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Green AND Affordable:

Green AND Affordable: Opportunities and Challenges for the Appraisal Profession with the Next Generation of Housing – Multi-Family. Michael D. Blaschuk, AACI Vice-President, BC Housing. Appraisal Institute of Canada National Conference 2010 – Victoria, BC. About BC Housing.

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Green AND Affordable:

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  1. Green AND Affordable: Opportunities and Challenges for the Appraisal Profession with the Next Generation of Housing – Multi-Family Michael D. Blaschuk, AACI Vice-President, BC Housing Appraisal Institute of Canada National Conference 2010 – Victoria, BC

  2. About BC Housing • Provincial Crown agency • Created to fulfill government’s commitment to providing subsidized housing to those most in need: • Homeless • Frail seniors/special needs • Aboriginal individuals and families • Women and children fleeing violence • Low-income seniors and families • Increasing subsidized housing options through: • Developing new housing • Maintaining existing portfolio • Rent assistance in the private market

  3. BC Housing - Building Portfolio • BC Housing Owns & Manages: • 8,000 public housing units in 650 buildings • 300 Group Homes • Administers: • 53,000 non-profit, co-op and shelter units • 27,000 rent supplements • Total • 87,000 Households • Influence on Low Income Sector • 6% of total BC Households • 40% of low income households in BC

  4. BC Housing Energy Efficiency Strategies Reduction of Energy Consumption and Greenhouse Gas Emissions Service Plan – GHG Reduction Targets & Results

  5. Livegreen – A Housing Sustainability Action Plan

  6. Key Strategies * Convert from natural gas systems to electrical systems* Integrate renovation and energy projects* Supplement “potentially dirty” electricity with solar* Link “energy performance” to capital projects* Support employee focussed “green” initiatives – bus passes, car pools, etc. * Use “green” materials and micro/hybrid vehicles* Tenant engagement and training – carrot/stick initiatives* Solar hot water pre-heat* System operator training* District Energy Systems* Recycling Demolition

  7. GREENBROOK: Sustainability in Action Energy Efficiency Initiatives

  8. Energy Efficiency InitiativesGREENBROOK: Sustainability in Action • Addition of exterior spray foam insulation to wall system • Addition of insulation to foundation walls during Perimeter Drainage project • Addition of attic insulation • Installation of new vinyl-framed, double glazed, low ‘e’, argon-filled windows • Installation of heat recovery ventilator and air tightness sealing • New roofing system

  9. Energy Efficiency InitiativesGREENBROOK: Sustainability in Action

  10. BC Housing Energy Efficiency StrategiesLEED Case Study – Solar Hot Water

  11. LEED Gold in New Construction Friendship Lodge Prince George

  12. Little Mountain - Sustainability in Action Demolition

  13. Little Mountain - Sustainability in Action Grinding & Recycling

  14. Energy Efficiency Initiatives 32 buildings in five lower mainland BC sites Energy use - $1.0 Million/yr Energy savings - $155 Thousand/yr Retrofit cost - $1.2 Million Engineer Payback – 7.6 years Appraiser Retrofit value = $155 K Cap’d at 5-6% = $2.6 - $3.1 Million

  15. Energy Efficiency Initiatives 17 buildings in 8 sites in Vancouver, Victoria, and Dawson Creek Energy Use $300 K/Year Energy savings - $45 K/yr Retrofit cost - $350 K Engineer Payback – 7.8 years Appraiser Retrofit value = $45 K Cap’d at 5-6% =$750 - $900 Thousand

  16. Disadvantages of Simple Payback: Can’t compare complex projects Does not account for benefits and costs after the equipment has been paid back Does not account for maintenance, financing, disposal costs; time value of money, and volatility of utility costs. Simple Payback is Too Simple

  17. Simple Payback is Too Simple • Advantages of “Appraisal-Based” Analysis (Direct Capitalization, NPV, IRR) • Compare projects that have different timing and magnitude of costs and savings • More complete financial picture by considering all costs and benefits over the entire lifetime • Language understood by investors – CFO, Purchaser, Developer, Investor - net present value (NPV), internal rate of return (IRR), and cash flows.

  18. Simple Model of Payback Based on Improved Capital Value

  19. Solar Panels Condensing Boiler Double pane windows Air-source Heat Pump

  20. Conclusion • Increasing options in energy-based projects for multi-family properties • Aging inventory and capital renewal being linked with energy upgrades • Cost and value being compared – Life-cycle costs and energy savings • Triple- bottom line becoming a key component of Corporate Social Responsibility (CSR) • Opportunity for the appraisal community to take a lead on introducing “VALUE” into the sustainability agenda • www.bchousing.org

  21. Questions • www.bchousing.org

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