Real Estate Weekly
April 24, 2013
By Andrew Padian, Vice President for Energy Initiatives, The Community Preservation Corporation
Just as April 15 is synonymous with Americans as Tax Day, all New York City multi-family building owners should remember May 1st as Benchmarking Day. May 1st is the deadline for all owners and managers of multi-family buildings over 50,000 square feet to report their buildings’ energy and water annual usage to the City or face fines. Developed under Mayor Bloomberg’s Greener, Greater Buildings Plan in 2009, Local Law 84 (LL84) was created to boost the quality of life for New Yorkers by making the Big Apple more energy efficient.
Despite 2013 being the third year for this requirement, many owners have not yet benchmarked their buildings either because they remain unaware of the law, or are overwhelmed by what they believe will be a time-consuming process. By conducting this energy and water analysis and complying with LL84, not only can owners avoid fines and be more environmentally friendly, but they can also save up to 20 percent in their energy bills.For the last few years, Mayor Bloomberg and his administration have worked to make New York City housing stock more sustainable and energy efficient. His Greener, Greater Buildings Plan is an innovative blueprint for sustainability; major objectives include lowering greenhouse gas emissions by almost five percent yearly, reducing citywide energy costs to $700 million by 2030, and creating roughly 17,800 construction-related jobs over 10 years.Under this plan, LL84 and its sister law, Local Law 87—which requires owners and managers of buildings larger than 50,000 square feet to complete an energy audit by end of 2013—make energy benchmarking and retrofitting a priority as they cut down on energy waste and make our existing housing stock more resilient and sustainable. Owners who do not comply are subject to a $500 fine per building for each quarter they do not benchmark energy and water usage.
If done properly, benchmarking is not time-consuming, and in fact, by combining it with an energy audit, it can be cost-effective. Building owners unsure of how to benchmark their buildings can work with industry organizations, such as The Community Preservation Corporation (CPC) that have proprietary benchmarking products and services to compliment the program and help multi-family building owners comply with the City and navigate this new arena. Benchmarking gives owners a crucial opportunity to analyze their bills, which surprisingly, is not always done.
This data can provide owners with important information about how their buildings’ energy and water usage compare to similar buildings, and how they can start to realize operational savings. Sustainable alternatives can reduce energy bills by up to 20 percent. Energy audits identify individual building energy inefficiencies and provide suggestions to improve overall sustainability in areas such as heating, hot water, electricity and water.
The City’s new comprehensive and mandatory campaign to create a greener New York is an important call to action for not only building owners, but all New Yorkers and future generations to get our consumption under control. Though the City’s vision calls for total implementation by 2030, it is most cost effective for building owners to comply by the upcoming May 1st benchmarking deadline, particularly if they are considering refinancing their building’s debt. While refinancing, owners can simultaneously borrow supplementary funds to cover the cost of future energy retrofit requirements.
Compliance with LL84 is a crucial step for building owners, not only to increase environmental sustainability, but to save on energy bills and enhance property values. By taking steps now to comply with energy efficiency standards, owners will save time and money on property maintenance for years to come.