In Columbus, Ohio in an effort led by the Mayor’s office, and Council members Emmanuel Remy and Priscilla Tyson, new legislation has been proposed that would institute energy benchmarking throughout the city. Energy benchmarking is one tool public policy can use to reduce a city’s carbon footprint and helps property owners determine the building energy use in comparison to their peers.
While the main opposition out there is from the apartment lobby, here at Praxia Partners, a dedicated developer, owner and manager of multi-family and senior housing, we are in full support of the measure. Our CEO, Joe Recchie, had testimony read into the record at a public hearing on March 12th. You can read the full testimony below.
Dear Columbus City Council,
Thank you to City Council for proposing this Energy Benchmarking legislation. I am writing in support of the currently proposed Energy Benchmarking Ordinance. As an experienced property owner and property manager, the ordinance aligns with the standard practice of real estate properties. The regular tracking and evaluation of our energy consumption and operational costs is a threshold of fiduciary and financial stewardship. Property owners and managers routinely share data with industry associations such as the institute for real estate management (IREM). IREM aggregates and publishes the benchmarks which then inform individual property owners of their own performance as compared to their peers, thus encouraging best practices. This ordinance simply mirrors an industry practice elevating energy efficiency as a common goal so that the information shared can advance public policy.We support the ordinance and recognize it’s benefit to us, the public and the environment. This ordinance does not set a new standard for property owners.
It is noteworthy that the City intends to hold itself to an even higher standard than it is asking of us in the private sector, and that commitment should be commended. In many cities that use energy benchmarking such as Des Moines, Chicago, DC and Philadelphia the energy benchmarking is required of spaces as small as 25,000 sq. ft. and/or can include enforcement fines. Compared to these communities, the modest Columbus ordinance proposed can hardly be considered too aggressive. It is incorrect to say that this proposed ordinance burdens commerce. It simply doesn’t.
Beyond the environmental and policy benefits, energy benchmarking has a positive economic impact on those that participate. There is a cost to keeping inefficient equipment around. Those costs are in missed energy savings, higher and more frequent repair costs and overall comfort of residents, employees or customers. Paying attention to our energy usage is how responsible property owners strategically determine best uses of our capital improvements and other investments.
According to the Institute for Market Transformation, energy efficient properties earn rental premiums over 10% higher than less efficient properties and have occupancy levels 10% higher as well. It is noteworthy that these numbers are trending upwards as energy costs increase and buildings age. Public energy benchmarking encourages market competitiveness for good stewards, in essence creating a race to the top for Columbus. This is good public policy, it is good for Columbus residents, Columbus property owners and the Columbus environment.
Energy benchmarking may be a threat to landlords that do not intend to be good fiduciary stewards of their properties. But just like having a building code is not a problem for people who wish to comply with the building code, benchmarking energy is not an issue for property owners who intend to be good stewards of their assets. Changing good public policy to accommodate the lagging performers would be a mistake.
As real estate professionals, my team and I are in full support of the proposed ordinance and we encourage City Council to pass it as is.
Thank you for your time,
CEO of Praxia Partners