Is Multifamily Ready for Building Electrification
As mandates approach, owners and developers need to get up to speed on policy and equipment.
After years of debates, the massive environmental initiative of building electrification is finally becoming reality. With mandates for new construction and retrofits around the corner, multifamily developers and building owners are delving into technologies such as induction stoves and heat pumps.
What’s keeping them up at night? While determining returns is complicated, non-compliance will result in steep fines. Leasing performance can also be at stake, as some residents are already being vocal about keeping their gas stoves even though scientific studies have shown these emit numerous pollutants, including nitrogen dioxide and carbon monoxide, known to exacerbate respiratory issues. As such, marketing teams need to make a strong case for the zero carbon lifestyle.
In L.A., Lendlease is working on 3401 S. La Cienega Blvd., which will have no gas service for heating, cooking or other uses across 260 residences and 250,000 square feet of office space. Image courtesy of Lendlease
Exporting policy
In December 2022, Los Angeles became California’s 69th city to require new buildings be all-electric—except for emergency equipment and commercial cooking.
“I am fortunate to live and work in a state that tends to lead the way for environmental requirements,” said Lily Ciammaichella, director of design at KTGY. “One of the biggest challenges we face is the increased load on the electrical system for all-electric buildings and electric-ready infrastructure.”
According to Ciammaichella, architects need to consider the effect on life safety systems such as fire pumps and generators when there is increased demand from residential EV charging, particularly in large multifamily residences and in jurisdictions with 1:1 EV charging requirements. “Developers can prevent problems by placing additional transformers and being careful about allocating the costs of supporting increased electrical demand.”
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Also emerging as a zero carbon trendsetter is New York State—where buildings alone account for 32 percent of greenhouse gas emissions. The All-Electric Building Act was adopted as part of the fiscal year 2024 New York state budget. Beginning in 2026, it restricts fossil fuel hookups in new homes and buildings up to eight stories. This all-electric buildings law will require most new buildings in New York State to use electric heat and appliances; however, requirements for larger buildings will be phased in by 2029.
Meanwhile, in December 2021, the New York City Council passed Local Law 154. Starting in 2024, the legislation phases fossil fuels out of the city’s new buildings that are smaller than seven stories. Taller buildings will be phased in by mid-2027. Local Law 154 sets CO2 limits that prohibit fossil fuel systems in gut renovations as well as new buildings. This allows more time for affordable housing to get up to speed and provides some exceptions for manufacturing, hospitals and restaurants.
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“The end of fossil fuels is here for new buildings,” pointed out Danielle Manley, policy manager with the Urban Green Council. “The future is all-electric new construction that eliminates fossil fuel heating systems, which emit more carbon in NYC than anything else. Developers should prepare now by understanding the law’s phase-in requirements by height and the latest efficient, all-electric technologies for heating and hot water systems.”
Trophy project
To see building electrification in action, look no further than Brooklyn, where Lendlease, Aware Super and Marvel Architects are working on the 1 Java Street mixed-use development, set to bring online more than 800 apartments. With a 2025 completion date, the project is looking to transform a full city block on the Greenpoint-Williamsburg waterfront into next-generation sustainable living.
“It is important to be aware of and anticipate forthcoming legislation that will affect new developments,” noted Sara Neff, head of sustainability for the Americas with Lendlease. “One reason that Lendlease designed 1 Java Street in Brooklyn to be an all-electric building was so that, upon completion, the property would comply with Local Law 154.”
According to Neff, there are advantages to taking these steps even absent of legislation, most notably decarbonization benefits that are attractive to both residents and real estate investors. “Developers that prioritize sustainability—such as Lendlease, which has made a commitment to reach absolute zero carbon across Scopes 1, 2 and 3 by 2040—are already exploring electrification in their developments. Those who are less willing to innovate and adopt new technologies will be left behind.”
Lendlease acquired $4 million in support from the New York State Energy Research and Development Authority (NYSERDA) to build a geoexchange system at 1 Java Street. The all-electric residential property is on track to become the largest residential project in New York State to use a geothermal heat exchange system. It is projected to reduce carbon emissions from heating and cooling by 53 percent when compared to typical systems. As an all-electric building, it will also avoid carbon emissions related to the use of natural gas.
Cooking without gas
Lendlease is developing 1 Java Street, an all-electric building in Brooklyn, New York City, that’s ready to become a first in the state. Image courtesy of Lendlease and Marvel Architects
Lendlease markets sustainability as a lifestyle to residents, who are encouraged to play their own role in reducing a property’s carbon footprint through everything from use of smart thermostats to participation in building-wide recycling programs. Neff said that while there is a vocal minority that is critical of fully electric appliances, this is in contrast to steadily growing consumer demand for sustainable residential communities.
“Multifamily developers and investors have taken note of this trend and are marketing their buildings accordingly in order to attract and retain residents,” she pointed out. Much of the opposition to electric stoves is by those who haven’t used them. About 15 percent of Lendlease’s military housing portfolio is already all electric and residents have been very positive about their kitchens.
“We switched to glass top electric ranges—which are safer than gas and much easier to keep clean—in all our developments around 2001,” added Les Bluestone, principal with Blue Sea Development, which is currently building Linden Grove Senior Residences, a 13-story modular low-income senior housing project in Bushwick, Brooklyn.
“Some people may have mumbled something to us about not having their gas, but it never was an issue that prevented a sale or rental in our affordable buildings. And, when we had the opportunity to explain why we did not use gas, many of them were grateful. There were some that loved their gas even if it did pose a potential health risk.”
Bluestone has been keeping an eye on induction ranges which are getting better all the time. Blue Sea has not yet switched over for affordable housing because of the cost—including replacement cookware—and education required to master their use.
Challenges ahead
Blue Sea Development has not gone back to electrify any of their older buildings, most of which are low- to moderate-income rentals. “These buildings do not have that kind of cashflow and most of them have been built with 30-40-year regulatory agreements that guarantee their affordability and do not allow for any real rent increase to cover the expense,” Bluestone argued.
The same government agencies that financed and created these regulatory agreements are going to need to develop new financing programs specifically for the purpose of conversion, or it will be impossible for many buildings to make the switch, he said.
Bluestone added that new construction is less of a problem in going with electric, but the cost of electricity in the Northeast and the increased maintenance makes them more expensive to operate. “This often works against the affordability goals of the municipalities. Going electric without also making improvements to the overall building shell (insulation and air tightness) is a recipe for disaster,” he pointed out.
“Another important thing to note is that electric meter service equipment is experiencing extremely long lead times—over a year in many cases—so get your loads and electrical equipment needs identified as early as possible,” Bluestone mentioned. Electric domestic hot water production is much more of a challenge and because the units do not have as much output as compared to gas equipment, there will likely be the need for additional DHW storage tank capacity.
An evolving landscape
Staying abreast of existing and emerging opportunities is a must for success. In New York, NYSERDA is offering a Multifamily Buildings Low-Carbon Pathways Program with four packages of incentivized energy upgrades including electrification of apartment properties. In California and Massachusetts, RMI (formerly the Rocky Mountain Institute) runs REALIZE, an accelerator to promote and standardize zero carbon deep energy retrofits. Their focus is on affordable, low-income housing and older building stock to ensure that populations most in need benefit from the transition off of fossil fuels.
REALIZE CA’s pilot demonstrations are being funded by the Energy Commission and a series of regional incentive programs funded by the utilities. “Our program is largely focused on the findings that are going to be derived from these pilot demonstrations,” said Nick Jiles, manager of REALIZE CA. “We will submit those to the state and that will inform how this equitable building decarbonization funding comes down the pipeline.”
REALIZE MA is dealing with the cold climate and poorly performing buildings with a lot of air leakage and terrible thermal comfort. “It’s not just a matter of swapping out your gas boiler to an electric air source heat pump,” said Eva Rosenbloom, senior associate at REALIZA MA. Usually there’s much more envelope improvements that need to be done. “Our mission is to reduce energy loads and then electrify. We also put the pieces of the puzzle together to help find available funding and other sources of support for these projects to get them to that point.”
Tsunami of change
Source: 2019 NYC GHG Inventory
Wood burning fireplaces are being phased out and will be replaced by electric versions. “We are tiptoeing up to a cultural paradigm shift,” mentioned Daniel Gehman, principal with Danielian Associates. Next year, gas appliances will be absolutely forbidden in California. In preparation, during 2023, the state building code is encouraging all-electric new construction by requiring that all new construction be “all-electric ready.” This means builders must provide alternate hookups—if they put in gas equipment, they must also have the corresponding electric circuitry.
“It’s a real disincentive to developers to use gas,” added Gehman. “That’s why this grace period is written the way it is. It makes no sense at all to wire for electrical and gas to then have gas outlawed and have to swap.”
An additional impetus going forward, Gehman predicts, will be enlightened capital. “Sources of capital are going to start demanding that the communities they finance have a demonstrable ESG.”
Even in progressive California, examples of electrified multifamily properties are hard to find. One example currently in development in L.A. is 3401 S. La Cienega Blvd., a transit-oriented, mixed-use project by Lendlease with co-developer Aware Super. The all-electric building will feature on-site renewables. It will have no gas service for heating, cooking or any other action in any of the building’s 260 residences or across the 250,000 square feet of office space.
“Lendlease is far ahead of the pack because it’s owned by an international company out of Australia,” noted Gehman. All multifamily developers should be getting ready for electrification now. “Nobody’s going to unring that bell. From the federal government on down, there’s a tsunami that’s heading in this direction.”
Gasoline-powered cars are on their way out too. In 2035, you will no longer be able to purchase a combustive engine vehicle in California. So far, Maryland, Massachusetts, New Jersey, New York, Oregon and Washington have announced they’ll also enforce a clean cars rule.
According to Gehman, luxury apartment buildings coming online in the very near future may debut with up to 5-10 percent of their parking spaces equipped with charging stations. Many have pre-wired for a larger number, even up to 20 percent. “I believe it is time to ramp up the consideration of what may need to be provided in the not-so-distant future as the percentage of EVs grows, and the demand for charging stations right along with it.”
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He suggests pre-wiring for 50 percent with an initial buildout of 15-20 percent. Having the infrastructure in place is really the backbone to avoid painful and costly future renovations; maybe the smart move is to go all in and pre-wire for 100 percent of the spaces.
“No matter what, you won’t want to have to install the infrastructure as a renovation project; it will be outrageously expensive. Better to overreach now and have cushion than to go back tomorrow and tear things apart to re-tool. If you didn’t get enough power to your site in the first place to accommodate the demand, you’re rapidly going to become a Class B or Class B- property.”
