PODCAST: Why navigating building regulations is getting harder

In the past, building codes mandated specific energy-saving measures like LED lighting and insulation to decrease building energy consumption.

But times are changing amid a shift to drive decarbonization at scale across commercial real estate buildings, which is responsible for 40% of global carbon emissions. In urban areas, this number can rise to 60 to 80%, according to JLL.

Rather than relying solely on building codes, city regulators are now embracing new regulations and implementing fines that mandate buildings to achieve specific performance targets for energy consumption and reduction of greenhouse gas emissions.

Over 30 U.S. cities have committed to developing building performance standards by Earth Day, at the end of April, as part of the Biden administration's National Building Performance Standards Coalition. Notable examples already implemented include New York’s Local Law 97, Denver's Energize Denver Ordinance and Boston’s BERDO 2.0 regulations.

As cities move towards implementing building performance standards, it's crucial to recognize that these standards can differ significantly in their ambition and specific targets.

“When it comes to building regulations, there's no denying that it can feel like a patchwork,” says Dan Luddy, Senior Project Manager, Building Performance at JLL. “So, the details can be kind of a headache to put together.”

For instance, New York's Local Law 97 aims to lower greenhouse gas emissions in large buildings. Other cities prioritize energy use intensity, which measures a building’s energy efficiency. The diverse nature of these standards highlights the need for a flexible approach to meet the unique challenges and goals set by each jurisdiction.

The patchwork of regulations poses challenges, especially for building owners with national portfolios, who are navigating different standards and compliance requirements in different cities.

On this episode of Trends & Insights: The Future of Commercial Real Estate, JLL’s Dan Luddy, Paulina Torres and Andrew Lim are joined by special guest Spencer Robinson from Central Michigan University. Together, they dive deep into the complexities surrounding building performance standards in commercial real estate. From the impact of these regulations on building owners and tenants to the potential penalties and challenges faced in achieving compliance, this panel of experts provides valuable insights and practical strategies for navigating this evolving landscape.