What is a Building Performance Standard?
Key Takeaways
Building Performance Standards (BPS) set efficiency targets buildings must hit by a certain date or face penalties.
A relatively new policy, BPS are quickly proliferating across local and state governments.
New laws regulating buildings are proliferating across the United States, aimed at increasing operational efficiency to lower carbon coming from the built environment, which accounts for nearly 40% of global emissions. The E.U., U.K., five major American cities, and two states have already implemented Building performance standards (BPS). The local, state or national policies require owners to meet certain performance targets or face fines, have commercial opportunities limited, or even the possible revocation of the structure’s certificate of occupancy.
BPS Basics
In the United States, building performance standards are actively being built out in major metros like New York City, Washington D.C., Boston, and St. Louis while many more local and state governments are exploring possible BPS legislation. Each standard may be slightly different than the next but they all revolve around the same core concept, designed to improve performance in energy use and water use. BPSs are an effective policy tool because they are centered on long-term thinking. Meeting current standards requires direct action from owners. Typically these targets become stricter over time, fueling continuous long-term investment in decarbonization while giving owners enough time for strategic capital planning.
BPSs are a key component in the process of decarbonizing the built environment because requiring certain standards for operation helps guide building owners and management teams to plan for long-term upgrades that not only improve the comfort and productivity of the asset but move it closer to carbon neutral. A BPS allows owners more flexibility by simply setting a target that landlords can work towards with whatever technologies and strategies are most economical for their assets. Aligning stakeholder engagement gets owners, occupiers, and regulators all working towards efficiency that will reduce emissions.
Compliance
A policy framework for any BPS will first start aligning and establishing goals based on the local authorities' climate commitments. Next, regulators determine which properties will be covered, typically starting with larger buildings and working their way down. Considering compliance approaches is where meaningful policy differences between varying BPS begin. For some, compliance is as easy as conducting an energy audit and promising you’ll improve. Others like New York City’s Local Law 97 will fine buildings that do not meet standards set to begin in 2024. Failure to meet minimum standards in the U.K. means the property will not be able to lease to any new tenants, renew, or even be listed for sale until compliance is met. Each BPS includes support for building owners through expertise and often cost-sharing. To ensure continued compliance and investment, each building will have to meet annual reporting requirements.
Investing in building improvements makes building stock more comfortable for tenants, more efficient, and stimulates local economies with retrofit jobs. In NYC alone, BPS have the potential to create more than 140,000 jobs by 2030, according to the EPA. Ultimately building performance standards are still a relatively new policy, the first is less than two decades old. It will take time to better understand the policy's efficacy and best practices, but early indications they are a powerful tool to drive the enhancement of the built environment.
