• Home
  • Energy
  • Sustainability
  • Climate Change
    • Eco Editorial
  • Environment
    • Environmental Issues
      • Environmental Pollution
      • Global Warming
      • Population Explosion
      • Renewable Energy
      • Species Extinction
      • Sustainable Management of Resources
    • Animals
    • Pollution
    • Environmental Policy
  • Green Technology
    • Green Tips
  • Contact Us
  • Home
  • Energy
  • Sustainability
  • Climate Change
    • Eco Editorial
  • Environment
    • Environmental Issues
      • Environmental Pollution
      • Global Warming
      • Population Explosion
      • Renewable Energy
      • Species Extinction
      • Sustainable Management of Resources
    • Animals
    • Pollution
    • Environmental Policy
  • Green Technology
    • Green Tips
  • Contact Us
Why Will High Carbon Emitting Buildings Be Worth Less Over Time
July 29, 2021

Carbon Emitting Buildings

Earlier the value of a building depended on its location and the features it offered. However, as sustainable construction is gaining importance, many cities are now set to change the rules of the game in commercial real estate. Buildings that are energy efficient are now being rewarded with high energy grades and displayed publicly which is changing how tenants look at the value of the building. Inefficient properties are not only facing high penalties but are being neglected as tenants prefer building that is efficient.

In New York City, the Climate Mobilization Act was designed to cut down carbon emissions dramatically. This Act will not only apply high penalties for building with high carbon emissions but also negatively impact the energy grades of the building. This in turn, makes such inefficient properties less competitive in the market.

Let us take a look at the factors that affect the value of a building.

Local Law 33 – Importance of Building Energy Upgrades

An energy grade is assigned to each building based on its ENERGY STAR score under Local Law 33. The law neither demands a minimum grade, nor applies any penalties for lower grades. LL33 was created to address the issue of enabling the general public with the building performance. You only need to submit the energy consumption report depending on which the grade is calculated.

A low grade negatively affects the value of your building due to the following reasons –

  • A building with a low grade leads to higher energy bills, which will divert tenants to a similar building with a higher grade.
  • Higher utility bills and eventual penalties with LL97 will make selling a building with low grade a challenge.
  • A low grade can hurt the corporate image of the building. Hiding the grade is not allowed under LL33.

In simple words, the general public is becoming smarter and a home that is efficient or working to become greener will be preferred over inefficient ones.

The building energy grades are updated every year. There are a total of 6 grades depending on the score –

Energy Grade ENERGY STAR Score
A 85 – 100
B 70 – 84
C 55 – 69
D 1 – 54
F No data submitted
N Exempted building

 

How Local Law 97 Can Reduce Property Value

Local Law 97 applies emission limits for building over 25,000 sq. ft. based on their area and occupancy classification. The limit will be applicable from 2024 which will affect around 20% of all buildings under the law. An annual penalty of $268 per metric ton of CO2-e will be applicable crossing the emissions limit.

If a building is subject to higher penalties under Local Law 97, there are high chances that tenants will be locked into a high-rent contract. Identifying which buildings will be subject to higher penalties is easy as the building grade in LL33 is publicly displayed. Thus, a building with Grade D can expect higher vacancies, while a building with a higher Grade will be high in demand.

More stringent limits will be applicable in 2030, and reducing emissions below 2030 limits will be a major technical challenge for inefficient buildings. This means now is the best time for building owners to turn their buildings into energy-efficient one.

Conclusion

A good location and useful attractive features will no longer be enough to compete in the highly competitive NYC real estate market. Investing in energy efficiency is an excellent opportunity while there is no pressure from the Local Laws. To identify the optimal energy efficiency measures, a professional energy audit is the best starting point. This enables better investment decisions to maximize energy savings.

Share

Environmental Policy

Michael Tobias
Michael Tobias, PE, is the principal and founder of www.ny-engineers.com. He leads a team of over 50 MEP/FP engineers. Although New York Engineers main headquarters are in NYC and Chicago the business has led over 1,000 engineering projects in New York, New Jersey, Connecticut, Pennsylvania, Florida, Maryland, and California, as well as Malaysia and Singapore. Michael is an advocate for green technology and energy efficiency, and approaches engineering as a vehicle to raise the quality of life

  • Recent Posts

    • The Environmental Impact Of Biomedical Waste And How To Reduce It
    • What Are the Most Eco-Friendly Types of Water Filters?
    • The Top 7 Eco-Friendly Kitchen Cabinet Picks For 2023
    • How To Sustain A Carbon-Neutral Lifestyle
    • Sustainable Fishing Methods to Fish More Responsibly
  • Categories

    • Animals
    • Climate Change
    • Eco Editorial
    • Energy
    • Environment
    • Environmental Policy
    • Green Food
    • Green Technology
    • Green Tips
    • Green Travel
    • Infographics
    • Other Stories
    • Pollution
    • Recycle
    • Sustainability
    • Toxics
    • Uncategorized
  • Archives

    • March 2023
    • February 2023
    • January 2023
    • December 2022
    • November 2022
    • October 2022
    • September 2022
    • August 2022
    • July 2022
    • June 2022
    • May 2022
    • April 2022
    • March 2022
    • February 2022
    • January 2022
    • December 2021
    • November 2021
    • October 2021
    • September 2021
    • August 2021
    • July 2021
    • June 2021
    • May 2021
    • April 2021
    • March 2021
    • February 2021
    • January 2021
    • December 2020
    • November 2020
    • October 2020
    • September 2020
    • August 2020
    • July 2020
    • June 2020
    • May 2020
    • April 2020
    • March 2020
    • February 2020
    • January 2020
    • December 2019
    • November 2019
    • October 2019
    • September 2019
    • August 2019
    • July 2019
    • June 2019
    • May 2019
    • April 2019
    • March 2019
    • February 2019
    • January 2019
    • December 2018
    • November 2018
    • October 2018
    • September 2018
    • August 2018
    • July 2018
    • June 2018
    • May 2018
    • April 2018
    • March 2018
    • February 2018
    • January 2018
    • December 2017
    • November 2017
    • October 2017
    • September 2017
    • August 2017
    • July 2017
    • June 2017
    • May 2017
    • April 2017
    • March 2017
    • February 2017
    • January 2017
    • December 2016
    • November 2016
    • October 2016
    • September 2016
    • August 2016
    • July 2016
    • June 2016
    • May 2014
    • March 2014
    • February 2014
    • January 2014
    • December 2013
    • November 2013
    • October 2013
    • September 2013
    • August 2013
    • July 2013
    • June 2013
    • May 2011



Home | About | Advertise With Us | Bike The Netherlands | Current Environmental Issues | Eco Editorial | Contact