Energy Transparency Legislation: Coup for Buyers and Tenants

As cities around the US pass energy disclosure legislation, commercial and multifamily building owners are required to comply with new energy rating and disclosure ordinances. To date there are 6 cities with ordinances in place: Seattle, NYC, Austin, Washington DC, San Francisco, and Philadelphia. While benchmarking, reporting, and disclosure are common to each ordinance, the size and type of buildings that must comply varies. Additionally some cities have included audits and/or public disclosure. For complete details, check out BuildingRating.org.

In short buildings of a certain size are being required to make their energy use public. Roughly 4 billion square feet of space is covered under current legislation.
The benefits of this legislation are being lauded at all levels, and include everything from job growth to energy savings. Only time will prove out the reality of these predictions. In the meantime, there is a market value that is currently not part of the conversation. Buyers and tenants will likely shift the market dramatically over the next five years.

There will come a time in major real estate markets when gathering energy use details will be a critical step in the process of leasing or purchasing a property. With 6 markets already requiring that existing owners make energy use data available, it will only be a matter of time before consumers understand the power of the information available to them. The long tail on this trend will be consumers demanding better energy performance and ultimately cities and regions becoming more attractive because of their high performing building stock.

Deadline Extended for City of Seattle Energy Benchmarking and Reporting Ordinance

Without fanfare, the City of Seattle extended the deadline to October 1, 2012 for the Energy Benchmarking and Reporting Ordinance for the buildings that were subject to the April 1, 2012 deadline.  This was the deadline for getting commercial structures over 10,000 square feet and all multifamily structures with more than 4 units attached into compliance.

This doesn’t come as a big surprise for two reasons: 1) the deadline for the 50,000 square foot buildings was extended a couple times before October 3, 2011 was the final final deadline and 2) there are roughly 9000 buildings that needed to comply with the April 1 deadline. That is about 10 times more buildings than needed to comply with the October 3, 2011 deadline for commercial structures larger than 50,000 square feet.

This is great news for building owners and property managers working diligently to get their buildings into compliance, not to mention the utilities who are getting a rush of requests for data uploads.  While an extra six months gives everyone some extra breathing room it doesn’t lessen the importance of getting on top of this compliance work as soon as possible. If you have questions and/or would like a quote, here is a simple request form.

For context, building rating and disclosure, which is the purpose of this ordinance, is not unique to Seattle.  There is an international movement afoot that shines a light on the transparency of building energy use.  Not unlike fuel efficiency in cars being an indicator of value and performance, buildings will now have public ratings that indicate their energy use performance and in turn their market value.

There are 4 other cities (Washington DC, NYC, Austin, and San Francisco) with similar ordinances in place and multiple states that have passed legislation, some of which require whole building audits and/or public disclosure of building ratings. And this doesn’t include all of the cities and countries internationally with their respective efforts. There are entire organizations dedicated to sharing this policy information. Building Rating is a great place to get a clear view of what is happening at the policy level and to get a clear understanding of the details of each local ordinance.