Certified Multifamily Projects Can Help Scale Sustainability

Buildings produce about 40% of annual CO₂ emissions globally, according to an Architecture 2030 analysis of International Energy Agency data. With awareness of this fact growing in both the real estate industry and the general public, developers are becoming increasingly attracted to the idea of “going green” because they can tackle carbon emissions while also conserving energy and water and improving the marketability of their buildings. 

Green buildings are designed to conserve resources and to promote health and well-being. Both of these elements could be incredibly attractive in the multifamily housing sector. For market-rate residential developers, some studies suggest that LEED certification can offer a competitive edge—increasing both rents and purchase prices. Research using 2018 data revealed that LEED-certified multifamily properties in Washington, D.C. saved 10% on operating costs in that year while bringing in almost 20% higher rent. A Cushman & Wakefield analysis of multifamily rental data from 2000 through 2021 showed more modest gains for LEED-certified space—around 3%—but sales prices were more than 9% higher.

For affordable housing projects, depending on jurisdiction, pursuing a LEED certification can help:

• expedite reviews and permitting processes
• create eligibility for density and height bonuses
• open up tax credits and property tax reductions
• garner fee reductions, waivers, grants, and revolving loan funds

Enterprise Green Communities, a national standard for green affordable housing, similarly encourages sustainability in the affordable multifamily sector. 

Depending on the project size and the specific goals a project team may have, there are several sustainability certification options for multifamily buildings. USGBC’s LEED certifications are the most widely known—with multiple certification types to choose from—but they are not the only option. The roadmaps below provide a quick breakdown of the different multifamily rating systems and how they can benefit your project.

LEED v4 Homes vs. LEED v4 BD+C for Multifamily Projects

There are three different directions a new multifamily project can take in LEED v4:

1. LEED v4 Homes: Multifamily Low-rise
2. LEED v4 Homes: Multifamily Mid-rise
3. LEED v4 BD+C: New Construction 

Pathways 1 and 2 fall under the LEED Homes rating system, while pathway 3 uses the LEED Building Design & Construction (BD+C) rating system. (The approach has been streamlined under v4.1, as explained below.) 

In all cases, the building must have 50% or more of its floor area designated as residential in order to be considered a residential project. Once the 50%-or-more threshold is met, the available rating system is dependent on the size and systems used in the project. Take a look at the flowchart below to see where your project falls. Important to note: if your project is not a full buildout, LEED BD+C: Core & Shell may still be an option.

Step 1: Check number of stories

If the mixed-use project is above four stories, you have choices. The project can certify under LEED Homes (provided it meets other criteria) or under LEED v4 BD+C: New Construction or LEED v4 BD+C: Core & Shell, whichever is applicable. If a project is under four stories, then it can only be registered as LEED v4 Homes: Multifamily Low-rise.

Step 2: Determine system type

Projects above four stories with centralized HVAC and water heating can use LEED Homes: Multifamily Mid-rise. They can also opt for LEED v4 BD+C: New Construction. These projects can pursue credit substitutions from the LEED v4.1 Residential Multifamily Beta Reference Guide.

Step 3: Choose Your Preferred Rating System if there is an Option

In some cases, project managers will have the option to choose between rating systems or system versions. 

If the project conditions merit the choice between LEED Homes: Mid-Rise and LEED BD+C: New Construction, it is important for managers to note that the rating systems for these two are quite different. Not only do they use different scorecards, but they also are certified quite differently. LEED Homes projects are more verification based, while LEED BD+C is more documentation based. This impacts who works on the project and how the project is managed. Close attention to project goals and construction methodology can help project teams choose which rating system is right for them.

In terms of system versions, if the project team would like to certify their entire project under LEED v4.1 in the U.S. or Canada, the only option for the project to pursue would be LEED v4.1 BD+C: New Construction. At the time of this writing, the LEED v4.1 BD+C: Residential rating systems—divided into Single-Family Homes (four units and under), Multifamily Homes (any predominantly multifamily building with two or more units), and Multifamily Homes Core & Shell (without complete interior fit-out)—may only be pursued in other countries. 

Green building certifications for affordable housing projects

Affordable housing project teams have a variety of rating systems available for green certification. There are LEED Homes, LEED BD+C, and Enterprise Green Communities, among others. 

Much like LEED, the Enterprise Green Communities criteria have gained traction in the affordable housing sector. This standard encompasses seven main categories and has one level of certification. The Enterprise Green Communities program also includes a pathway for both moderate and substantial rehab (see graphic).

LEED and Enterprise Green Communities feature similar categories and can help affordable multifamily projects achieve greener, healthier outcomes for residents, the surrounding community, and our planet as a whole. Figure 3 identifies where these certifications align and where their priorities differ. Of particular interest, Enterprise Green Communities pulls out actions related to operations, maintenance, and engagement that usually would lie in LEED Innovation credits and puts them in their own category.

Also, through an alignment process undertaken during development by Enterprise Community Partners and the International Well Building Institute, projects certified under the most recent (2020) criteria automatically receive WELL v2 certification.

Why green, healthy buildings matter 

Whether it be a commercial building, healthcare facility, educational institution, or in this case, a residential building, having a green building certification can aid a project’s sustainability performance as well as its market performance. Certified buildings are designed to have lower utility bills due to reduced water and energy use, offer marketing value for more sustainability-conscious living, and give incentives to incorporate tenant health and well-being into design and operations. 

The three pillars of sustainability—people, planet, and profit—are inherently intertwined in green buildings. Housing weaves financing and shelter—including, in the case of affordable housing, shelter for the most vulnerable. With the help of certifications like LEED and Enterprise Green Communities, housing development can positively impact the environment as well. Here’s one way to break that down.

People

Residents of green multifamily buildings are beneficiaries of the green features affecting their health and well-being, like good indoor air quality and materials made with less-toxic ingredients. 

Planet

The multifamily housing sector offers unique opportunities for decarbonization at a larger scale. Green building certifications can help create a positive impact on the world … and at this point, we need all the help we can get.

Profit

Profitability increases from higher long-term ROI, lower operational costs, and increased rental and sales income from green multifamily buildings.