(Photo by George Dagerotip / Unsplash+)
This story was originally published by Canary Media.
Hulking, aging buildings pose a huge climate problem for the United States’ biggest cities — and innovative laws meant to address that challenge are coming into full force this year.
In the U.S., buildings can account for up to three-quarters or more of a city’s carbon output, mostly from fossil fuels burned for space and water heating.
Those emissions largely come from existing apartments, hotels, and office complexes. That’s why more than a dozen cities and states across the country have adopted building performance standards, a policy first introduced around five years ago that requires large buildings to gradually reduce their climate pollution.
This year, New York City and St. Louis will be the first metropolises with building performance standards to reach initial compliance deadlines. By May, large property owners will be required to submit data on energy performance and see if their buildings are up to snuff. Based on how well these programs are working, city staff will determine what challenges, including costs, administrative burdens, and public awareness, still need to be overcome — and whether they have to penalize any owners for noncompliance.
“St. Louis City was the first jurisdiction in the Midwest and one of the first four in the U.S.” to adopt a building performance standard, said Katarina Michalova, who oversees implementation of the policy in the Missouri city. “So this is all brand new.”
Building performance standards work by setting limits on emissions or energy-use intensity per square foot in a city’s largest buildings, typically 25,000 or 50,000 square feet or more. Those limits become stricter over time, helping regions decarbonize on pace with their climate targets.
Key to the policy is flexibility: Performance standards set energy-efficiency benchmarks, but leave it up to building owners to figure out how to reach those mandates. Those who fail to comply with the laws usually face financial penalties, the revenue from which typically goes toward other building decarbonization efforts. Many local governments, including New York City and St. Louis, provide free technical assistance to building owners and offer a menu of compliance options, from swapping fossil-fueled HVAC systems with heat pumps to embarking on energy-efficiency retrofits.
The policy has been adopted by four states — Colorado, Maryland, Oregon, and Washington — and nine local governments, including Boston and Seattle. Around 30 more governments have committed to follow suit through a national coalition led by the Biden administration, which has backed the policy with a federal push: Last year, the Department of Energy granted hundreds of millions of dollars to cities and states across the country to fund the development and implementation of building performance standards.
Though no silver bullet, the policy fills a critical gap in regulating older structures that make up the bulk of a city’s building stock and climate pollution, said Marshall Duer-Balkind, director of policy programs at the Institute for Market Transformation, a nonprofit focused on energy efficiency in buildings. Currently only around 1% to 2% of commercial buildings are retrofitted each year, meaning it would take over 50 years for all buildings to undergo even modest updates. Building performance standards help accelerate much-needed upgrades “in a flexible, cost-effective manner,” Duer-Balkind said.
Building performance standards: A novel approach that’s already working
The first performance standard in the U.S. was introduced in 2018 in Washington, D.C., followed shortly by New York City’s Local Law 97 in 2019. This year’s compliance reporting in New York City and St. Louis will provide the first concrete data on effectiveness so far, giving policymakers a chance to reevaluate benchmarks and understand barriers in implementation.
The policies have faced major pushback from large building owners. In April, apartment and hotel trade associations launched a lawsuit against Denver and the state of Colorado’s building performance standards, claiming that the policies are preempted by federal law and place unjust financial burdens on property owners. The city of Denver recently postponed its first compliance deadline from 2025 to 2026.
There are also encouraging signs: In New York City, where carbon emission caps apply to most structures over 25,000 square feet, 89% of buildings covered by the law have already met 2024 targets. Condo buildings that have switched to heat pumps to comply with the law have helped tenants save hundreds of dollars on their utility bills. In St. Louis, funding from the Inflation Reduction Act and the Bipartisan Infrastructure Law has helped apartment buildings and schools afford retrofits and efficiency upgrades to come into compliance, said Malachi Rein, director of Building Energy Exchange St. Louis, a nonprofit that helps building owners navigate the law.
In 2020, St. Louis became the first city in the Midwest to adopt a building performance standard. The policy covers buildings of 50,000 square feet or larger, with exemptions for manufacturing and industrial facilities, and is designed so that at least 65% of all buildings will need to make energy-efficiency improvements. Each building type has a different energy-use intensity target — hospitals using hundreds of plugged-in machines have a more lenient target than empty warehouses, for example.
Most buildings have until May 4 to meet the current benchmark. The city will issue a new set of stricter requirements in 2026 and further ramp up targets every five years.
About 80% of greenhouse gas emissions in St. Louis come from buildings, and the city is full of historic structures. It also has a goal of becoming carbon neutral by 2050. “Moving the needle on this existing building stock is really important, because it really is the crux of the problem for the greenhouse gas numbers,” said Rein.
Like New York City, St. Louis relies on its building division, which issues building and occupancy permits, to administer the program. If property owners don’t comply with the standard, the division has the authority to pull those permits, in addition to assessing fines.
Michalova said that she’d rather it not get to that point, though. Investing in energy upgrades not only improves indoor air quality and comfort for tenants but can also help building owners save in the long term, she noted.
Part of the challenge so far in St. Louis has been the administrative load: Michalova spearheads a small team that liaises with the more than 750 buildings covered under the law. While hiccups like frequent turnover in management or gaps in data are expected, one of the more difficult tasks is introducing energy benchmarking and reporting as a standard business practice. Regulators and building owners alike are new to this process and still learning — but over time, the data collected and progress made will help illuminate the financial, social, and health benefits of energy efficiency improvements, Michalova said.
“Every time I talk to building owners, I let them know that this is the new normal,” Michalova said. “Once we adjust our mindset, it is not as scary as it looks.”