I’ve been talking the talk about Green Technology for a long time, and, having recently started YD Development with Yoori Oh, I took my first steps in walking the walk. Not surprisingly, it’s easier said than done. But real estate development is mostly about problem solving, so we are tackling the challenges head on.
Step 1: Dream
In a highly efficient real estate market like NYC, the most bankable projects are the types that everyone else is doing. For the past six years, it’s been luxury condos. But now that the luxury market has softened, it takes some creativity and out-of-the-box thinking to get the numbers working. Or of course you could simply sit on the sidelines and let the market’s corrective mechanisms do their thing, but where’s the fun in that? Pioneers don’t wait around to time the market.
Our dream is to eventually build a zero energy, zero waste, negative carbon building. See? Easy to say. But visualizing the goal is a crucial first step. Otherwise you’ll find yourself listening to consultants tell you how everyone else does things. We’re starting with solar panels.
Step 2: Research
It’s not impossible to build a passive building, and in fact, there are a quite a few examples around the world already. I started diving into Solar Panel research by calling some vendors and getting some quotes. That in turn led to reading up about the federal tax credits, NY State credits, NYC abatements, NYC regulations, depreciation methods for taxes, understanding your electric bill, and solar technology in general.
Since so much of real estate development is intertwined with zoning regulations and permitting, I also decided to get more involved in politics and understand how that side of things works (that’s a rant I’ll save for another time). If you build a good understanding of what’s involved in realizing your goal, you’re ready for the next step.
Step 3: Map Out A Plan
Solar panels are just one of a number of commercially available green technologies. In the past I’ve also researched LED lights, tankless water heaters, combined heat and power systems, and high efficiency plumbing fixtures. I’ll be looking into more existing technologies soon. And there’s always the possibility of inventing technology solutions on our own.
All of these have their own costs, regulatory nuances, and installation hurdles, and they can all be quantified in terms of reduced utility bills and increased property valuations. So by solving for the most potent financial returns, I can lay out the road map from there. Once I have a road map, I can work towards making it a reality.
Step 4: Don’t Give Up
One of the most important lessons I learned from Stan Gale is to stay positive in the face of negativity. A lot of people will tell you NO when you’re trying to do something different. It’s partially because they’re so used to doing what everyone else is doing. Lawyers, Architects, Engineers, and Expeditors won’t hesitate to tell you why something can’t be done or how expensive and time consuming something will be. You have to push your team to find another way to get it done.
I’ve already encountered road blocks with solar panels. Due to fire safety regulations, NYC requires the panels to be set back at least 3 feet from the edge of the roof. On a narrow building, there’s not enough installable square footage to make it financially viable. And both the Federal and NYS tax credits are only applicable to installations on my primary residence. So where do I go from here? I’ll be looking into building a solar canopy structure that’s at least 3 feet higher than the roof (which will come with its own structural engineering issues). Or perhaps I’ll invest in solar panels off-site through a NYSERDA program. At the very least, I’ll definitely know what’s feasible for the next project. The important thing is not to give up!