to collaborate and make their own decisions about the best
ways to improve their spaces’ energy efficiency, whether
that means installing energy-reducing fixtures, automated
thermostat systems that react to the presence of people in
the space, or more dramatic changes. They can take into
account all the aspects of their building – its age, location,
climate, the varying uses that its tenants have, upgrades for
energy efficiency that have already been installed – and then
choose the best, most cost-effective options for it.
Tenant Star will provide commercial building owners and
their tenants with an incentive to decrease their energy
consumption, which not only reduces their energy bill, but
also benefits the environment. It may encourage some to
look into taking steps to improve aspects of their building’s
energy use, and others to create programs for tenants to
follow to lower their energy consumption within their spaces.
The label it brings with it should improve the marketability
of the spaces and buildings that participate in the program,
without stigmatizing buildings that choose not to.
WHAT HAS NAR DONE?
The National Association of REALTORS® (NAR) was a
strong proponent of the Tenant Star legislation, participating
in a coalition of other commercial real estate industry groups
to lobby for its passage. NAR took part in meetings with key
Congressional offices to encourage its passage, and signed
onto a coalition letter sent to the House of Representatives
Leadership urging them to take up and pass S. 535, which
it did shortly thereafter. As the law goes through the
rulemaking and regulatory process, NAR will continue to
monitor it and take advantage of opportunities to participate
to ensure that the program provides the most benefit to
commercial real estate.
The Department of Energy is currently working on the
rulemaking for Tenant Star. The first step is for the Federal
Government to serve as the test sites for the country – the
General Services Administration (GSA) will develop and
publish leasing provisions for federal buildings to serve as a
template for commercial building owners and tenants to adopt
energy and water-saving measures in their spaces. The GSA
is also required to develop “best practices” to implement
their measures in the real estate services it provides to federal
agencies. The GSA provisions are required by the law to be
completed within 180 days of enactment, so they should
be published by the end of October 2015. There is also a
title in the bill requiring the DOE to complete a one-year
feasibility study on methods to improve energy efficiency
in commercial buildings, which will be completed by May
2016. Final rulemaking on the program is expected to be
completed in 2017.
In March 2015, the Senate passed S. 535, the “Energy Efficiency ImprovementActof2015,”introducedby Senator Rob Portman (R-OH) and cosponsored by Senator Jeanne
Shaheen (D-NH). One month later it was passed by the House
of Representatives, and shortly thereafter the President signed
it into law. The law creates the “Tenant Star” program through
the Department of Energy (DOE), a new way to promote energy
efficiency in commercial buildings, by creating a government-sponsored “branding label” for landlords and tenants who
design, build, and operate energy efficient lease spaces. So –
what does that mean?
WHAT IS “TENANT STAR?”
Tenant star is, first and foremost, a voluntary, market-driven
program. It is intended to encourage building owners and their
tenants to improve the energy efficiency of the spaces they use,
and will also increase investment and job creation. The law
authorizes the Environmental Protection Agency (EPA) and
the DOE to create together a voluntary “Tenant Star” program.
Modeled after the popular “ENERG Y Star” program that inspires
its name, this program is the first of its kind for commercial
buildings, providing recognition with a government-endorsed
label to recognize leased spaces within commercial buildings
for sustainable design and operation.
Specifically, the program will align the interests of both tenants
and landlords to make wise and cost-effective investments in
energy-efficient leased spaces. It will save both tenants and
landlords money on their energy costs, and on the macro level,
is expected to generate new jobs in the field of energy efficiency.
Unlike other proposals calling for mandatory benchmarking
programs to encourage energy efficiency in commercial buildings
Congress has put forth, Tenant Star is completely voluntary,
and will be market-driven. Tenants and landlords will be able
By Erin Stackley, NAR Commercial Real Estate
Legislative Policy Representative