In the Rockaways, pipeline debate takes a contentious turn

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FAR ROCKAWAY, N.Y. — On the night of Sept. 9, 2010, a 30-inch natural gas pipeline buried underneath the city of San Bruno, California, exploded. The fire was so large and the corresponding roar so loud that many residents thought a plane from the nearby San Francisco International Airport had crashed.

The next morning, state Sen. Jerry Hill walked through the Crestmoor neighborhood and surveyed the damage: eight people dead, dozens of houses leveled, an entire neighborhood transformed overnight.

“I have a difficult time talking about it because people died,” Hill says through tears. “The houses were still smoking … I was standing next to automobiles where the tires were just melted off. That’s what began the questioning for me. How could that happen? What went wrong?”

The San Bruno disaster is what activists point to when they talk about the dangers of natural gas pipelines. And it’s here in the Rockaways — a working-class beach community off the coast of Brooklyn and Queens — that the discussion has taken one of its most contentious turns.

A new pipeline called the Rockaway Delivery Lateral Project is under construction in the Rockaways. It will deliver 647,000 dekatherms of natural gas to New York City each day — enough to power 2.5 million homes. Activists, organized into two loosely affiliated groups, the Coalition Against the Rockaway Pipeline (CARP) and No Rockaway Pipeline, say the project is inherently dangerous and is just the latest sign of a broken approval and monitoring process for the United States’ energy infrastructure. They say if the history of pipelines and of the company building this pipeline is any lesson, residents of the Rockaways have reason to be concerned.

“It’s happening so fast,” says Elizabeth Press, a filmmaker from Brooklyn who joined the protests after riding her bike past the construction site one day. “You leave and come back, and it’s already under construction. There are people at the beach just going about their activities while they’re building something with such high risk.”

But at least for now, their fight might be winding down. Williams, one of the nation’s largest pipeline companies, has already begun laying pipe off the coast. When the project is complete, it will connect Williams’ existing Transco pipeline in the Atlantic — which gathers and distributes gas throughout the eastern United States, including the shale gas fields of Pennsylvania and Ohio — to New York City’s gas distribution system.


NYC construction spending forecast to rise by 10% this year

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New residential construction in the US

The US Census Bureau, together with the Department of Housing and Urban Development, has announced that privately owned housing starts came in at a seasonally adjusted rate of 1.093 million in July 2014. This is 21.7% higher than in July 2013 and 15.7% higher than the revised June 2014 estimate of 945 000. Single-family housing starts increased by 8.3% from 606 000 in June 2014 to 656 000 in July. Meanwhile, single-family housing completions were up 6.2% on the revised June rate to reach 635 000. Privately owned housing completions were at a seasonally adjusted rate of 841 000 in July 2014, compared to 811 000 in June 2014 and 779 000 in July 2013. Finally, single-family units authorised by building permits reached 640 000, up slightly on June’s 634 000. Permits for privately owned housing units were also higher than the previous month, rising by 8.1% from the revised June rate of 973 000 to 1.052 million. This figure is 7.7% higher than the revised July 2013 estimate.

New York City construction spending

The New York Building Congress’ midyear analysis estimates that overall construction spending will reach US$31.5 billion in 2014, up 10% from US$28.5 billion in 2013. Construction employment is also forecast to increase, rising by 1.5% y/y to 122 700.

The improvement in construction spending has been attributed to an expected 50% increase in residential spending. In 2013, residential construction spending came in at US$6.8 billion. The forecast figure for 2014 is US$10.2 billion. However, the Building Congress expects non-residential construction spending to fall to US$7.8 billion this year, compared to US$8 billion in 2013.

“At this point in the City’s economic recovery, we had hoped for better results in the non-residential sector,” said Richard T. Anderson, Building Congress President. The good news, here, however, is that a number of major institutions, such as Columbia and NYU, are poised to move forward with major expansion projects, and millions of square feet of new office development are currently on the drawing board at the World Trade Center and the Hudson Yards district.”


Construction unions support lower pay for affordable housing

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New York City construction unions have struck an agreement with housing advocates to support a plan that would see some hardhats paid significantly less for working on affordable housing projects. The move puts pressure on Mayor Bill de Blasio to require developers to hire organized labor as the city moves toward its goal of building 80,000 affordable units over the next decade. Policy makers, developers and housing advocates have traditionally aligned against unions because lower labor costs tend to yield more units. The arrangement would see unions accept a 40 percent reduction in wages for less experienced workers who build affordable housing in certain neighborhoods, the Wall Street Journal reported. In exchange, the unions would throw their support behind housing advocates’ push to set aside half of all new units for low- and middle-income people. Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York, told the Journal that 80 percent of member unions support the plan. The proposal is likely to face opposition from developers, whose projects would likely become less profitable under such a system, according to the newspaper. [WSJ] – Tom DiChristopher 


Landlords push back on housing plan

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A coalition of affordable housing advocates—along with union leaders and elected officials—is set to march in Harlem Wednesday afternoon to call for Mayor Bill de Blasio to require new projects in areas rezoned for greater development to set aside half the apartments as affordable.

But the Real Estate Board of New York said the proposal would not be economically feasible.

The city is currently contemplating a series of neighborhood-wide rezonings that would require affordable housing to be built as part of any new construction. The coalition, called Real Affordability for All, will march to urge Mr. de Blasio to require at least 50% of new units in these areas be affordable for a range of income levels. The administration, meanwhile,  is currently formulating its plan, and recently reached out to the private sector for help.

The coalition’s idea is that the higher 50% requirement in some areas would hold down land prices, since landowners could only sell their parcels at a price that would give developers enough financial room to meet the higher standards for affordable units. Nonetheless, the development community still reacted to the 50% call with skepticism.

The longtime head of the Real Estate Board of New York stressed that creating more affordable housing is a top priority for the advocacy organization and for the city, but he insisted that the coalition’s financial models were not realistic.

“The success of the new housing development analysis that we have discussed with advocates, relies upon the accuracy of extremely optimistic assumptions,” said REBNY President Steven Spinola. “The economics of a new development program creating 50% market-rate housing and 50% affordable pose serious questions about market rents, interest rates, and labor costs.”

For instance, a financial model provided to Crain’s by the coalition assumes a large upzoning for a manufacturing site in Manhattan projects that rents for market-rate units of $75 per square foot would be sufficient to offset the cost of creating the affordable units. The problem is that figure may well be too high for projects in most parts of the city. In addition, the model factors in deeply discounted costs for union labor, which are still above the current cost of nonunion crews. When asked about that, a member of the coalition suggested that the proposal is only a starting point for negotiations.

“Maybe we’re too optimistic and they are too pessimistic, but let’s get to the middle and go,” said Ismene Speliotis, executive director MHANY Management Inc., who helped draft the financial model.

The model is a flexible one, she said, ranging from projects in lower-income areas like East New York, where a project might end up being 100% affordable, to high-income areas like the Manhattan example, where market-rate apartments could be used to offset the cost of building affordable.


Nine Next-Level Sustainability Moves

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Switching to energy-efficient lightbulbs and low-flow toilets—that’s been done. Big data is where the next big gains in energy efficiency lie.

Yesterday, more than 200 joined Bisnow at our New York Sustainability Summit at The Roosevelt Hotel, where Vidaris’ Bob LiMandri (our moderator and Bloomberg-era Department of Buildings commissioner) played a lively devil’s advocate for an hour and half to force the panelists to figure out how to spark the energy-efficiency spirit among building owners and developers.

1) NYC’s Massive Data Pull

New York City hosts almost 16,000 buildings larger than 50k SF, responsible for half the city’s greenhouse gas emissions, says Urban Green Council executive director Russell Unger. The City’s Greater Greener Buildings initiative has forced a massive reporting of energy-usage data for benchmarking, creating the largest such data set in the country, and the NYC Office of Long-Term Planning and Sustainability put out a report on the first wave of results. It turns out, Russell says, that older buildings tend to use less energy. (Just like old people.) But the data set also contained a lot of outliers, so first things first: The City has to take steps to help owners deliver accurate data before it’s actionable.

2) Drilling Down to Individual Buildings

Collecting data, though, is a worthy first step. TIAA-CREF’s Nick Stolatisnotes, “You can’t manage what you don’t measure.” His organization has been using the EPA Energy Star Portfolio Management tool for years but next plans to use data to examine individual properties. A Prius with a bunch of 50-pound bags of sand in the trunk won’t get the gas mileage the car marketer promised, he says, and a building that isn’t managed efficientlywon’t fulfill its promise, either. (Though this does solve the case of Nancy Drew and The Sand Stealer.)

3) Involving Building Staff

JPMorgan Asset Management executive director Cavarly Garrett, whose company invests in more than 23M SF of LEED-certified office buildings in the US, has been talking more with the chief engineers of buildings in which her funds invest. These folks love being part of the process, she says, after having been ignored for so long and having their projects slashed from operating budgets. JPMorgan also has been trying to engage brokers, she says, but has generally found less success.

4) New Age Meters

Each federal agency is required to reduce energy-use intensity by 3% (from the 2003 baseline) every year. GSA reduced by 24% in fiscal year 2013, says Public Buildings Service chief greening officer Eleni Reed, and from ’08 to ’13, it avoided $238M in energy bills. But the low-hanging fruit has been harvested. The next step, she says, is advanced metering, which measures energy and water use in 15-minute intervals, delivering real-time info on usage peaks and valleys. The water meters also help detect leaks. Plus the system enables remote energy audits. Eleni’s agency soon will have advanced meters in 400 federal buildings. Next up is GSAlink, installed in 50 buildings and coming to another 26 this year. It uses data from building automation systems to tell property managers where energy-usage surges are happening.

And the cost of smart meters is coming down, according to Code Green Solutions’ Chris Cayten. That, he says, will lead more owners to track granular-level before-and-after energy use of their retrofits to justify upgrade investments.

5) Give the Scarecrow a Brain

Each building needs its own operating system, says Rudin Management COO John Gilbert, so his company teamed with Columbia University and Finnmeccanica to develop the technology. Di-BOSS predicts energy consumption based on occupancy, weather, orientation of the sun, and even the previous day’s usage. Conventional wisdom used to prompt property managers to turn chillers on at 5:30am and turn them off at 6:30pm, John says. The Di-BOSS system narrowed that window at Rudin’s 345 Madison to 6:15am to 3:45pm without compromising comfort. That has reduced energy usage 7.8% and saves the property $1M a year. He figures that at today’s cap rates, Di-Boss has added $30M to the building’s value.

6) Government Incentives: Act 2

All of the City’s benchmarking and audits are great, says Consolidated Edison Co of New York’s Dave Pospisil, but action is needed, too. For a while now, $50M in Con Ed rebates have been available for building owners reducing their properties’ energy usage. That offer stands through 2016, but more are on the way in anticipation of the potential closing of the Indian Point nuclear plant. Now, there are demand-management incentives to the tune of $100M a year for owners that reduce usage on weekdays from 2pm to 6pm from June through September. Extra incentives also are available in Brooklyn and Queens, where there are restraints on energy transmission and where fewer building owners are institutional.

7) Next Gen Architects

young and excited designer pool is coming out of school with sustainability on the brain and advanced modeling capability, says Spagnolo Gisness & Associates’ Jacob Higginbottom. Corporations also are relocating back to dense, urban environments. In SG&A’s hometown of Boston, in particular, the suburban exodus is reversing, Jacob says. SG&A just completed Biogen’s HQ in Cambridge’s Kendall Square.

8) Motivated by the Competition

Europe still has the US beat in energy-saving design, but Asia is catching up, says RTKL’s Ray Peloquin. Every building his company is working on in China is either LEED or certified via China’s own three-star system. Architects there are considering factors like a building’s orientation to the sun, how to reduce heat gain, and the influence of daylight on the interior.

9) New Compensation Strategy

Ecosystem Energy Services CEO Andre Rochette (left) suggests using a building’s net present value as the metric for energy projects. The Integrated Energy Performance Contracting model, for instance, rewards innovative design and lean construction, and the performance guaranteesboost asset value. When energy-efficiency forms are incentivized to overperform, he says, the asset manager’s stake is maximized while the energy-efficiency firm takes on the risk.


Reducing NYC's carbon emissions one building at a time

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Hurricane Sandy highlighted New York City’s vulnerabilities to coastal storms and provided a devastating snapshot of the growing risks from climate change, including rising seas, increased heat and more frequent severe weather events. In response, Mayor Bill de Blasio has committed to increasing the city’s resiliency to better withstand future events, and has taken significant steps to reduce the harmful greenhouse gas emissions that contribute to climate change.

Since January, the de Blasio administration has undertaken a number of major environmental, sustainability and resiliency-related initiatives. This includes the creation of the new Mayor’s Office of Recovery and Resiliency, the first city office focused on resiliency.

On Earth Day, de Blasio announced the most sweeping update to New York City’s Air Pollution Control Code since 1975, which will update emission standards for sources including commercial char broilers, fireplaces, food trucks and refrigeration vehicles and reduce dangerous particulates that contribute to more than 2,000 deaths each year.

Moreover, de Blasio has made environmental sustainability a key component of his affordable housing plan, calling for an energy efficiency program for affordable buildings. Last month, the mayor announced a $350 million partnership with Community Preservation Corporation and Citi as part of that plan, which will include financing for efficiency retrofits.

Buildings cause nearly 75 percent of New York City’s GHG emissions. Reducing their energy use is essential to mitigating citywide greenhouse gas emissions. It also has the benefit of lowering energy costs, saving building owners money and providing welcome relief from rising housing costs that have contributed to a growth in inequality.

Since its launch in 2007, the NYC Carbon Challenge has helped reduce energy use in buildings and lower their energy costs. Nearly 100 of NYC’s universities, hospitals, commercial businesses and residential property management companies have joined this voluntary leadership program, pledging to work with the city to reduce their carbon intensity by 30 percent or more in 10 years.

New York University is a successful participant of NYC Carbon Challenge. (Credit: Jonathan71 via Wikipedia)To date, participants have reduced their emissions by an average of 16 percent. Six universities and hospitals even met their goals several years ahead of schedule. New York University, for example, cut its emissions by 30 percent through a combination of major capital investments such as its state-of-the-art co-generation system that kept the lights on during Hurricane Sandy. It also has implemented low- or no-cost strategies such as instituting regular operations and maintenance schedules. As a result, the university saved more than $11 million last year, and is now doubling down to cut its current emissions in half over the next five years.

Moreover, the Carbon Challenge participants are piloting cost-effective energy efficiency strategies and paving the way for others to follow. Commercial firms participating in the challenge, which include some of the largest global corporations such as Google, JP Morgan Chase and Crédit Suisse, are experimenting with innovative projects including server virtualization in their data centers, continuous commissioning of building equipment, consolidation of office space and maximization of natural daylighting.

As participants implement and evaluate strategies, the city can learn from their experiences and create case studies of best practices, which have the potential to multiply energy reductions and cost savings well beyond the scope of the program.

Consequently, the city under de Blasio aggressively has expanded the success of the Carbon Challenge to deliver the same benefits for multi-family buildings. In partnership with the New York State Energy Research and Development Authority, the city is working with 18 of the largest residential property management companies who have committed to reducing greenhouse gas emissions from their portfolios of multi-family buildings. As a result, residents of these buildings could save as much as $300 on their annual energy bills. They also will benefit from breathing cleaner air and helping the city mitigate its greenhouse gases.

The efforts of Carbon Challenge participants are making a significant dent in citywide emissions. All together, they make up more than 190 million square feet of space in New York City — about one-third of the entire built area of San Francisco — and contribute roughly 5 percent of citywide emissions. By the end of the challenge, they will eliminate more than 700,000 metric tons of carbon — or roughly the equivalent of making all buildings in Santa Monica carbon neutral.

A lot more work remains to be done. New York City will continue to play a leadership role in tackling climate change, while striving to make the city a more resilient and equitable place to live.


Apartment Construction Ominously Nears 25-Year High

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If you live in a major U.S. city and look out over the skyline, chances are good you’ll see construction cranes. Lots of them. Only twice in the past 25 years have new apartment buildings been going up as fast as they are right now. That’s not necessarily a good omen. The first time, in February 2000, was right before the dot-com bubble burst. The second time, January 2006, came right before the housing bubble burst. Now we learn that builders broke ground on 423,000 new multifamily units in July, right before … who knows what?

Monthly building data released earlier this week by the Census Bureau and the Department of Housing and Urban Development showed that new home construction overall posted strong gains in July, with the highest number of new home starts in eight months. The comeback largely manifested in an uptick in apartment buildings with five or more units, which saw an almost 50 percent increase in new starts in July over a year earlier. By comparison, starts on single-family homes were up only about 10 percent over the same period.

That’s part of the reason that the Northeast, with its large, dense cities, saw the biggest monthly increase, up 44 percent from June. That matches the analysis by Trulia (TRLA) Chief Economist Jed Kolko, who found that among metro areas, Boston and New York are building more than in the past.