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Green Building Rules Vary Widely, But Lessons Are Emerging

States and cities introducing rating and disclosure policies for green building are “literally writing the rules as they go,” leading to big variations in such regulations, according to a report.

The Institute for Market Transformation report, Building Energy Transparency, says that in the absence of federal policy, states and cities have tailored rating and disclosure policies according to their local needs and political considerations. Differences include whether benchmarking is triggered by a real estate transaction or an annual requirement, and whether building ratings must be reported to transaction parties, to the general public or to local governments.

In the past five years, the cities of New York, San Francisco, Seattle, Austin and Washington, D.C., and the states of California and Washington, have all begun to phase in such policies. These policies will affect four billion square feet of building space—nearly three times the current impact of the LEED rating system, IMT says.

The lack of a national blueprint has left local policy-makers and regulators with a large and complex task, IMT said.

“Fundamentally, rating and disclosure is quite simple – millions of people see the concept applied every day in appliance energy labels, fuel economy stickers on vehicles and nutritional labels on food,” the report said. “Yet, its mandatory application to buildings presents unique challenges.”

These challenges include the diversity of building stock and of building stakeholders, ranging from institutional property investors that own and operate large portfolios of high-rise offices to individual owners that may hold a single asset, as well as commercial tenants, third-party building operators, energy services companies and utilities.

In addition, utilities’ energy data can be difficult to access, many cities lack a complete inventory of building stock, and many jurisdictions are implementing policies under severe budget constraints, the report said.

Many jurisdictions have delayed policy implementation due to initial challenges, but best practices are rapidly emerging that can help them overcome the many barriers, the IMT said.

These include:

  • Referencing and reinforcing the EPA’s technical benchmarking rules
  • Developing procedural guidance to further define compliance responsibilities
  • Requiring the signature of building owners on all reported benchmarking information
  • Using tax assessment and other data to create an inventory of privately owned buildings and management contacts
  • Forming partnerships with industry associations
  • Working with utilities to help them provide whole-building usage data to owners.

The report’s discussion of challenges and emerging best practices grew out of a November 2010 roundtable that IMT convened with senior policymakers, real estate industry leaders and building energy efficiency experts.

In addition to the report, IMT and CB Richard Ellis have also released a compact user’s guide to the requirements,. CBRE’s “Guide to State and Local Energy Performance Regulations” can be downloaded here.

In March, the Institute for Market Transformation and the Natural Resources Defense Council launched a global library of building energy rating policies. BuildingRating.org aims to create a standard way of comparing the energy performance of buildings, by providing a searchable library of rating and disclosure information.

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