How will new building regulations affect the US built environment?

Amidst a global drive to meet net zero targets, regulations worldwide are undergoing rigorous changes. In the United States, policymakers have set their sights on achieving net zero by 2050.

As Demand Logic gears up for exhibiting at CREtech New York this month, our attention turns to the American built environment. Specifically, we delve into the implications of New York's Local Law 97 in the face of this transformative shift.

Local Law 97

New York City's Local Law 97 (LL97) has earned its reputation as one of the nation's most ambitious emission-curbing initiatives. The law, which is the backbone of the city's sustainability efforts, mandates that buildings exceeding 25,000 square feet must adhere to new energy efficiency and greenhouse gas emission standards by 2024. Even more stringent criteria are expected to be implemented by 2030. 

The overarching objective of this legislation is to engineer a substantial 40% decline in emissions generated by the city's largest structures by 2030, followed by an 80% reduction by 2050.

Highlighting the gravity of the situation, it's been found that over 70% of New York's greenhouse gas emissions stem from its vast collection of approximately one million buildings. In the face of this stark reality, this comprehensive and forward-looking strategy is a sign of the city awakening to the pressing matter of climate change. With an impending need for compliance and adaptation, the impact of Local Law 97 on New York City's skyline and urban landscape has the potential to be transformative.  

Recent data from the city also sheds light on the encouraging progress around Local Law 97 compliance. A huge 89% of New York City's buildings are on a trajectory that aligns with the 2024 requirements set forth by LL97, showing that the city is already prepared. This achievement surpasses previous estimates, defying expectations that as many as 20% of structures would not be ready for LL97.

However, for the remaining 11% that find themselves falling short, there will be fines in place with penalties exacted on an annual basis at a rate of $268 for each ton of emissions exceeding the limit cited by LL97. Notably, larger buildings and those with higher inefficiency and pollution levels (as determined by their Local Law 95 Energy Grade, with grades of D and F), could face multi-million dollar penalties.

While the law's intent is clear and its progress is noteworthy, it hasn't been without its share of opposition. As indicated by the discussions surrounding a proposed bill that seeks to defer Local Law 97 fines by seven years, there have been various expressions of dissent. As the city grapples with the changes brought about by LL97, these challenges highlight the interplay between regulatory mandates, economic considerations, and the broader goals of sustainability. 

Ultimately, this will be revolutionary in the US built environment and if it’s a success, it could be replicated across the nation. In making these changes, building teams will be safe from penalties and they will also save money through improved operational performance leading to reduced energy bills. 

In a shift that resonates with the changing landscape of real estate, investors are also amplifying their calls for more sustainable building practices. This demand for environmentally conscious buildings comes as the real estate sector braces itself for a new era of growth, signaling a profound shift in priorities as a global construction surge looms on the horizon.

Elsewhere in the US

The drive for heightened building regulations extends beyond New York. One year ago, President Biden signed the Inflation Reduction Act into law, which is having a positive impact on climate action. The bill has put billions of dollars into protecting affected communities from the impacts of climate change, and its clean energy and climate provisions have already created more than 170,000 clean energy jobs. What’s more, over $110 billion of investment in clean energy manufacturing have been made since the law was signed. 

Throughout the United States, a growing focus on building performance standards for existing structures is evident, as jurisdictions including Colorado, Maryland and Washington state, and cities such as Reno, Nevada, and St. Louis joined New York in enacting climate-focused standards for their built environments. However, the pace of change appears to be slowing, as the ‘Mandatory Building Performance Standards: A Key Policy for Achieving Climate Goals’ report also reveals that it could take a staggering 300 years to execute comprehensive whole-building retrofits for all homes and apartments. Similarly, retrofits for all commercial buildings could take over five decades to complete.

While the US is currently without mandatory Energy Performance Certificates like those in the UK, strides are being taken to steer in that direction. Taking a proactive step, the Department for Energy unveiled a funding injection of $46 million in August 2023, aimed at bolstering energy efficiency initiatives and fostering emission reductions within both the commercial and domestic sectors. 

As these measures gain momentum, it's apparent that the journey toward greater sustainability within the built environment is an ongoing and evolving endeavor across the nation.

How we can help

Understanding your building’s performance is the first step to making changes. Not only can you track your performance, but you will also be able to prove your credentials to employees, investors and authorities. 

Demand Logic’s technology offers multiple benefits to buildings and property managers, streamlining energy efficiency and operations. By analyzing real-time data, it uncovers hidden inefficiencies, enables proactive adjustments, and prevents energy waste to help reduce costs and improve occupant comfort. 

Learn more about our services by emailing us or calling +44 20 7193 4212.