A Minneapolis affordable-housing developer tried to up its energy efficiency game. Here is what it learned.

For Aeon, a Twin Cities nonprofit that manages thousands of income-restricted rentals, affordability has always been among the highest priorities. About 15 years ago Aeon recognized that it might save $20 million to $30 million or more over the next two decades if it could improve the efficiency of its buildings. So Aeon developed the first income-restricted apartment building in the Midwest to meet Leadership in Energy and Environmental Design (LEED) Platinum standards, and then converted a historic building into apartments that met LEED Gold standards. Aeon CEO Alan Arthur talks about its latest challenge: the Rose, 90 apartments with architects MSR Design and developed in partnership with Hope Community and US Bancorp.

Q: The Rose was built to Living Building Challenge standards, which are far more stringent than even the LEED guidelines. In 2017 you launched a study to determine the effect of those LBC standards at the Rose; did you consider that building an experiment?

A: At Aeon we consider ourselves to be a 100-year owner. We saw the Rose as the next step in Aeon's exploration of how to build a more efficient, healthier place for our residents. At that point we were already 10 years into this exploration.

Q: At the outset, did you expect to meet all of your goals/imperatives?

A: Although we tried to pick products, systems and designs we thought would have a positive impact, there are always unintended results. For example, a product that might be a very low-VOC, healthier product might not hold up under regular use in a multifamily rental property.

Q: The LBC sets extremely high standards, requiring projects to be net-zero energy and net-zero water, and to meet strict materials requirements. And you set an additional goal of being able replicate those solutions for $140 per square foot. Did the building fail to meet more imperatives than you expected?

A: We knew from the beginning that the Living Building Challenge was going to be tough, and that we were unlikely to meet all of the imperatives.

Q: Which of the elements that didn't meet expectations was most surprising?

A: Our biggest surprise is that, given the high-insulation R-factors in the Rose envelope, that the HVAC system is not performing as well as it should. It's not performing as well as a similar HVAC system in another property we own. We had high hopes we could meet the water imperatives, but there are many obstacles there.

Q: For some imperatives that didn't meet expectations, you cite resident behavior as a critical factor. Is it possible to educate residents enough to change their behaviors to garner the intended outcomes?

A: Some Aeon team members remain dedicated to more resident education, but ongoing education is a big challenge in a multifamily rental property. Unlike a single-family homeowner, there is continual turnover. We had unrealistic expectations about our ability to educate residents and the impact it might make. Finding ways to more directly incentivize or disincentivize residents to change behavior will likely be more successful.

Q: The LBC standards are among the most stringent in the industry. What's the most formidable barrier right now to meeting the project goals?

A: Well, we met our goals to create affordable housing that pushed the envelope to learn more in the areas of energy efficiency, sustainability and building health for our residents.

Q: What was the biggest takeaway?

A: Perhaps our biggest takeaway is how our built environment affects health. Volatile-organic compounds — VOCs — in the majority of building materials negatively affect our health every day. When we all finally find out how bad they are for us, VOCs will far eclipse lead and asbestos in impact on our collective health.

Q: Has what you have learned at this point already influenced the way you develop buildings?

A: Absolutely, though there is still more work to do. The Rose certainly reconfirmed our emphasis on the building envelope, and we've compared options and are moving toward standardization. It is pushing us to simplify HVAC systems. It's made us more conscious of VOCs and how to reduce them in our buildings.

Q: As you move forward, do you plan to repeat the Challenge?

A: We have used LEED to drive better performance in three projects and have two LEED-certified properties. We've used "passive haus" principles in a project, and with the Rose we used the Living Building Challenge as our guide. We don't have current specific plans to repeat "the Challenge," but we much admire its performance-based approach, and will continue to use what we've learned in everything we do.