The
by Ric Jackson
February 18th, 2014

EPA + Freddie Mac = Opportunities in Multifamily Market

A January 30 press release announcing an agreement between the Environmental Protection Agency (EPA) and Freddie Mac to reduce carbon pollution by 20 percent by 2020 might have left many wondering what exactly this union means to the fenestration industry.

According to the release, roughly one-third of Americans live in apartments within multifamily buildings, spending approximately $22 billion on energy every year. Rising energy costs are contributing to the decline in affordability for many of these Americans. One of the main objectives of the EPA and Freddie Mac agreement is to boost the affordability of multifamily projects by encouraging the use of energy-efficient materials.

So at a very high level, American families have the most to gain. But, companies selling into the multifamily markets should take notice of the potential opportunities that could come from this agreement.

How It Works

Both sides will make significant contributions to the program.

Freddie Mac will collect energy and water performance data during the loan underwriting and asset management processes that will hopefully result in financial incentives for borrowers. In the words of the press release, “By demonstrating the financial value of energy and water efficiency to lenders and borrowers, Freddie Mac hopes to be able to influence lending practices in ways that encourage investments in energy efficiency and make multifamily housing units more affordable.”

On the flip side, the EPA will assist by providing technical and educational support through its resources, including the Energy Star® Portfolio Manager, an online tool to help property owners collect and compare performance data of their buildings to similar properties across the country. There has already been widespread adoption of this tool, including 35 percent of the Fortune 500®, half of the largest U.S. healthcare organizations, major league sports teams, colleges and universities, and entire cities (according to the Portfolio Manager Web page).

What This Means for Us

With more and more programs like this, building owners and consumers, alike, will be able to determine exactly how much impact energy-efficient products can have on consumer wallets, as well as the environmental benefits. They will be more educated and possibly more “incentivized” for upgrading to energy-efficient products in multifamily buildings.

For our industry, greater awareness could mean greater demand for energy-efficient, Energy Star-rated fenestration products. With continued bipartisan support from Washington encouraging improved energy efficiency in building design and materials, “The View from Here” is that we can expect more programs like this to come—and we need to be prepared as an industry to seize the opportunities that come our way.

How do you see the EPA and Freddie Mac agreement impacting the multifamily market? Leave a comment here or drop me at line at eric.jackson@quanex.com.

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