Just before the July 4 holiday, Fireman’s Fund, which launched the green building property insurance market back in 2006, released what it is calling its “next generation” of green building policy endorsements.
As an increasing number of Canadian governments are considering the merits of LEED-driven legislation, Canada’s contractors are speaking out about the increased costs and associated red tape on projects that pursue third-party green building certification.
While California’s recent adoption of a state-wide green building code once again has green building legal practitioners focused on the legal issues surrounding green building legislation, the antitrust implications of incorporating LEED or other third-party green building rating systems into state- and local-level legislation has yet to be fully explored.
In September of 2008, the Board of Directors of the National Institute of Building Sciences (“NIBS”) assembled a Task Group of design professionals, builders, and its own staff members to review third-party building performance rating systems and associated individual accreditation programs currently in use across the United States. The Task Group identified twenty systems and programs and interviewed representatives from AIA, ASHRAE, BOMA, GBI, NAHB, EPA, USGBC, and Victor O. Schinnerer & Co.. among others, in compiling its “Report on Building Rating and Certification in the U.S. Building Community,” which was released last month.
On July 1, new green building legislation applying to private development took effect in Baltimore. Council Bill 07-0602, which was signed in August of 2007, required that the city establish green building standards for new or substantially renovated commercial and multi-family residential buildings larger than 10,000 square feet. City-owned buildings were required to comply with the new legislation beginning January 1, 2008, city-subsidized buildings by January 1, 2009, and all other buildings this past July 1. While the city is developing its own Baltimore-specific green building standards that should be released by the end of 2009, in the interim, in order to obtain a building permit, all buildings applying must be “equivalent” to LEED Silver. The legislation does not require formal LEED certification, but owners must submit a checklist for the appropriate LEED rating system as part of the plans submittal for a new building permit. Checklists must set forth specific credits the project will pursue, briefly describe how each credit will be achieved, and (interesting to note from a legal perspective) the parties responsible for each credit. The checklist must also be signed by a LEED AP who is not an employee of the building owner at the time of submittal. Again, although certification is not required, in order to obtain a building occupancy permit from the city, at the time of occupancy permit application, project teams must submit a completed checklist indicating which credits the project met successfully, signed by a non-employee LEED AP. As we’ve discussed frequently here at GRELJ, all of these requirements could raise interesting- and novel- liability issues in the event that a project fails to receive a building permit or certificate of occupancy as originally contemplated. However, the city’s development community is calling for Baltimore’s City Council to reconsider the legislation based on perceived additional green building first costs and asking it to propose an incentive-based structure in its place.
As the Waxman-Markey climate change legislation heads to the Senate, I think it’s important to note that, as currently drafted, the bill includes provisions that could impose the types of energy efficiency mandates which NAIOP argued against in its controversial report that was released earlier this year. Section 201 of the American Clean Energy and Security Act (H.R. 2454) would first set baseline standards for all commercial (ASHRAE 90.1-2004) and residential buildings (the 2006 IECC code) and dates for certain percentage reduction targets in energy consumption over those baselines. The Act would require an immediate 30 percent reduction over those baselines once enacted (likely in 2011 or 2012 if the bill proceeds through the Senate and is implemented as drafted), followed closely by a 50 percent reduction by 2014 for residential buildings and 2015 for commercial buildings. The reduction mandate would increase by 5 percent every 3 years through 2029/2030 for a total reduction of 75 percent over the baselines. However, the Department of Energy would have the ability to increase or decrease the reduction targets based on technological feasibility. Section 201 further obligates state and local governments to adopt the codes, or their own codes that meet or exceed the established targets; the federal government itself will enforce the national codes if state and local governments fail to comply. If you recall the comments from NAIOP President Thomas Bisacquino in the aftermath of the uproar created by the NAIOP study, Waxman-Markey may ultimately create the precise scenario that NAIOP and its constituents feared: 30 to 50 percent reductions over ASHRAE 90.1-2004 in the short-term.
Notwithstanding many of the persistent- and still emerging- concerns over the increased risks from their installation, Toronto is on the verge of becoming the first city in North America to mandate green roofs for most types of new construction. By a vote of 36-2 which, according to the National Post, “was adopted after remarkably little debate on the floor of council,” the sweeping legislation requires green roofs on all residential buildings over 6 stories, schools, affordable housing developments, commercial, and industrial buildings. The legislation is slated to take effect on January 31, 2010 for new residential and commercial construction; industrial buildings are not impacted until January 31, 2011. The development community in Toronto opposed the legislation on the basis of increased costs, while green roof advocates believe the legislation is not broad enough, and actually successfully fought to increase its purview over a previous iteration of the bill. Toronto’s mandate is interesting to consider in light of the risks that we have pointed out previously both here at GRELJ and over at gbNYC with respect to green roofs generally.
During the first homestand of the season at $1.6 billion New Yankee Stadium, baseballs flew out of the ballpark at an unprecedented rate; the 20 dingers that were clocked during last weekend’s series against the Cleveland Indians were the most ever in a four-game set to open a new stadium in baseball history. Last season, Old Yankee Stadium saw 160 home runs; the current pace would yield a mind-boggling 351 round-trippers for the entire 2009 season. The Yankees did not anticipate that their new ballpark would turn into a Little League bandbox; dimensions at the new park are the same as they were across the street and engineers performed a wind study in advance of construction that did not suggest any major changes in currents or speeds. So, after witnessing several routine fly balls to right field land halfway into the lower deck last Saturday, it struck me that there are some parallels between what’s been happening thus far at the new ballpark in the Bronx and some of the building performance issues that we frequently discuss here at GRELJ.
In the aftermath of last year’s AHRI et al. v. City of Albuquerque litigation, there has been an increased level of discussion with respect to how municipalities and states should craft green building policy and legislation. Although I have not been following what’s been taking place in California all that closely, a recent article in the Sacramento Bee noting one California county’s reaction to a newly enacted piece of state-level green building legislation caught my eye. California’s Senate Bill 1473 took effect on January 1 and requires cities and counties in California to collect, on behalf of California’s Building Standards Commission, a building permit application fee. The fee is based on the building’s valuation as determined by the pertinent local building official and is assessed at $1.00 for every $25,000.00 of value. Cities and counties are entitled to keep up to 10 percent of the fee in order to cover their own administrative and enforcement costs; the rest of the funds are sent to a special revolving fund established by SB 1473 which the Commission will use to “fund development of statewide building standards, with emphasis on green building standards.” Officials in El Dorado County (which is about halfway between Sacramento and Lake Tahoe) believe that the fee is illegal, calling it “a tax without calling it a tax.”
I have often used Washington, D.C.’s 2006 Green Building Act as a paradigm for green building legislation that is enacted quickly, fails to define key terms, or fails to address other important legal ramifications that were not contemplated by the drafters. A little over a year ago over at gbNYC, we linked to a letter that Mark McCallum, general counsel for the National Association of Surety Bond Producers, had written to the D.C. City Council expressing his concerns over certain provisions of the Act. I had been wondering where the NASB’s efforts stood because certain provisions of the Act are scheduled to take effect beginning in January. Accordingly, I was interested to recently see an article in the Washington Business Journal noting that the D.C. Department of the Environment has created a working group in cooperation with the Department of Consumer and Regulatory Affairs to address Mr. McCallum’s concerns.
In an article that we recently posted over at gbNYC, green building attorney Paul D’Arelli of the Greenberg Traurig law firm calls San Francisco’s new green building legislation “LEED on acid.” Mr. D’Arelli points out that San Francisco’s new legislation now penalizes developers who redevelop real property, holding them to a higher green standard than developers who are building on vacant parcels. For example, if a project involves demolition work, it must achieve an additional 10 percent in LEED points in order to comply with the ordinance. “There is no correlation required in terms of the extra points required to comply with the mandated 10 percent increase and the goals sought to be advanced in rehabilitating rather that redeveloping buildings, namely preserving embodied energy and materials in existing buildings and reducing the consumption of energy and materials in constructing new building,” D’Arelli writes.
Back in early October, Chief District Judge Martha Vazquez of United States District Court for the District of New Mexico granted a preliminary injunction in favor of a number of HVAC industry plaintiffs who are challenging the legality of certain Energy Conservation Codes in the city of Albuquerque. The suit alleges that applicable federal legislation already exists for the same equipment that the Codes purport to regulate, thereby preempting the proposed codes. Over at gbNYC, we frequently discuss the problems with green building regulatory schemes, many of which have been crafted quickly and without consideration of broader legal ramifications. Judge Vazquez’ opinion, in fact, noted this very issue, pointing out that “the drafters of the code were unaware of the long-standing federal statutes governing the energy efficiency of certain HVAC and water heating products and expressly preempting state regulation of these products when the code was drafted and, as a result, the code, as enacted, infringes on an area preempted by federal law.”
