Greg Vasil
It’s no secret that Massachusetts has high energy prices. Natural gas bills were so high recently that Gov. Maura Healey took the unprecedented step of sending a letter to the state Department of Public Utilities demanding they find a way to reduce consumers’ costs. Our electricity rates were the second highest in the country last December, right after Hawaii.
While an increasing amount of evidence points to the state’s aggressive greenhouse gas reduction goals as the main culprit, any finger pointing overshadows the fact that ratepayers at all income levels remain concerned as to what will come next.
Unfortunately, the experience of our 12,000 members indicates that the costs of meeting the state’s energy policies are increasingly showing up as a stealth energy tax in the form of higher housing ownership costs, higher rents, and in reduced housing supply, directly impacting the housing goals of the Healey-Driscoll administration.
A lot of the additional costs impacting housing are due to the actions at some of the state’s 351 municipalities, each vying to “do their part” to reduce greenhouse gases in their city or town.
Instead of developing programs that work together, the result so far has been a patchwork of regulations that fit the climate agendas of each municipality, with little understanding or concern as to how it all fits with state programs or goals – or how it raises costs.
For example, Massachusetts has three different building energy codes, and each municipality can choose which to adopt.
There is the base building energy code, a more stringent “stretch” energy code and an even more stringent “specialized” energy code. As of now, the base code applies in 53 municipalities, while the “stretch” code and the “specialized” code have been adopted by 250 and 48 municipalities respectively, challenging developers.
Little Differences Can Become Big
Then there are new building energy disclosure reporting requirements.
In the handful of municipalities that have adopted them, that means either BERDO, the Building Emissions Reduction and Disclosure Ordinance or BEUDO, the Building Energy Use Disclosure Ordinance.
At the state level, it’s known as LBER, for Large Building Energy Reporting. The state rule covers municipalities that have not adopted either a BERDO or BEUDO, or some that have if their rules don’t apply to the same buildings as the state program or have similar data reporting obligations.
Each differs a bit, but the basic goal is to develop a database of building energy use. This brings a concern that the state – or individual cities and towns – will develop dozens of different building performance energy standards or emission reduction goals.
With thousands of commercial and residential buildings in Massachusetts each with different economic and technical needs, that notion is scary to many owners and developers.
In reality, some buildings are easy to electrify, but some are not due to mechanical systems embedded in building envelopes or lack adequate electric service capacity. Those who can’t electrify will pay fines or penalties, all passed to the owner or tenant.
We Need State Coordination
There are others – a ban on fossil fuel use for new or remodeled buildings in 10 mostly Eastern Massachusetts, mostly wealthy communities will likely raise housing costs even further in those municipalities, guaranteeing that little or no low- or moderate-income housing will be built there.
The Greater Boston Real Estate Board supports the state’s decarbonization goals. But there is a limit as to what the housing sector can absorb. These layered and uncoordinated programs push electrification at all costs, regardless of whether it is cost-effective or practical.
Reducing greenhouse gases needs coordination at the state level – the current way encourages inefficiency and duplication. A good first step would be to make real, permanent changes in our energy policies to address the biggest barrier to electrification – the high price of electricity.
The goals of our members are the same as the goals of the administration – more housing. Partnering, we can meet the Healey-Driscoll administrations housing targets cost effectively, making Massachusetts more competitive while at the same time reducing our emissions of greenhouse gases in accordance with state requirements. That is the better way.
Greg Vasil is CEO of the Greater Boston Real Estate Board
