Most of the apartment buildngs I inspect lately in NYC have dual-fuel systems, and flaunt them to me as a cost-cutting measure. These are mid-size to larger mid-rise (6-story) and high-rise buildings. Some are mixed-use buildings with ground-level retail and commercial uses.
The lower the costs of running a building the highter the Net Operating Income and the higher the appraised value of the property. Believe me owners are sure to point out ot me dual-fuel systems.
BTW below 20*F (-6.6*C)and Brooklyn Union Gas will electronically "notify" boilers in Queens and Brooklyn (via automated controls) to automatically stop using natural gas and revert to oil to ensure adequate supply (read pressure) for smaller users who can't/don't are not required to cut their demand in peak-use periods.
Quote: Rental apartment properties, especially those where a majority of tenants are rent controlled/stabilized won't spend that kind of money without some sort of way to get their costs back.
Oh yes they do, even if they CAN'T get it back. They have a great incentive to cut heating costs in that the below-market rents kill their expense ratios that are frequently too high. Owners simply pass fuel costs along to their tenants as fuel-surcharges by way of state and city mandated increase in (regulated) rents if the owner can prove financial hardship. Since larger NYC aprartment building's owners must file a NYC RPIE statement each year [an income and expense statement upon which their real-estate taxes are influenced], all the onwers have to do is show a major capital repair or improvement and high fuel bills and *POOF* voila they get their increasein rents. You see, taxes are done on a a semi-cash basis rather than the accrual basis of accounting and I believe what is normally considered a major capital expenditure can be expensed almost immediately-- for tax purposes --rather than using GAAP (Genarally Accepted Accounting Principles) to expense such capital impovements over many years, thus wreaking havoc (purposely) on a bulding's cash-flow statement. Bottom line is, if lanlords WANT to spend, they will recover the money (via legally increased rents) with some creative data presentation to the state and city. All perfectly legal.
Do let me know what you find this year in boiler rooms and how things have changed based on the number of boilers you have inspected in the last 5-or so years. I'd be fascinated to hear your findings and expertise on the subject.
[this post was last edited: 1/16/2011-21:53]
