According to an article published earlier this month by the Chicago Tribune, the Chicago City Council has passed a controversial new ordinance that, once in effect, will require landlords to disclose how much energy their buildings use on an annual basis. The measure, which passed by a vote of 32-17, is seen by many as the first step towards the City’s goal of improving its energy efficient by thirty percent by the year 2020. The law will require landlord to begin submitting annual reports on energy efficiency beginning in 2014.
According to the CNT Energy, a division of the Center for Neighborhood Technology, Chicago’s buildings account for approximately seventy percent of the City’s energy use. Under the ordinance, buildings exceeding 50,000 square feet, which make up less than one percent of Chicago’s total buildings but represent twenty two percent of all total energy consumption, will be required to disclose energy consumption data and information regarding building size, use, and occupancy levels.
The data collected will be entered into a software program administered by the Environmental Protection Agency. The program, named Energy Star Portfolio Manager (“ESPM”), is designed to compare energy efficiency between similar buildings and award a score to each building based on its efficiency. EPA officials have stated that energy use declined by seven percent in the 35,000 buildings that used ESPM from 2008 to 2011.
Many opponents of the ordinance, such as the Building Owners and Managers Association of Chicago (“BOMA”), have referred to it as a “public shaming” and will end up hurting struggling building owners in a competitive rental market. According to BOMA Executive Vice President Michael Cornicell, “[T]he obligation under this ordinance to disclose the scores does nothing but create more problems for buildings that will struggle with their scores.” Cornicell was referencing the ordinance’s requirement that scores measuring each building’s energy use be made public. The BOMA has argued that efficiency scores should not be made public, but rather only interested parties such as buyers or renters.
Chicago Alderman Brendan Reilly, a vocal opponent of the ordinance, claimed that ESPM will force building owners to improve efficiency scores to compete in the rental market, resulting in costly renovations. Alderman Reilly has proposed an ordinance which would exempt residential buildings from the ordinance.
In response to Alderman Reilly’s position, Mayor Rahm Emanuel claimed that public disclosure of efficiency scores is the entire purpose of the ordinance, stating, “Do you check the mileage before you purchase a car? Do you check the energy-efficiency of a utility before you purchase it? Do you do comparative? What is wrong with providing people information?”
Although the City of Chicago’s efforts to improve its overall energy efficient are certainly laudable, there is some concern that, if required to undertake building renovations to improve energy efficiency, landlords will pass the costs of such efforts on to their tenants. If you have questions regarding the rights and obligations you have as a tenant or believe you have been the victim of the unfair practices of a landlord, contact the experienced real estate attorneys at The Slater Firm, Ltd. today.