The downtown Denver skyline is pictured on July 3, 2023. (Kathryn Scott/Special to The Denver Post)
Mayor Mike Johnston’s latest proposed changes to the city’s new rules over building energy use are not enough for four real estate groups that sued the city over the measure last year.
In a letter to the city Thursday, the Apartment Association of Metro Denver, Colorado Apartment Association, Colorado Hotel and Lodging Association and NAIOP Colorado said the changes “will not fix the fundamental flaws of Energize Denver.”
The changes announced by Johnston and Denver’s Office of Climate Action, Sustainability and Resiliency, or CASR, last week include halving penalties and pushing back deadlines. Building owners would need to comply by 2032, instead of 2030, with extensions beyond 2032 possible if requested.
The changes, which Johnston described as both business-friendly and climate-friendly could be approved as soon as next month.
But the four real estate groups said the proposal “would change nothing” because the changes would be made only in a Technical Guidance document that accompanies the regulations.
“In CASR’s own words, ‘nothing in this Guidance shall supersede any Denver ordinance or regulation.’ This means CASR’s promised changes are not binding, subjecting the public to the whims of the Denver government,” the groups wrote.
The groups also objected to making building owners individually request a deadline extension.
“CASR knows the current compliance deadlines are unreasonable and they should just be fixed across the board, rather than forcing case-by-case bargaining that will impose an unnecessary burden on private and public resources,” the groups wrote.
A key concern for building owners has been that, to hit their required energy-use reductions, they will be forced to update heating and cooling equipment before that equipment reaches the end of its useful life.
While the latest changes signal the potential for some flexibility in that area — again on a case-by-case basis — the four groups say that still leaves “the expensive, wasteful and disruptive removal of perfectly functioning” equipment as the default.
“The only way out of this unreasonable and crushing requirement is a costly petitioning process that is available only on a guidance basis, with no parameters or certainty as to the result,” the groups said. “Instead, CASR should adopt a common-sense policy allowing the use of functional and legal equipment until the end of its useful service life by default.”
The letter was signed by NAIOP Colorado Executive Director Kathie Barstnar, CEO Amie Mayhew of the Colorado Hotel and Lodging Association and Mark T. Williams, executive vice president of the two apartment associations.
The Energize Denver regulations were passed in 2021. Commercial and multifamily buildings account for 49% of Denver’s emissions, according to the city. The Energize Denver rules apply to buildings 25,000 square feet and larger.
The four groups sued the city over Energize Denver last April, alleging that the rules are at odds with federal regulations. That case is still pending. A judge has yet to rule on Denver’s request that the lawsuit be dismissed.
If approved, the mayor’s changes announced last week would be at least the second set of changes made since the lawsuit was filed.
In their letter, the groups said they are open to efforts to “improve sustainability and efficiency in the building sector.”
“This includes reasonable initiatives to decrease greenhouse gas emissions from buildings that are part of a comprehensive strategy that considers energy efficiency goals, Denver’s continuing need for affordable housing and a vibrant economy, and realistic evaluations of available technologies, the capabilities of the grid, and achievable schedules,” they wrote.
Emily Gedeon, a spokeswoman for Denver’s climate office, said in an email that the latest changes “were crafted through direct engagement with more than 2,000 stakeholders over the last 6 months as well as 2 years of lessons learned from initial Energize Denver implementation with buildings.”
Not every local real estate trade group has taken the same approach to seeking Energize Denver changes. Last year, a coalition that includes the Denver Metropolitan Commercial Association of Realtors, or DMCAR, and the Building Owners and Managers Association formed to negotiate changes directly with the city.
DMCAR head Katie Kruger told BusinessDen last week that “unsung strides have been made between Energize and the industry.” She said whether the changes are ultimately enough will depend on feedback from individual building owners, as well as possible changes to regulations at the state level.
“This is a longer process of seeing if these changes get us there. … We are now in a place with the Energize team to stay at the table permanently,” Kruger said.
Denver’s climate office will consider enacting the changes at a hearing April 1.
The downtown Denver skyline is pictured on July 3, 2023. (Kathryn Scott/Special to The Denver Post)
Mayor Mike Johnston’s latest proposed changes to the city’s new rules over building energy use are not enough for four real estate groups that sued the city over the measure last year.
In a letter to the city Thursday, the Apartment Association of Metro Denver, Colorado Apartment Association, Colorado Hotel and Lodging Association and NAIOP Colorado said the changes “will not fix the fundamental flaws of Energize Denver.”
The changes announced by Johnston and Denver’s Office of Climate Action, Sustainability and Resiliency, or CASR, last week include halving penalties and pushing back deadlines. Building owners would need to comply by 2032, instead of 2030, with extensions beyond 2032 possible if requested.
The changes, which Johnston described as both business-friendly and climate-friendly could be approved as soon as next month.
But the four real estate groups said the proposal “would change nothing” because the changes would be made only in a Technical Guidance document that accompanies the regulations.
“In CASR’s own words, ‘nothing in this Guidance shall supersede any Denver ordinance or regulation.’ This means CASR’s promised changes are not binding, subjecting the public to the whims of the Denver government,” the groups wrote.
The groups also objected to making building owners individually request a deadline extension.
“CASR knows the current compliance deadlines are unreasonable and they should just be fixed across the board, rather than forcing case-by-case bargaining that will impose an unnecessary burden on private and public resources,” the groups wrote.
A key concern for building owners has been that, to hit their required energy-use reductions, they will be forced to update heating and cooling equipment before that equipment reaches the end of its useful life.
While the latest changes signal the potential for some flexibility in that area — again on a case-by-case basis — the four groups say that still leaves “the expensive, wasteful and disruptive removal of perfectly functioning” equipment as the default.
“The only way out of this unreasonable and crushing requirement is a costly petitioning process that is available only on a guidance basis, with no parameters or certainty as to the result,” the groups said. “Instead, CASR should adopt a common-sense policy allowing the use of functional and legal equipment until the end of its useful service life by default.”
The letter was signed by NAIOP Colorado Executive Director Kathie Barstnar, CEO Amie Mayhew of the Colorado Hotel and Lodging Association and Mark T. Williams, executive vice president of the two apartment associations.
The Energize Denver regulations were passed in 2021. Commercial and multifamily buildings account for 49% of Denver’s emissions, according to the city. The Energize Denver rules apply to buildings 25,000 square feet and larger.
The four groups sued the city over Energize Denver last April, alleging that the rules are at odds with federal regulations. That case is still pending. A judge has yet to rule on Denver’s request that the lawsuit be dismissed.
If approved, the mayor’s changes announced last week would be at least the second set of changes made since the lawsuit was filed.
In their letter, the groups said they are open to efforts to “improve sustainability and efficiency in the building sector.”
“This includes reasonable initiatives to decrease greenhouse gas emissions from buildings that are part of a comprehensive strategy that considers energy efficiency goals, Denver’s continuing need for affordable housing and a vibrant economy, and realistic evaluations of available technologies, the capabilities of the grid, and achievable schedules,” they wrote.
Emily Gedeon, a spokeswoman for Denver’s climate office, said in an email that the latest changes “were crafted through direct engagement with more than 2,000 stakeholders over the last 6 months as well as 2 years of lessons learned from initial Energize Denver implementation with buildings.”
Not every local real estate trade group has taken the same approach to seeking Energize Denver changes. Last year, a coalition that includes the Denver Metropolitan Commercial Association of Realtors, or DMCAR, and the Building Owners and Managers Association formed to negotiate changes directly with the city.
DMCAR head Katie Kruger told BusinessDen last week that “unsung strides have been made between Energize and the industry.” She said whether the changes are ultimately enough will depend on feedback from individual building owners, as well as possible changes to regulations at the state level.
“This is a longer process of seeing if these changes get us there. … We are now in a place with the Energize team to stay at the table permanently,” Kruger said.
Denver’s climate office will consider enacting the changes at a hearing April 1.
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