Dear Editor:
Jim Cronin’s article, “Pilot Property Ratings System A Potential Grade A Disaster” (March 20, 2011), erroneously concludes that Massachusetts’ building energy rating pilot is “primed for failure.”
The Boston chapter of the National Association of Office and Industrial Properties (NAIOP) claims the pilot will discourage business from coming to Massachusetts. That is false logic. This initiative will reduce consumer energy costs for local businesses and spur new economic activity, creating hundreds or thousands of new jobs for engineers, contractors, architects and construction firms in Massachusetts. As the business publication Crain’s recently reported, significant job growth is already occurring in New York City as a result of a similar building energy rating initiative passed in 2009.
NAIOP argues that energy ratings will unfairly disadvantage older buildings and keep building owners from securing loans. Yet, studies from the National Trust for Historic Preservation and the U.S. EPA have shown that older buildings are often just as energy efficient, or even more energy efficient, than newer buildings. Integrating energy ratings into loan underwriting will reward energy-efficient buildings with better financing and incentivize owners to make energy improvements that will save money and increase operating income for them and their tenants.
The Massachusetts DOER is soliciting feedback from a diverse group of stakeholders to ensure the rating program is achievable and cost-effective for building owners, and that new financing options and significant financial incentives are available. NAIOP’s members are better served by working toward these outcomes with DOER than by waging hostile media campaigns.
Respectfully submitted,
Andrew Burr
Director, Building Energy Rating Program
Institute for Market Transformation
Washington, DC
Dear Editor,
In his recent article, “Pilot Property Ratings System A Potential Grade A Disaster,” Jim Cronin claims that if more energy rating information were available for commercial properties, the properties would lose value and be harder to sell, or refinance.
Energy ratings for buildings will not prevent the sale of inefficient buildings any more than mile-per-gallon ratings on cars prevents consumers from buying trucks and SUVs. What the ratings will do is provide a valuable piece of information to help buyers understand the benefits of smart investments in efficiency in existing and new buildings. By providing more energy data about buildings, energy labeling will reduce surprises, which adds value and increases the likelihood of a successful sale or refinance. Commercial markets in places such as New York City, Washington, D.C., California, Washington State and Austin, Texas, have already implemented legislation making disclosure of energy ratings mandatory.
The iconic and historic Empire State Building, for example, has undergone an important energy efficiency retrofit which has dramatically reduced its cost of operations and transformed it from a property with a very difficult leasing history to one of the most sought-after addresses in New York City.
Here in Massachusetts, the Department of Energy Resources pilot program will motivate owners to increase the use of energy information while improving the energy efficiency of commercial properties. We expect to take two to three years to develop a useful and cost-effective tool for the commercial real estate market, and anticipate costs will be well below the speculative estimates cited in Mr. Cronin’s article. The pilot will also help property managers take full advantage of recently expanded incentives and technical assistance for commercial buildings stemming from the Green Communities Act 2008, which requires utilities to procure all cost-effective energy efficiency before turning to new sources of power to meet demand.
We value ongoing input from the real estate community to help us maximize the value of this pilot, while advancing future building labeling programs at the state and national level.
Respectfully submitted,
Mark Sylvia
Commissioner
Mass. Dept of Energy Resources
Boston
