Is Your Multifamily Community Prepared for Climate Disasters?
Specialized materials defend against extreme weather. They also help with insurance and resident retention.
Climate change is an increasing risk for multifamily. During the first 10 months of 2024, there were 24 confirmed weather/climate disasters in the U.S. with losses exceeding $1 billion each, according to the NOAA National Centers for Environmental Information. These events included severe storms, tropical cyclones, a wildfire and two winter storms.
Apartment developers and owners need to plan and prepare for these disasters to protect the safety of residents and staff and the integrity of the properties themselves. Climate-resilient exterior building materials help stakeholders mitigate risk and lower operating expenses.
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What’s more, they might also qualify for insurance premium discounts. And, depending on whether they improve the energy-efficiency of an apartment community, they might aid with marketing and retention efforts as well.
Why climate-resilient materials matter
Integrating climate-resilient materials into both new builds and retrofits gives multifamily owners and operators a host of advantages:
Return on investment: According to a report on climate-safe housing by Enterprise Community Partners, a nonprofit owner and developer of affordable homes, every dollar invested in pre-disaster mitigation yields an average of $4 in savings from damages avoided. Many climate-resilient materials can reduce energy usage and operational expenses as well.
Less damage: Apartment buildings constructed from the right resilient materials will be better able to withstand storms, floods, fires or other natural disasters. That reduces repair costs and may even reduce financing costs.
Safe havens: Resilient properties are more likely to allow residents, and even staff or community members, to shelter in place.
Insurance costs: Using climate-resilient materials may qualify a community for premium discounts, but that’s on a case-by-case basis, said Nat Worden, area vice president of A.J. Gallagher Insurance. If resilient materials increase the replacement value of a building, that could actually increase the premium, even if those materials will better protect it.
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However, for earthquake or wildfire zones on the West Coast, the situation may be different. “There are materials you can build with that are more protective, and in some cases an insurance company won’t even offer insurance unless you’re building with those materials,” Worden cautioned. “But there are examples where adding certain controls can trigger credits that will alleviate the cost of your insurance.”
Preferential financing: Since many climate-resilient materials have the effect of improving energy efficiency, perks may be available. For example, Fannie Mae offers preferential financing terms for loans on properties with qualifying Green Building Certifications, many of which incentivize building with climate resilient and/or sustainable materials.
The upfront costs that make sense down the road
While the use of climate-resilient materials offers advantages, industry professionals say upfront costs are often higher than with traditional building materials. But these premiums can yield savings down the road.
At The Reef Apartments, a 456-unit community in Atlantic Beach, Fla., a barrier island near Jacksonville, The Klotz Group of Cos., which developed and owns the property, incorporated a variety of climate-resilient materials. The long list includes elements from roof products that resist rapid deterioration from the sun, rain and salt air to impact-resistant windows, cementitious lap siding, corrosion-resistant aluminum for stair and balcony railings, stainless-steel fasteners and special sealants, as well as solutions to protect against water intrusion.
This community, which came online about a year ago and is fully stabilized, qualified for 12 insurance premium credits, saving the owner about $25 to $35 per unit per year, according to Jeff Klotz, the company’s CEO. There are also savings on operational costs, and Klotz estimated that between insurance and operational savings, he’s getting $150,000 to $200,000 of NOI improvement per year.
It’s important to use the right products and contractors to achieve climate resilience, Klotz added. “There are lots of companies marketing themselves to produce and sell climate-resilient materials, but they’re actually not any more beneficial than the regular materials,” he warned. “It’s a marketing ploy, so you have to be an educated consumer and know what you’re buying.”
Helping against fire, floods and heat
There are myriad threats, and so there are myriad solutions. Here are some examples of communities that incorporate climate-resilient materials. Based on location, they respond to specific challenges.
Fire Risk: AvalonBay Communities regularly looks for new ways to integrate climate-resilient materials into both new and existing multifamily projects, said John Pitner, vice president of capital projects. The aim is to enhance durability and reduce maintenance costs over time.
To mitigate fire risks at the company’s AVA Toluca Hills community in Los Angeles, wood-framed balconies were replaced with prefabricated steel ones. The new balconies are fire-proof and require less maintenance over time.
“While climate-resilient materials may initially carry a higher price tag compared to traditional options, their long-term benefits often outweigh these costs as we work to future-proof our communities and uphold our commitment as long-term owners,” Pitner said.
Flood Risk: Charles Thomson, architect & associate principal of CetraRuddy, does a lot of work in New York City. And while the label sounds a bit quaint, the Big Apple is a marine environment with significant flooding risks.
Tower 77, a 766-unit community in a Brooklyn flood zone, was designed to elevate the residential component enough that it excludes the need for flood-proofing altogether, Thomson said. However, for the ground-floor commercial space, the developer used granite for the facade.
“It’s a really durable stone,” he added. “When the flood recedes, all you have to do is clean it.”
Heat/Sun Risk: Developer RXR, the owner of AVE Hamilton Green in White Plains, N.Y., planned the mall-to-housing conversion to withstand groundwater and changes in weather patterns brought by longer-term climate change. The property, which expects its first occupants in December 2024, was built with View Glass, a dynamic smart glass technology that uses artificial intelligence to automatically adjust in response to the sun. The result: More natural light, better views and a reduction in heat and glare.
“What this does is allow the building to be cooler in the hot months and warmer in the cold months, and it translates to mechanical, HVAC, lighting and energy savings,” said Joe Graziose Jr., executive vice president & head of construction and development for RXR. The company expects to see a 15 to 30 percent reduction in HVAC and lighting energy because of the product.
Another benefit of the climate-resilient glass? Studies show that View Glass reduces eyestrain by some 50 percent, according to Graziose. In turn, that results in fewer headaches and more sleep. This can translate to increased resident satisfaction and higher retention rates.
