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Established in 1992 under President George H.W. Bush’s administration,
Energy Star is a voluntary program of the Environmental Protection Agency
(EPA) to encourage energy efficiency and to certify buildings and consumer products that meet certain energy-efficiency standards. Energy Star
Portfolio Manager is the benchmarking tool used on more than 450,000
commercial buildings, representing more than 40 billion square feet of
space, to measure a property’s energy, water and waste consumption.
The use of Portfolio Manager is ingrained in real estate business models
and operational practices.
More than 40 percent of the commercial real estate industry currently
uses Energy Star and there is no existing private-market replacement. In
2015 alone, American businesses cumulatively saved $3.4 billion on utility
bills through the program. Many real estate investors and businesses that
lease space have Energy Star-certification requirements, and these buildings
often prove to be the best investments.
Although Energy Star enjoys widespread bipartisan support, President
Trump proposed eliminating the program in the 2018 federal budget.
The demise of Energy Star could potentially cause widespread disruption to the commercial real estate industry, both in terms of operations
The House Appropriations Committee passed the fiscal year
2018 Interior and Environment Appropriations bill this past
July. The legislation, which includes funding for the EPA,
contained language that expressed the committee’s
support for Energy Star, although funding will drop
by 40 percent. This was the first step in a long process. BOMA International and its partners will
continue to engage Congress and the Trump
administration on the business case for safeguarding the Energy Star program.
Polling from earlier in the fall had Congress’ approval rating hovering
around 16 percent, while President Trump’s approval rating was at about 38
percent. It is hard to pinpoint that a lack of legislative victories is the cause
for those historically low numbers, especially in the current hyperpartisan
atmosphere. Regardless of the reasons, members of Congress and President
Trump himself understand the relative lack of accomplishments could influence the outcome of the 2018 midterm elections.
Although the political maps of House and Senate seats favor Republicans,
there is still cause for angst among those in power. The next political season
starts in early 2018 and, absent further action, elected officials will be hard-pressed to show that they have achieved significant legislative victories.
Bipartisanship seems rare these days, but commercial real estate’s top
priorities offer clear economic wins for both Democrats and Republicans.
BOMA International is aggressively lobbying both sides of the aisle to support these issues, and is making the case that policies that positively affect
commercial real estate are not only good for the industry, but also good for
the country. The exclusion of certain provisions in tax reform that currently encourage real estate investments, such as 1031 exchanges and carried
interest, could curtail future commercial real estate growth. And the elimination of the Energy Star program would inhibit certain real estate
transactions and disrupt the operations and management of
n n n
If Congress and the Trump administration are going to show voters that they are looking after the
interests of the economy, BOMA International
has given them a road map that can help them
achieve a stated goal: passing an agenda that
supports commercial real estate. n
Rob Brierley is chair and chief elected officer of the Building Owners and Managers Association (BOMA) International.
He is also the managing director of real estate management services and an executive vice president at Colliers International
in Boston. Reach Brierley at email@example.com.
“More than 40 percent of
the commercial real estate industry
currently uses Energy Star.”