Green buildings saved renters nearly $72 million in the past six years through simple, eco-friendly initiatives and retrofits such as energy-efficient lightbulbs, low-flow toilets and heating and cooling systems, according to a new report published by Fannie Mae.
The results are from a volunteer government program which offers landlords willing to undergo an energy audit and make energy improvements to their properties a reduced mortgage rate and increased loan amount to cover green improvements.
“Fannie Mae’s Green Bonds support critical investment in existing U.S. rental housing to improve energy- and water-efficiency and also recognize investments in green building certifications, cutting utility costs for families and making these properties more economical for owners,” said Jeffery Hayward, executive vice president and head of Multifamily at Fannie Mae. “This innovative program supports job growth for local communities and furthers our efforts to make housing more sustainable and affordable.”
As a result of the program, Fannie Mae issued $51.7 billion in Green mortgage-backed securities and $6.1 billion in Green structured securities, making it the largest green bond issuer in the world in 2017 and 2018.
Building owners who made their properties more efficient are projected to recoup their investment within approximately six years on average and nearly 550,000 renters saw an annual utility reduction of 10% or $145.
With a significant number of multi-family transactions closing at above the $100 million a 21.3% increase over 2017 and foreign investment volume gaining 29.3% in 2018, the program can serve as effective means of reducing costs to portfolio owners and better monetize their assets.
Through the program multifamily properties accessing Fannie Mae Green Financing are required to either possess a nationally recognized, current Green Building Certification or make property improvements that target reductions in energy and/or water use.
Owners who receive Green Financing were required to report the property’s annual energy star score for tracking of energy performance over the life of the loan.
The environmental impact from the program reduced water waste and consumption by nearly 6 billion gallons which amount to the annual water use by nearly 54,000 American families and greenhouse gas emissions by 287,000 metric tons annually, equivalent to nearly 61,000 passenger vehicles driven for one year.
The newly constructed or retrofitted green multifamily buildings are estimated to have contributed $7.2 billion in workers’ income and $14.6 billion to the gross domestic product (GDP) and supported 170,000 jobs.