Speaker Quinn, Mayor Bloomberg propose new laws to force buildings to become more energy efficient; dangle $750 million in annual savings on energy costs.

The city’s elected leaders unveiled a package of legislative and policy initiatives that would require building owners to improve the energy efficiency of their properties. Four bills from the City Council, along with two mayoral programs, will save $750 million annually in energy costs and lower the city’s carbon footprint by 5%, Mayor Michael Bloomberg said today.

One bill would trigger energy efficient upgrades to meet modern standards any time a building is renovated. Currently, only renovations of more than 50% of a building trigger such an upgrade. City Council Speaker Christine Quinn characterized the bill as closing a “loophole” but some landlords are likely to see it as a fundamental change in policy and an onerous mandate.

A second bill would require buildings that are 50,000 square feet or larger to undergo an energy efficiency audit every 10 years and receive a rating to be posted online. The Building Owners and Managers Association has expressed concerns about the measure.

One principle of the bills is that only changes that will pay for themselves within five years will be required. Landlords are seeking language in the measures to ensure that the payback goes to those who paid for the improvements.

Hearings will be conducted and changes to the bills will be considered, Mayor Bloomberg said on Earth Day as he announced the plans on a green roof in midtown. “We don’t think any of these things will cost people money,” he said, referring to building owners. He added, “Government does have a responsibility to lead and cajole … and in some cases to be even more aggressive.”

Various laws passed in the last three years have required similar improvements to city-owned buildings, but this is the first broad effort to upgrade private structures, which make up most of the city’s building stock.

The city will create a revolving loan fund with $16 million in federal stimulus money that building owners can borrow from to improve their properties’ efficiency. It will also launch a jobs program to train workers for the estimated 19,000 construction jobs that the legislation will create.

A third bill would measure every building’s energy use to establish a benchmark. Ms. Quinn said it would demonstrate to owners how inefficient many buildings are. A fourth bill would require energy efficient light bulbs; lighting accounts for 20% of a building’s greenhouse gas emissions.

Steven Spinola, president of the Real Estate Board of New York, says the benchmark bill fails to distinguish between different uses and types of buildings and, as written, would result in unfairly low grades for high-energy operations like trading floors or refrigeration units. And he says audits could cost a small building $10,000 to $20,000. “If you’re a small building, in bad times, it’s a significant hit,” he said.

But Mr. Spinola said with modest changes, the legislation would have a positive impact. “It is going to be a significant step toward making our city cleaner and greener,” he said. “We just want it written in such a way that people are able to do what they’re required to.”

Tenant organizations are concerned that improvements mandated or inspired by the bills will allow landlords to raise the rent on regulated apartments. But Mr. Bloomberg said work that pays for itself by lowering energy costs would not qualify as a “major capital improvement” and would thus not justify a rent increase. Ms. Quinn said the council would work to ensure the measures did not lead to higher rents.

Buildings account for 80% of the city’s carbon emissions and $15 billion in annual energy costs. Environmental groups said the measures would inspire similar action by other cities. “New York City today is offering a game-changer,” said Fred Krupp, president of the Environmental Defense Fund. “It is showing how cities can grow … while cutting emissions.”

Source: crain's new york business.com