Insider Sits Down with VP of Development, Kent Gonzalez, to Discuss Sustainability, Passive House Design, and the Northland Newton Development
July 27, 2023
By Catherine Boudreau
Rising heat and electricity bills. Bad air quality from wildfires. Unpredictable power outages.
All these trends — exacerbated by the global energy crisis and the climate crisis — have raised interest in ways to lower energy use at home and ensure the places we live are resilient to more extreme weather.
Europe is ahead of the curve when it comes to the energy transition. One way is through designing buildings and residences using Passive House standards, a green building-certification program focused on energy efficiency. These buildings are well-insulated, airtight envelopes that have heat, ventilation, and cooling systems that draw in filtered air and take advantage of the heat our bodies — and certain electronic devices like laptops — give off.
The project pipeline has soared in places like the UK, and is also catching on in the US in states including New York and Massachusetts. Developers are interested in how Passive House buildings can help save energy, emit fewer greenhouse gasses, and deliver lower utility bills.
A study of 45 multifamily buildings in New York and Massachusetts found that utility bills were between about 30% and 50% lower than average. The up-front costs of these homes equipped with all-electric appliances were about 3.5% higher than those built to standard code — yet in some cases, they were cheaper when factoring in financial incentives from affordable-housing programs and utilities, according to the study published this week by the Passive House Network.
“A typical building is like a sieve you use to strain pasta, where air is moving through the walls. A Passive House is more akin to a thermos,” Ken Levenson, the executive director of the Passive House Network, a nonprofit that educates the real-estate and construction industry on the standards, said.
These are “future-proof” buildings, he added, because they can keep air clean from outdoor pollutants and maintain stable temperatures for longer than a typical home during scorching hot or frigid days, even during power outages. Passive House standards don’t require that electricity come from renewable-energy sources, but they do encourage it, Levenson said.
Residents of a 13-building Passive House project in Newton, Massachusetts, won’t pay heating and cooling bills because the costs are projected to be as low as about $35 to $55 a month, and can be factored into monthly rent. Most of the 800 all-electric units will be priced at the market rate, while 140 will be considered affordable housing.
The project cost is in the $1 billion range, according to Kent Gonzales, the vice president of development at Northland, the real-estate private-equity firm leading the project. He said there weren’t any major cost increases due to designing to Passive House standards.
Still, less than 1% of the multifamily housing that’s been constructed in the US in the past 10 years have adopted Passive House standards. There have been nearly 300 projects, half of which were designated affordable housing.
In New York City and Boston, buildings account for 70% of their carbon footprint, higher than transportation and food waste. New building codes aimed at decarbonization, as well as subsidies to build more sustainable and affordable housing, have encouraged developers there to look for greener ways to build homes and use Passive House standards.
“The biggest impediment to widespread adoption is inertia,” Levenson told Insider. “Real estate is conservative in that they want to build what was sold yesterday and not take any chances. We argue that Passive House lowers their risks as we face more extreme weather.”