Recently, Harcourt Brown & Carey (HB&C) was tasked with identifying financing instruments and sources of funds (investors) for financing energy efficiency and renewable energy improvements in all forms of multifamily housing: public, assisted and market rate. HB&C conducted interviews with 27 people from various organizations involved in this sector. These interviews helped HB&C to provide perspectives on the complexities inherent to this sector.
To accomplish this task, HB&C performed the following:
- Identified barriers to funding clean energy improvements in multi-family properties.
- Identified design criteria for financial products that could be utilized for clean energy improvements in multifamily properties.
- Evaluated funding options and financial products that meet the design criteria mentioned above.
- Analyzed the feasibility of new finance products.
- Compared existing financing instruments.
- Prepared a discussion on lender returns.
HB&C concluded that no one single finance tool will work for every project, but there is a sequence recommended to follow in evaluating, which is best. This sequence begins with a 2-pronged finance strategy, followed by a decision tree to help choose the best finance options for individual projects. The 2-pronged strategy consists of: 1) Targeting properties based on their existing financing and 2) Targeting properties based on non-financing attributes (technical energy savings opportunity, green motivation, relationships, etc.). Finally HB&C created a list of viable finance options that describes why these options are in fact the best fit for specific projects and properties.