Torchlight #24 | Getting Down To Work
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Torchlight Getting Down To Work
By: Nancy E. Anderson, Ph.D., Executive Director, The Sallan Foundation Issue: Torchlight #24 Date: April, 2009 0
Torchlight #24 Getting Down To Work Earth Day 2009 saw the launch of four bills drafted by the Bloomberg Administration that take aim at making New York home to climate-friendly buildings of all ages. Let’s start with a cheer. Last fall, I wrote about earlier drafts of this “Deep Green Quartet” and it’s thrilling to see these bills in the light of day. The operation of 950,000 buildings produces 79% of this city’s carbon footprint. The Administration estimates that its deep green quartet will cover the largest 17,000 properties and it expects 2,000 jobs will be linked to the work created by this legislation.
Among the four bills is the “benchmarking” legislation. Making owners and tenants aware of how much energy and water a building consumes through requirements of the benchmarking bill is a fairly straightforward first step. While some building owners are already going much further by voluntarily upgrading the energy performance of their current portfolios, the number of standing structures that have undergone such renovations is very small.
Consider the Empire State Building. Its owners, with the support of the Clinton Foundation and the Rocky Mountain Institute, will upgrade this Depression-era icon’s energy efficiency by 38% to make this building, once again, a global poster child. This upgrade could allow owners to charge higher rents to their commercial tenants while making a smaller carbon footprint. What it will not allow is direct comparison of its energy use to comparable buildings in the City. The benchmarking bill would create a database allowing tenants and prospective tenants or buyers to compare the energy efficiency of comparable buildings measured in terms of an “Energy Utilization Index”. Despite concern over provisions for the public posting of benchmarking results (something that many EU building owners have accepted) because owners have little control over tenants’ “plug load” electricity consumption, in New York’s tough real estate market a good Index rating could provide the desired competitive edge and a poor rating could be the incentive to rethink standard operating procedures.
The benchmarking bill’s explicit enforcement language is unique among the four pieces of legislation. It spells out that failure to file mandatory benchmarking reports by the stipulated due date makes building owners subject to a Buildings Department notice of a “lesser” violation, which
© 2009 The Sallan Foundation, Inc. All rights reserved. http://www.sallan.org
1
Torchlight #24 Getting Down To Work could entail a Commissioner’s Order to correct the problem. Property owners are also required to retain relevant documents that must be available for inspection and audit by the Department. Curiously, there is no language that addresses the filing of false, misleading or incomplete data.
Two other bills in the deep green quartet extend further in their reach and impact. One would adopt the 2007 New York State Energy Code as the City’s own, but unlike the State Code, compliance with energy requirements would have to be demonstrated for virtually all renovation projects. As a practical matter, the State Energy Code as currently written is a dull tool for making existing buildings more energy efficient.
The new energy code bill is clear: “For existing buildings, the State Energy Code only applies when an alteration leads to the replacement of at least fifty percent of a building’s system or subsystem, meaning there are no energy efficiency requirements for many renovation projects of a lesser magnitude or lower threshold. As a result of this loophole, New York City is failing to reap the benefits of energy improvements as the building fabric is updated in those situations.” Its Statement of Purpose is also clear about the importance of enforcement: “The Council finds that it is reasonable and necessary to promulgate a New York City Energy Conservation Code in order to ensure the enforcement of the State Energy Code within New York City”.
Just how would enforcement be carried out under this legislation? It’s hard to say because the bill says nothing. Generally, the City’s Administrative Code provisions governing building and construction are enforced by issuing notices of violation (NOVs) returnable to Environmental Control Board. If an NOV is not resolved, the file remains open and this could throw up roadblocks if the owner tries to sell or refinance the property. Presumably, this would be the enforcement mechanism for the new energy code bill, too.
As well, the City’s current energy code webpage carries this notice: “In Spring 2009, the Buildings Department will begin auditing New Building and Alteration applications for ECCCNYS [State Energy Code] compliance and, when appropriate, issuing objections and notices of revocation for
© 2009 The Sallan Foundation, Inc. All rights reserved. http://www.sallan.org
2
Torchlight #24 Getting Down To Work applications that do not meet these requirements”. This language suggests that application review by Buildings will be the first line of ensuring compliance with the proposed law. This will be a big step forward for the City when it comes to reviewing the information that backs up a permit application under the Energy Code. Whether the audit staff at the Buildings Department will have the resources to manage its new and expanding assignments and what standards will be established for selecting permit applications for auditing remains to be seen. Since the language of the energy code bill is so specific about its enforcement purpose, this is not a small matter.
The audit and retrofit bill is the most sweeping in its requirements and, in the short run, is likely to be the most costly to property owners and to tenants, as a result of cost pass-throughs.
In a nutshell, if passed, this bill would require owners of all buildings larger than 50,000 square feet to undertake energy audits once every decade and to make “cost effective” energy improvements, which could entail either upgrading the building’s physical fabric and systems, retro-commissioning to achieve greater energy efficiencies or some combination of these actions. “Cost effectiveness” is to be calculated in terms of the anticipated recurring long-term drop in energy consumption that results from investing in improved efficiency in the short run. For buildings that already perform at a very efficient level, the bill contains provisions requiring only the submission of energy efficiency reports to the Department of Buildings. The bill as currently drafted incorporates neither tax, zoning nor other measures to nudge forward meaningful public acceptance and implementation. Should such measures emerge as the bill undergoes public review, it remains to be seen if they will be applicable to all kinds of building or restricted to a subset such as financially distressed properties.
If a building owner is unable to afford energy efficiency improvements, the bill provides that the owner may apply for a compliance extension from the Department. This is the only “incentive” the legislation offers and that may not be enough. [ii] In light of the current credit freeze, access to funds for retrofits and retro-commissioning could be a high bar for many, especially for owners of affordable housing, and for many co-op and condo owners it could also be a tall order. Serious and sweeping legislation merits strategic and sufficient resources to get passed.
© 2009 The Sallan Foundation, Inc. All rights reserved. http://www.sallan.org
3
Torchlight #24 Getting Down To Work Advocates for affordable housing stress the difficulty of providing decent shelter to New Yorkers and are concerned about costs entailed by any new mandates. At the same time, missing from the legislation as it now stands, despite Administration claims to it serving as a labor market stimulus, is reference to things like job training, labor standards. Absent such language, labor-environmental groups like the Apollo Alliance will wonder whether the greening of the existing building stock will be an impetus “good, green-collar” jobs able to offer decent wages, benefits and working conditions. While other Building Code provisions do not concern themselves with such matters, passage of the audit and retrofit bill could hinge on responding to the concerns of such stakeholders.
As drafted, the audit and retrofit bill lacks mechanisms for encouraging early adapters to step forward. While energy efficiency may not be rocket science, the know-how, the track record and the work force to shrink our collective carbon footprint by shrinking our buildings’ energy consumption is a challenge and getting it right will take some doing. Building owners ready and willing to start down the energy efficiency path now would provide real world lessons to everyone; that’s something worth government support. Call them carrots, inducements or nudges; good policy here calls out for considering every option to make it a success. Let me say it again, the deep green quartet has the potential to become the most powerful and direct way to cut energy demand and shrink the carbon footprints of New York and cities everywhere. Show us the carrots!
Since I started this column with a cheer, let me end with some sober suggestions. In light of a widely-shared (but not universal) sense of urgency about greening our building stock to combat climate change, the most likely enforcement mechanism — an NOV returnable to the ECB and the risk that an open violation would eventually interfere with an owner’s ability to sell or refinance the property — just doesn’t shout out “Urgent! Important!” The lack of specific language to penalize the filing of false, misleading or incomplete documents related to audits and to calculating the cost and return on investment equations for retrofits or re-commissioning is worrying given that there’s more than one way to make these calculations. Could it be that support for the legislation was purchased at the price of anemic enforcement? The lack of robust language in the current bills foreshadows laws that could be fooled with or flouted.
© 2009 The Sallan Foundation, Inc. All rights reserved. http://www.sallan.org
4
Torchlight #24 Getting Down To Work Compliance with much of the City’s Building Code is based on the owner’s need for a certificate of occupancy before a new building can open its doors. But that doesn’t apply for the targets of this legislation, existing structures. Therefore, the ultimate version of the deep green quartet ought to offer a menu of technical and economic assistance options. More specifically, the City should provide accessible information and encourage training for building operations and maintenance staff because this could be a low-cost path toward substantial energy efficiency gains. Private sector incentives could also be mobilized by legislative language that requires code compliance to be made available to property insurers. Now that the insurance industry is beginning to create products that reward green, energy efficient buildings, such language could add to the legislation’s force and impact. Finally, on a different note, when considering legislative strategy, while all four bills have great merit, stakeholders and supporters must consider whether the bills could function separately or if they are meaningless unless they all be passed together
The deep green quartet could be a landmark in legislation and urban sustainability. But the Big Apple gets just once chance to get it passed and get it right. We’re close. We need to get closer.
Nancy Anderson is the Executive Director of The Sallan Foundation.
i
Access to NYSERDA funds or use of federal tax relief or stimulus funds for energy efficiency improvements is beyond the scope of this discussion.
© 2009 The Sallan Foundation, Inc. All rights reserved. http://www.sallan.org
5
By: Nancy E. Anderson, Ph.D., Executive Director, The Sallan Foundation Issue: Torchlight #24 Date: April, 2009 0
Torchlight #24 Getting Down To Work Earth Day 2009 saw the launch of four bills drafted by the Bloomberg Administration that take aim at making New York home to climate-friendly buildings of all ages. Let’s start with a cheer. Last fall, I wrote about earlier drafts of this “Deep Green Quartet” and it’s thrilling to see these bills in the light of day. The operation of 950,000 buildings produces 79% of this city’s carbon footprint. The Administration estimates that its deep green quartet will cover the largest 17,000 properties and it expects 2,000 jobs will be linked to the work created by this legislation.
Among the four bills is the “benchmarking” legislation. Making owners and tenants aware of how much energy and water a building consumes through requirements of the benchmarking bill is a fairly straightforward first step. While some building owners are already going much further by voluntarily upgrading the energy performance of their current portfolios, the number of standing structures that have undergone such renovations is very small.
Consider the Empire State Building. Its owners, with the support of the Clinton Foundation and the Rocky Mountain Institute, will upgrade this Depression-era icon’s energy efficiency by 38% to make this building, once again, a global poster child. This upgrade could allow owners to charge higher rents to their commercial tenants while making a smaller carbon footprint. What it will not allow is direct comparison of its energy use to comparable buildings in the City. The benchmarking bill would create a database allowing tenants and prospective tenants or buyers to compare the energy efficiency of comparable buildings measured in terms of an “Energy Utilization Index”. Despite concern over provisions for the public posting of benchmarking results (something that many EU building owners have accepted) because owners have little control over tenants’ “plug load” electricity consumption, in New York’s tough real estate market a good Index rating could provide the desired competitive edge and a poor rating could be the incentive to rethink standard operating procedures.
The benchmarking bill’s explicit enforcement language is unique among the four pieces of legislation. It spells out that failure to file mandatory benchmarking reports by the stipulated due date makes building owners subject to a Buildings Department notice of a “lesser” violation, which
© 2009 The Sallan Foundation, Inc. All rights reserved. http://www.sallan.org
1
Torchlight #24 Getting Down To Work could entail a Commissioner’s Order to correct the problem. Property owners are also required to retain relevant documents that must be available for inspection and audit by the Department. Curiously, there is no language that addresses the filing of false, misleading or incomplete data.
Two other bills in the deep green quartet extend further in their reach and impact. One would adopt the 2007 New York State Energy Code as the City’s own, but unlike the State Code, compliance with energy requirements would have to be demonstrated for virtually all renovation projects. As a practical matter, the State Energy Code as currently written is a dull tool for making existing buildings more energy efficient.
The new energy code bill is clear: “For existing buildings, the State Energy Code only applies when an alteration leads to the replacement of at least fifty percent of a building’s system or subsystem, meaning there are no energy efficiency requirements for many renovation projects of a lesser magnitude or lower threshold. As a result of this loophole, New York City is failing to reap the benefits of energy improvements as the building fabric is updated in those situations.” Its Statement of Purpose is also clear about the importance of enforcement: “The Council finds that it is reasonable and necessary to promulgate a New York City Energy Conservation Code in order to ensure the enforcement of the State Energy Code within New York City”.
Just how would enforcement be carried out under this legislation? It’s hard to say because the bill says nothing. Generally, the City’s Administrative Code provisions governing building and construction are enforced by issuing notices of violation (NOVs) returnable to Environmental Control Board. If an NOV is not resolved, the file remains open and this could throw up roadblocks if the owner tries to sell or refinance the property. Presumably, this would be the enforcement mechanism for the new energy code bill, too.
As well, the City’s current energy code webpage carries this notice: “In Spring 2009, the Buildings Department will begin auditing New Building and Alteration applications for ECCCNYS [State Energy Code] compliance and, when appropriate, issuing objections and notices of revocation for
© 2009 The Sallan Foundation, Inc. All rights reserved. http://www.sallan.org
2
Torchlight #24 Getting Down To Work applications that do not meet these requirements”. This language suggests that application review by Buildings will be the first line of ensuring compliance with the proposed law. This will be a big step forward for the City when it comes to reviewing the information that backs up a permit application under the Energy Code. Whether the audit staff at the Buildings Department will have the resources to manage its new and expanding assignments and what standards will be established for selecting permit applications for auditing remains to be seen. Since the language of the energy code bill is so specific about its enforcement purpose, this is not a small matter.
The audit and retrofit bill is the most sweeping in its requirements and, in the short run, is likely to be the most costly to property owners and to tenants, as a result of cost pass-throughs.
In a nutshell, if passed, this bill would require owners of all buildings larger than 50,000 square feet to undertake energy audits once every decade and to make “cost effective” energy improvements, which could entail either upgrading the building’s physical fabric and systems, retro-commissioning to achieve greater energy efficiencies or some combination of these actions. “Cost effectiveness” is to be calculated in terms of the anticipated recurring long-term drop in energy consumption that results from investing in improved efficiency in the short run. For buildings that already perform at a very efficient level, the bill contains provisions requiring only the submission of energy efficiency reports to the Department of Buildings. The bill as currently drafted incorporates neither tax, zoning nor other measures to nudge forward meaningful public acceptance and implementation. Should such measures emerge as the bill undergoes public review, it remains to be seen if they will be applicable to all kinds of building or restricted to a subset such as financially distressed properties.
If a building owner is unable to afford energy efficiency improvements, the bill provides that the owner may apply for a compliance extension from the Department. This is the only “incentive” the legislation offers and that may not be enough. [ii] In light of the current credit freeze, access to funds for retrofits and retro-commissioning could be a high bar for many, especially for owners of affordable housing, and for many co-op and condo owners it could also be a tall order. Serious and sweeping legislation merits strategic and sufficient resources to get passed.
© 2009 The Sallan Foundation, Inc. All rights reserved. http://www.sallan.org
3
Torchlight #24 Getting Down To Work Advocates for affordable housing stress the difficulty of providing decent shelter to New Yorkers and are concerned about costs entailed by any new mandates. At the same time, missing from the legislation as it now stands, despite Administration claims to it serving as a labor market stimulus, is reference to things like job training, labor standards. Absent such language, labor-environmental groups like the Apollo Alliance will wonder whether the greening of the existing building stock will be an impetus “good, green-collar” jobs able to offer decent wages, benefits and working conditions. While other Building Code provisions do not concern themselves with such matters, passage of the audit and retrofit bill could hinge on responding to the concerns of such stakeholders.
As drafted, the audit and retrofit bill lacks mechanisms for encouraging early adapters to step forward. While energy efficiency may not be rocket science, the know-how, the track record and the work force to shrink our collective carbon footprint by shrinking our buildings’ energy consumption is a challenge and getting it right will take some doing. Building owners ready and willing to start down the energy efficiency path now would provide real world lessons to everyone; that’s something worth government support. Call them carrots, inducements or nudges; good policy here calls out for considering every option to make it a success. Let me say it again, the deep green quartet has the potential to become the most powerful and direct way to cut energy demand and shrink the carbon footprints of New York and cities everywhere. Show us the carrots!
Since I started this column with a cheer, let me end with some sober suggestions. In light of a widely-shared (but not universal) sense of urgency about greening our building stock to combat climate change, the most likely enforcement mechanism — an NOV returnable to the ECB and the risk that an open violation would eventually interfere with an owner’s ability to sell or refinance the property — just doesn’t shout out “Urgent! Important!” The lack of specific language to penalize the filing of false, misleading or incomplete documents related to audits and to calculating the cost and return on investment equations for retrofits or re-commissioning is worrying given that there’s more than one way to make these calculations. Could it be that support for the legislation was purchased at the price of anemic enforcement? The lack of robust language in the current bills foreshadows laws that could be fooled with or flouted.
© 2009 The Sallan Foundation, Inc. All rights reserved. http://www.sallan.org
4
Torchlight #24 Getting Down To Work Compliance with much of the City’s Building Code is based on the owner’s need for a certificate of occupancy before a new building can open its doors. But that doesn’t apply for the targets of this legislation, existing structures. Therefore, the ultimate version of the deep green quartet ought to offer a menu of technical and economic assistance options. More specifically, the City should provide accessible information and encourage training for building operations and maintenance staff because this could be a low-cost path toward substantial energy efficiency gains. Private sector incentives could also be mobilized by legislative language that requires code compliance to be made available to property insurers. Now that the insurance industry is beginning to create products that reward green, energy efficient buildings, such language could add to the legislation’s force and impact. Finally, on a different note, when considering legislative strategy, while all four bills have great merit, stakeholders and supporters must consider whether the bills could function separately or if they are meaningless unless they all be passed together
The deep green quartet could be a landmark in legislation and urban sustainability. But the Big Apple gets just once chance to get it passed and get it right. We’re close. We need to get closer.
Nancy Anderson is the Executive Director of The Sallan Foundation.
i
Access to NYSERDA funds or use of federal tax relief or stimulus funds for energy efficiency improvements is beyond the scope of this discussion.
© 2009 The Sallan Foundation, Inc. All rights reserved. http://www.sallan.org
5
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