Portland, Ore.–based developer Ed McNamara is keenly focused on building green and achieving high levels of energy, water, and other resource efficiencies. And he's obligated by HUD and other public financing partners to rent at below-market rates.

His secret to building affordable high-performance structures begins with an understanding of basic building science. “You start by trying to reduce the demand for energy with a tight envelope,” he says, using a systematic and computer-modeled assembly of structural, insulating, air-sealing, fenestration, and cladding components that reduce both air and moisture infiltration and thermal transfer. “That’s where you need to make the smartest decisions to get the most impact for your money.”

That reasoning applies to new buildings as well as existing ones. For its adaptive-reuse projects, in which it transforms historic and iconic industrial/commercial buildings into modern multifamily properties, developer Village Green makes sure to address and improve the envelope first to reap downstream benefits.

“By nominally increasing the thermal value of the walls, we're able to reduce the HVAC equipment size by 5 percent or more,” says Shawn Zimny, vice president of development for the Farmington Hills, Mich.–based company. “That not only affords us an up-front savings for the equipment, but also reduces our operating expenses later.”

The envelope is so important to McNamara that he doesn’t keep track of whether the system he ultimately installs carries a cost premium. “It’s just what you need to do,” he says, to achieve the 50 percent energy-use reduction he wanted for The Ramona, a 138-unit rental property his Turtle Island Development company built in downtown Portland, where a studio apartment rents for about 55 percent of the market’s median and tenants enjoy monthly utility bills that are half of what they paid elsewhere. “It makes more sense to reduce the demand first,” before installing energy-efficient HVAC equipment and appliances.

Only after he settles on the envelope and calculates the proper size and highest performance possible for a few key mechanical systems does McNamara turn his attention to indoor fixtures and finishes, what he calls “the gadget stuff,” such as solar and recycled-content surfaces that supplement his sustainability goals and message. “I’ll replace them in 10 years, and by then they’ll be more efficient, more available, and cheaper.”

The lack of mainstream investment in green, however, baffles McNamara. “Forget if you believe in the ecological benefits of green building,” he says. “It just makes good business sense for affordable housing to build something that lowers and controls my operating expenses and my turnover.”

As Millennials continue to flood the apartment market, building green will make even more business sense. “The fact that the property was built using green products and is equipped with energy-efficient appliances and fixtures is extremely appealing to a potential renter,” says Zimny.

Learn more about markets featured in this article: Portland, OR.