Ann Arbor wants more green buildings, how quickly could developers adjust?

In 2020, Ann Arbor kicked off a 10-year journey to a carbon neutral future. The ambition was encapsulated in a 138-page carbon neutrality plan which addressed high-emission sectors ranging from electric grid changes to transportation initiatives to residential constructions. Buildings account for the largest output of greenhouse gasses locally and in 2020, residential buildings alone accounted for more than one-fourth of the overall greenhouse gas emissions in Ann Arbor.

In line with the plan’s third strategy to achieve carbon neutrality, the plan proposes that all new constructions from 2022 to 2030 have net-zero carbon emissions, meaning new properties should only use electric energy and should be able to generate their own renewable energy on-site. More than two years into the plan, where does Ann Arbor currently stand with respect to its transformative vision?

In an email to The Michigan Daily, Brett Lenart, planning manager at the Ann Arbor Planning Commission, wrote that only a small fraction of the buildings that have been planned or built since 2020 are conforming to the city’s sustainability goals. 

“I know of one net-zero building proposed, two approved developments that require/have committed to some level of electrification and a handful of other projects that have identified electrification as a goal, but it is not required,” Lenart wrote. 

The Daily spoke to developers and city officials about the progresses and obstacles underlying Ann Arbor’s efficient building commitment.

Process improvements that enable cost-saving sustainable construction

In small- and middle-scale housing developments, some local developers are leading the way for sustainable initiatives.

In particular, two proposed projects have garnered attention from Ann Arbor residents over the past couple of months. One of them is a quadplex, which has been called the most sustainable building in Ann Arbor and even the world. The quadplex is a new apartment building which is slated for construction in the Ann Arbor Old Fourth Ward neighborhood on North Division Street, and is designed to generate more energy on-site than it consumes. The development’s sustainability feats earned it the title of a “passive house,” or a building that is voluntarily energy efficient. 

The other project is a 79-unit apartment building which will be built on North Maple Street and relies solely on electric energy and geothermal heating — with 15% of the units being priced at a more affordable cost, the building might just be the perfect recipe for Ann Arbor’s sustainability and affordability goals. 

For many developers, sustainability can be hard to achieve because of the high price tag often associated with environmentally-friendly features like built-in renewable energy generation. According to the Office of Energy Efficiency & Renewable Energy, 55% of the energy U.S. households consume is used to power heating and cooling systems. While heat pumps are more sustainable than traditional heating and cooling systems, it could also cost more to install them. 

Doug Selby, the long-time Ann Arbor developer and co-founder of Meadowlark Builders behind the Old Fourth Ward quadplex, told The Daily in an interview that efficient building envelope design — architectural models which prevent heat-loss to the outside environment and insulates the interior of the house by balancing internal and external environmental forces — could allow sustainable heating systems to be deployed in less costly ways. In general, better insulation means that less heat or air-conditioned air is lost to the outside environment.

“What do we do to make all the energy that we need to run this building on site?” Selby said. “The first thing I need to do is bring the energy consumption of this building way, way down. If you are building a low-energy building envelope, it offers the opportunity to redesign an HVAC system that uses a lot less ductwork and the equipment needs to be a lot smaller in capacity.”

Jeff Wilkerson, a local developer who leads the development of the North Maple project, said he also placed high value on constructing buildings with the envelope design. He said the reduced cost of energy has allowed him to plan for more affordable units in the building while upholding his commitment to full-electrification.

“When you can beef up the thermal envelope, you get one chance to get that right,” Wilkerson said. “The biggest part of the expense on the whole electrification is in the heating and cooling …Typically landlords pass that on to the renters. So, unfortunately, (renters) can be the ones who get hurt by that. I think, as developers, if we’re being responsible to our community, this is something to be considered.”

Opportunity with high-rises and future challenges

Wilkerson said he has recently been considering the use of recyclable mass timber, a type of solid wood panel, as an alternative building material to concrete and steel in his project. Because recyclable wood could absorb carbon, mass-timber could further reduce construction costs and carbon emissions related to the construction process. 

However, Wilkerson said he eventually decided that using mass timber would not be financially efficient for his four-story North Maple project.

“In our examination, with cross laminated timber (a type of mass timber), something in the seven or eight story range is like the sweet spot where the costs can be very competitive against steel and concrete construction,” Wilkerson said. “For the three or four story building — which is what we’ve designed on North Maple Street — traditional (concrete and steel) framing is still the most cost effective option.”

Lisa Sauvé, an Ann Arbor planning commissioner and the founder of Ann Arbor-based Synecdoche Design Studio, included mass timber in her project design for “Southtown,” an eight-story high-rise building she has planned on developing on South State Street with Prentice 4M, a developer of lifestyle assets. Sauvé said using mass-timber for an eight story building is still not allowed by current Michigan building code. However, Sauvé said she is optimistic that the new Michigan building code, which is currently in the planning stage, would allow the technique to be applied to high-rises, as early as this summer.

“Mass timber would be included in the 2021 building code for Michigan,” Sauvé said. “I know that there is a group led by Sandra Lupien at Michigan State University trying to get some of the language included (in the Michigan building code), which would allow even taller mass timber structures. That would allow mass timber structures to really happen downtown as an opportunity.”

While the “Southtown” project was designed to only use electric energy, Sauvé said she realized that increasing energy demand from future tenants might pose an issue. The prospective energy demand currently exceeds what could be supplied by local electrical substations, Sauvé said, meaning that she would have to source electricity from other substations farther away from the site. 

“We need to first work with DTE to upgrade the amount of electrical service in the neighborhood so that there is enough electricity to (allow) the building to be entirely electric,” Sauvé said. 

Howard Frehsee, the developer behind two high-rise buildings in downtown Ann Arbor, said he had similar concerns related to energy demand when the city first considered requiring all new buildings to be fully-electrified last year. While his current high-rise project behind The Michigan Theater features solar panels, Frehsee said the high energy demand in the building relative to the limited available land made many other sustainability features unattainable.

“We have been researching geothermal as a new source of heating, but in a downtown environment, it is very difficult to use the geothermal (energy) because you have to anchor over a large amount of land and do substantial amounts of piping,” Frehsee said. “You don’t have enough area in Downtown to do that.”

The future of affordable green housing

Ann Arbor has also outlined sustainability goals for affordable housing in their Carbon Neutrality Plan. 

In an interview with The Daily, Wendy Carty-Saxon, the director of real estate development for Ann Arbor’s non-profit affordable housing developer Avalon Housing, said the organization hasn’t developed any net-zero carbon emission buildings yet. She said they are gradually working to achieve the city’s carbon neutrality goal for new development.

“Fifteen of our properties, with over 190 units (in total), have made commitments to enterprise green community standards on books,” Carty-Saxon said. “We have also installed (electric) air-source heat pumps for three of our new constructions.”

Carty-Saxon said rising construction costs in the wake of the COVID-19 pandemic affected all parts of the real-estate planning and construction processes. For instance, the Catherine Street Project, a large-scale development planned by Avalon, has seen the construction cost per-unit rise over the past two years to $450,000.

Despite the challenges, Carty-Saxon said the group was not discouraged and has continued to focus on projects at the intersection of green and affordable housing. Unlike many private, for-profit developers, Avalon also paid utility bills for its residents. Carty-Saxon said this model incentivizes increasing energy efficiency in the long-term.

“We own and develop our properties,” Carty-Saxon said. “We do all this with the intention of really operating these properties essentially in perpetuity. We considered our long-term fiscal responsibility to be different (than for-profit) … we are always trying to figure out what are the things we are able to (build to benefit our) future, even if we can’t do it immediately.”

Lessons on regulatory impact

As developers consider ways to improve energy efficiency, Ann Arbor officials are discussing measures to make their goals happen as quickly as possible. In an interview with The Daily, Lenart and Planning Commissioner Ellie Abrons, the latter of whom is an associate professor at the University of Michigan, a Planning Commissioner and a local architect, said passing sweeping city regulations takes time. For instance, codifying certain sustainable features like full-electrification into the city’s zoning code is not something that can happen overnight.

Ellie Abrons said the City Planning Commission doesn’t want to make the rules for new developments so restrictive that developers will build elsewhere and force residents to commute, thus inadvertently increasing carbon emissions from vehicles.

“It’s a fine-line,” Abrons said. “We need housing so badly in this city. So, should we be prioritizing that or should we maybe throttle the amount of housing a bit and make sure all of them are built sustainably? It is a very difficult decision.”

There is, nevertheless, one leverage in Ann Arbor official’s toolbox to nudge the developers to build more sustainably. Currently, housing developers often have to go through Planned Unit Development (PUD), a rezoning process that would allow them to build high-density housing. 

Abrons said the Planning Commission has been using this leverage to reflect the city’s evolving expectations of sustainability.

“I do think we are seeing more site plans that include solar panels and identify building electrification as a goal,” Abrons said. “That is not enough, but we are seeing more. I think we have established for the development community that if they come to the Planning Commission and consider sustainable features to a larger degree, they will be better received.”

Daily Staff Reporter Chen Lyu can be reached at lyuch@umich.edu.