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The list of environmental issues related to the property management industry has grown to dozens of issues. There is little doubt that all management companies have been or will be touched by an environmental problem or opportunity in the new century. There are a number of reasons why real estate management firms need to be concerned with environmental issues, including: 1. energy costs, 2. liability issues, 3. marketing edge, 4. product and technology availability, and 5. management opportunities. The issues of most importance to the real estate management community can be broken down into several key categories: 1. chemical reduction, 2. reducing energy use, 3. lighting, 4. certified wood products, 5. recycling, 6. indoor air quality, and 7. paper reduction.

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In the early '90s, it was easy to keep track of environmental issues related to the property management industry. There were only a few on the radar screen: asbestos, mercury in fluorescent lighting, underground oil tanks and Legionnaire's Disease. Today, however, that list has grown to dozens of issues including a modern-day energy crisis, water shortages, ADA issues, lead paint, lawsuits with sick employees and building mold problems.

Indeed, this environmental arena has produced fodder for a good novel or a thrilling movie script with plenty of mystery, suspense and intrigue. There is little doubt that all management companies have been or will be touched by an environmental problem or opportunity in this new century. Gone are the days that being environmentally concerned is seen as being radical, left wing or too touchy-feely--today it is just plain good business.

Why will real estate management firms need to be concerned with environmental issues now and in the future? There are a number of good reasons including:

* Energy Costs. California has rolling blackouts. Minnesota is under a new threat of an energy shortage over the next several years. High natural gas heating bills two and three times that budgeted defined the winter of 2001 for the northern U.S. There were outrageously high electric cooling rates in the southern and western states in the hot spring of this year. Gasoline prices hit near or over the $2/gallon price point in most markets prior to Memorial Day. These examples stand alone as a reason to make energy management a priority at all of your properties.

Since the energy crisis of the '70s energy has been cheap and plentiful, but suddenly, it is expensive and not always available. Property managers and building owners need to explore alternative energy sources for their buildings, educate residents and tenants about conservation and replace or update antiquated equipment.

* Liability Issues. There are a growing number of people who suffer from Multiple Chemical Sensitivity (MCS), a debilitating disease characterized by a heightened sensitivity to one or all chemicals present in our everyday lives. Consequently, building managers or owners may be asked for a "reasonable accommodation" for a tenant's disability. This accommodation may take the form of asking the building owner or manager to use non-toxic cleaning products, paints or building materials in their unit or common areas. There have been laws and lawsuits over building issues related to lead paint, asbestos and mercury-we have started to see litigation about the ubiquitous indoor air not only in commercial buildings but in residential properties as well. On the horizon are lawsuits involving worker health for those we hire to clean and paint at our properties as a result of their contact with these products. Education and planning can greatly reduce the potential for litigation as it relates to environmental issues.

* Marketing Edge. According to sociologist Paul Ray and psychologist Sherry Ruth Anderson's research, "there are 50 million Americans who are defined, in part, by their deep caring about ecology and saving the planet". This American sub-culture, known as the "Cultural Creatives," a term coined by Ray and Anderson, cuts across all boundaries of class, age, religion and place. This is a group that is just starting to be recognized by advertising agencies and large corporations as a marketing target. It is time that the property management industry embrace this trend and more effectively market to this large group by creating environmentally-sensitive buildings in both the multifamily and office sectors.

* Product and Technology Availability. Internet and computer technology has made it possible to have a paperless property management firm. It is not only possible but it saves a tremendous amount of money through filing and paper storage space square footage savings, paper-handling labor cost reduction and mailing costs savings. File cabinets no longer need to take up valuable square footage thanks to document management systems and scanners which can provide information via the Internet to anyone who has an Internet connection.

A paperless office also makes it possible to truly telecommute and still have access to any file or document needed. There also have been technological advancements in energy controls, water savings devices and monitors, less toxic building products and other environmentally-related products and services.

Management Opportunities. There is now a growing inventory of 'Green' or 'Sustainable' buildings in the United States. These buildings require a high level of knowledge about alternative or green products and services in order to maintain them in a sustainable manner. There will be an ever-increasing need for knowledgeable managers for this type of product in both commercial and residential management firms as green building concepts catch fire in the development community.

The environmental movement has been around since the 1960s, but never before have there been so many compelling reasons to change management practices to include environmental issues in building management plans and budgets.

Dollars and Sense Savings

While there are many environmental issues today to consider, those of most importance to the real estate management community can be broken down into the following key categories:

Chemical reduction. Chemical reduction at a property is easy to achieve and often costs up to 25% less than traditional products. The switch to less toxic cleaning products, paints and carpet cleaners is a good starting point as they are readily available in most markets where hospitals are located since hospitals often operate with some type of low toxicity plan. There are several benefits of reducing chemical usage in commercial or residential properties. First, there is less risk of an ADA complaint from a person with Multiple Chemical Sensitivity. If there is a complaint, this is one solution for dealing with reducting whatever chemical may be disturbing the person asking for an accommodation.

Second, workers who use less toxic products are safer than workers who use a toxic chemical substance for cleaning, painting or carpet shampooing. Even though the Material Handling and Safety Data Sheets accompany all toxic chemical products, some workers fail to follow directions. Sometimes building service people develop long-term health problems after years of cleaning and painting with hazardous products.

The third benefit is that the building has fewer Volatile Organic Compounds (VOCs) floating around. The VOC content of a product is a measure of combustible or harmful vapors. VOCs can affect the health of workers and occupants and the air quality of the environment. Since most Americans spend 70-80% of their lifetimes indoors, reducing VOC contents in the products that are used at a property can improve the indoor air quality (IAQ), thereby improving the environment for the building occupants.

As part of a chemical reduction program, it is also important to consider Integrated Pest Management (IPM) rather than traditional indoor pest control and toxic outdoor lawn maintenance weed control. The IPM approach focuses on proactively preventing pests from moving in at all, rather than trying to eliminate them once they are a problem. IPM emphasizes regular inspection for pests, monitoring the conditions that contribute to pest problems, and changing those conditions to prevent pest infestations. A pest control technician decides what actions are necessary based on the biology and the habits of the pests involved. IPM considers the use of pesticides only as a last resort and then uses the least hazardous pesticides possible to effectively control or reduce the pests.

- Reducing energy use. In the '70s, reducing a building's resource use involved resident and tenant educational conservation programs. Today it most likely means getting "off the grid" (i.e., not purchasing power from a utility). With today's technology, it is possible for a building to produce some of its own energy and even sell it back to the local utility through rooftop solar panels or tiles, wind turbines or an underground heat pump system for heating and cooling. It is also possible in some regions to purchase "green power" or power made from renewable energy. Renewable energy sources exist in limited quantities such as coal, oil, natural gas and uranium.

Lighting. Lighting is another area where energy can be reduced and money saved. Compact fluorescents have come a long way since the '70s. They now come in a spectrum of lighting colors that provide a more incandescent hue rather than the blue office light of the last century. There are also fairly sophisticated and reasonably priced timer and building monitoring systems that can be hooked up along with the heating and security systems of the building. Building lighting retrofit payback periods can be as short as 18 months and sometimes can even be financed through a state's Public Utilities Commission or directly from the utility. Most utilities or states provide some type of free energy analysis for buildings to encourage conservation and equipment upgrades that save energy, so that the utility will not have to continue to build more power plants.

Certified wood products. Another way to be conscious of resource use is to purchase certified wood for buildouts and remodels. Certified wood is wood that has been grown in a sustainably-managed forest. In other words, the trees that were cut to make the wood were not from a clear-cut area of a forest. Sustainable forestry maintains the ecosystem of the forest and provides for an environmentally-sensitive way to harvest wood for buildings and maintain a very important renewable resource. A few years ago certified wood was difficult to find for building applications and expensive, but now it is fairly readily available and costs the same price as traditional wood.

Recycling. Recycling opportunities exist today beyond bottles, cans and paper. In the property management industry, opportunities to recycle pop up every day. Whether it is an office suite build-out or an entire building remodel, construction and demolition waste adds up, both physically and financially. In fact, when building materials are thrown out, the bottom line takes a beating twice. You pay once when you purchase the materials and again when you dispose of them. There is now a discipline in the construction industry called "deconstruction", which focuses on taking apart a building for re-use rather than traditional demolition (filling up a dumpster with construction debris). The deconstructed building materials can be sold, donated or re-used by your own property. Once those deconstructed parts are replaced in a new or remodeled suite or building, it is called "reconstruction" rather than construction. A building made up of reconstructed building materials will cost significantly less than new materials.

* Indoor air quality. Improving indoor air quality needs to be a conscious and regular activity for any property manager, commercial or residential. In addition to using low VOC building products, the best solution is prevention through performing routine and proper building maintenance. Adopting a smoke-free policy, lowering humidity levels to make conditions inhospitable to growth of bacteria, and performing regular maintenance such as cleaning air filters, carpets and furniture can go a long way in improving indoor air quality. In addition, whenever possible, install hard washable flooring rather than carpeting and conduct regular inspections of the air handling, humidifying, and dehumidifying equipment (including drain pans and water seals in floor drains).

Also, be sure to correctly and quickly remove mold or mildew once it is discovered. Many environmental engineering firms can take samples of walls or ceilings when mold is suspected on the backside of sheetrock or plaster from a water leak. Microorganisms include viruses, fungi, bacteria and molds. They are also known as biological contaminants and can be found in ducts, humidifiers, drain pans, water damaged ceiling tiles, walls, insulation or carpeting. The presence of fungal growth and molds can cause allergic reactions, and in some cases, serious illness. It is important to establish procedures for residents and tenants to express concerns about Indoor Air Quality issues. Management must also have a proactive protocol for responding to complaints in a serious and timely manner so that residents feel that they have recourse other than litigation.

Paper Reduction. Paper reduction for property management firms should be a top priority today. The property management industry uses an enormous amount of paper for communication with residents and tenants which it then needs to store somewhere. A paperless office is not only about reducing the actual cost of paper, which is still fairly inexpensive. The real savings are found in reducing the handling of the paper in labor, postage, storage, file space and energy costs.

The journey to a paperless office can start with simply providing e-mail addresses for all personnel. A computer system can be expanded with a document management system set up with an intuitive filing scheme that mimics your own physical file cabinet organization. An office scanner can be purchased to scan in all incoming information. An Internet version of most property management software can be purchased to complete the mobility and accessibility of all staff to any information.

Once all of the systems are in place there is no longer a compelling reason to have all staff working at a main office. Property managers can work from home, their car or a hotel. Site managers and maintenance people can work from laptops and PDAs. Accounting staff can telecommute from home as well since there is no paper to deal with. And home could be in New York, Miami or the Bahamas even when the main management office is in Seattle. Paperless technology has given our industry the possibility to decentralize our offices and the ability to hire workers from anywhere without a commute. Yes, we still need site staff to show and repair apartments and commercial properties but at least our paper shuffle can end. And our central offices can be dismantled and shrunk down to a shadow of their former selves saving time, human capital and money.

Opportunities Abound

There are environmentally-friendly alternatives for literally every process in the property management industry. It takes a little research, creativity and planning to integrate them into our daily management routines, but it has become not only possible to find the alternative products and services but in most cases, more cost effective than using traditional methods. Waste of any kind is a poor use of both financial and natural resources.

Over the last couple of years, environmental issues have been inextricably linked to industry change and, in many cases, to NOI. The new energy crisis has fueled new research and development in building technologies, which will ultimately make buildings cheaper to operate. The advent of the Internet and related technologies have provided new flexibility and reduced administrative overhead costs. A new market of consumers has resulted in fresh opportunities to reinvent property management practices in an earth-friendly manner by managing cleaner and greener buildings.

The new millennium has brought with it new challenges and difficult decisions about environmental issues. However, an informed property management firm has the ability to find opportunity, positive change and even extra dollars in this industry despite today's current energy crisis,