Key points:

  • The multi-family marketplace has experienced tremendous growth, and despite economic uncertainties, should continue to expand.
  • An increased focus on enhanced indoor air quality and energy efficiency in multi-family buildings positions ERVs as an optimal solution.
  •  Contractors are at the center of making multi-family buildings healthier and more sustainable and can rely on ERVs in this effort.

In recent years, the multi-family housing market in North America has experienced substantial growth, driven by shifting demographics, urbanization trends and evolving consumer preferences. Similar to other structures, one of the main focuses of multi-family buildings has become enhanced indoor air quality (IAQ) and energy efficiency. Consequently, interest is growing in energy recovery ventilators (ERVs) as a way to provide cleaner and healthier indoor air while minimizing energy consumption.

Who is the central figure orchestrating the transition to healthier and more sustainable multi-family buildings? That key person is the contractor who oversees this whole complex process. However, navigating the multi-family landscape in North America can be daunting with many different building types and a variety of codes and standards to consider.

Therefore, we created this overview to help contractors maneuver through these challenges on the way to better multi-family buildings. In this blog post, we will delve deeper into the dynamic multi-family market in North America. We will explore its current landscape and projected growth, the role of advancements in IAQ and energy efficiency and how ERVs are an optimal solution for contractors.

Understanding Multi-Family Buildings
According to the U.S. Environmental Protection Agency (EPA), one out of five people in the U.S.—about 80 million—live in some type of multi-family building. The EPA goes on to say that multi-family buildings include attached townhouses, low-rise apartments and condos, mid-rise apartments and condos and high-rise apartments and condos.

However, as stated by the U.S. Department of Energy (DOE), the precise definition of “multi-family” differs slightly depending on the agency or code. For example:

  • ASHRAE/IES 90.1 and 90.2 define mid- and high-rise multi-family buildings as having more than three stories above grade and low-rise multi-family buildings as three stories or fewer above grade containing three or more individual units.
  • The U.S. Department of Housing and Urban Development (HUD) defines multi-family buildings as five or more units, regardless of stories.
  • The U.S. Census Bureau defines multi-family buildings as residential buildings containing units built one on top of another and those built side-by-side that do not have a ground-to-roof wall and/or have common facilities (i.e., attic, basement, heating plant, plumbing, etc.).

All of these different definitions can be confusing. Fortunately, offers a concise and simple definition: A multi-family structure is a building with more than one unit where people can live, each with their own separate kitchens, living rooms, electric bills and so forth. Also called a multi-dwelling unit, or MDU, they are typically found in densely populated areas such as cities where space is at a premium. Multi-family homes can be rented or owned or serve as investment property where landlords can collect rent from tenants. states that multi-family buildings include the following types:

  • Duplex: Two homes in one freestanding structure.
  • Townhouse: Any number of homes attached at the sides with separate entrances.
  • Condominiums: A private residence in a building or community with multiple units.
  • Apartment building: Could be up to hundreds of homes in one structure. Unlike the above dwellings, apartment building units are often rented by tenants rather than owned. 

Are Multi-Family Buildings Residential or Commercial?
Multi-family buildings blur the lines between residential and commercial classifications, often falling into both categories depending on various factors. As explained in an article from Realized, multi-family properties are typically regarded as commercial real estate when they consist of five or more units. This classification is primarily due to the investment nature of these properties, which are often owned by investors or property management companies and operated for profit. Moreover, multi-family buildings are subject to different financing, zoning and taxation regulations compared to traditional single-family homes.

However, from a functional standpoint, multi-family buildings primarily serve as residences for tenants, which aligns with the residential classification. They offer living spaces with amenities such as kitchens, bathrooms and communal areas, emphasizing their residential nature. Additionally, tenants in multi-family buildings typically sign residential leases, further reinforcing their residential aspect. As a result, different building codes and standards classify multi-family buildings as both residential and commercial. 

Growth of the Multi-Family Marketplace in North America
Historic growth of multi-family housing in North America is unmistakable, as evidenced by data provided by the National Association of Realtors. Indeed, as of October 2022, the number of multi-family structures built in the U.S. was about 50% more than the pre-pandemic historical average. Further, according to Global Information, Inc., in 2022 the U.S. multifamily market was valued at $265 billion and is expected to reach $466 billion in 2030. This includes a compound annual growth rate (CAGR) of 7.31% for the forecast period between 2023 and 2030.

Although growth has been strong recently, Fannie Mae’s multi-family market outlook for 2024 suggests a mixed landscape characterized by potential instability amid economic uncertainties. While the multi-family sector has historically demonstrated resilience, factors such as inflationary pressures, supply-chain disruptions and geopolitical tensions may introduce volatility into the market.

Despite these challenges, several primary drivers provide optimism for growth in the multi-family market going forward:

  • Fannie Mae asserts that demand for rental housing is expected to persist, driven by demographic shifts and lifestyle preferences, particularly among younger generations seeking flexible living arrangements. As such, demand for multi-family housing is predicted to increase again toward the end of 2024.
  • According to JP Morgan, there are two reasons for a positive multi-family outlook: 1) A strong job market that has aided renters’ financial stability, 2) A tight housing market with high interest rates that may continue to keep would-be homebuyers in the rental market.
  • CBRE states that multi-family real estate is playing a more important role in alleviating a severe shortage (at least 3.1 million) of single-family homes that is contributing to homeownership challenges, particularly in a high-interest-rate environment.

The Critical Role of Contractors in Multi-Family Construction
Contractors play a pivotal role in both new construction and retrofits within the multi-family building sector. Specifically, they oversee project management, coordination of subcontractors and compliance with building codes and regulations. They are also responsible for providing the materials, labor and equipment for the job.

In new-construction multi-family projects, contractors serve as the backbone of the development process, collaborating closely with architects, engineers and developers to bring design concepts to life. Responsibilities encompass everything from site preparation and foundation work to the installation of building systems such as plumbing, electrical and HVAC. Contractors also navigate complex zoning regulations and building codes, ensuring compliance while maximizing efficiency and profitability for their clients.

In retrofit multi-family projects, contractors leverage their specialized knowledge and experience to upgrade existing multi-family properties, enhancing IAQ, energy efficiency, safety and overall functionality. Retrofitting is necessary for modernizing aging multi-family buildings to meet evolving sustainability standards and tenant expectations. From implementing energy-efficient lighting and HVAC systems to enhancing insulation and weatherproofing, contractors are fundamental in the process of revitalizing older structures.

Building Codes Relevant to Multi-Family Buildings
Building codes and standards for multi-family buildings in the U.S. are essential to ensure safety, accessibility and quality of life for residents. These codes encompass various aspects of construction and design, covering structural integrity, fire safety, ventilation, energy efficiency, accessibility and more. However, it gets tricky because multi-family buildings are considered both residential and commercial structures.

Some of the most relevant codes and standards for multi-family buildings include International Building Code (IBC), International Residential Code (IRC), International Energy Conservation Code (IECC), International Fire Code (IFC), International Mechanical Code (IMC), International Plumbing Code (IPC), International Existing Building Code (IEBC), ASHRAE 62.1 (four stories and above), ASHRAE 62.2 (up to three stories), ASHRAE 90.1 (high-rise multi-family buildings) and ASHRAE 90.2 (low-rise multi-family buildings).

Growing Focus on IAQ and Energy Efficiency in Multi-Family Buildings
Multi-family buildings play a critical role in the sustainability landscape, and there’s a growing emphasis on optimizing IAQ and energy efficiency within these structures. As outlined in the EPA’s IAQ guidelines for multi-family renovations, prioritizing improvements in ventilation systems, insulation and energy-efficient appliances not only enhances living conditions for occupants but also reduces energy consumption and greenhouse gas emissions.

Furthermore, the criticality of enhanced IAQ and energy efficiency in multi-family buildings is underscored in the DOE’s Integrating Health and Energy Efficiency in Multi-Family Buildings guide. It states that for multi-family buildings in high-density urban centers, an efficient exhaust or ventilation system with particle filtration becomes critical for better IAQ. Further, it asserts that energy-efficiency upgrades could improve the efficiency of multi-family residential buildings by 15-30%, saving $3.4 billion in utility costs across the U.S.

Multi-Family Building Standards Emphasize Better IAQ
Outside of the prominent building codes listed above, there are several standards related to IAQ in buildings that apply to multi-family structures. One of the most notable and stringent is the International WELL Building Institute (IWBI)’s WELL Building Standard (WELL). Another is Fitwel, which was created by the U.S. Centers for Disease Control and Prevention (CDC) and the U.S. General Services Administration.

WELL focuses on effective and enhanced ventilation, including:

  • Giving credit for increased outdoor air supply 30% above ASHRAE 62.2, and an additional credit for 60% above.
  • Demand-controlled ventilation targeting carbon dioxide (CO2) thresholds with increasing credits of 900 ppm, 750 ppm and 600 ppm.
  • Meeting thresholds for particulate matter, organic gases and inorganic gases.

Fitwel includes testing requirements for IAQ, requiring certified buildings to comply with a minimum of five measures from the following list:

  • Particulate matter less than 25 μg/m³.
  • Carbon dioxide less than 1100 ppm or 700 ppm over ambient.
  • Total volatile organic compounds less than 500 μg/m³.
  • Carbon monoxide less than 9 ppm.
  • Formaldehyde less than 27 ppb.
  • Relative humidity between 30-60%.

Greater Energy Efficiency Required in Multi-Family Buildings
As of 2023, all new residential central air-conditioning and heat pump systems sold in the U.S. are required by the DOE to meet new minimum energy-efficiency standards. This means that these systems in multi-family buildings must also meet the new energy-efficiency requirements.

The new DOE standards that became effective in 2023 require a seasonal energy efficiency ratio (SEER)—higher SEER ratings indicate better energy efficiency—of no less than 14 SEER for residential systems in the northern part of the U.S. In the southern part of the country, where cooling loads are a larger share of home energy use, a rating of 15 SEER is required. Previously it was 13 and 14 SEER respectively.

Why ERVs are the Best Choice for Multi-Family Buildings
Energy recovery ventilation is crucial for maximizing both IAQ and energy efficiency in every type of structure. ERVs provide balanced ventilation by exchanging equal parts of stale indoor air with fresh outdoor air while recovering energy from the outgoing air stream. By preconditioning incoming air, ERVs help maintain comfortable indoor temperatures and reduce the workload on HVAC systems. This lowers energy consumption and utility bills and helps to meet strict building codes and standards for IAQ and energy efficiency.

What does this mean for multi-family buildings? ERVs stand out as the optimal choice for multi-family buildings, prioritizing both IAQ and energy efficiency, for several reasons. First, ERVs facilitate continuous ventilation, ensuring a constant supply of fresh and filtered outdoor air while simultaneously expelling stale indoor air. This consistent airflow helps maintain high IAQ levels by minimizing pollutants, allergens and moisture buildup, which is crucial for the health and comfort of residents.

Second, ERVs incorporate heat and moisture exchange mechanisms, allowing them to recover total energy from the outgoing air stream and transfer it to the incoming fresh air. This process significantly reduces the energy required for heating or cooling the incoming air, resulting in substantial energy savings and improved energy efficiency via sustainable ventilation.

In addition, ERVs operate independently of HVAC systems, enabling targeted ventilation control for individual units or common areas, thus enhancing overall IAQ management while optimizing energy usage. By combining superior ventilation performance with energy recovery capabilities, ERVs emerge as the most effective solution for multi-family buildings seeking to simultaneously enhance IAQ, promote energy efficiency and cut costs.

RenewAire ERVs: The Optimal Solution for Multi-Family Buildings
RenewAire ERVs stand out as the premier choice for multi-family buildings due to their unmatched energy efficiency and cutting-edge technology. With features such as the enthalpic core and variable speed motors, RenewAire ERVs effectively capture and transfer both heat and moisture, thus maintaining a comfortable and healthy living environment in a sustainable manner. This is particularly crucial in multi-family settings where ventilation needs are diverse and constant, as RenewAire ERVs excel in providing balanced and controlled airflow throughout the building.

Specifically for contractors, RenewAire’s commitment to durability, reliability, ease of installation and technical support makes it the preferred choice for those seeking long-term performance and value. In addition, RenewAire now offers BACnet Fan Control, an inexpensive and streamlined solution to connect ERVs with a building management system (BMS) or building automation system (BAS).

Among the available RenewAire ERV options, the best choices for multi-family settings include the SL Series, GR Series and EV Premium Series.

In Summary
As the multi-family housing market continues to grow and evolve, contractors stand at the forefront of transforming these structures into healthier and more sustainable living spaces. Despite the complexities of navigating building codes and standards, contractors play a pivotal role in orchestrating the transition towards enhanced IAQ and energy efficiency in multi-family buildings.

With the multi-family market’s strong growth and continued expansion anticipated, the demand for innovative solutions like RenewAire ERVs is on the rise. These systems not only optimize energy efficiency but also prioritize the well-being of occupants by providing clean and fresh indoor air. Together with RenewAire, contractors can embrace the challenge of improving multi-family buildings, thus paving the way for a future where sustainability and comfort coexist harmoniously. Ultimately, this benefits residents, the environment and the bottom line.

For more information on how RenewAire can support contractors in enhancing IAQ and energy efficiency in multi-family buildings, contact us today.