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May 11, 2018

Large NYC buildings will soon be sporting a conspicuous A to F letter grade at their public entrances. Modeled after the NYC’s restaurant grades and similar building rating programs in Europe. Local Law 33 mandates building energy efficiency grades, starting in 2020, which uses energy consumption data from 2019, starting next January.  

Why bother with grades when we already have benchmarking, you might ask? The theory behind benchmarking is that transparency will galvanize the market to reward betterperforming buildings through higher rents and lower vacancies. But this can only happen if renters and buyers are aware of a building’s energy use, which few are.  

Under the new law, people entering NYC buildings will immediately see the energy grade. Some may not even know what the grade represents, but they will see that they’re walking into an “A” building or an “F” building. And, given an alternative, who wants to rent or buy in an F building?

The energy label will include both a letter grade and the building’s Energy Star score, with the latter included to soften the margins between grades. (For instance, a building with an Energy Star score of 89 is a strong performer but only a B under the grading system. By including the score, an owner can still draw attention to the building’s relative efficiency.)

The law also includes a requirement for the Department of Buildings to annually conduct spot audits of benchmarking information. This is an important addition, as the temptation to fudge benchmarking data will likely grow with the arrival of energy grades.


Source: Urban Green

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