The green movement has reached a tipping point. Sustainable practices are showing up in nearly every industry and neighborhood across the U.S. There are now more than 4 million solar panels installed across all 50 states. There are more than 196,000 EV charging ports in the U.S., and over 195,000 LEED-certified projects reported across 186 countries. In 2024, Illinois ranked 2nd among the top 10 states for LEED-certified green buildings, with Chicago leading the way in urban sustainability.
Rising interest from investors, owners, and tenants is also accelerating the “eco” construction trend in Chicagoland’s multifamily market. While reducing energy consumption and infusing renewable and recycled materials is becoming more and more common in new builds, there’s also growing attention on retrofitting the area’s older housing stock as well. At this stage, most residents expect energy-efficient, cost-saving, and health-conscious environments, making the real question for owners and property managers not if or when, but which green features to incorporate, at what cost, and with what return.
Fueling market expectations at scale, some of the biggest names in business have made concerted commitments to reach net-zero carbon emissions by 2025, further positioning energy efficiency to the forefront of market priorities. These goals are more than optics; they’re driven by the outsized role buildings and construction play in emissions but also the economic benefits behind these practices.
Of the five economic sectors contributing to greenhouse gas emissions, 75.7% is attributed to the energy sector. Within that, the following shows just how much impact the built environment has:
Residential buildings alone represent the largest share of energy-related emissions, contributing 12.5% globally when accounting for both electricity consumption and direct fossil fuel use, like gas-powered appliances. Compounding the issue, emissions from manufacturing and construction have grown by 60% since 1990. As building activity continues to rise, so does the opportunity to look into practices that not only benefit the environment but also the bottom line.
The multifamily housing green building market was valued at $5.47 billion in 2024 and is projected to increase at a compound growth rate of 4.60% to $8.29 billion by 2032. Between regulations, tax incentives, technology advancements, and long-term ROI, the market signals steady growth and opportunities for multifamily property owners to realize financial returns through multiple channels by going green.
While upfront costs are the primary disadvantage of sustainable development, the cost difference is marginal compared to long-term operational savings, higher rents, and increased property values.
Key revenue and operating advantages in multifamily renovations and new construction:
Over time, the advantages of multifamily sustainable construction compound. Life cycle cost analysis consistently points to better long-term financial performance compared to decisions based solely on upfront costs.
Following, we’ve researched real-world case studies to break down the numbers behind energy-efficient upgrades in multifamily renovations and new construction projects, highlighting where the investment pays off. Results will vary by property, utility rates, and available incentives.
Lighting
Upgrading to LED lighting is one of the most cost-effective ways to reduce energy in multifamily construction projects, often with relatively low upfront costs and faster payback periods compared to other upgrades. Plus, it lowers consumption and maintenance requests thanks to a lifespan of up to 10 years.
For multifamily renovations, it’s recommended to start with common areas, such as parking lots, stairwells, hallways, and lobbies, to realize immediate savings, while unit-by-unit upgrades can be timed with tenant turnover. In lower-traffic areas, consider adding motion sensors and daylight controls for increase efficiency.
Below is a sample cost breakdown for an LED lighting retrofit, based on real project data:
HVAC Systems and Smart Controls
Heating and cooling systems in multifamily buildings are among the largest energy draws, many of which are operated by outdated, standalone thermostats that are fragmented and require manual adjustments. Meaning, systems that go unchecked during off-hours or in unoccupied spaces are quietly inflating energy costs that can add up quickly.
The following is a cost and savings snapshot for an HVAC system and control upgrade as part of a multifamily retrofit in a 55-unit, 87-year-old building in Chicago:
Even simple multifamily remodeling upgrades like installing smart thermostats can improve the energy efficiency of multifamily properties by 15–30%.
Rooftop Solar Panels
Solar is a cost-effective way to power multifamily buildings with a resilient, clean energy source that keeps the community running during outages or severe weather. The following case study outlines how a multifamily retrofit on an older building can generate renewable power and provide a significant financial incentive to the property owner.
Water
Prioritizing water efficiency in apartment renovations or new construction is another measurable benefit for multifamily property owners, from decreasing utility costs to supporting sustainability goals. With residential consumption averaging more than 300 gallons per household per day, there’s room for improvement with new energy-efficient technologies like smart irrigation, flow monitoring, and water reuse systems.
Below is a case study that highlights the impact of weather-based irrigation controllers as part of a targeted water-saving strategy across a multifamily portfolio.
Smart upgrades like LED lighting, HVAC replacements, solar panels, and irrigation controls are foundational features used for enhancing long-term efficiency in multifamily renovations and new construction, but they’re not the only ways to drive savings. Improvements such as energy-efficient windows, better insulation, low-flow plumbing fixtures, ENERGY STAR® appliances, and durable, recyclable materials all contribute to a more efficient and lower-cost property over time. Although the initial investment may be higher than standard options, the long-term benefits far outweigh the costs.
As a leading multifamily contractor in Chicago, we know how to identify cost-saving opportunities and are committed to supporting the long-term success of your project. Reach out to ETI with questions or request a quote for your next project.