draw them in. Time will tell."

Neil Vickers, executive vice president of finance and administration at Austin Community College, said the school had a ringside seat for watching the demise of the Highland Mall.

“We’ve had our main administration building there since the early 1990s,” he said. “When department stories folded, we could see it right out the window.”

He said the school began planning for an expanded presence in central/southeast Austin about a decade ago. At the same time, the mall’s demise was picking up speed.

Even the currently successful malls may have difficulties in the future.

Photo by Lars Plougmann

Photo by Patrick

44 ON COMMON GROUND

Austin Community College Highland Campus ACCelerator Photos courtesy of Austin Community College

“We had something of an ‘aha’ moment when Dillard’s announced they were departing for the Domain, a highdensity, mixed-use project in the high-tech northwest corridor of Austin.

“We said, wait a minute, we are already right here, so why don’t we see about taking advantage of the new vacant Dillard’s building? We got a great deal, not knowing we’d have the opportunity to buy more of the mall.

But it made sense.”

As part of that acquisition, ACC partnered with Red Leaf Properties, which is building apartments, offices and retail on 1 million square feet of parking lots as part of a mixed-use development.

Because the surrounding neighborhood was hurting, he said the city welcomed the renovation of the former mall.

That has meant moving through the required upgrading of water, sewer and other utilities has been a breeze.

No zoning changes were required to turn the actual mall property into classrooms, he noted.

Vickers said ACC has so far completed the renovation of 200,000 square feet of the mall into a traditional college campus, including a huge computer lab with 600 stations. The school is now at work on a 600,000-square-foot effort and will eventually repurpose all 1.2 million square feet and may even put up some additional buildings.

“We’ve been very happy with all that’s happened so far,” he said. “A lot remains to be done and things are

The surrounding neighborhood was hurting, so the city welcomed the renovation of the former mall.

happening a lot faster than anyone imagined. In fact, our 20-year-plan is now a five-year plan. But the Austin economy is strong and that has helped accelerate a lot of development plans for this site.”

In Colorado, Englewood Community Development Manager Harold Stitt said when Cinderella City opened in 1968, it was one of the largest enclosed malls west of the Mississippi. It was the city’s sales tax “cash cow” for two decades until more modern malls in other Denver suburbs began to draw business away and the decline began.

He said the mall’s 1.3-million-square-feet of space was not maintained well after things began to go south. The demise picked up speed and by the mid-1990s, the drop turned into what he described as a steep “double black diamond ski slope.” In 1999, it closed, in part because the owners did little to “freshen it up. In fact, it only had one facelift over its 30-year-life.”

SUMMER 2017 45

Worse, he said, the owners threatened to put a fence up around the mall and auction it as distressed real estate.

“Of course the city did not want that to happen to a 55-acre chunk of land that was only a short distance from our old downtown, which was doing OK,” he said, noting that Englewood owned about 40 percent of the ground on which the mall parking lots were built.

Courtesy of Englewood Public Library

(Above) The old Cinderella Mall in Englewood, Colo.

Courtesy of Museum of Outdoor Arts

(Below) CityCenter Englewood

When city leaders found out that the regional transit district was planning to expand light rail into the southwest corridor of Denver’s suburbs and build a station next to the failed Cinderella City, they saw that as an opportunity to build a transit-oriented development (TOD) with a mix of residential, commercial, retail and civic tenants.

It did just that by forming its own Englewood Environmental Foundation, a development group.

The former Foley’s Department Store was repurposed into the Englewood Civic Center, which is now home to city offices, the library, municipal court and the Museum of Outdoor Arts. The Civic Center was the first part of CityCenter Englewood to debut when it opened in 2000.

Englewood became one of the first suburbs to replace a mall with a mixed-use downtown.

“It’s worked out well,” he said of the CityCenter Development. “I’d describe it as a ‘hybrid TOD’ because we also have a 147,000-square-foot Walmart on one side that is not transit development. But the closer you get to the light-rail line, the uses are more accommodating of mass transit, with residential and civic functions, including open space that includes a piazza with a performance space for concerts in the summer.”

In Nashville, the grand opening of the 100 Oaks Mall back in 1967 was a big deal. It, too, did well for several decades, before it fell on hard times. But in 2007, the Vanderbilt University Medical Center (VUMC) leased more than half of the mall’s 800,000 square feet and converted the second floor into 20-plus clinics, replacing shuttered department stores and shops. In addition, the mall’s former main entrance has been converted into the medical center’s lobby.

Janice Smith, the VUMC chief administrative officer, said the move to 100 Oaks gave a boost to the remaining

Englewood, Colo., became one of the first suburbs to replace a mall with a mixed-use downtown.

46 ON COMMON GROUND

Vanderbilt University Medical Center converted the 100 Oaks Mall into health clinics in Nashville, Tenn.

Photos courtesy of Gresham Smith and Partners

retail stores in the mall and has given a lift to the district bordering 100 Oaks.

“It’s been nice to watch the metamorphosis since we moved in and pumped new blood into the neighborhood,” she said. “We took our police force with us out there too, and that added level of security has been a catalyst for the surrounding area."

Smith said the medical center kept the interior of the mall model, with waiting areas throughout the concourse and 20 different specialty clinics on either side.

“It was a bit of a leap for us to do this, but we engaged several focus groups to try to understand what people wanted. But we also knew we needed to expand off our main campus where we are relatively landlocked.”

She said 100 Oaks was the first mall in Nashville. And even though it had fallen on hard times, Smith said many Nashville residents “had sentimental reasons” for wanting to see it refurbished.

She said workers gutted the entire facility and “took everything back to the concrete walls and floors” so the building could be converted into a medical center.

“We looked at all we needed from an air handling perspective, to beefed-up plumbing and having back-up, emergency power — which is not something most retail needs,” she said.

Smith said the medical center has proven to be popular with patients.

“It’s been a big success and folks appreciate the easy parking and access,” she noted. “We worked to make it accommodating, so it’s easy to find where you’re going.

Frankly, I was a little worried about how the ambiance would turn out, but it is very calming and welcoming, not sterile at all.

“People have responded positively and told us they’d love to see us do something like this again and add more clinics in the community,” she said.

Brian E. Clark is a Wisconsin-based journalist and a former staff writer on the business desk of The San Diego Union-Tribune. He is a contributor to the Los Angeles Times, Chicago Sun-Times, Milwaukee Journal Sentinel, Dallas Morning News and other publications.

SUMMER 2017 47

R esi li e nt P la n ning for the Future

Photos courtesy of Rebuild by Design

By John Van Gieson

T

he island off the Louisiana Gulf Coast that members of the Biloxi-Chitimacha-Choctaw Tribe call home is virtually disappearing before their eyes. Rising sea level and coastal erosion have reduced Isle de Jean Charles from 32,000 acres to 320 acres.

The future looks bright thanks to the rapidly growing resilience movement.

“We used to live off the land,” said Chief Albert White Buffalo Naquin. “Now we just live on the land.”

The future looks bright, however, thanks to the rapidly growing resilience movement. The state of Louisiana has received a $48-million federal resilience grant to move the tribe to a new community that will be built inland in a sugar cane field.

The resilience and adaptability movement grew out of the rebuilding of New Orleans after Hurricane Katrina smashed the city in 2005, killing more than 1,400 people, flooding 80 percent of the Crescent City and causing $108 billion in damages.

Naquin said “300 or so, up to 400” members of the tribe will move to the new location. “We’ll be building a brand new little city,” he said.

“Adaptability is about repairing cities and adapting to the future,” said Amy Chester, managing director of Rebuild

by Design, a major player in the resilience movement.

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Resilience starts with rebuilding after a cataclysmic event.

“Resilience is the ability to bounce back from any shocks or stresses.”

Resilience starts with rebuilding after a cataclysmic event such as a hurricane or mitigating flooding caused by rising sea levels in coastal cities. It also encompasses building stronger cities by addressing equity issues such as income inequality, inadequate housing, lack of jobs, poor health or failing schools.

“What cities have to do to make themselves more resilient over time is to think about the social systems that are in place,” said Samuel Carter, managing director in charge of resilience at the Rockefeller Foundation.

“What are the economic systems that need to be in place? What are the policies that need to be in place so when the systems do fail, when it floods again, people are kept safer.”

Resilience goes hand in hand with sustainability, a NATIONAL ASSOCIATION OF REALTORS® priority. “REALTORS® thrive in a culture of sustainability

that promotes viability, resiliency, adaptability and resource efficiency,” NAR said in a 2016 vision statement.

Jeb Brugmann, director of solutions, development and innovation at 100 Resilient Cities, said resilience is having a positive impact on the real estate market.

“In many respects the real estate industry is already saying, ‘this one is more resilient than that one,’ and values are already recording that,” he said. “A better neighborhood is the one where people know it’s going to be as good 10 years down the road as it is today.”

The Rockefeller Foundation first got involved in resilience in the United States when it took a lead role in the rebuilding of New Orleans after Katrina. The foundation brought in outside experts to work with local interests to identify the city’s vulnerabilities and develop a plan to fix them. Flood control and other improvements designed to make New Orleans resilient to future shocks have cost more than $14.5 billion so far.

The New Orleans experience followed by Superstorm Sandy slamming New York and New Jersey in 2012 led the foundation to create 100 Resilient Cities, a global network of cities developing resilience to physical, social and economic challenges. Of the 100 cities, 23 are in

The island of Isle de Jean Charles off the Louisiana Gulf Coast is disappearing from rising sea levels and erosion. Members of the Biloxi-Chitimacha-Choctaw Tribe who call the island home are moving to a new community that will be built inland in a sugar cane field.

Photos courtesy of Chief Albert White Buffalo Naquin

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(Right) On the beachfront, resilient infrastructure fortifies the boardwalk and can be used as seating or for recreation during normal conditions. Resilient interventions for commercial buildings and open space lining the boardwalk include deployable flood and debris barriers, protecting storefronts from severe damage, but leaving them open to normal activity during the high season.

(Below) Hurricane Sandy devastated coastal cities.

Photos courtesy of Rebuild by Design

Requirements to join 100 Resilient Cities include developing a robust resilience strategy. the United States, including New Orleans, New York, Miami Beach and Norfolk, Va., all of which are building resilience to flooding issues related to climate change.

When the foundation selects a new member of 100 Resilient Cities the first requirement is to hire a chief resilience officer whose salary is paid by Rockefeller.

“It’s not just about building walls to keep out the water,” said Christine Morris, Norfolk’s chief resilience officer.

“My job is to say whatever we’re going to do, are we thinking about it with respect to those three potential shocks we have? Are we making sure people have access to opportunity or are we isolating them?”

Norfolk’s three potential shocks are rising sea levels, over dependence on federal spending in a city that’s home to the world’s largest Navy base and a 19 percent poverty rate.

The other requirements to join 100 Resilient Cities are developing a “robust” resilience strategy, working with

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96 business, academic and nonprofit partners to implement the strategy and networking with other members of the group, some as far away as Mandalay, Myanmar.

When a bridge collapsed on heavily congested Interstate 85 in Atlanta earlier this year, the city’s chief resilience officer asked 100 Resilient Cities to provide consultants to advise small business owners along I-85 how to protect themselves while the busy urban interstate was closed.

Rebuild by Design, now associated with the Rockefeller Foundation, was created in a partnership with the U.S. Department of Housing and Urban Development to help New York City and the state of New Jersey recover from the battering they took from Sandy. Rebuild by Design held a competition to design local recovery projects and awarded $930 million to six projects, four in New York and two in New Jersey.

“What we set out to accomplish was to ensure that disaster recovery funds weren’t just going to building back what was there but to build for the future,” Chester said.

The projects include the “Big U,” flood control structures and green water retention areas around Lower Manhattan, including flood gates that would lower into place from the underside of an elevated highway. A New Jersey project calls for a variety of flood control structures

to protect the cities of Hoboken, Weehawken and Jersey City, which were flooded by a surging Hudson River during Sandy.

A second, even larger design competition was launched

by HUD in 2014. Last year the agency awarded nearly $1 billion to 13 cities, counties and states that submitted the best resilience strategies. The winners included Louisiana’s plan to move the Biloxi-Chitimacha-Choctaw Tribe to a new home. Among the other winners were New York City, New Orleans, Norfolk and Minot, N.D.

When Sandy flooded basements in Lower Manhattan the water knocked out transformers providing electricity to numerous office buildings and apartment houses.

Con Edison, the city’s power company, is boosting resilience by installing 158 waterproof transformers in Lower Manhattan buildings.

New Orleans has not put a price tag on its ambitious Resilient New Orleans Strategy, which addresses a full range of issues affecting the quality of life in the city. The plan declares the city must “adapt to thrive.”

New York received $176 million from HUD to help pay for flood control protection in Lower Manhattan. That project is incorporated into the OneNYC resilience strategy announced by Mayor Bill de Blasio in 2015. New York is planning to spend as much as $19.5 billion to achieve physical, social and economic resilience.

HUD granted New Orleans $141 million to help create the city’s first Resilience District, a pilot water retention project in the Gentilly neighborhood north of the French Quarter. The project includes the Mirabeau Water Garden, a water retention area that will store 10 million gallons of rain water on the 25-acre site of an old convent.

“OneNYC is ambitious, setting clear and aggressive goals,” de Blasio said when he announced the strategy.

“Our initiatives address every aspect of life in New York City — how we live, work, learn, and play, raise our children, and enjoy all our city has to offer.”

Soils are subsiding in Gentilly, where swamps were drained to make way for development, exacerbating flooding problems there, said Jeff Hebert, New Orleans chief resilience officer. He said the strategy deals with economic resilience as well as training residents to construct the flood control improvements.

OneNYC initiatives address every aspect of life in New York City.

“We have a program that is training people to go into those jobs,” Hebert said. “We are connecting people who are unemployed or underemployed to the jobs that we’re creating through this work, also they’re the jobs of the future, they’re green and blue jobs.”

Morris said sea levels have been rising faster in Norfolk than any other place on the East Coast, creating periodic flooding on high tides.

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The state of Virginia received $112 million from HUD to help pay for flood control projects in Norfolk. The Norfolk resilience strategy advocates economic resilience by incorporating the city’s poverty reduction plan.

“The idea is if you have to redesign the city anyway to deal with water, could you redesign it in ways that drive economic opportunity, so that really is the strategy,” Morris said. Plans to deal with economic and social issues must be viewed through a “resilience lens,” she said.

In recent years, Miami Beach has experienced flooding caused by rising sea levels. During the highest tides, sea water flooded business and residential areas around South Beach. Photos of cars plowing through axle deep water on Miami Beach streets were common.

Miami Beach has raised streets where the flooding was the worst up to two-and-one-half feet and installed new pumps to keep the water out of the streets, said Chief Resilience Officer Susanne Torriente.

“The last king tide all roads were dry,” she said. “We didn’t have to divert any traffic.”

Torriente said the city is paying for raising streets, new pumps, “living seawalls” made of vegetation and updating its zoning code with $400 million in storm-water fees paid by residents.

Miami Beach is raising its streets, installing new pumps and living seawalls made of vegetation and updating its zoning code.

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More and more communities are turning to resilience initiatives to protect their physical, social and economic future.

President Trump has declared climate change issues off limits for federal agencies under his control, meaning local governments can no longer count on federal funding for resilience projects.

Carter said it will be up to local governments to adopt creative financing solutions and change the way they spend existing funds. “People are recognizing that the dollars they’re spending year after year on transportation maintenance, on education, on health, actually are dollars they already have and can be directed to lead to more resilient outcomes,” he said.

Minot received $74 million from HUD to help pay for flood control projects and economic resilience. In recent years, the city has been stressed by flooding of the Souris River, which inundated 27 percent of Minot in 2011. Initially, people seeking jobs at the nearby Bakken Oil Fields moved into Minot, raising housing prices and creating a shortage of affordable housing. Many of those workers left when Bakken production declined, depressing the housing market.

Minot is buying several hundred houses located in the flood plain, leaving those properties vacant to help absorb flood water and moving the residents to new affordable housing on higher ground, said Robert Davis, Minot’s planning director and chief resilience officer.

(Above) Photos courtesy of DVIDSHUB

Minot, N.D., has been stressed by flooding of the Souris River, which inundated 27 percent of Minot in 2011. Minot is buying several hundred houses located in the flood plain, leaving those properties vacant to help absorb flood water and moving the residents to new affordable housing on higher ground.

“We think that it’s better to move the residents out of these areas and move them into new housing because we don’t have the money to build floodwalls or the levees yet and if we had another flood the same homes would be inundated again,” Davis said.

More and more communities are turning to resilience initiatives to protect their physical, social and economic future. They realize that planning for the worst is the best way to protect themselves.

John Van Gieson is a freelance writer based in Tallahassee, Fla. He owns and runs Van Gieson Media Relations, Inc.

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Courtesy of Center for Neighborhood Technology

Photo by Katie Elzer-Peters

The greening of stormwater infrastructure How some cities are adding green space throughout the urban area to capture rainwater.

By Joan Mooney

E

very developer, resident and business must deal with water on their property. Several cities are working hard to bring their stormwater infrastructure into compliance with the federal Clean Water Act. In cities like Philadelphia, Chicago and Washington, D.C., that means a big push for alternative ways to capture rainwater, such as pervious pavements, rain barrels and greened streets, technologies that will be explained below in further detail. How does the “greening” of stormwater infrastructure affect REALTORS®?

The answer depends on the neighborhood climate — meteorological, economic and cultural. Beverly Chandran is a Philadelphia REALTOR® with Coldwell Banker who started her career in the Maryland suburbs of Washington.

She has the NAR Green Designation and has always been interested in environmentally friendly homes.

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“In the Maryland market, people would say, ‘I want to see a green home,’” Chandran said, meaning one with environmentally sound and energy-saving measures built in. “In Philadelphia, only two families have said that in five years.” A big reason is cost. Homes with eco-friendly features tend to be more expensive.

Water is a major issue in Grand Junction, Colo., where Linda Romer Todd is a REALTOR® with Associated Brokers and Consultants and has been a water activist for many years. Todd’s part of the state gets less than 10 inches of precipitation a year, so green stormwater infrastructure is not a selling point for homes.

But last year, the Grand Valley Drainage District imposed a stormwater management fee to fix deficiencies with the drainage district and bring the state into compliance with the Clean Water Act. Residential fees are as low as $36 for a house, Rodd said, but commercial properties with

REALTORS® are dealing with stormwater infrastructure. large paved lots — impervious surfaces that water can run off, sending pollutants to creeks and rivers — pay $15,000 to $20,000 a year.

One way or another, REALTORS® are dealing with stormwater infrastructure, or will be soon. So it’s a good idea to be educated on the elements of green stormwater infrastructure (GSI). Here are some of the most important GSI measures cities have used, followed by examples of programs in Philadelphia and Prince George’s County, Md. A more effective, cost-efficient alternative GSI is seen by many planners not as an add-on, but as a more effective and cost-efficient alternative to the

traditional “gray” infrastructure of sewage treatment systems. David Rouse, research director of the American Planning Association, describes GSI as a large-scale, open space system that uses resources such as parks, forest and farmland that allow stormwater to infiltrate into the ground where it is generated instead of putting it in the pipelines to be treated.

“The urban forest — backyards, parks — are the most critical component of green infrastructure in cities,” said Rouse. The trees there absorb rainwater and improve air quality. And as REALTORS® are well aware, green space on or near a residential property can improve property value.

A more deliberate approach is designing streets to reduce stormwater runoff. The overall goal is to plant more greenery. Both Philadelphia and New York, for example, have found that it costs far less to plan and maintain green stormwater infrastructure than to build a new sewage treatment system. And the green infrastructure has the added benefits of cleaning the air and water, creating a more beautiful space to live and work, and improving the health of residents.

Types of green stormwater infrastructure

Photos courtesy of Center for Neighborhood Technology

Elements of GSI, include: • Stormwater planters with trees collect rainwater and allow it to infiltrate the soil instead of running off pavement to pollute the waterways.

• R ain gardens are depressed areas planted with vegetation to collect rainwater. New York City’s Department of Environmental Protection has planted rain gardens throughout the city.

• R ain barrels, successfully used in Seattle and Lancaster, Pa., among other cities, store water that can be used by homeowners to water their gardens.

• B ioswales are small, planted areas in a sidewalk that collect rainwater. New York City has built thousands of them across its boroughs. But some residents have complained that the bioswales collect trash and are not properly maintained.

GSI is seen by many planners as a more effective and cost-efficient alternative to the traditional “gray” infrastructure.

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• P ervious pavements are a large type of green infrastructure that may not include greenery. They have small holes that let rainwater seep into the ground, replenishing the groundwater and improving water quality. On sidewalks, parking lots and other lowtraffic areas, pervious pavement can replace more commonly used impervious pavement of concrete and asphalt that creates runoff.

Philadelphia: 25-year plan for green infrastructure Many years ago, Philadelphia built big tunnels underground to store the water from its snowmelt, so it would not go right into the sewage treatment plants.

But rather than upgrade the tunnels and build new ones at a cost of billions of dollars, five years ago the city persuaded the U.S. Environmental Protection

Agency that it could instead meet the Clean Water Act requirements by integrating green infrastructure throughout the city. The city is now five years into its 25-year Green City, Clean Waters plan. The plan is projected to cost $1.2 billion — calculated in 2009 dollars. The city is using all the measures listed above, plus others such as wetlands with native plants, green parking lots with vegetative buffers, and stormwater inlets leading to tree trenches — systems of trees connected by underground infiltration.

To make the program successful, the city wanted to integrate green infrastructure into private properties, said Rouse — developments, businesses and parking lots. In most cases, the properties are being retrofitted with GSI.

Philadelphia's plan includes wetlands with native plants, green parking lots with vegetative buffers, and stormwater inlets leading to tree trenches.

Photos courtesy of Philadelphia Water Department

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The regulations are not to squash development but to try to make things better.

“Managing stormwater is everyone’s problem,” said Marc Cammarata, deputy commissioner of planning and environmental services for Philadelphia Water. “We need to look at who is creating that hardscape and try to mitigate that and make it more naturalized.

“The regulations are not to squash development but to try to make things better,” Cammarata said.

Courtesy of Corvias

To achieve its goals, the water department modified stormwater regulations for development. More stringent water management regulations kick in based on “earth disturbance.” If existing or new development modifies the earth on a site to a certain threshold, the developer must ensure that no more runoff occurs than before the development.

Courtesy of Corvias

“Developers’ initial reaction was, ‘You can’t impose more regulations on development,’” said Cammarata.

“People said, ‘Developers will leave the city.’” But developers want to be in the thriving urban center, and they have adapted.

“Now it’s part of the building community,” Cammarata said. “They know what to do — vegetated roofs, use of green space, energy enhancement — to make it more sustainable.”

Although developers say the regulations have increased their cost, “when you factor it into new development,

Developers know what to do to make it more sustainable.

Courtesy of Center for Neighborhood Technology

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there’s ways to make your money back,” said Cammarata.

“If you put a green roof in the building, you can rent or sell your property at higher cost.”

A five-year report published in 2016 by Philadelphia Water estimates a 10-percent increase in property value in properties within a quarter mile of a GSI investment.

Chandran, the Philadelphia REALTOR®, said the city’s green infrastructure initiative is more visible in Center City, which has seen a lot of new construction with the real estate boom.

“Increased property values associated with stormwater infrastructure can be seen easier in Center City, and these benefits will transfer to other communities later down the road,” she said.

Prince George’s County public-private partnership For Prince George’s County, Md., to meet its compliance obligations under the Clean Water Act, the county formed an unusual type of public-private partnership with developer Corvias Solutions. This model has more control by the county and, at the county’s insistence, more emphasis on social goals such as workforce development. That type of partnership is emerging as a trend, said Paula Conolly, coordinator of the Green Infrastructure Leadership Exchange.

Courtesy of Philadelphia Water Department

Corvias, which has historically developed military and university housing, has a contract to design, build, finance, operate and maintain 4,000 acres of property to be retrofitted with green stormwater infrastructure, said managing director Greg Cannito. Corvias also handles community outreach and education.

The work consists of 120 projects including public schools, churches and nonprofits. Corvias is installing rain barrels, permeable pavement and rain gardens, and removing impervious surfaces and planting more trees.

“Developers don’t usually like green infrastructure,” said Cannito. “It’s more expensive on the construction side and

Green infrastructure’s more expensive on the construction side and less expensive on the maintenance side.

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Courtesy of Corvias

Green infrastructure is a permanent change in people’s lives. less expensive on the maintenance side.” But because Corvias is doing so much GSI work, that is driving the cost down.

Cannito warns that if green infrastructure is put in the streets and it is not properly maintained, it can become an eyesore. In this case, Corvias has a 30-year maintenance contract for everything the company builds.

That long-term maintenance plan helps maintain property values.

Photos courtesy of Center for Neighborhood Technology

Conolly, who has a good overview as coordinator of the Green Infrastructure Leadership Exchange, said the data does not yet exist showing that green infrastructure is less expensive than traditional gray infrastructure.

The up-front costs of green infrastructure are relatively reasonable compared with gray infrastructure (such as building a new sewage treatment plant), but long-term costs mount up and have no end date.

“The number of [GSI] installations is only going to increase,” Conolly said. “They need to be maintained on a very regular basis, or you get complaints.”

Communicating the value of green infrastructure to the public is not easy. GSI is much more visible than an underground sewage system, and any problems such as poor maintenance are immediately visible.

“Green infrastructure is a permanent change in people’s lives,” said Conolly. And that is never easy.

Joan Mooney is a freelance writer who has written extensively about transportation for Urban Land magazine and other publications. She also wrote NAR’s water infrastructure toolkit.

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Photo by Blaine O'Neill

Achieving an Equitable Future with Smart Growth Principles Courtesy of USDA

By Brad Broberg

R

esidents of two Spartanburg, S.C., neighborhoods struggled for decades in the shadow of harmful influences on their quality of life.

— a conservation-based approach to guiding growth and development that goes hand-in-hand with smart growth — can lead to a more equitable future for unfairly burdened neighborhoods.

Living near an active chemical plant, a former dump and an abandoned fertilizer plant, the predominantly African-American populations of Arkwright and Forest Park endured high rates of illness, unemployment and disinvestment.

The journey began 20 years ago and has produced a host of transformative outcomes along with an excellence award from the American Planning Association (APA) for advancing diversity and social change. The latest plan: plant a solar power farm on a 35-acre former landfill with few other possible uses.

The two neighborhoods were a textbook example of environmental injustice where historic legacies of discrimination, negligence and lack of political clout saddle disadvantaged communities with an unfair share of pollution producers.

Arkwright and Forest Park are now a textbook example for a different reason. They’ve shown that sustainability

Advocates describe sustainability in terms of a triple bottom line — economic prosperity, ecological integrity and social equity. The first two legs typically overshadow the third, but in Spartanburg all three are prominent.

One resident, Harold Mitchell Jr., got the ball rolling and continues to push it forward. After his father died

Sustainability, that goes hand-in-hand with smart growth, can lead to a more equitable future for unfairly burdened neighborhoods.

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Urban planning and environmental justice can address health disparities within communities. of an undiagnosed illness, Mitchell, now a South Carolina state representative, formed the ReGenesis Project in 1997 to rally support for cleaning up contaminated and abandoned property and breathing new life into the Arkwright and Forest Park neighborhoods.

After securing an initial $20,000 grant from the Environmental Protection Agency (EPA), ReGenesis has attracted more than $270 million worth of funding to revitalize the two overburdened neighborhoods while remediating the dump and fertilizer plant — both Superfund sites — and four other brownfield sites.

Besides improving air, soil and water quality, ReGenesis has helped establish six health centers, construct 500 affordable/workforce housing units, provide job training, create senior housing and build a park and community center.

“Rep. Mitchell’s efforts demonstrate how urban planning and environmental justice can address health disparities while making a visible difference within communities,” said W. Shedrick Coleman, an architect who chaired the APA awards jury. “ReGenesis now serves as a model for other communities in

Courtesy of City of Spartanburg

South Carolina, across the country and even around the world.”

Environmental injustice is difficult to root out in places like Arkwright and Forest Park where a past web of inequitable laws, policies and practices — everything from redlining to lack of protective zoning — has maintained a lingering grip on communities of color.

“We’ve never completely undone some of those entrenched segregations,” said Vien Truong, director of Green for All, an Oakland nonprofit that assists communities on the frontline of pollution. “We [continue to] see an unfair allocation and siting of processing plants, landfills, dump sites, freeways and highways ... in communities of color and low-income communities.”

The siting of hazardous facilities and infrastructure historically follow the path of least resistance. “There have been documented studies that have shown ... a lot of these sites are placed in these communities because they anticipate less opposition or protests at city hall when these decisions are being made,” Truong said.

A study led by the University of Michigan, “Toxic Waste and Race at Twenty,” found that more than half of the people who live within 1.86 miles of toxic waste facilities in the United States are people of color.

A University of Minnesota study, “National Patterns in Environmental Injustice and Social Equity,” found that minorities are on average exposed to 38 percent higher levels of nitrogen dioxide — a pollutant produced by

Courtesy of Greenbelt Alliance

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cars, construction equipment and other sources — than whites in the cities where they live.

The EPA recognizes the relationship between smart growth, environmental justice and equitable development.

A recent report, “Creating Equitable, Healthy and Sustainable Communities,” describes how communities can meld the three to address longstanding burdens such as diesel emissions from freight trucks and contaminated soil at former industrial sites.

win-win-win that uses a renewable energy source, reduces operating costs and curbs air pollution in neighborhoods near busy roads and freeways, Truong said.

Environmental equity isn’t just about addressing the bad stuff. “You need to put in as much equal access to the good stuff as possible,” Truong said. “It’s about making sure that no matter what their income, [people] are living near a park or a pool, making sure the community is walking- and biking-friendly.”

An online tool published by the EPA called EJSCREEN quantifies environmental justice at a community level.

Users click on a map that overlays environmental indicators such as proximity to hazardous waste facilities with demographic indicators such as income and racial makeup to paint a color-coded picture of places pollution might impose an unfair burden.

While heightened environmental awareness and closer regulation have made inroads against environmental injustice, “We’re still living through history,” said Gordon Yin, a professor of urban studies at Cleveland State University. “We’re talking about communities that have been persistently disadvantaged and have a lot of remaining problems with infrastructure and toxic environments.”

The EPA developed the tool to help the agency identify areas with disproportionate hazards, enforce regulations and show the progress of active cleanup projects, but also to help people understand and confront environmental injustice in the communities where they live.

The good news is that many processing plants, landfills and other toxic facilities have shut down over the years because of changing economics and stricter oversight.

The bad news is that these brownfields — which can be

Several things need to happen to reduce the disproportionate burden of environmental hazards on disadvantaged populations, Truong said. Decision makers need to more actively engage disadvantaged communities in the planning of projects that affect their health and well-being.

That includes going the extra mile to provide adequate notice to residents who may not speak English and who may feel intimidated by the process, she said.

Another step involves using the ecological leg of sustainability to support the equity leg by moving away from pollution generating facilities and activities altogether, she said. “If we can begin reducing the need for landfills or the need for power plants that crank out dirty energy [we can] reduce the burdens that are potentially harming families who live near the facilities.”

Promoting alternative energy sources like electricity and fuel cells to power cars, buses and trucks rather than relying on fossil fuels — especially diesel — is a sustainability

Heightened environmental awareness and closer regulation have made inroads against environmental injustice.

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Photos courtesy of Greenbelt Alliance

People with the least economic status often wind up in the most vulnerable places. as large as a factory or as small as a gas station — remain a blight unless they are cleaned up and made suitable for redevelopment.

Converting brownfields to productive use is the epitome of sustainability — especially in places where an undue burden of pollution has held back growth and development. “You’re taking something that was a liability and turning it into an asset,” Yin said.

In Tacoma, Wash., a regional health center was built on the site of a former gas station in a low-income neighborhood. In Omaha, Neb., the Salvation Army built a community center on the former site of an auto auction/ salvage yard and meat packing plant in a traditionally underserved part of the city. In Lawrence, Mass., the city is working to transform 14 acres of rail yards and industrial sites into a commercial corridor and connect it to a greenway that winds through some of the poorest neighborhoods in the city.

Pollution isn’t the only undue environmental burden that threatens disadvantaged communities. Many also suffer disproportionately when natural disasters strike because the least safe places to live are also the least expensive.

“People with the least economic status often wind up in the most vulnerable places ... because they don’t have a lot of choices,” Yin said. “The big wakeup call for this was New Orleans and Hurricane Katrina, where there was a very close correspondence between the least sustainable area of the city, the most ecologically at risk area of the city and the most socioeconomically at risk area of the city.”

Hurricane Katrina opened a window on the inherent burdens of disaster-prone areas, not just the physical

destruction. “People are beginning to look beneath the surface at health, at education, and saying these places don’t confer a relatively equitable quality of life,” Yin said.

New sets of inequities are constantly emerging as cities and regions grow and change, Yin said. The disappearance of supermarkets in many disadvantaged neighborhoods has created “food deserts” where it’s difficult to maintain a healthy diet. “Research shows that this costs people years of life expectancy,” Yin said.

As inner cities gentrify, low-income residents are pushed to the suburbs, where barriers to walking — sprawl, lack of sidewalks — can make it difficult for people to get the routine physical activity they need to be healthy, he said.

An unhealthy community is ultimately an unsustainable community, but smart growth strategies such as walkability, mixed land-use and infill development can help overburdened communities overcome environmentally driven disparities in health and prosperity.

“The question is how can we show people where the overlaps are and help them take advantage of them,” Yin said.

Brad Broberg is a Seattle-based freelance writer specializing in business and development issues.

His work appears regularly in the Puget Sound Business Journal and the Seattle Daily Journal of Commerce.

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2017

Six REALTOR® Associations honored with Community Outreach Awards REALTOR® Associations all across the country constantly collaborate to improve their communities. Recently the NATIONAL ASSOCIATION OF REALTORS® (NAR) recognized six associations with prestigious Community Outreach Awards. This is the second time NAR has honored REALTOR® associations with Community Outreach Awards. To be considered for the award, associations must have made use of multiple REALTOR® Party Community Outreach resources over a two-year period to address challenges facing their community, developed partnerships with community stakeholders, or involved the public in a project or discussion to improve the community. The award recipients were announced and recognized at NAR's 2017 Association Executives Institute in Denver.

“REALTORS® are community leaders and are dedicated to building successful neighborhoods and advocating on behalf of homeowners,” said NAR President William E. Brown at the awards ceremony. Brown is a second-generation REALTOR® from Alamo, Calif., and founder of Investment Properties, a division of his family real estate business. “I am proud to recognize the associations that are receiving NAR’s Community Outreach Award; through their work, these associations exemplify the core values of REALTORS® to improve their neighborhoods and communities.”

For more information on NAR's Community Outreach programs, please visit http://www.realtoractioncenter.com/for-associations/community-outreach/

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The 2017 recipients of the NA R Com munit y Outr e ach Awar ds ar e :

Cape Fear REALTORS®, North Carolina – The Association used NAR grants to work with the community on education and enhancement projects. An NAR Placemaking Grant combined with a REALTOR® volunteer action day helped build community gardens. A seminar on local water issues attended by 165 participants was made possible thanks to an NAR Smart Growth grant. NAR Land Use Initiatives helped the association defeat a proposed vacation rental ordinance in Kure Beach and work with local officials to modify a zoning change for group homes in New Hanover County.

Greater Rochester Association of REALTORS®, New York – The association, working closely with local officials and organizations and utilizing an NAR Housing Opportunity grant, held a successful housing fair called “Celebrate City Living,” which was attended by 500 people. The association also used four NAR Smart Growth grants to organize a lecture series on equity in planning and a symposium on planning and transportation for community design professionals.

Austin Board of REALTORS®, Texas – In Austin, the board provided a local opportunity to learn more about the National Association of Real Estate Brokers’ (NAREB) State of Housing in Black America report. Using an NAR Diversity grant, the board sponsored a two-day conference attended by members of the local NAREB chapter and leaders from the local Hispanic and Asian real estate professionals’ organizations, the local NAACP, Black Chamber of Commerce and the Urban League. The board used NAR Housing Opportunity grants to fund several programs — connecting homeless veterans to permanent housing, holding an event about the community’s need for small homes and townhouses, hosting housing fairs and organizing a forum to explore the connection between housing and health. The board also took advantage of an NAR Smart Growth grant to fund a community workshop about a large development that many neighbors opposed, which helped facilitate consensus among the city, developers and neighbors.

Richmond Association of REALTORS®, Virginia – Richmond’s association used several NAR grants to support a number of service and educational events. An NAR Housing Opportunity grant supported a Project Homeless Connect event that helped match volunteers and service providers with the homeless. Grants also were used for public education on the connection between the housing supply and economic prosperity and for seminars on community land trusts. The association organized two vacant property trainings for public officials, city staff and other stakeholders, beginning discussion that resulted in the city establishing a land bank and putting hundreds of city-owned properties back on the private market.

Coastal Carolinas Association of REALTORS®, South Carolina – The association utilized NAR Smart Growth grants to support a community planning analysis by the Urban Land Institute and to sponsor a ‘walkshop’ where a national expert conducted a walkability study to observe and analyze the conditions for pedestrians in Myrtle Beach. The result will make a major commercial artery safer and more welcoming for pedestrians. The association also used an NAR Placemaking grant to build a much needed playground.

Bronx-Manhattan North Association of REALTORS®, New York – The association partnered with the local Bronx Community Board 9 and utilized an NAR Placemaking grant to support a public arts project where local artists created a mural that celebrated notable people from the Bronx and helped beautify a pedestrian plaza adjacent to a rail transit station. NAR Smart Growth Grants were also used to support the association’s collaborative efforts on long-term planning activities that affect local land use and zoning.

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REALTORS Take Action ®

Making Smart Growth Happen

NAR Grant Helping Transform Despair into Hope in Asheville, N.C. Asheville, N.C., invites visitors to enjoy the city’s rich culture, walk its historic Urban Trail, tour the nearby Biltmore mansion, travel the Blue Ridge Parkway and enjoy a plethora of gorgeous city and natural views.

But for more than a decade, there is one city view that many describe as an eyesore. In fact, locals refer to a vacant plot of land found in the heart of the city’s vibrant, historic downtown as ‘the pit of despair.’

The lot, located at Haywood Street and Page Avenue, is across from the U.S. Cellular Center and the spectacular Basilica of St. Lawrence and adjacent to two historic high-rise apartments for senior citizens.

Asheville residences call it the ‘pit of despair’ not only because the fenced-in gravel lot has been vacant for a dozen years, but because until recently the community had been unable to reach a consensus on what to do with the city-owned property. Over the years there have been many suggestions, including a hotel, a parking lot or a park.

“One side has been pushing for a park and one side for an income stream for the city,” explains Mike Butrum, Government Affairs Director for the Land of the Sky Association of REALTORS®. “Our informal position is the solution should be both.”

Now, after more than a decade of contentious and stalled debates, there is hope for the vacant land. That hope is built on a collaborative process made possible by a $15,000 NAR Smart Growth Action Grant.

“We’ve been really able to make an incredible step forward to get past the fighting,” explains Asheville Design Center (ADC) Executive Director Chris Joyell.

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SUMMER 2017

Photo by Ken Abbott

“But the project required so much manpower. The budget for the project would have been strapped without the NAR grant.”

ADC was tasked by the city council with facilitating the search for solutions. More than 2,000 Asheville residents participated in the collaborative process that brought together stakeholders and the larger community. An 18-member advisory team made up of volunteers from a variety of constituencies and viewpoints spent months gathering public input and considering various options for the site. ADC held a series of community listening sessions where participants were invited to envision what they wanted to do at the site. More than 600 comments were shared during the sessions. In addition, more than 100 one-on-one interviews were conducted and approximately 1,400 online comments were collected.

Experts from nearby Lenoir-Rhyne University processed and coded the comments.

“Our membership has been engaged throughout,” says Mike Butrum, noting that Land of the Sky Association of REALTORS® members were active participants in the Advisory Team. “Because of our involvement, we’ve been able to offer expert advice to help improve the situation.”

David West, CEO of Land of the Sky Association of REALTORS® agrees. “Our membership is a cross section of Asheville. We are involved in conversations to make sure we have a vibrant community.”

The interviews, conversations and various comments explored how to best create a sustainable space that would provide a responsible and efficient use of resources. The advisory team overwhelmingly approved a vision and several general site suggestions. The team presented them to the city council, which earlier this spring unanimously approved the advisory team’s recommendations and directed city staff to issue a request for proposals (RFP) to seek out a designer and advance the team’s recommendations.

“There was pressure on the advisory team to get it right,” Joyell says. “The team stuck to its guns and listened to the public and didn’t allow cherry-picking of ideas.

Reaching consensus sends a clear message to the council. There was a strong, singular voice coming out of a diverse group of people.”

So as not to lose the momentum of the community-driven process, the advisory team suggested that temporary solutions be first tried out on the site so that the public could have a clearer sense of space and actively experience the site’s potential. This summer, a temporary farmers’ market and a variety of food trucks will serve residents and visitors alike. Raised garden beds and removable seating are also planned in the short-term.

“We’ve been thrilled to be part of the process,” says Terry Horner, president of Land of the Sky Association of REALTORS®. “Determining the best use of the property goes to our association’s core values.”

Asheville’s gravel pit finally has a hopeful future and the promise of becoming a community asset. But perhaps what is most welcoming and promising is the interactive, community-based process that has brought divergent points of view together to work towards a vibrant civic vision.

Photo by Ken Abbott

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REALTORS® & Smart Growth