Archives for January 2019

If roads, bridges, and phone and transmission lines are the veins of American infrastructure, buildings are the heart. Whether residential or commercially owned, the buildings that serve as places of work and living in the United States unquestionably shape public health, safety, and economic productivity. As buildings’ multiplying energy needs increasingly force their integration into the United States’ energy grid, it has become necessary to update building practices and technologies accordingly. These updates should minimize energy leakage and make greater use of each unit of energy consumed.

By upgrading energy efficiency in buildings, the United States can realistically lower energy costs for consumers, encourage job growth, and reduce energy-related pollution and carbon emissions. Buildings present a vast opportunity for Congress to revitalize the core of U.S. infrastructure and improve communities across the country.

Energy efficiency policy targets in a progressive U.S. infrastructure package

Although the energy efficiency space has seen mounting gains over the past several decades, the United States still has vast untapped efficiency potential that current and emerging energy technologies can activate. Currently, the building sector is the largest energy consumer in the United States. According to the U.S. Department of Energy’s 2015 Quadrennial Technology Review, implementing the best available energy efficiency technologies in the country’s existing building stock would result in a 50 percent reduction in residential energy consumption and a 46 percent reduction in commercial consumption. The most energy consumptive services in residential and commercialbuildings include space heating and cooling, water heating, and lighting. Improvements in HVAC standards, stronger building envelope insulation, and proliferation of technologies such as heat pumps, LED lightbulbs, and efficient appliances are at the forefront of realizing buildings’ energy efficiency potential.

All federal investments in buildings should lower buildings’ energy use while maintaining or enhancing levels of service and realizing additional benefits for citizens, the environment, and the economy. A progressive infrastructure plan should include a commitment to greater energy efficiency in buildings as a means to:

1. Save consumers money on their energy bills by decreasing household demand without sacrificing level and quality of service
2. Create additional, well-paying, and sustainable jobs in the burgeoning energy efficiency sector
3. Improve public health by shifting reliance away from polluting sources of energy generation and by making deep carbon-emissions cuts on a national scale by reducing fossil-fuel demand

Reductions in consumers’ energy bills

Several federal-level energy efficiency programs have already successfully saved consumers on their energy expenditures. Still, each year, Americans spend more than $400 billion to power their homes and workplaces. In 2015, residential energy consumption alone cost approximately $1,856 per household and $219 billion in total nationwide. With expedited improvements in energy efficiency standards, buildings’ energy expenditures would decrease, keeping more money in the pockets of individuals and small businesses. Further lowering barriers to energy efficiency is not only a way to decrease energy costs for most consumers, but a compelling avenue to greater energy burden parity between disparate demographics.

Indeed, the financial burden of energy expenditures in the United States’ residential building sector falls disproportionately on lower-income Americans and historically underserved populations. Energy insecurity, defined as the inability to meet basic household energy demand, is a known precursor to discomfort and poor health—depressing the standard of living and productivity in households already struggling to make ends meet. In 2015, one-third of American households found it difficult to pay their energy bills, while one-fifth reported forgoing food, medicine, and other basic necessities in order to fulfill this payment.

In particular, African American and Latino households shoulder disproportionately high energy burdens. By simply updating their home efficiency standards to the U.S. median, African American households could potentially save 42 percent on their excess energy burdens, while Latino households could save 68 percent. Renters, multifamily households, and rural households also pay a larger percentage of their income toward energy bills than the average American—another underacknowledged disparity. A more progressive energy efficiency policy has de facto potential to ease the financial burdens of the United States’ most underserved populations, and legislators should consider designing policies that specifically retain those implicit savings.

Potential for employment in the energy efficiency sector

Energy efficiency policy produces benefits beyond savings for energy consumers; it also provides sustainable, skilled jobs for Americans across all states and energy markets and at many levels of associated supply chains. As of 2018, 2.25 million Americans were employed in the energy efficiency sector across all 50 states. In 2017, the sector had 1,274,975 filled jobs in construction, 449,799 filled jobs in professional and business services, 315,578 filled jobs in manufacturing, and 167,492 filled jobs in wholesale trade, distribution, and transport.

With 70 percent of energy efficiency jobs provided by small businesses and a strong domestic manufacturing presence for energy-efficient equipment, expanding energy efficiency policy for buildings would be an easy win for American employment. While often touted as the low-hanging fruit of green energy policy, energy efficiency is no small endeavor at the labor level; millions of Americans are already hard at work making U.S. buildings more energy-efficient. This existing employment framework ensures that pursuing energy efficiency in buildings is a sensible and reliable way to boost domestic employment.

Reductions in pollution and carbon emissions

An often overlooked yet vital aspect of infrastructure is the connection between buildings, the environment, and public health. There is tremendous potential for energy efficiency to better public health outcomes across the country by greatly reducing energy-related air pollution while also improving the insulation of buildings—a safeguard against common allergens, moisture-related illnesses, and thermal stress. By reducing the amount of energy generation required to maintain the same level of energy service in buildings, energy efficiency measures reduce the amount of particulate matter and irritant gases that fossil fuel-burning power plants produce—including pollutants such as ozone, sulfur dioxide, nitrogen oxides, mercury, and soot. Studies suggest that air pollution causes hundreds of thousands of premature deaths each year in the United States and contributes to serious and increasingly common afflictions such as asthma and chronic obstructive pulmonary disease. Moreover, power plant emissions are not only directly harmful to those who breathe them in, but they also negatively contribute to public health and the environment by entering water resources, ecosystems, and the food chain.

In addition to traditional pollution reduction, scaling energy efficiency in buildings to their potential could make deep cuts in greenhouse gas emissions despite the United States’ growing population and economy. Thus, strong and timely energy efficiency targets can help the country avoid some of the worst environmental, economic, and social outcomes of climate change. Ambitious energy efficiency targets can reduce harmful emissions that result from current methods of energy generation, which should be a compelling reason for action.

Conclusion

Energy-efficient buildings can lay a foundation for cleaner, stronger, and more equitable infrastructure. The varied, cross-disciplinary benefits of energy efficiency have made past efficiency policies and programs popular among legislators, market actors, and the American people. These efforts have resulted in blueprints for more ambitious efficiency targets at the federal level. For example, the Environmental Protection Agency’s Energy Star program—a labelling program encouraging greater energy efficiency standards for products and buildings—touts significant market penetration, sustained industry support, and a high rate of consumer brand recognition. Among its successes with various stakeholders, Energy Star is also the largest single energy efficiency technology application employer in the country and successfully reduces energy demand and costs in participating households.

Offering varied benefits to a range of stakeholders, ambitious energy efficiency measures can rally bipartisan constituencies toward improving communities across the country, and they should be championed as an important component of a healthy, low-emitting building stock. U.S. residents need lasting jobs, cleaner air, and fewer barriers to economic mobility. Energy-efficient infrastructure has significant potential to simultaneously address these needs.

By: Bianca Majumder and Luke Bassett (Center for American Progress)
Click here to view source article.

New Mexico’s oil boom could mean big bucks for statewide road projects.

Both Gov. Michelle Lujan Grisham and a key legislative committee have proposed using a hefty chunk of the state’s current budget surplus – $300 million to $400 million – on improvements to an aging, and in places overwhelmed, state road system.

“We’re not going to get this kind of circumstance every year,” said Sen. Carlos Cisneros, D-Questa, sponsor of an annual infrastructure bill that will ultimately include the road funding. “This is a one-time opportunity we have to take advantage of.”

It would ultimately be up to the state Department of Transportation to decide which projects receive funding, Cisneros said.

Although no decisions have been made yet, the agency has already identified some possible projects, including reconstructing a heavily trafficked oil field route in Eddy County and building a new Interstate 25 interchange near Los Lunas.

Adding a third traffic lane on Interstate 25 between Bernalillo and Santa Fe could also be an option, according to DOT and Legislative Finance Committee files.

Michael Sandoval, Lujan Grisham’s pick to lead the Department of Transportation, said projects would be selected in large part based on their potential to create economic growth.

“Everything is on the table right now,” Sandoval told the Journal. “We just need to be really smart and strategic about choosing the projects.”

He said there will most likely be no regional formula for choosing road projects, and said the agency would seek to keep politics out of its decision-making.

However, some lawmakers are already advocating for road funding in a state that has more than $1 billion in identified road repair needs, according to the DOT.

Rep. Cathrynn Brown, R-Carlsbad, said much of the available budget surplus should go toward roadwork in southeastern New Mexico, where the state’s oil boom is concentrated.

“People are upset that the state hasn’t put more money into the region,” Brown said in an interview. “There needs to be some reinvestment.”

She said increased vehicle traffic on area roads – including numerous trucks hauling oil field equipment – regularly leads to traffic delays and has created public safety problems.

For instance, she said, there’s little or no space for law enforcement officers to safely pull vehicles over on N.M. 31 near Carlsbad.

“The problem is more severe than it’s ever been,” Brown said. “Our future revenues depend on a sound infrastructure.”

Temporary help

Using money from the state’s unprecedented revenue windfall would mark a new – if temporary – approach to funding road projects.

The state typically finances such projects either by issuing bonds or from a state road fund that gets its money from a gasoline tax, along with other taxes and fees. New Mexico also receives federal dollars for highway construction projects.

However, the state has struggled to keep up with maintenance on more than 30,000 miles of roadways in recent years, in part because more fuel-efficient vehicles have led to lower tax collections.

“We recognize there are a multitude of roads in dire need,” Cisneros said.

Due primarily to a steady increase in oil production levels, New Mexico is on track to end the current budget year in June with a more than $1.2 billion budget surplus.

The LFC has proposed using roughly $400 million of that amount for statewide road projects, while Lujan Grisham has recommended $300 million for such projects.

Even such a large one-time cash infusion might not address all the state’s road repair needs, however, as the average cost of paving construction in New Mexico is $2 million per mile, according to the Lujan Grisham administration.

Gasoline tax

A former Motor Vehicle Division director and longtime DOT employee, Sandoval said a big down payment from this year’s budget surplus would not be a fix-all for New Mexico’s roads.

He specifically mentioned the infrastructure situation in Eddy and Lea counties, but said roads statewide will require future maintenance.

“We understand that everywhere in the state has needs, both urban areas and rural areas,” he said.

For that reason, lawmakers are considering increasing the state’s gasoline tax of 17 cents per gallon to address future road repair needs. The Lujan Grisham administration has not said whether it would support such a tax increase.

But a big, immediate expenditure on road projects would make a dent in the state’s current highway repair backlog while also bolstering the state’s construction industry, Cisneros said.

“It will infuse a lot of money into the local economy,” he said.

Meanwhile, because no bonds would have to be issued, construction could begin shortly after the governor were to sign off on a bill including the road projects – possibly by as soon as this summer.

By: Dan Boyd (ABQ Journal)
Click here to view source article.

Many real estate companies today don’t recognize that today’s millennials and generation Zers have different expectations and aspirations, and work/life balance priorities than prior generations.

The booming CRE industry during the last five years has been great for investors and sponsors but has created a shortage of C-suite experienced leaders and junior level employees. CRE is a $7 trillion business in the U.S. and it must do a better job of creating, enabling and training a more agile and engaged workforce. It must also allow for a new wave of leadership in the industry as many of the Baby Boomer founders of REITs, private equity firms and institutional investors are over the age of 75 and will retire in mass in the next few years. CRE companies need to increase efforts to groom senior level personnel to take over the reins of these firms and also attract next-generation talent. These efforts should concentrate on retraining existing talent, recruiting junior level employees right out of college and diversifying senior leadership along with advisory and corporate boards.
CRE companies have also been slow to use the power of social media and new technologies to change business operations, marketplace perceptions and attract this next-generation talent. Many real estate companies today don’t recognize that today’s millennials and generation Zers have different expectations and aspirations, and work/life balance priorities than prior generations. These include; mobility and flexibility in work, use of mobile devices and data analytics, advancement potential and incentive compensation in employer real estate investments. Very few real estate firms show up on college campuses to recruit college graduates for entry-level positions, which is a big mistake in securing this next generation of talent.
The executive suite of many CRE companies is comprised of Baby Boomers who want to exit the workforce and others who would like to continue to be in employment, but with more work flexibility. Many CRE firms do not have an established and formal knowledge-transfer program from Baby Boomers to the younger generations including Generation X, Millennials and Generation Z individuals. A culture and focus on lifelong learning from these highly skilled Baby Boomers are critical. One of the most important value-added skills of a CRE Baby Boomer is their judgment, decision making, and experience of working in the industry for 30 or more years and the various ups and downs of the business during this period. Most CRE Baby Boomers that have been in the industry since the 1970s have been through two secular mini-depressions from 1987 to 1992 and most recently, 2007-2012 and six normal recessions. The experiences gained in steering a real estate firm during these downturns and the effect on rents and property values is vital to running a successful real estate advisory, investment or development firm and this skill set must not leave the firm when these senior-level employees retire or move on.
Another area of concern for many real estate firms today is the incentive compensation structure. The compensation programs of a number of real estate investment and development firms do not include a portion of the general partner’s carried interest as incentive compensation to all the firm’s employees. Some of these firms pay generous salaries and bonuses, and that’s great, but do not allocate a portion of the firm’s real estate investments profits to employees. There’s an old saying in professional service type firms and that is; “If you don’t take care of your key employees, they will leave and become your competitor.” This is very true in the CRE industry and one of the primary reasons to provide an attractive incentive compensation program as well as a workplace environment. CRE is a major asset class that is in one of the greatest boom periods ever, however, much more needs to be done to recruit and train junior level employees, train senior-level employees for the C-suite and transfer the skill set of successful Baby Boomer founders and CEOs.
By: Joseph Ori (Globe St)
Click here to view source article.