While local lawmakers and leaders are patting themselves on the backs for passing an energy benchmarking ordinance in Cambridge, Mass., local multifamily owners and operators are questioning if the new mandate will help or harm housing in the area.
City council members unanimously passed the ordinance July 28 in an effort to use data for local energy planning, according to the city’s website. The Building Energy Use Disclosure Ordinance will require multifamily buildings that have more than 50 units to report energy and water usage data through a government portal.
Multifamily buildings will be required to report the information by May 1, 2015, according to a city news release. The city plans to post the energy use data on its website during the second year of reporting.
However, the first year of data will not be posted, according to the city’s website.
Patricia Baumer is particularly concerned about what kind of impact the ordinance will have on local affordable housing. The concerns echo those seen in other markets, such as Chicago, Boston, and New York City, where mandatory energy reporting deadlines are approaching or have started.
Baumer, director of government affairs for the Greater Boston Real Estate Board, says one of the problems with the requirement is that utility companies aren’t obligated to share gas, water, or energy information with apartment owners.
“The owner may have to get a privacy release from a tenant, and then they have to collect their utility bills,” she says. “If the bills don’t exist, they can use an aggregated number, a default data set. So, then there’s the question of how reliable the information is going to be.”
And using time and resources to collect information with inaccuracies could be damaging to owners because the ordinance requires a seller to provide the energy information to potential buyers.
Doug Culkin, president of the National Apartment Association, saying labeling building efficiencies against one another may turn out to be toxic because the values of buildings will be tied to the benchmarking data.
“Between 81 and 82 percent of apartment buildings [in New York City] were constructed before 1990, and a lot of those properties at the time they were built didn’t have the same energy or green requirements that have been passed in place now,” Culkin says. “We’re concerned about that. And of course these are the properties that are essential to the affordable housing supply.”
Not to mention how affordable owners are trying to figure out how to pay for extra surveys, inspections, and upgrades in order to comply.
“You can’t pass the cost along to the tenant,” Baumer says. “It’s just not a marketplace that can absorb those costs either. So, we haven’t really seen the full impact of it yet.”
Both Baumer and Culkin say they support energy benchmarking, but on a voluntary basis.
The Environmental Protection Agency (EPA) and Energy Star are working together to create a voluntary energy reporting tool for owners.
“That info isn’t shared by EPA though,” Culkin says. “Once [an owner] has a base year in, then they can submit that data for each following year, and they can get a good idea of how they’re competing.”
Lindsay Machak is an associate editor for Affordable Housing Finance. Connect with her on Twitter @LMachak.