A Modest Proposal: Grade Residential Buildings Like Restaurants

There has already been significant pushback against the Trump administration’s decision to withdraw the United States from the Paris climate accord – beginning with former New York Mayor Michael Bloomberg’s marshaling of governors, mayors, corporate chiefs and university presidents who have vowed to meet the U.S.’s emission targets under the accord.

Now comes a modest proposal for New York co-op and condo boards to join the cause. It comes from Danielle Spiegel-Feld, executive director of the Guarini Center on Environmental, Energy and Land Use Law at New York University Law School. Writing in the New York Times, Spiegel-Feld urges passage of a bill now languishing in the city council that would require larger buildings to post their energy-efficiency ratings derived from the annual benchmarking mandated by Local Law 84. The current ratings are under-used and poorly understood. Under the proposed legislation, buildings would be awarded a letter grade – similar to restaurants’ sanitation grades – which boards would have to post on the building and in real estate listings. That way, potential renters and buyers – and brokers – would know how energy-efficient the building is.

“If buyers and renters value energy efficiency, or at least the savings on utility bills that come with it,” Spiegel-Feld writes, “improving the disclosure of energy-performance information should help increase demand for high-scoring properties and encourage investments and upgrades in others.”

While no such posting law exists in the U.S., the European Union adopted one in 2010. As a result, energy-efficient buildings have enjoyed an increase in value. “Since that law was enacted, studies of various property markets in the union have found that buildings with higher energy grades command price premiums,” Spiegel-Feld writes. “In Denmark, for instance, properties with high grades have sold for an average of 10.1 percent more than low-rated properties.”

Someone should pass the news along to Donald Trump: green buildings aren’t just good for the planet, they’re good for the wallet, too.