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Are Publicly Posted Building Energy Grades the Next Step for Cities?

President Trump’s withdrawal from the Paris Climate Agreement generated criticism from mayors across the country last spring. As a result, mayors have made ambitious pledges to carry on work in their cities to reduce carbon emissions (including energy usage) and accelerate energy conservation policies beyond mandatory benchmarking. As part of this development, Chicago and New York are pursuing legislation to require apartment buildings to post the building’s grade, based on its ENERGY STAR score, publicly on the building facade. Given the trend towards mandatory benchmarking in the past, posted scores could be the next frontier for cities.

Chicago

On November 14, the Chicago City Council Committee on Zoning, Landmark & Building Standards held a hearing for O2017-7060, Mayor Emmanuel’s proposal to require energy performance ratings for the city’s buildings (based on the ENERGY STAR scoring system). This proposal is intended to motivate the public to make leasing, purchasing and moving decisions based on the buildings’ scores, which in turn forces property owners to make their properties more efficient. NAA’s affiliate, the Chicagoland Apartment Association, raised several concerns about the proposal, including:

  • There are no studies that indicate a building grade would successfully influence people’s decisions on if they will lease an apartment.
  • Currently, ENERGY STAR scores for commercial buildings are based on 2003 energy use and sometime in the next 12 months, the system will move to 2013 energy use. Since commercial buildings became more efficient in the last 10 years, ENERGY STAR scores will drop and property owners will need to adapt to the new system.
  • A significant portion of the ENERGY STAR score is outside of the residential property owner’s control. EPA ENERGY STAR team estimates that apartment residents’ energy usage accounts for 70-80 percent of building output.[i]
  • Owners cannot place requirements on residents’ activities nor individually monitor their energy usage because of privacy concerns.
  • Publicly branding apartment buildings may require owners to spend more money to quickly increase a building’s ENERGY STAR score, which results in higher rents for residents.


Despite opposition from CAA, the committee still voted to move the measure to a full city council vote on November 20. If the measure passes, it will be the first of its kind in the country. CAA continues to monitor the situation and hopes to work with the mayor’s office going forward on voluntary initiatives or other projects that can highlight what the industry is already doing to improve building energy efficiency in apartments.

New York City

The New York City Council is considering Int. 1632-2017 to require building efficiency grades for apartment buildings 25,000 sq ft or larger in the city. Building owners would also have to post the score outside the building for public viewing. Like Chicago, the goal of this program is to influence the decision-making process of renters. It is unclear whether this bill will pass the City Council as the legislation is not part of Mayor DiBlasios’ 1.5 Degree plan, the Mayor’s Paris Climate Agreement priorities.

NAA expects to see more state and local proposals that require apartment buildings to publicly post grades based on their ENERGY STAR scores. NAA is drafting talking points for affiliates and members to use in discussions with local policymakers and other stakeholders on this issue, expanding on CAA’s arguments listed above.

In addition to the government affairs’ resources, NAA, as part of the Return on Energy initiative, is working on a resident engagement study to find ways to positively engage and educate residents on reducing energy usage in their homes. When finished sometime in January 2018, the report will also include guidance on working with local governments to educate policymakers on energy conservation issues.

For more information, please contact Holly Charlesworth, Manager of Government Affairs.

 

[i] Overall resident output can depend on age of community, type of construction, and amenities.