Budgeting and Building Performance Standards
The Multifamily industry is in its budgeting season. This process impacts all teams throughout a portfolio. Property Managers evaluate their projected expenses, utility rate increases, and occupancy (revenue) for the year. Facilities and Maintenance teams are evaluating the current condition of their fixtures, hardscapes, landscape, and service agreements to ensure all various expenses are documented and proposed enhancements’ costs memorialized. Asset Management is reviewing all the possibilities and outcomes.
At GreenT, we hope you are integrating Building Performance Standards, Enhanced Benchmarking, and solutions into the process. Building Performance Standards (BPS) has active regulation in thirteen jurisdictions. Letters to operators from the authorities, like those that Denver has sent out, are in the hands of operators now. Penalties for failure to meet the requirements can cost an operator hundreds of thousands of dollars. While many of these standards have a compliance deadline with penalties in the not-so distant future, it is good to integrate into budgeting now, to ensure that work can begin and property performance improve prior to the mandated compliance period. It is important to consider that the performance deadline is for the annual period the year prior to the reporting year. This means that if the deadline to comply is June 1, 2027, then the property’s consumption included in that report is for the service period of January 1, 2026 to December 31, 2026. This means that if an operator needs to make enhancements to a property, that work needs to be scheduled and completed in 2025. Additionally, if the compliance deadline is further out into the future, by starting now, an operator is able to break the work into phases and potentially utilize incentive programs and grants to partially or fully cover the scope of work.
You need information to successfully budget.
Do you know which of your properties need to comply with a BPS requirement and which do not? Do you know what the BPS is based on, Energy Use Intensity (EUI), GreenHouse Gas (GHG) emissions, EnergyStar Score, or something else. Each regulation is different, so it is best to know what is measured, and how your property’s performance compares to the current standard and future tiers. If you only focus on the most pressing requirements, you may be throwing money away as your improvement will not live up to a future requirement. For example, if you are evaluating a domestic hot water system replacement where an 80% efficiency system could bring your property into compliance with the current requirement, but a 90% efficiency system bundled with additional measures could not only garner compliance with the current standard, but create a comprehensive CapEx strategy that gangs projects together over multiple years to future proof your asset from additional phases of compliance. By looking into the future requirements as well as the immediate threat, you can deploy your capital proactively.
How is your information stored?
Data is always key to making thoughtful decisions, but where the data is located and how that data is used to measure success is not always consistent. For many organizations, the data is kept in disparate locations, consultant drop boxes U Drives, Teams Folders and Google Drives without providing easy accessibility of all data necessary to complete the picture to the decision makers. Key files of data are misplaced, or simply forgotten on the landslide of various projects and priorities. Additional difficulties lie in the frequency that data is refreshed if it is. How is that data validated and assured to confirm that the expenditures you invest in are performing compared to BPS. In addition to the Capex plan for your portfolio, a software investment may be warranted to facilitate the capture of disparate data in one place. This is where GreenT can help you aggregate, identify, document, and track your portfolio against existing and future requirements.
Budgeting and planning are essential to ensuring your properties and portfolio is compliant with BPS policy. It takes time to collect data and assess your properties, plan financially and operationally effective actions, and implement them to comply with performance standards.
GreenT Climate Software provides a streamlined solution to help you stay current on compliance requirements and manage risk. For more information, please contact us.
