Green Building Forecast

January 8, 2010
Client Alert Newsletter Forecast 2010

In 2010, energy efficiency will be a primary driver for green building legislation and legal issues as increased attention to climate change has focused attention on building energy use. Emerging trends include requirements for collection and public reporting of building energy usage data and mandates for improved energy efficiency through revisions to building energy codes.

In 2009, the climate change bill passed by the U.S. House of Representatives included a provision which would have mandated the adoption of a national standard for building energy efficiency. It remains to be seen whether Congress will ultimately enact legislation implementing a national building energy code or green building code. In the meantime, on January 12, 2010, California passed the first state-level building code mandating "green" standards for energy performance, water usage, and construction practices. As of January 2011, the "CalGreen" regulations will require new buildings in California to recycle 50 percent of their construction waste and to reduce water usage by 20 percent. All commercial buildings over 10,000 square feet will be required to undergo mandatory commissioning of air conditioning, heating, and mechanical equipment. The regulations are intended to help the state achieve its goal of reducing greenhouse gas emissions by 33 percent by 2020.

In December 2009, New York City enacted legislation requiring that new buildings and existing building renovations meet minimum energy conservation standards. The legislation requires large building owners to conduct mandatory energy audits every ten years and to gather and report energy performance and water use data on an annual basis. Benchmarking data will be made publicly available. As of January 1, 2010, Washington D.C. is phasing in a similar benchmarking and disclosure requirement for private buildings. Washington State and Seattle have also recently enacted energy benchmarking legislation. Likewise, in 2009, the United States Green Building Council ("USGBC") introduced a "minimum program requirement" requiring LEED certified projects to commit to providing their project energy and water usage data to USGBC for a period of five years after occupancy. Some parties have expressed concern that the requirements for public reporting of energy usage could lead to legal disputes, including design or construction defect claims or claims by tenants against landlords, where newly available data provides evidence that buildings are failing to perform as promised.

In our region, Philadelphia joined the growing list of municipalities with requirements for green building, enacting legislation in December 2009 requiring contracts for new construction and major renovation of city-funded buildings of over 10,000 square feet to "include requirements intended to insure that the finished project will achieve a silver-level LEED rating." Under the legislation, at least five points towards LEED certification must be earned in the category of Energy and Atmosphere.

Green building and energy efficiency legislation will undoubtedly continue to emerge and evolve at the national, state, and local level in the coming year.