Energy efficiency isn't nearly as sexy a topic as building out some shiny new solar farm, but it is equally important, and when this energy efficiency benefits low income families who have traditionally been disproportionately effected by issues such as climate change, and pollution, even better again.
In this episode of the podcast I spoke to Ryan Cassidy. Ryan is the Director of Sustainability & Construction at RiseBoro Community Partnership in New York.
We had a fascinating conversation discussing how Riseboro is making low income housing in New York City extremely energy efficient, how that benefits the health, as well as the financial wellbeing of the families living there, and how these benefits can be realised by other communities.
This was an excellent episode of the podcast and I learned loads as always, and I hope you do too.
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And what you end up getting is affordable housing units that are actually, healthier, more energy efficient has more up to date technology in terms of heating and cooling, then you're getting on the market side. And so, that's an exciting place to be. I think both for affordable housing and for, the environmental pieceTom Raftery:
Good morning, good afternoon, or good evening wherever you are in the world. This is the Climate 21 podcast, the number one podcast, showcasing best practices in climate emissions reductions, and I'm your host global vice president for SAP, Tom Raftery. Climate 21 is the name of an initiative by SAP to allow our customers calculate, report, and reduce their greenhouse gas emissions. In this Climate 21 podcast, I will showcase best practices and thought leadership by SAP, by our customers, by our partners and, by our competitors, if they're game, in climate emissions reductions. Don't forget to subscribe to this podcast in your podcast app of choice, to be sure you don't miss any episodes. Hi, everyone. Welcome to the climate 21 podcast. My name is Tom Raftery with SAP under with me on the show today, I have my special guest Ryan, Ryan. Welcome to the podcast. Would you like to introduce yourself?Ryan Cassidy:
Yeah, thanks for having me, Tom. My name is Ryan Cassidy. I'm the director of construction and sustainability for Riseboro community partnership. We are a nonprofit housing developer and social service provider in Brooklyn, New York. We've been around for over 40 years and we've been in that time providing social services and really using housing as like a foundational, service to, uh, help people, thrive in their communities.Tom Raftery:
Okay. And this is the Climate 21 podcast Ryan. What has housing got to do with climate?Ryan Cassidy:
Yeah. So in New York city in a lot of major urban areas, uh, multi-family housing is one of the largest, producers of greenhouse gases and users of energy in the overall, energy sector. So New York state and New York city is, has realized, over the last, probably 15 to 20 years that we can't approach the climate problem without dealing with our multi-family buildings, especially multi-family buildings. These are really dense buildings that you know, that you see throughout cities that are between, you know, four stories and up, and that provide the bulk of the housing in New York city. And so that's a major component of, uh, what we're doing and what we've been involved in, in the last, 20 years during our housing development.Tom Raftery:
Okay. And by multi-family buildings, you're talking about the kind of apartment complexes, that kind of thing. Yeah?Ryan Cassidy:
Yeah. That's correct.Tom Raftery:
Okay. And How do you fix that? How do you make sure that the energy that they use? well, how do you reduce, I guess their, their energy footprint, which is the big problem you're alluding to?Ryan Cassidy:
Yeah. So there's two. Types of housing stock. One is the, is the stuff that we're doing in new construction. And so there's been a real revolution in, in New York state over the last 20 years where the quality of the new construction that we're building as it relates to energy. So. We know we can build buildings that are vastly more efficient than even buildings we built 10 or 15 years ago. So on that side of the equation, you know, there there's a path forward there to build more efficient buildings, but the real challenge and the challenge that most city space is that most of the buildings that are there In the city are, are already built, right? So most of the, the land use is already happening. The energy footprint is already there. So if we only address new construction, that's only a tiny sliver of energy consumption. So the way they get to energy reduction is to really deal with existing buildings. And so that's where the challenge comes in because you've got occupied buildings, you have buildings that were built in the case in New York city over the range of mostly, you know, anywhere between 20 to a hundred and fifty, a hundred seventy five years ago. And so dealing with the energy footprint of those buildings is a real challenge. And so what we've learned from new construction, they're kind of like means and methods, to get to a highly efficient buildings. And we're trying to take those lessons learned in new construction and apply them to existing, uh, retrofits. The way that we've done it at Riseboro has been to use, passive house construction a passive house is a type of building that's been around for quite some time, in Europe and recently kind of came back to the U S in the last 10 years and is really all about insulation and air sealing. So if you have a really well-insulated building that isn't leaky and is kind of airtight you can drastically reduce your loads, in the building and then use far less energy. And the metrics on this are, are not incremental. It's not 20% savings or 30% savings. These are deeply, efficient buildings they use anywhere between 60 and 80%, less energy than a standard building. So on the new construction side, like I said, we're. Those changes have been implemented. A lot of, builders know how to do it now, but we're really still in the early stages of learning how to do this on existing buildings. So that's where, that's where the, the biggest lever is for improvement, uh, citywide, and that's where like the most learning probably needs to occur as we move forward.Tom Raftery:
Okay. I can imagine, obviously, if you're building a new house, as you said, I presume building codes have been updated and it's now required to put some of these things in place, a new housing. So you get economies of scale there. And as you say, builders or builders are coming up to speed on how to do it. How do you do it with existing stock?Ryan Cassidy:
Yeah. Well, you, you mentioned that you raised a good point, right? So the building code is the biggest, policy point in the biggest lever that we have in getting like mass adoption of, new techniques. So New York city didn't really have much of an energy code all the way up until probably like 2015. So that the energy codes that we're talking about are, are really new. Um, and they're getting better all the time. And in every couple of years, there's what they call the stretch code that kind of is going deeper and deeper into, uh, making new buildings be more energy efficient. So that's been great. It's really forced the market to, to deal with Both how to construct these new buildings and the means and methods. So the question is what do we do on existing buildings? So the, the sticks and the carrots are still there that you would get, uh, for new construction, right? You can have a code apply to older buildings in the city of New York has done that. There's now these energy, uh, scores that you'll see on the outsides of buildings, uh, much as we did in restaurants. 10 or 15 years ago where they started scoring restaurants. You now get a building energy score. So property managers and building owners, don't like to have a C or a D hanging outside of their, of their beautiful, residential building and tenants are becoming more aware of what that is and what it means. And so that's been one, uh, kind of very visible policy that the city is implemented as this building scoring. What goes along with that is. Ultimately penalties for not getting your building, to an energy efficiency standard, that the city wants to see. So over time, there's right now, it's just for informational purposes, but over time, there's going to be actual fines. And in sinew, the city is going to start fining building owners for poorly performing buildings. And so that's the motivation right now is probably more on the marketing and leasing side. but over the next few years, that's going to start to hit the pockets of owners and owners, don't like to spend money on those types of things. And so the idea is that it starts to drive, these meaningful upgrades.Tom Raftery:
Okay. And what kind of. What can you do to an older building to make it more passive?Ryan Cassidy:
Yeah so, it remains, uh, the key components are still insulation and air sealing. So in the affordable housing space, you know, affordable, housing's had a unique opportunity to be a leader in the field. Because most of our operating budgets are spent on utilities and because we can't raise rents the way a market rate developer can just simply ride the wave of the market. And, you know, an apartment that 10 years ago costs. $2,000 now cost $4,000 and they can just, you know, rake it in. In affordable housing. We can't do that. So we have constrained, incomes, so it makes our operating expenses even more critical. And when you look at our operating expenses, you know, anywhere between 30 and 50% of our operating budget is for utilities. So. It's spurred affordable housing developers to get into this space over the last, you know, five to seven years in a way that, uh, market rate providers have not. So what have we learned? We've learned that air sealing and insulation are the keys to load reduction in producing, energy, use in a building and the best way to do that with occupied buildings, because you're not, you know, you're not emptying buildings out. Being able to go in and do these massive renovations is to do it from the outside. So, that's led to a lot of interesting, uh, means And methods with contractors and with designers. It gives a really great opportunity to, to change the look of these buildings and in a meaningful way. One of the problems with affordable housing is that you could essentially walk around the city and point to the buildings that are affordable housing, right? We all, we all know what the NYCHA buildings look like. We know what Mitchell Lama buildings look like and so this is an opportunity to not only change their energy profile, but to really, change them from an aesthetic point of view, that can be really meaningful to people as well. So, recladding buildings, with a really dense insulation is the best way to lower the loads and the best way to get to these deep energy retrofit savings. The second piece is broadly called electrification. And what that means is that we're moving off of fossil fuels to keep, buildings and to heat, hot water. And we're moving to systems, that are, electrical and in almost all cases, that means, an air source heat pump, which is like a, you know, condenser on your rooftop and then in your unit, you get like a wall hung unit or a ducted system. So we kind of know how to do that. And so those renovations, those two pieces, you know, insulation, air sealing, and then electrification are the pathway. And that's something we've learned in over the last few years, uh, that maybe we didn't know, five to seven years ago. And now I think is pretty clear in the market of what we need to do to get there.Tom Raftery:
And what kind of costs does that entail for a building?Ryan Cassidy:
Yeah. So in affordable housing we have like these very clear milestones of when we, refinance buildings and when we are kind of taking on major capital improvements, it's a little different than market rate buildings but in both cases, we know the costs now of what these renovations are. And they are greater than what is, uh, what's typically done in affordable housing. It's at year 15 where we typically have like a tax credit investor that is exiting the project and we have an opportunity to refinance, and do some major capital improvements. So at that year 15, we would typically spend, you know, somewhere between like 40 and $60,000 per unit on just general, capital prevents the types of renovations we're talking about now, are far above that level. We're talking anywhere between 125 and $150,000 per unit. So that's a, it's a major, change. And I think the way to look at it isn't maybe as much, the increased cost as it is a realignment of capital. And so when I say that, what I mean is that there's been no problem in either the affordable or the market rate sector of building new construction in these major cities. And these are cities that construction costs just explode over time. And so buildings that we built 15 years ago for $200 a square foot, we're now building for $400 a square foot. Hasn't really slowed production on the new construction side. So what that tells us is that the capital is actually there, right? What we don't have as an alignment of capital, we don't have this idea that renovations are important and that banks and lenders are lining up to execute projects like this. So I think there's now a realization that we can't solve our, housing problem and our energy problem with new construction, we have to do more on the renovation side. And so we need everybody, you know, appraisers, lenders, contractors, to understand that this is really where the new market lies, the new opportunities lie, and to just align the capital behind that. So all the resources that we get in new construction, we need to start, you know, getting some of those, resources into renovation, budgets. And so I think we know we've learned the means and methods over time, we've gotten the, uh, public policy is aligned behind, you know, delivering the carrots and the sticks to drive people towards this. And now we just need, banks and, lenders to understand that, this is how we, get there, how we get to a lower carbon future in lower energy efficient, future, and make sure that we can align that capital and execute these new types of projects.Tom Raftery:
Okay. And you said, if I understood correctly, you said that the tenants in these, the tenants in these houses, their utility bills can make up 50% of their costs. How has that changed when these houses become more passive?Ryan Cassidy:
Yeah. So the 50% number is kind of our, as the owner, what we pay on operating costs. So most of our operating costs are on utilities, but there is an impact here for tenants. And we know that, you know, whether it's con ed or some other utility provider. The rates are, starting to skyrocket as we move both away from natural gas and as you know, market conditions change. So lowering loads, benefits owners, but it also benefits tenants. In New York city, we're all very familiar with, a window AC that you put it into your window. It's got these goofy flaps that never worked. And the whole thing is like, you're just cranking away on that, uh, air conditioner, trying to keep your apartment at like a livable temperature. So when you air seal, when you insulate a building, most of those problems are being solved from kind of what we will call the outside. So we're getting better thermal performance of our walls. We're getting tighter, wall assemblies, and then we've got an air source heat pump. That's our electrification that is, up on a wall or, or through a sleeve that's well sealed and it's operating, highly efficiently and, you know, far above what a window AC is going to do. So these renovations are also going to produce pretty dramatic savings for tenants in terms of cooling. You know, of course, if you're doing lighting replacements as well, there's a big opportunity for, LED lighting replacements. So the overall benefit to the tenants, on the financial side, is also, is also there. I would add too that, one of the things that in the way that we really look at passive house building at Riseboro, is it's really a quality building metric as well. When your air sealing something you're stopping the flow of air. So that means you're stopping not only air, but you know, pests smells moisture through assemblies that causes mold. So all these other things that are, really quality building metrics and have a big impact on tenants lives, whether it's, you know, reducing pests, reducing the smells in the apartment. Providing consistent temperatures, reducing moisture and mold, throughout wall assemblies. So all those things are really important to tenants and ultimately have some, big impacts, especially, on indoor air quality. And that's an area that, I think we're, we're looking to expand at Riseboro and we're looking, starting to study indoor air qualities and, uh, how that relates to these more energy efficient buildings.Tom Raftery:
Interesting. I just, I read a study a week or two back showing that indoor air quality can be hugely effected as well by having gas cookers. Are you taking that into account and switching out gas cookers for electric cooking?Ryan Cassidy:
Yeah, we are. And that's part of the, uh, electrification. We're, we're both, removing the fossil fuels to heat water for hot water and for building heat, but also removing the gas appliances from apartments and moving to electric stoves. And, you know, we've, undertaken a study with, MIT over the last two years to study air quality inside the existing apartments. And when you turn on a gas stove appliance in an apartment, your air quality, is drastically affected. And these are air qualities that aren't just bad for indoor air quality, but they're actually, in some cases exceeding the air quality for outdoor. So, you know, you're talking about air quality that that is worse than standing next to a major highway in terms of like particulate matter. So it's a real problem. And we know that, especially in affordable housing, um, low-income communities are more at risk, both from an external environmental perspective. And now what we're learning is that these gas stoves are also huge sources of pollution within an apartment. So if we can get rid of the gas appliance and also introduced a real ventilation into apartments, those are the two pathways to improve, indoor air quality. And you couple that along with, uh, decreased pests and, decreased moisture intrusion. And you've got an apartment then how it can be really healthy to be in instead of these, uh, the apartments that we currently see with the existing housing stock.Tom Raftery:
And are you putting in the likes of double glazing on windows as well? Because I can imagine that would help not just with the thermal insulation, but it would also help with noise insulation.Ryan Cassidy:
Yeah, that's right. So this kind of outside in approach, is air sealing insulation and in the windows. And so we kind of like redo the entire envelope, so that, uh, yeah, the, the performance of the windows, is double, almost always going to be the double glazing in many cases, depending on, you know, the fenestration of the overall building it's it could be triple glazed. And so yeah that helps with both thermal performance, as you mentioned in cities, especially, noise and insulation helps with noise too. So if you're recladding your building with a new window in anywhere between four and six inches of insulation, your apartment's going to be a whole lot quieter than when you started from the outside.Tom Raftery:
Fantastic. So people in low income housing are getting lower energy bills. They're getting lower noise, pollution inside the building. They're getting fewer pasts, higher air quality. it seems like a, and, you know, re reducing the carbon footprint of these buildings as well. It seems like a complete win-win-win.Ryan Cassidy:
Yeah. And it's been, really encouraging to see the affordable housing industry. Like I said before, really be first in line for this because of the financial makeup of the buildings where we're not collecting, you know, we've never been able to collect more rent and the cost of energy is going up. And so we've been incentivized to take kind of more radical action in the market. And what you end up getting is affordable housing units that are actually, healthier, more energy efficient. has more up to date technology in terms of heating and cooling, then you're getting on the market side. And so, that's an exciting place to be. I think both for affordable housing and for, the environmental piece.Tom Raftery:
How can we take those learnings and move them into the rest of the housing market?Ryan Cassidy:
Yeah, it's going to be difficult. I mean, there's certainly one of the advantages that affordable housing has is that, as I said before, you can, the existing architecture of affordable housing, isn't really anything that, that you would need to preserve. So recladding a building is a really great aesthetic option, you know, as you get into other building typologies, whether they're historic or, steel and glass towers and things like that. Or you get into some deeper challenges, but still a huge, component and supply of existing housing units are these like four 12 story, mass apartment buildings and all of those, all the learnings that we're getting from these affordable housing buildings can be transferred over to these types of buildings. So it's a good opportunity for a pretty wide swath of, market rate buildings. And then I think it's going to come down to really getting one capital aligned for, you know, these bigger capital budgets, and then ultimately the market doesn't move unless there's a pretty good stick to compel them to. And so that's where all of these, uh, local laws come in, that are both, measuring your building energy, use, grading your building, and then subsequently, fining buildings for performance. And so those, the good news is, is all those things are in place. They're all fairly new. And so over the next, five to 20 years as building owners start to feel some of the pain that's when we expect, some of those, market changes to take place.Tom Raftery:
And how do we move it outside of just New York?Ryan Cassidy:
Yeah. That's a great question. So New York, as I said earlier, really didn't have any kind of energy policy, even, 10 years ago, you know, and we were way behind. We had building code There wasn't a major overhaul of the building code until 2010. And so we were working on a 1968 building code. So it's a, it's a pathway for municipalities to take that really didn't exist. And so a lot of work went in from NYSERDA. Who's the New York state energy research and development authority that really helped, build the case with data. And with case studies that this was feasible and we had some good political leadership, both, in New York city, to get this done because, you know, as New York city goes with some of these housing policies, the rest of the state can follow. And so it's, it's been transformed over the past five to 10 years. And so if there's people out there that you know, are in other states or, or places that don't have good energy codes are not existing energy codes, this is potentially a roadmap, for those places to follow, these types of systems. And there's been a lot of political willpower there, on the building side, and then also on the utility side to switch off of fossil fuels, whether it's, you know, removing natural gas or adding solar, adding winds, all these things that are grabbing headlines are all ways to replace some of the, uh, the natural gas usage. Because ultimately, you know, we we're doing what we have to do on the end use, but if we're switching all these buildings from natural gas to electricity, of course we need new sources of electricity. So, the states been working pretty hard to, to work both sides of that equation.Tom Raftery:
Superb superb Ryan, we're coming towards the end of the podcast now. Is there any question I didn't ask that you wish I did, or any aspect of this we haven't mentioned that you think it's important for people to be aware of?Ryan Cassidy:
Yeah. Well, we talked about the, health of the, tenants, in our buildings. it's most interesting to us at Riseboro how we can kind of blend this housing approach kind of our housing plus model of providing a good affordable housing to people so that they can thrive in their communities and do all these other things that they want to do because people don't want to think about, you know, their energy consumption of their house. Does it need to be like a main point of their life? So when we do that, you know, in thinking about tenant health, Get more creative around, uh, financing models. And that might mean bringing in. If we're getting healthier buildings and people are having, less asthma attacks or going to emergency rooms less for breathing issues or leading healthier lives because of their buildings. That's something we want to try to translate into capital opportunities. So whether that's, you know, getting Medicare involved with helping to finance buildings like this, whether it's getting insurance companies to realize. that these buildings are, are more efficient and, resilient. So we didn't, we didn't talk about that. And that's kind of like in cases of power outages or other issues, people can shelter in place because the buildings are so efficient, they retain so much of their, their heat in the, winter, and they're cool in the summer. And so kind of being more creative around financing methods and bringing more, financial tools to bear on these types of projects than just the typical, uh, housing finance. So, you know, looking towards insurance companies and healthcare industry to recognize the benefits of, energy efficient housing and in these benefits go beyond energy. And so I think that's, what's interesting is how to do that in the future in intake, take some of these, uh, advantages and try to build out a better, capital base, to finance these types of projects.Tom Raftery:
Cool, cool. cool. Really interesting Ryan, that has been fascinating. Thanks a million for coming on the podcast today. If people want to know more about yourself, Ryan Cassidy, or about Riseboro or any of the things we talked about on the podcast today, where would you have me direct them?.Ryan Cassidy:
Well, thanks for having me. Yeah. You can go to, uh, riseborough.org. It's R I S E B O R o.org. And see what we do. It's, it's much more than housing, but like I said, it's sort of a housing plus model. And I'm happy to join you today. And I hope, for more, uh, really great outcomes, both in New York and then beyond New York, as we, push these deep energy retrofits.Tom Raftery:
Fantastic Ryan. Thanks a million for coming on the podcast today.Ryan Cassidy:
All right. Thanks for having me, Tom.Tom Raftery:
Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about Climate 21, feel free to drop me an email to Tom dot Raftery @ sap.com or connect with me on LinkedIn or Twitter. If you liked the show, please don't forget to subscribe to it in your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks catch you all next time.