Executive Summary

Building to the Passive House design standard reduces operational costs, which can offset incremental costs of construction and create additional, ongoing cash flow.

This playbook analyzes energy use, emissions, and operational cost data from six New York City multifamily Passive House buildings and compares it against data from their conventionally built peers. Findings show that the Passive House buildings use far less energy than typical multifamily buildings. These results translate into operational cost savings that can increase access to private debt and may also decrease reliance on public subsidies for certain types of affordable housing. Passive House buildings also emit significantly less carbon than conventional buildings, which may enable them to avoid civil penalties related to carbon regulations.

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This study was a collaboration between the New York City Department of Housing Preservation and Development (NYC HPD), The Community Preservation Corporation (CPC), Bright Power, and Steven Winter Associates (SWA).

Passive House Performance

Buildings that meet the Passive House standard are designed according to a key set of principles. Occupants and owners enjoy a variety of benefits, including lower operating costs, improved health and comfort, and reduced risk. The figure below provides an overview of the fundamental strategies and outcomes of Passive House construction.

Analyzing Energy Consumption

Reducing energy use is a key motivator for pursuing Passive House. The team’s research confirmed that the Passive House study group buildings greatly outperformed the control group buildings, consuming 32-58% less energy.

Looking at Energy Use Intensity (EUI), the Passive House case study buildings consume 32-58% less energy than the buildings in the post- 2003, conventionally-built control group.

Analyzing Greenhouse Gas Emissions

Building to the Passive House standard can help owners meet climate legislation by reducing emissions, thereby avoiding costly retrofit projects that would otherwise be required for compliance.

Emissions from buildings are a major concern, particularly in NYC, where buildings account for two-thirds of citywide emissions. NYC Local Law 97 of 2019 (LL97) established limits on building-level emissions that go into effect in 2024 and become more stringent every five years until 2050.

This study found that the Passive House buildings would all comply with the 2024 and 2030 emissions limits, while the control group buildings would need to invest in significant energy efficiency upgrades to avoid facing civil penalties in 2030.

The Passive House case study buildings would comply with 2024 and 2030 LL97 emissions caps. The control groups would need to invest in significant capital improvements to avoid civil penalties.

Underwriting to Passive House Savings

This study demonstrates that the energy efficiency and operational cost savings associated with Passive House construction can increase a building’s net operating income (NOI), which can unlock access to additional private debt and also reduce reliance on public subsidies for certain types of buildings.

By underwriting to Passive House savings, lenders can help accelerate the adoption of high-performance, low-energy-use buildings and help overcome financial barriers that currently hinder adoption, particularly in the affordable housing sector.

Looking Ahead

Future research will focus on developing better tools for lenders and collecting data from a larger set of buildings. A capstone team from the City College of New York (CUNY) Sustainability in the Urban Environment program is currently working on a multifamily Passive House database, which uses an online survey to collect data from projects in New York and similar North American climates.

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Project Team

This study was conducted by a team from New York City Department of Housing Preservation and Development (NYC HPD), Bright Power, The Community Preservation Corporation (CPC), Steven Winter Associates (SWA), and Building Energy Exchange (BE-Ex).

The report was made possible by generous support from the NYC Accelerator.