Case Study

Retrofit R Street Apartments, Washington, D.C.

5 min read

R Street Apartments, a collection of 130 apartment units in five historic low-rise buildings, is an example of a situation where an initial green retrofit project doesn’t have to be the end-all and be-all. Rather, new upgrades a few years later can reap additional utility cost savings.

The five buildings were acquired and renovated in 2008-2009 in a joint venture by National Housing Trust/Enterprise Preservation Development Corporation and Hampstead Development Group. NHT/Enterprise is an affordable housing development and property management company formed by the National Housing Trust, a Washington, D.C.-based nonprofit policy, lendisng, and development organization, and Columbia, Md.-based Enterprise Community Partners, a national nonprofit policy and development group.

With the use of low-income housing tax credits, the R Street properties were purchased and rehabilitated to create 124 affordable and six market-rate apartments. The buildings were renovated to meet the Enterprise Green Communities Criteria standards, featuring a wide array of upgrades to increase the energy and water efficiency at the development.

Less than four years after the renovation was completed, NHT/Enterprise decided to look deeper into property savings and determined that a new, smaller water retrofit project made economic sense.

“We’re finding that the water technology is changing so rapidly that we’re coming in [to our properties] every four to five years and doing additional retrofits,” said Jared Lang of the National Housing Trust, who described the upgrade project in a presentation April 3 at the National Housing & Rehabilitation Association’s Preservation Through Energy Efficiency Road Show in Philadelphia.


Simple Water Upgrades

In January 2012, NHT/Enterprise installed more efficient water devices in all of the apartments at a total cost of $9,750, including labor and equipment. Specifically, these improvements included installing more efficient aerators (cost, $5 each) in the kitchen faucet (1.5 gallons per minute) and bathroom faucet (1.0 GPM), and putting in a more efficient showerhead (1.25 GPM, cost $25). The water usage rate before the replacements was 2.0 GPM for the faucets and 2.5 GPM for the showerheads.

The existing toilets (1.28 gallons per flush) were retained.

Installation of the new aerators and showerhead took about two hours per apartment, for a total labor cost of $5,200. The total cost for the equipment was $4,550, bringing the entire cost for the water retrofit project to $9,750. The project was financed by the District of Columbia Sustainable Energy Utility’s (DCSEU) Direct Installation Program. DCSEU is a nonprofit entity that administers the District of Columbia’s energy and water efficiency programs. The organization supplied and directly installed the water measures. If it had not funded the work, NHT/Enterprise’s Plan B was to pay for the retrofit using project reserve funds.

Lang said the payback period for the water upgrade project was less than six months.

Substantial Water Cost Savings

The project has cut the average annual water cost at R Street Apartments by 39%, or $27,600. The average annual cost for the three years prior to the retrofit project was $70,700. The average annual cost for the two years since has been $43,100.

Lang indicated that the water upgrades are projected to have a useful life of about five years; at that point another retrofit may make sense. Accordingly, assuming a discount rate of 6%, the net present value of the expected five-year water cost savings from the recent retrofit project is about $100,000, Lang said.

“We’re trying to do these [water retrofits] every day everywhere across our portfolio.”

Lang noted that while affordable multifamily housing properties built in the 1970s and 1980s are great candidates for water retrofit projects similar to that performed at R Street Apartments, even newer properties – say those developed in 2007-2009 – should be examined for feasibility as well.

Pick the Right Products

Lang cautioned that owners should select specific upgrade products (e.g., showerheads) that their asset managers and their residents will be comfortable with. “If you install a new showerhead and it feels like nothing is coming out and a lot was coming out before, the tenants are going to replace them.”

He reported that NHT/Enterprise is experimenting with a new $25 showerhead (he also likes other less costly models) that turns off the water automatically if a resident walks away and forgets the shower is on. It is described to tenants as a convenience measure.

At R Street Apartments, the residents had no financial incentive to cut down on their water usage since the owner pays for all of the water for the entire building. Lang said this is the situation at all of the properties in the NHT/Enterprise portfolio, which includes about 3,000 rental units on the East Coast and in Illinois.

Lang said NHT/Enterprise aims for achieving at least 20% utility cost savings in its new development projects. “We usually exceed that,” he notes. “And we try to do it at very minimal cost, maybe one to two percent additional construction cost.”