The past decade has seen energy rating and disclosure mandates become increasingly common as legislators and policymakers realize the large energy imprint of commercial buildings – in U.S. commercial buildings account for 19% of energy related carbon emissions. However, without federal policy in place, all of this activity has been occurring at the state and local level, resulting in policy innovation with widely varying requirements among jurisdictions. To date, according to the Institute for Market Transformation’s Guide to State & Local Energy Regulations, all U.S. policies leverage ENERGY STAR software to generate ratings based on building operations data.
IMT and real estate services firm CBRE have developed this summary guide to keep real estate professionals informed on policy impacting existing buildings. The guide provides a brief overview of the regulatory mandates in each jurisdiction, with a summary of the policy in place, reporting and disclosure rules, exemptions to the rules, and penalties for violating the policy (Click here for a more extensive review of existing legislation and policy).
For example in New York City, a widely known benchmarking and disclosure law (LL84) is in place as a part of Greener Greater Buildings Plan that aims to reduce energy consumption in existing buildings. Building owners must annually benchmark their buildings and submit the NYC Benchmarking Compliance Report via EPA Energy Star Portfolio Manager. The law applies to non-residential and multifamily buildings with a square footage over 50 000 with exemptions for Energy Star labeled buildings (must be labeled 2 of the past 3 years), LEED EB Operations & Maintenance buildings (certified within 4 years), and those being documented by a registered design professional as Energy Star or LEED equivalent. Failure to benchmark results in a fine of $500 each quarter. Benchmarking data is published on NYC.gov’s website since 2012 for non-residential and 2013 for multifamily buildings. Several other municipalities, including Seattle and Washington, DC, have made energy disclosure data available for publicly owned buildings.
With more and more operational data being made public and easily accessible, energy costs and efficiency can now play a significant role when it comes to decisions towards renting, leasing, investing in, financing and buying real estate properties.