Real estate today: City wants building owners to report energy usage

March 29, 2013
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A new proposed city ordinance would require owners of commercial and large residential buildings to disclose their energy usage to the City. But critics are not convinced the measure would achieve anything and will create unnecessary financial burdens for building owners.

“In order for Boston to continue to be a sustainability leader, our buildings must aggressively invest in energy efficiency,” Mayor Thomas Menino said in a press release. “Bostonians demand buildings with high performance and this ordinance will encourage building owners to meet that demand.”

“Our members are 100 percent behind sustainability and conservation. The frustrating thing is, it’s really a data collection exercise and it’s not clear that it will have any benefit,” Greater Boston Real Estate Board (GBREB) CEO Greg Vasil told the Gazette. “There’s been no evidence to date that [this kind of legislation] work[s]. If we pass something, shouldn’t we pass something that works?”

The GBREB is an association for real estate professionals.

The “Building Energy Reporting and Disclosure Ordinance” is intended to encourage building owners to participate in local utility energy efficiency programs and educate tenants on building performance, according to a City-issued press release.

But it could penalize low-income tenants as much as $9,000 a year for failing to report usage, according to Vasil. Building owners who refuse to provide their information would also be fined up to $250 after 30 days of being notified of their violation, City spokesperson John Guilfoil told the Gazette.

The ordinance would require all large- and medium-sized buildings to report annual energy use, water use, and greenhouse gas emissions to the City of Boston Environment Department. The City would then make that data for individual buildings available online in a standardized format.

In addition, building owners may be required to pay for energy audits or other evaluations every five years to see if they need energy efficiency improvements. Buildings in the top 25 percent of energy performance or already taking “significant efficiency actions” would be exempted from the requirement, according to a City press release.

According to a U.S. Department of Energy report, an energy audit could cost anywhere from $0.12 to $0.50 per square foot, which could translate to as much as $25,000 for a 50,000 square foot building.

According to Vasil, there is a component of the proposed ordinance that would require landlords of buildings with more than 24 units to collect utility bills from their tenants. A tenant could pay up to $9,000 in penalties per year for failing to comply, with no exception for Section 8 federally subsidized affordable housing, he said.

“We think it could be done a lot better,” Vasil said.

“While well-intended, this proposed law will impose a significant financial burden on both commercial and residential property owners as well as their tenants, who will ultimately bear the cost of any energy efficiency upgrades made to the building through increased rents,” GBREB Director of Government Affairs Patricia Baumer told the Gazette in an email. The GBREB is “flatly opposed” to the ordinance, Baumer added.

According to Guilfoil, churches and other non-profits that own buildings larger than 25,000 square feet would have to comply with the ordinance, but any upgrades recommended by audits would not be required of any building owner.

Buildings with a low performance would not be punished beyond the energy assessment required every five years. High-performing buildings and buildings that show significant improvement would be exempt from the assessment, he added.

Meanwhile, the City Council will “absolutely” play a role in the implementation of the ordinance, local City Councilor O’Malley said.

“I certainly support this ordinance. We have a lot of work to hammer out, but it will ultimately deliver better education and awareness,” he said.

O’Malley added that he expects the City Council to have at least two hearings to discuss this ordinance before voting on it in the coming weeks.

Similar ordinances have been instituted in New York City, Washington, D.C., San Francisco, Seattle and Minneapolis. According to the City, lessons learned from these cities have informed the proposed ordinance. But the GBREB said in a release that “there is no credible evidence to date that this regulatory approach is effective in achieving the goals for which they are intended.”

“The Building Energy Reporting and Disclosure Ordinance follows the principal of, ‘What gets measured gets managed’,” Brian Swett, City chief of environment and energy, said in a press release. “Through measurement and transparency, the ordinance will encourage cost-effective building investments in energy and water efficiency that will improve building performance, save money, and reduce greenhouse gas emissions.”

The City would annually disclose its energy and water use in all of its facilities starting with 2012 building data.

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