Climate Change
Background and Objective:
Recent studies and news accounts tout the dangers of climate change. These reports, combined with the desire to lessen America dependence upon foreign oil, have created a groundswell for legislation dealing with energy conservation and reduced carbon dioxide emissions.
According to the EPA, commercial buildings account for almost 20% of our nation’s greenhouse gas emissions. Commercial and residential energy usage has declined over the last thirty years on a per square footage level. The Fifth U.S. Climate Action Report indicated that greenhouse gas emissions increased by 17 % from 1990-2007, while the U.S. GDP increased by 65 % .
In January, 2010, the President put forth an Executive Order requiring all federal agencies to reduce greenhouse gas emissions by 28 % by 2020.In June 2014, the Environmental Protection Agency proposed the Clean Power Plan, a regulation which seeks to cut carbon pollution from existing power plants by 30% through the next two decades. Along with Executive actions taken by the Obama Administration aimed at doubling the fuel efficiency of cars made in the United States, and limits on the carbon dioxide emissions emitted from new power plants, these regulations signal the increasing urgency with which administrators and legislators are dealing with the issue of climate change.
IREM Position:
IREM strongly supports positive incentives for energy conservation activities. We support energy tax credits and voluntary programs like Energy Star.
Recognizing the serious concerns of global warming, IREM supports the development of voluntary standards for reducing greenhouse gas emissions. We support the use of sustainable materials in the construction of buildings, and programs that reduce the “carbon footprint” of real estate assets. However, requirements to retrofit existing buildings must take into consideration the needs of the buildings and costs associated with such changes. Additional research is necessary to determine to what level greenhouse gases are affecting the environment versus natural climactic changes humans control.
Thus, we strongly urge that Congress focus on voluntary standards for new construction and existing properties.
(Adopted 4/07, updated 3/11, 9/14)
Energy
Background and Objective:
Energy is a vital part of the world economy and of America's way of life. Fluctuating energy costs, decreased demand, supply concerns, technological advances, and environmental considerations are changing the way we use energy and how we think about our future energy situation. As electricity and gas are a necessity rather than a luxury, discussion has surfaced regarding creating a free market to encourage competition, which in turn should bring lower utility rates. It should be noted, however, that electricity's elements are different from the other utilities in its generation, transmission, and distribution. While the transmission and distribution costs are somewhat fixed and may remain regulated, the generation of electricity may provide for the most competition and benefit for consumers. Additionally, as the demand for electricity and gas continues to increase, energy efficiency and conservation are sorely needed.
Over the past several years we have seen new initiatives intended to conserve energy. President Obama introduced the Clean Power Plan in the summer of 2015. This plan puts in place strict limits on pollution, specifically on energy producers. Also, in August of 2015 the first phase of the Tenant Star program was launched. This voluntary program is similar to Energy Star, but targeted at tenants in rental units.
IREM Position:
The free market system is the most appropriate means of attaining energy conservation and production goals. Increased conservation and domestic expansion are essential to our nation's security and economic prosperity. The nation must strive for greater energy self-sufficiency through further development of existing sources, decontrol of energy prices and the development of all new sources of domestic energy to reduce our dependence on foreign energy supplies.
We support the concept of conservation policies and the use of energy efficient technology. However, we strongly oppose mandatory national standards for building energy conservation. Specifically, IREM opposes mandatory installation, purchase, or usage guidelines for energy conserving products. Instead, we encourage positive incentives for conservation activities such as energy tax credits and an increased emphasis on energy efficient technology by the nation's building industry.
We support the security of all energy distribution systems (electrical grid, gas transmission pipelines, etc.) as the systems are the necessary backbone for the delivery of our energy needs.
It is vital that consumers (both individuals and businesses) have access to reliable, reasonably priced energy. IREM encourages its members to conserve energy and reduce demand in their facilities and to be proactive in educating tenants on programs and practices that can help conserve energy. We encourage voluntary participation in programs such as EPA’s Building Program, Green Lights Program, Energy Star Program, Tenant Star Program, the U.S. Green Building Council’s LEED program and Canada’s Green Globe program.
(5/01, updated 4/05, 10/09, 10/13, 1/14, 9/15)
Energy Conservation
Background and Objective:
Federal regulations have been proposed which calls for government regulation of energy-using products used in the building premises. With the above position in mind, IREM has expressed a position on the following issues:
IREM Position:
The free market system is the most appropriate means of attaining energy conservation and production goals. Increased conservation and domestic expansion are essential to our nation's security and economic prosperity. The nation should strive for greater energy self-sufficiency through further development of existing sources, decontrol of energy prices and the development of all new sources of domestic energy to reduce our dependence on foreign energy supplies.
Further, we support the concept of positive incentives for conservation activities such as energy tax credits and an increased emphasis on energy efficient technology by the nation's building industry.
IREM supports legislation that encourages voluntary energy efficient improvements to buildings. These include tax credits for energy efficient commercial building property expenditures, tax deductions for energy management devices, and tax credits for residential solar energy property expenditures.
However, we strongly oppose mandatory national standards for building energy conservation. Specific IREM positions opposing mandatory installation, purchase, or usage guidelines for energy conserving products include the following:
Mandatory Purchase and Installation of Heat Pump Water Heaters (HPWHs)
In 2015 the Appliance and Equipment Standards Program, implemented by the Department of Energy, began requiring the use of HPWHs in certain properties.
IREM opposes the mandatory purchase and installation of HPWHs due to the following reasons:
Property owners will be forced to incur out-of-pocket expenses in order to convert to an HPWH from an electric water heater. The cost of initial retro-fit and renovation to install HPWH systems, the purchase and installation of condensate drainage lines to remove moisture (one pint/hr) created during normal HPWH operations, the cost of training of property staff to repair and maintain the sophisticated HPWH system, and the possible expense of purchasing an alternative DOE-approved system if a unit requires additional space and layout would create a prohibitive installation cost of HPWHs.
IREM seriously doubts the validity of HPWH savings in cold weather. Outdoor HPWHs are inoperable in weather below 40 degrees F and extra costs are incurred for the purchase of alternative winter heating systems.
The U.S. Government provides insufficient incentives for property owners and managers to comply with mandatory conversion, as they reap little economic incentives for their incurred capital investments and structural inconveniences.
IREM opposes combining HPWHs and electric-resistant water heaters into a single product class, as it will set a single product efficiency standard and eventually eliminate electric-resistance water heaters from the market. In response to the added expense of compliance, property owners may be forced to cut back on or neglect property maintenance, upkeep, and repairs.
Minimized Use Options of Fluorescent Lamp Ballasts
The Energy Independence and Security Act of 2007 (H.R. 6) was signed into law on December 19, 2007. The law includes a section titled “Energy Savings Through Improved Standards For Appliance and Lighting” which focuses on manufacturers, not building owners or managers. Manufacturers of lighting, including light bulbs and lamps, are directly affected the law.
The law does not state when building owners and managers must have the updated appliances and lighting in place. Rules may be promulgated regarding the products that could affect real estate owners and managers.
In 2010, it was mandated that manufacturers could no longer make T12 magnetic ballasts. These ballasts will be prohibited beginning in July, 2012 by Department of Energy regulations. This event marks the increased efforts to regulate energy emissions and conservation.
IREM continues to oppose restriction of choice in fluorescent lamp ballasts and believes the industry should be given reasonable time to deplete current ballast supplies and receive incentives of refunds or rebates to resell unused ballasts back to manufacturers. The rapidly growing market for energy-efficient magnetic ballasts and electronic ballasts indicates that they should be allowed to compete in the lighting system market. Market restriction would lessen the flexibility and performance of lighting systems and negate energy savings otherwise attained in the existing market. Property managers and owners should have the right to choose their product preference to allow compatibility with other building systems effecting performance, such as TV infrared remote controls and lighting system designs.
In December of 2011 Congress voted to defund the enforcement of the lightbulb performance requirements. Although, having been in place for four years the light bulb manufacturers had already retooled their production lines, making reverting back very unlikely.
Mandatory Replacement of Window or Through-Wall Room Air Conditioners
IREM opposes mandatory replacement of currently installed room air conditioners with larger compressors because of the burdensome retrofit and replacement costs property owners will be forced to incur. Retrofit costs will be incurred for either the window and frame containing the air conditioner, or the building walls and exterior (in the case of a through-wall unit). In many of these cases, the existing housing and sleeves will not accommodate a larger size compressor. Also, according to the US Energy Department, room air conditioners are in many instances a better option than central air. While they tend to be less energy efficient, they are more focused, cooling only where it is needed. This in turn results in less overall energy used.
Since the multi-family industry has an "aging" inventory with more than 70 percent of buildings built before 1980 (cited 2009), an exception should be made for these units on the basis of economic feasibility and undue burden on property managers and owners. Further, the federal government should continue the Energy Star program that allows tax credits for certain units.
(6/86, updated 4/02, 4/08, 10/11, 4/16)
Energy Emission Trading
Background and Objective:
One option for reducing pollution and greenhouse gas emissions is a program called emissions trading, or “cap and trade.” This type of program provides economic incentives to achieve reductions in emissions. Under this approach, regulated industries can buy and sell what are, in effect, permits to pollute. Usually a governmental agency will set a limit on the amount of pollutants that a company or organization can emit. If these emissions limits are surpassed, the organization must pay a fine.
Each company will be allocated a number of credits equal to its limit. Companies that reduce their emissions below the threshold can then sell or trade their credits to companies that exceed the cap.
The feasibility of emissions trading for buildings is unknown. It would require all buildings to participate in energy audits to determine current emissions levels. Voluntary participation wouldn’t work, as trade programs require all actors – “good” and “bad” to participate. In addition, it will be difficult to quantify direct vs. indirect emissions. Direct emissions come from the operation of boilers, gas fireplaces, etc. Indirect emissions are those from using purchased energy such as electricity.
Cap and Trade programs require participants to commit to a level of emissions reduction. These requirements also include associated activities like monitoring and verifying emissions levels. These activities add cost. Some emissions from buildings are at least partially caused by tenants. It would be difficult for property owners to control the actions of tenants that may contribute to emissions.
On the other hand, many argue this is an incentive-based approach that would be more workable than energy efficiency mandates. In addition, allowing property owners to sell credits would help pay for energy efficient improvements in buildings.
Several emission trading systems have been enacted at either the state or regional level. Of these, none directly apply to real estate, but to power plants and certain entities considered major emitters.
IREM Position:
Providing an economic incentive, in the form of credits, would encourage energy efficiency improvements and assist in paying for those upgrades. IREM supports voluntary, market-based incentives for energy efficiency. IREM supports federal funding of a cost/benefit analysis and research into the feasibility of an emissions trading program for the real estate industry.
(Adopted 4/08, 10/11, 4/16)
Environment
Efforts to control pollution and to protect natural resources must be balanced with efforts to increase (a) energy efficiency and independence, (b) economic vitality, and (c) productivity.
We support legislation and/or regulations that require more complete disclosure of information pertaining to hazardous waste on property that is to be sold or leased. However, provisions should be included to relieve intermediaries of liability when they are unknowingly involved in property transactions where hazardous waste has been generated, stored, or disposed.
We support the wise use and management of our nation's water resources so that residential, commercial, and industrial development can proceed unencumbered in the future. States' water rights and regional customs as they have developed over the years should be considered by all levels of government. We also recognize the importance of well-developed infrastructure in ensuring adequate water quality and quantity.
We believe that the federal government cannot and should not assume all the responsibility for eliminating pollution problems. State and local governments should participate fully in such decisions, free of the threat of federal sanctions.
We oppose those aspects of environmental and natural resource legislation that amount to uncompensated condemnation of private property through government actions. It is essential that the rights of private property owners be fully recognized in federal programs and laws.
(6/86, updated 11/05, 10/09, 8/12)
EPA Energy Star Program
Background and Objective:
EPA's ENERGY STAR Buildings program is a voluntary energy-efficiency program for U.S. commercial buildings. It explores profitable investment opportunities available in most buildings using proven technologies. The program allows partners to reduce total building energy consumption, saving $362 billion on utility bills, and reducing greenhouse gases by 2.5 billion tons since 1992. The program continues to be a success with more than 19,000 organizations participating.
IREM Position:
IREM supports EPA's Energy Star program as a means for reducing energy costs. IREM agrees to be an endorser of this program, and will encourage our members to use proven energy-efficient technologies to eliminate waste and cut energy costs.
(Adopted: 11/97. Updated: 4/07, 3/11, 10/16)
Indoor Air Quality
(also see Appendix III)
The members of IREM are committed to the maintenance of the health and safety of all occupants in buildings, and are ready to take actions that might be necessary to meet prescribed qualifications. We understand the issues with air quality in buildings and believe that our members should be informed as to the potential hazards to tenants and employees from indoor air contaminants such as asbestos, radon, mold, volatile organic compounds (VOCs), and lead. We will make every effort to disseminate the available information to assist the general membership in their ability to provide adequate solutions to indoor air quality problems without the imposition of unnecessary and burdensome government regulations. We believe that the federal government cannot and should not assume all the responsibility for eliminating pollution problems. State and local governments should participate fully in such decisions.
Any regulation of indoor air contaminants in buildings should be based on scientifically proven significant levels of exposure and hazard to the public. Such regulation should allow reasonable time periods in which to comply with regulations, provide flexibility in how to comply, require comprehensive training and certification for treatment or abatement contractors and laboratory technicians, and provide for a "prioritization" of regulation with respect to the particular hazard posed by certain building types and classes as well as geographic location.
Specifically, however, we do support the provision of tax credits to property owners on their federal, state and local tax returns for buildings that require treatment or abatement of indoor air contaminants as a result of complying with applicable government regulation. Further, we support the position that properties receive real estate tax credits to recognize the fact that the imposition of building codes in many instances forced owners to use materials which were later discovered to pose health risks and which they must now bear the cost to remove.
Asbestos
Asbestos is a known carcinogen, which, before discovery of its heath risk, was widely used in insulation, ceiling and acoustic tile, vinyl flooring, and other building materials between 1930 and 1976. However, it only poses a threat when it becomes friable and can be inhaled. It creates a serious and costly problem for real estate managers who must assess its condition and take appropriate steps to reduce the potential health hazard resulting from it. There is a great deal of disagreement over the best way to deal with asbestos.
The Institute urges the EPA to declare two different clearance levels for the two different mineralogical types of asbestos. The different types represent different levels of hazard/risk.
The Institute urges the EPA to adjust current policy relating to the size and type of fiber found. In order to measure, adjustments need to be made in the microscopy standards as well as the EPA's standards.
Finally, the Institute urges the EPA to update the "science" of asbestos to reflect that low levels, as indicated by existing research, of fibers may not be a significant health risk. Further, we urge the EPA to research and consider the benefits of managing asbestos rather than removing it. Scientific evidence indicates that asbestos fibers pose a health risk only when they become airborne. In most cases, asbestos left undisturbed will result in less airborne fibers than would normally be experienced by removal efforts.
Because a large percentage of existing asbestos is not friable, proper management of it in place will result in low and safe levels of airborne asbestos. This could be determined by air monitoring or some other scientific method. With a "safe" level established, building owners could follow guidance documents, test for clearance, and have some objective way of "ensuring safety" for occupants. In the case of future lawsuits, an owner would show adherence to guideline documents and demonstrate that the "safe" level was attained.
Radon
Radon is a colorless, odorless gas that occurs naturally from the breakdown of uranium, which exists deep within the earth. Radon is a source of radiation and has been linked to lung cancer-related deaths. Because radon emanates from the ground upward, it tends to affect a property's basement, ground floor, and sometimes first floor. Although radon can affect upper floors through HVAC systems, the danger is significantly reduced at higher levels. The threat that radon does pose should be of concern to real estate managers and IREM urges owners to take voluntary action to reduce or eliminate radon. Any federal radon gas legislation should be based on scientific evidence verifying radon's harmful effect on humans.
IREM opposes any form of mandatory testing for the presence of radon gas tied to the real estate transaction process. A decision to test or not test should be left to the discretion of the seller/lessor and potential purchaser/lessee. Premises may be tested only if mutually agreed upon by the parties. If the purchaser/lessee demands a test, it would be at their expense and they would have to provide the seller/lessor with a copy of the test results.
With regard to the selling or leasing of single and multifamily properties, the Institute would not oppose legislation which mandates that, prior to entering into a sales contract/lease, it is the responsibility of the seller/lessor to 1) provide a radon hazard information pamphlet, and 2) disclose any known radon hazard in the premises, as well as, any radon inspection report of which the seller/lessor is aware. However, legislation that requires that disclosure statements be "read and understood" creates potential liability problems for sellers/lessors and their agents. It should be sufficient that the purchaser/lessee acknowledge that they have received the information since it would not be possible for the seller/lessor or their agent to determine the extent to which the potential purchasers/lessees have fully comprehended the information.
IREM would also support language in any radon bill limiting the liability of sellers and lessors who comply with the bill's provisions. In addition, we support the inclusion of legislative or regulatory language prohibiting lending and insurance institutions from refusing to lend or grant liability insurance on properties solely because of the presence of radon. We oppose making radon testing a pre-requisite for qualifying for any federally-backed mortgage insurance guarantee under FHA, Rural Housing Service, Veterans Administration or any other government or quasi-governmental entity. We oppose efforts to prohibit the making of a federally-related mortgage loan on residential properties identified to be affected by radon gas if such a property can be shown, through appropriate testing methods, to meet indoor air quality guidelines for radon as established by the appropriate federal agency.
Lead
The presence of lead in paint, which was widely used until it was banned in 1977, has been a concern for real estate managers, especially those who manage federally assisted properties. Although lead was used until 1977, the concentration of lead contained in paint was much greater prior to 1950. After 1950, the amount of lead in paint was significantly reduced. Several abatement methods exist ranging from painting over lead contaminated paint to dry scraping of the paint. Some methods, most notably the latter, create lead dust that has proven to be more harmful and a greater cause of lead poisoning than the paint itself. The largest and most expensive undertaking to abate lead-based paint has occurred in federally assisted housing at the order of the Department of Housing and Urban Development.
The Institute is concerned that the removal of lead-based paint is done in a manner that is the safest and most economically feasible. Because federally assisted housing typically involves low and moderate-income families, displacement of these families during abatement of lead-based paint creates additional hardships. The Institute also recognizes that lead poisoning is a most serious threat to children who ingest or breathe lead paint or dust. IREM supports abatement procedures that are tailored to protecting children. Abatement efforts that require the removal of paint which is inaccessible to children, or in little danger of being exposed, merely squanders scarce financial resources which could be used to remove accessible paint in other units and properties. Abatement efforts should also be weighted in regard to the years that lead concentration in paint was the highest.
On March 6, 1996, the Environmental Protection Agency (EPA) and the Department of Housing and Urban Development (HUD) issued final regulations on Title X of P.L. 102-553, the Residential Lead-Based Paint Hazard Reduction Act. The regulations deal specifically with disclosure of the presence of lead-based paint in properties built before 1978 (the year lead-based paint was banned for use in most homes and buildings), which are up for sale.
The regulations went into effect on September 6, 1996 for owners of more than four residential dwellings, and on December 6, 1996 for owners of fewer than four. Specifically, property owners and managers who rent target housing must:
- Disclose the presence of known lead-based paint and/or lead-based paint hazards in the home and any available reports on lead in the housing.
- Give renters the EPA pamphlet entitled Protect Your Family from Lead in Your Home, or another EPA-approved lead hazard information pamphlet.
- Include certain warning language in the lease as well as signed statements from all parties verifying that all requirements were completed.
- Retain signed acknowledgment for three years as proof of compliance.
On September 15, 1999, HUD issued its final lead-based paint regulation for federally-owned residential property and housing receiving federal assistance; these policies will implement the Section 1012-1013 requirements of the Residential Lead-Based Paint Hazard Reduction Act of 1992, or Title X These regulations went into effect on September 15, 2000.
On June 18, 2010, the U.S. Environmental Protection Agency (EPA) issued an amendment to the final Renovation, Repair and Painting Rule (RRP Rule), effective April 22, 2010. The RRP Rule requires that contractors who work in residential buildings built before the 1978 outlaw of lead based paint be certified by a government-approved trainer and follow particular safety rules. The ruling aims to reduce the amount of lead dust created during home renovation and repair, and affects tens of millions of homes, including multifamily units.
The RRP Rule requires that certified firms engaging in repair, renovation, or painting activities that disturb lead based paint be certified by the EPA. It applies if asbestos abatement disrupts over 6 square
feet of painted surface per room in an interior, or over 20 square feet of painted surf ace on an exterior, or involves window replacement or demolition of painted surfaces. Some of the requirements outlined in the RRP Rule include information distribution to building occupants to notify them of the work being conducted, obtaining written certification from the adult occupant that the information has been received, postage of signs defining the work area, isolation of the work area by covering all ducts with taped down plastic, closing window and doors and covering them with plastic sheeting, covering the floor with taped
down plastic, negatively pressurizing the work space, storing daily waste under containment that prevents the release of dust, disposing of the waste in a sealed bag approved by the EPA, placing all waste in a lined container and disposing of it into an EPA approved site.
IREM members respect and follow the lead paint hazard disclosure law. Such compliance has resulted in a dramatic decrease in the number of lead paint poisonings. According to HUD, the average blood lead level in young children declined by 25% from 1996 to 1999 alone. We believe the lead paint disclosure law has been a proven success. We oppose any changes that would confuse the industry and the public. Instead, we urge HUD and EPA to continue education, outreach, and enforcement of this important law.
Volatile Organic Compounds (VOCs)
Volatile organic compounds (VOCs) are found in two sources that should concern real estate managers: 1) oil-based paint, and 2) carpeting. VOCs react with the sun to form ozone or smog, which can irritate the eyes and respiratory system. Further health effects are still being studied. They are particularly harmful to people with respiratory problems. The use of VOCs is heavily regulated in manufacturing. They are used in a variety of consumer products, including oil based paint, varnish, shellac, stains, and rust and fire inhibitors. They are also present in emissions from new carpeting.
The Institute urges the Environmental Protection Agency (EPA) to further study VOCs and its health effects. The Institute supports the policy dialogue, which the EPA has initiated prior to specific rule making proceedings. The Institute hopes that the EPA solicits meaningful input from concerned parties, including real estate managers, during this dialogue. We believe that diligent work and cooperation prior to the rule making will result in final regulations that are workable and beneficial to everyone.
(11/90; updated 4/06, 4/10, 4/13)
Residential Smoking
Background and Objective:
Smoking laws and policies vary in each state, city, and building and there is no federal legislation addressing smoking in residential buildings. Where no smoking laws exist, the building owner may, if they think necessary, establish smoking policies within their building.
There is an extensive list of health risks associated with smoking. Research shows that indoor air quality is significantly reduced with second hand smoke. Furthermore, there are fire hazards associated with smoking inside a building or home.
IREM Position:
IREM is concerned over the health and well-being of individuals, the environment, and visitors of residential buildings. When no federal, state or local smoking laws exist, residential property owners may decide what is in the best interest for their occupants and maintenance of the property.
(Adopted: 4/11. Updated: 10/16)
Water Conservation
Background and Objective:
The United States as a nation possesses abundant water resources and has developed and used those resources extensively. The future health and economic welfare of the nation’s population are dependent upon a continuing supply of fresh uncontaminated water. Many existing sources of water are being stressed by withdrawals to meet off-stream needs to meet human and environmental needs.
A national water rights system does not exist. Instead, each state regulates water usage and laws pertaining to their needs. While a national water rights system is not in place, the federal government does reserve water rights for land set aside from the public domain thereby reserving sufficient water to satisfy the purpose for which the reservation was established. Regardless of the doctrine the states and the federal government follow, the entire country is increasingly faced with the need to balance water demand with available supply due to the ever-expanding population and subsequent need for new development.
EPA WaterSense Program
In 2006 the EPA launched the WaterSense partnership program. Similar to EnergyStar, WaterSense is a voluntary program aimed at helping partners such as homebuilders, manufacturers, retailers, and other organizations decrease water consumption. Since its inception, the program has helped consumers save over 1.5 trillion gallons of water and more than $32.6 billion in utility bills. The program is growing rapidly, in 2015 246 homes earned the WaterSense designation, almost double the amount in 2014.
Commercial Water Use
Commercial water use includes water for motels, hotels, restaurants, office buildings, other commercial facilities, and civilian and military installations. During 1995, commercial water use was an estimated 9,590 million gallons per day or 16 percent more than during 1990. Three applications account for 88% of water used in commercial buildings – sanitary (e.g. toilets and sinks), landscaping, and heating and cooling. According to the USGS, the large increase in commercial water use has more to do with different sources of information, changes in how the estimates are calculated, and how fish hatcheries and military establishments are reported, rather than actual changes in water use. The USGS has not collected data since the 1995 study, thus more recent numbers are unavailable.
Water utilities offer payments, rebates and incentives for adopting conservation measures like retrofitting (low-flow faucet aerators, showerheads and toilets), landscape efficiency (Xeriscaping™), and use and recycling of “graywater”, or treated wastewater for non-potable (non-drinkable) water uses. According to the USGS, these conservation efforts have made a significant impact on the amount of water resources used for commercial purposes.
Residential Water Submetering
Traditionally, the cost of water usage has been included in the monthly rental charged to residential tenants, regardless of how much water is actually consumed in each unit. Due to the increased costs to property owners for water and sewage services in the past decade, property owners have to measure water consumption more closely and accurately. The practice of submetering (installing secondary meters) provides property owners with the ability to measure consumption unit by unit and distribute consumption costs accurately to each resident.
IREM Position:
IREM supports the continued voluntary usage of water conservation efforts such as retrofitting, landscape efficiency, the use of graywater, education programs, water-use audits, pressure management, water accounting and loss control by commercial real estate where feasible. States and localities should have the authority and flexibility to determine which of these measures are most suitable for their state or location with the assistance of guidelines from federal government agencies like the Environmental Protection Agency.
IREM supports state efforts and initiatives that encourage economic growth while promoting the sustainability of water resources. Regulations, requirements and penalties should be minimized in order to foster commercial growth due to commercial real estate’s measurable and continued commitment to water conservation. Investment real estate professionals understand that the quantity of water available has a direct impact on the quality of water for all uses. In addition, IREM supports the states in their efforts to maintain control over water use issues.
The practice of submetering has proven to be effective in promoting water conservation. Submetering provides an equitable method for property managers to accurately distribute water usage cost to tenants, thereby controlling operating expenses and rent increases. Studies have shown that in properties that are sub-metered residents generally consume 18% to 39% less water than those with one shared water meter. IREM supports legislation at the state and local level that allows property owners to engage in water submetering without subjecting owners to burdensome regulatory and compliance requirements. IREM also encourages the EPA and state and local water authorities to exclude those practicing submetering activities as public water systems. The water source provider needs to continue to assume responsibility for the quality of the water.
(Adopted: 11/00. Updated: 4/02, 4/07, 3/11, 10/16)
Toxic Mold
Background and Objective:
Fungi are present almost everywhere in indoor and outdoor environments. Concern about indoor exposure to toxic mold in the past decade, had been increasing in the real estate industry as a few well publicized cases have increased public awareness that exposure to toxic mold may cause a variety of health effects and symptoms, including allergic reactions. Since 2002, attention to the issue of indoor mold has decreased significantly. Property owners, managers, brokers and lessees are increasingly aware of mold as a potential health hazard due to a few well-publicized cases. However, there have only been a limited number of documented cases of health problems from indoor exposure to fungi.
Mold is a type of fungus and is different from plants, animals and bacteria. Molds decompose dead organic material such as leaves, wood and plants. Molds can also infect living plants and animals. In order to propagate, mold needs water, food, oxygen and a temperature between 40 degrees and 100 degrees F to grow. Most importantly, without water, mold cannot grow. Mold is a real estate problem because it consumes wood, products made from wood, and the paper facing on gypsum board (drywall).
Some molds can cause disease while others are opportunistic, which can cause disease in people who may be immuno-compromised. Not all molds are harmful, yet some are very toxic. Everyone is affected to varying degrees by mold exposure due to mold being present in almost every indoors and outdoors environ; however, there is no established dose-response relationship nor is there an established safe level of exposure. This absence of scientific and health-related research and data presents a risky situation for property owners, managers and other real estate industry professionals. A lack of supportable guidelines creates a tenuous situation for disclosure to a potential tenant.
IREM Position:
The Institute encourages all governmental bodies to conduct vigorous scientific study of indoor mold, prior to promulgating any regulations or legislation on toxic mold. Further, IREM encourages the development of consumer oriented information which fairly and accurately portrays the real estate related issues raised by mold, such as information about the conditions which allow for mold growth, and the need for tenants to make their own determination of whether further investigation of mold is needed based upon the information available to them and their agents. The Institute’s role is to encourage the development of the information. This information should be the product of an authoritative governmental agency (e.g., CDC, EPA) or recognized independent authority that will be accepted by consumers, business and government (e.g., Harvard, Johns Hopkins, American Lung Association).
The Institute encourages the adoption of state laws that will provide a defense to claims against real estate brokers and property managers who have truthfully disclosed any known mold problems or conditions and provided buyers/tenants with specified disclosure information regarding mold. To assist real estate professionals where such laws have not been adopted, we encourage the National Association of REALTORS to explore the development of measures that can be recommended for use by real estate professionals to minimize their exposure to liability for mold. These should include dissemination by real estate professionals of authoritative information about the implications and effects of mold in real estate. Such measures may also encourage recommending that parties to a real estate transaction (buyers, sellers, lessees and lessors) consult with appropriately qualified experts for any desired advice and guidance about mold, and avoiding conduct that may infer that real estate brokers, managers and appraisers are experts in the field of mold or its effects.
The Institute, in conjunction with NAR, should investigate current practices and continuously monitor conditions regarding the availability of property insurance coverage and the impact of mold on the availability of that insurance. As may appear necessary, the Institute and NAR should also seek, or encourage state chapters or associations to seek, legislative or regulatory relief to avoid any interruption in the availability of that insurance caused by mold.
The Institute, in conjunction with NAR, should review the availability of errors and omissions insurance coverage for real estate professionals for claims based on bodily injury or property damage associated with mold. To the extent such coverage is not available, or that it may appear that it is likely to become unavailable, the Institute and NAR should work with carriers and/or seek legislative or regulatory relief to avoid any interruption in the availability of errors and omissions insurance.
The Institute encourages the development of and will assist in the dissemination of information regarding new means of reducing the impact of mold, such as improved anti-microbial paints. These new methods may enhance the ability of owners to effectively remediate mold problems long term.
The Institute supports the federal development of a national mold hazard insurance program akin to the flood hazard insurance program. We also support the establishment of federal tax credits that reimburse a taxpayer for expenses paid during a taxable year for mold inspection and remediation.
(11/02, confirmed 4/07, updated 3/11)