On December 12, 2015, 197 nations, party to the United Nations Framework Convention on Climate Change, entered into the Paris Agreement in an effort to reduce climate change emissions, maintain the global temperature, and increase green energy sources. After coming into force on November 4, 2016 at the UN Headquarters in New York, 148 of the 197 parties have ratified the agreement into domestic law. Following the Trump administration’s announcement that the U.S. would withdraw from the Accord, New York has taken matters into its own hands by tackling emissions, particularly in buildings.
Local Law 84 currently requires New York buildings that are larger than 50,000 square feet to annually measure and report their energy and water consumption. In May 2018, buildings that are larger than 25,000 square feet will also be subjected to the regulations. This process is known as “benchmarking”, which allows the City to compare metrics across participating buildings and gives building owners the opportunity to assess their efficiency and implement new targets to limit energy and water use. The purpose of the benchmark law is to cut emissions 80 percent by 2050.
However, Danielle Spiegel-Feld, the executive director of the Guarini Center on Environmental, Energy and Land Use Law at New York University Law School, argues that because these reports sit idly on a government website, the public, including real-estate brokers, do not have sufficient access or adequate understanding of buildings’ scores. A new measure has been proposed to City Council that would obligate buildings to efficiently disclose their energy and water reports to a wider audience, such as buyers and brokers. Spiegel-Feld proposes that the benchmark scores should become more transparent and consumer friendly, such as using a letter grading system similar to the Health Department’s restaurant grading. This grade would also have to be presented on the building’s website, real estate listings, and posted on the building itself.
The European Union implemented a similar policy in 2010, requiring Member States to ensure that all buildings in their country listed for sale or rent include their energy performance grade. How would this be beneficial for co-ops and condos? Studies in Denmark show that buildings with high energy efficiency grades sell for about 10.1 percent more than buildings with low energy efficiency grades.
For all co-op and condo buyers who are either conscious of climate change or simply want to save money on their utility bills, board members would attract new buyers by adopting modern energy saving measures (such efficient heating and lighting systems) and advertising their energy efficiency scores. If New York’s City Council enforces these requirements, it can revolutionize the behaviors of buyers and renters in addition to making a meaningful impact on climate policy.