House Passes Bennet-Ayotte Better Buildings Act, Heads to President’s Desk

Bipartisan Bill Aims to Boost Energy Efficiency in Commercial Buildings

WASHINGTON, D.C. – April 22, 2015 – (RealEstateRama) — The House of Representatives today passed a bipartisan energy efficiency bill that includes legislation previously introduced by U.S. Senators Michael Bennet (D-CO) and Kelly Ayotte (R-NH) to boost the use of energy efficient technology by tenants in commercial buildings. The Better Buildings Act encourages tenants of commercial buildings to voluntarily implement cost-effective measures that will help reduce energy consumption and ultimately utility costs for businesses. Bennet and Ayotte first introduced the bill in 2013.

“Energy-efficient construction and technologies have come a long way in the past couple decades,” Bennet said. “The Better Buildings Act is a commonsense way we can encourage commercial building tenants to increase the energy efficiency of their leased spaces, all while saving money and reducing carbon pollution.”

“I’m pleased the House passed this bipartisan legislation, which includes our Better Buildings Act to boost energy efficiency in commercial buildings,” said Ayotte. “This is a commonsense measure that would incentivize commercial tenants to voluntarily implement cost-effective measures to responsibly reduce energy consumption, and I’m hopeful the president will quickly sign this bill into law.”

The Better Buildings Act encourages tenants of commercial buildings to implement cost-effective measures that will help reduce energy consumption and ultimately utility costs for businesses. As building owners across the country strive to distinguish their buildings with the voluntary ENERGY STAR label to help attract tenants and satisfy investors, this bill creates a new voluntary “Tenant Star” certification to reward and recognize tenants that design and construct high-performance leased spaces.

To date, the focus has been on how real estate owners and developers may lower energy consumption at the “whole-building” level. However, office tenants like data centers, law firms, banks, trading floors, restaurants, and retail stores use a lot of energy – especially in areas experiencing large growth and development. The Better Buildings Act takes a holistic approach by considering office tenants’ impact on energy consumption and behaviors.

In addition to the “Tenant Star” designation, the bill asks the Department of Energy to study and learn from private sector “best practices” of how commercially-leased spaces are designed to achieve high performance and help reduce utility costs for businesses.

Dozens of organizations from the real estate sector, construction industry and environmental advocacy, among others have endorsed the bill, including the Real Estate Roundtable, the Natural Resources Defense Council, the American Institute of Architects, the National Association of Home Builders, the Natural Resources Defense Council, the Sierra Club, the Real Estate Roundtable, and the U.S. Green Building Council.

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Read below to hear what others are saying about the Better Buildings Act:

“Historically, most tenants understand Energy Star to be a ‘building-specific’ responsibility. However, a building cannot maximize its energy performance and sustainability efforts without tenant assistance and input. Incorporating Tenant Star allows tenants to team up with the building as an active partner in achieving overall energy and sustainability performance goals.”
– Judy Purviance-Anderson of Cushman & Wakefield General Manager of 1670 Broadway in Denver, Colorado

“BOMA/Denver Metro and its members are thrilled that the Tenant Star program has been created. Through this new program, the tenants in our members’ buildings now will be able to earn recognition for their sustainable best practices, energy efficiency improvements, water savings and their environmental stewardship. I speak on behalf of our members when I say we are excited that tenants will now be true partners with our building owners and property managers in furthering commercial real estate’s efforts for greater efficiency and a reduced environmental footprint.”
– Jeannie Bernard of Denver Metro BOMA

“Senators Bennet and Ayotte have championed innovative, transformative energy policy through their Better Buildings Act and its ‘Tenant Star’ provisions. Tenants consume 50% or more of the energy used by commercial buildings, so they should be recognized for making smart choices in high-performance design and operations within leased spaces they control. This bill is a major step forward to better align commercial landlords and tenants toward a common goal of lowering energy use in built environments across our nation.”
– Jeffrey D. DeBoer, President and CEO of The Real Estate Roundtable

“In a typical office building, between 50-65% of all energy is consumed by tenants. Decisions tenants make in building out their spaces make a huge impact as to the energy consumed on total U.S. energy consumption. Our work at the Empire State Building and in the Center for Market Innovation’s High Performance Demonstration Project has documented that tenants can make economically rewarding steps to reduce energy consumption and want to be recognized for building energy efficient spaces. The Energy Star program is a widely recognized and sought after designation for building owners and for tenants choosing where to lease, but offers no recognition or direction to tenants who are the single biggest consumer of energy in buildings. The ‘Tenant Star’ program in the bill introduced by Senators Bennet and Ayotte will motivate office tenants voluntarily to seek recognition for good work done in job creating, energy efficient tenant installations across the commercial real estate sector.”
– Anthony E. Malkin, Chairman & CEO of Empire Realty Trust which owns the Empire State Building