developers oppose costs of climate change legislation | Maryland News

By STEPHEN NEUKAM, Capital News Service

ANNAPOLIS, Md. (AP) — The renewed effort by Democrats in Maryland to push sweeping climate legislation through the General Assembly has met one of its first major challenges, with commercial real estate representatives balking at the to the bill’s major changes to building efficiency standards and questioning the affordability of the proposed changes.

The Climate Solutions Now Act of 2022, the Senate version of inter-chamber environmental legislation, would prohibit newly constructed buildings from 2024 from using fossil fuels for heating and hot water and existing buildings over 25,000 square feet to reduce greenhouse gas emissions. to net zero by 2040.

Representatives from the commercial real estate industry argue that the new standards would be too costly for developers and that the changes are unrealistic to accomplish within the time frame set by lawmakers.

The debate is expected to continue at a Friday hearing before the House Environment and Transportation Committee for a bill, HB831, sponsored by Del. Dana Stein, D-Baltimore County, which has many of the same building efficiency provisions.

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The developers’ objections illustrate the tension between what many agree about the need to act on climate change and the cost of aggressive action to address building emissions. Representatives of commercial real estate argue that the bill does not do enough to incentivize landlords to make buildings more energy efficient.

The Senate bill, SB528, establishes a task force to provide financial incentive recommendations for building owners to achieve additional emissions reductions.

Real estate officials and some lawmakers say that’s not enough. They note that the bill already provides penalties for building owners if they fail to meet new environmental standards, but does not offer specific financial incentives to help them switch to lower carbon emissions. .

Michael Powell of NAIOP Maryland, which lobbies on behalf of the commercial real estate industry, said in an interview with Capital News Service that the Senate bill should have concrete incentives for landlords to reduce emissions from buildings instead of a working group to study potential incentives.

Sen. Paul Pinsky, D-Prince George’s, the bill’s lead sponsor, said in an interview that he had raised the possibility of adding specific financial incentives to his bill, such as tax credits. , but said the working group was the most appropriate place to consider feedback from all stakeholders on potential incentives.

Pinsky briefed the Senate Finance Committee on the bill last Friday. During the hearing, Sen. Benjamin F. Kramer, D-Montgomery, questioned the costs and logistics of the retrofit needed to meet tougher energy standards.

Kramer, which owns commercial buildings, said in an interview that many large buildings were designed specifically to use oil and natural gas. The cost and logistical challenge of major modernization projects would be immense, he said.

“Where will the currency come from?” he said. “(Lawmakers) are already fighting for every penny of the budget.”

If specific incentives were included in the legislation, he said, they would help alleviate some of the concerns of the commercial real estate industry.

Michael Hindle, co-owner of Passive to Positive, a Maryland-based high-performance construction consulting firm, doesn’t buy the commercial real estate industry’s cost barrier argument. Instead, he said in an interview that real estate executives should consider the long-term value of investing in more efficient buildings.

Hindle agreed that retrofit projects can be difficult, and said allowing tax incentives could be a fair way to encourage building owners to achieve the emission reductions.

Hindle, who has worked on new construction and renovation projects across the country, pointed to the social cost of not taking action to address greenhouse gas emissions.

Building owners can reduce emissions by adopting creative solutions that don’t involve overhauling a building’s structure, he said.

“The biggest hurdle to doing this profitably is resistance from developers and professionals,” Hindle said. “They have to get into the ball game and start solving the problems.”

The Chesapeake Bay Foundation, which supports the legislation, touted its own 32,000-square-foot Maryland office in Annapolis, the Philip Merrill Environmental Center, as an example of successful investment in green infrastructure.

The center uses 57% less energy than a comparable office building, and the organization realizes annual energy savings of between $67,000 and $80,000, said Josh Kurtz, executive director of the Chesapeake Bay Foundation Maryland. , in an email.

During his testimony, Kurtz said he did not have a cost estimate for the Annapolis office’s multiple renovation projects. He told the committee and Capital News Service that once he had an estimate, he would provide the number.

Pinsky has repeatedly said he is open to changes in the law and told Capital News Service he will continue to meet with commercial real estate lobbyists.

Powell said conversations with lawmakers did not yield any resolution, but industry representatives continued to voice concerns with the bill.

This article was provided to The Associated Press by the University of Maryland’s Capital News Service.

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Teresa H. Sadler