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Kansas City to Become Latest to Require Energy Benchmarking and Disclosure

Energy Benchmarking

KANSAS CITY, Mo. - The Kansas City Council is the latest local governing body to require multifamily building owners to track and report their energy and water usage. The practice, known as benchmarking, is law in more than a dozen other cities. The ordinance, which is expected to pass, has been opposed by the local real estate community including the Apartment Association of Kansas City. Commercial buildings – including multifamily – 50,000 square feet or larger are covered by the new law; the first compliance deadline (for properties 100,000 square feet and larger) is May 1, 2017. The rest of the covered buildings will begin reporting May 1, 2018. Public disclosure starts 15 months after data is submitted.

While the ordinance contains exemptions in cases where building owners are unable to get the necessary utility data, and does not require property owners with poor energy scores to improve their efficiency, opponents’ primary concern remains the eventual expansion to a mandate, which could include costly retrofits. There are also concerns on the overall impact that this ordinance may have on development in the Missouri city; specifically if this restrictive ordinance will disadvantage the community by driving development away to neighboring cities. The noncompliance penalties range up to $2,000.

While this ordinance is expected to pass at the local level, the industry is considering pursuing preemption language with the state legislature. Arizona’s legislature set a precedent in April of this year, passing a bill to prohibit cities from mandating that commercial and multifamily owners benchmark and disclose their energy usage.

Other cities that have passed benchmarking ordinances are Atlanta, Austin, Berkeley, Calif., Boston, Cambridge, Mass., Chicago, Minneapolis, New York, Philadelphia, Portland, Ore., San Francisco, Seattle, and Washington D.C. New ordinances are anticipated this year in Los Angeles and Orlando.

Source: Kansas City Business Journal, Apartment Association of Kansas City, Arizona Multihousing Association, National Apartment Association