New York City’s Local Law 97 charges building owners $268 per metric ton of CO₂e (carbon dioxide equivalent) over their carbon limit. A mid-size office building that misses by 500 metric tons could face annual penalties of approximately $134,000, and under the law those penalties can continue to accrue each year until the building achieves compliance. Similar programs are now active across the country, and projections from active BPS programs consistently show that most covered buildings are not currently on track to meet their 2030 targets, a gap that the Institute for Market Transformation (IMT) and other policy groups have tracked across major U.S. markets.
Building performance standards (BPS) are the regulations behind that gap. Unlike traditional building codes, which apply only to new construction, BPS generally require existing buildings to maintain ongoing performance against measured energy or emissions targets, a different obligation than simply reporting utility data.
This article explains how BPS programs work, which buildings they cover, how performance is measured, and what the compliance process typically involves.
Key takeaways: Building performance standards compliance for property managers
BPS regulations affect existing commercial buildings across a growing number of U.S. jurisdictions. The following highlights what property managers and building owners typically need to understand.
What BPS regulations generally call for
Active BPS programs share several defining characteristics:
- BPS policies generally require existing buildings to meet specific energy or emissions targets, not just report usage
- Penalties in some jurisdictions may recur annually until a building reaches compliance
- Requirements vary by city and state, with different size thresholds across programs, and some phased programs starting with larger buildings before expanding
Understanding these features is a useful starting point for evaluating where a portfolio stands.
How to approach BPS compliance
Compliance programs generally follow a predictable sequence of steps:
- Benchmarking through ENERGY STAR Portfolio Manager is often the first required step in active BPS programs
- Energy audits and operational improvements typically come before capital investments
- Alternative pathways exist in many jurisdictions for buildings facing financial or structural barriers
Each of these steps is covered in detail further in this article.
For portfolios with buildings in active BPS jurisdictions, working with experienced professionals can help clarify which requirements apply and where to start. Contact Rimkus to speak with a qualified expert about building performance standard requirements.
What are building performance standards?
Most building codes tell developers and contractors what to do when constructing or renovating a building. BPS policies work differently. They measure how an existing building actually performs over time, using real utility consumption data, and may hold owners accountable for the results.
A building owner who has been diligently reporting energy data for years may still face significant improvement costs if actual performance falls short of the BPS target. Navigating that gap is not always straightforward, and the U.S. Department of Energy (DOE) offers resources for building owners and managers working through these requirements through the Better Buildings Initiative.
BPS programs run on a recurring schedule, with regulators evaluating performance across multiple compliance periods. Energy use patterns, building operations, and reporting practices can remain relevant year after year. For property managers, that ongoing obligation can affect budgeting, capital planning, tenant communications, and the timing of improvement projects.
How BPS affects the bottom line
That ongoing obligation carries real financial consequences. The most visible risk is the fine, but noncompliance can also reduce asset values and may make it harder to attract tenants with sustainability commitments.
Compliance, on the other hand, can work in a property’s favor. Buildings that meet or exceed performance targets tend to carry lower operating costs, which can support stronger net operating income and improve positioning with lenders and investors increasingly focused on sustainability criteria.
On the energy cost side specifically, the DOE’s Better Buildings Initiative mentioned earlier reports that participating organizations have typically seen between 2% or more in energy intensity improvement per year.
Those savings, however, depend on staying ahead of requirements that are scheduled to become more demanding. The exposure compounds over time. Under Local Law 97, carbon limits tighten further in 2030, and several other active jurisdictions have set similarly escalating timelines. Property managers responsible for buildings in multiple cities often face different deadlines, different metrics, and different reporting requirements in each place. Identifying performance gaps early, through condition reviews and benchmarking, can help clarify what improvements may be needed and when.
Not all buildings are equally at risk. A property that narrowly misses its target may have a different path to compliance than one with a large performance gap. Understanding that difference early can help guide where attention and budget may be most effectively directed.
Which buildings are covered
BPS programs primarily target large commercial buildings, though the specific property types subject to requirements vary by jurisdiction. Office buildings, multifamily residential properties, retail centers, mixed-use developments, industrial facilities, and hospitality properties all fall within the scope of active programs. Some jurisdictions also include large healthcare and institutional buildings. Coverage generally begins with the largest properties in a market, with smaller building thresholds phased in over time.
Size is the most common determining factor. According to the U.S. Energy Information Administration (EIA)’s most recent Commercial Buildings Energy Consumption Survey, buildings above 50,000 square feet account for a disproportionate share of total U.S. commercial floor space, and most active programs set their initial thresholds at or near that level. New York City, Boston, Washington, D.C., Colorado, and Washington State each have active programs with varying size cutoffs, and several have phased schedules that will expand coverage to smaller properties in the coming years.
For portfolios that include properties in multiple jurisdictions, tracking which buildings are covered under which program is often the first practical step. Property condition assessments can help property managers identify where specific assets stand relative to applicable targets.
How BPS programs measure performance
Once it is clear which properties are covered, the next question is how each program defines compliance. BPS jurisdictions do not all measure performance the same way. Three metrics are commonly used across active U.S. programs, and the one that applies to a given building depends on where it is located. The choice can significantly affect which improvement strategies may be worth pursuing.
Energy use intensity
Energy use intensity (EUI) measures how much energy a building consumes relative to its size. It is typically calculated as total annual energy use divided by gross floor area, expressed in kBtu per square foot per year. A lower EUI means the building is using less energy per square foot. Washington State and Colorado both use site EUI, which reflects energy consumed at the building itself, as their primary compliance metric.
Greenhouse gas emissions intensity
Greenhouse gas (GHG) emissions intensity measures the carbon output of a building’s energy use relative to its size. Rather than tracking raw energy consumption, it converts that consumption into CO₂e using emissions factors that reflect how the local electricity grid is powered. New York City’s Local Law 97 uses this metric, which is why buildings that run on cleaner electricity may have an advantage under that program compared to buildings in markets with carbon-heavy grids.
ENERGY STAR score
The ENERGY STAR score takes a different approach. Rather than measuring absolute energy or emissions, it ranks a building’s performance on a one-to-100 scale compared to similar buildings across the country. A score of 50 means the building performs at the national median for its type. Washington, D.C. uses the ENERGY STAR score as its primary BPS compliance metric, with target scores that vary by property type.
Because programs use different metrics, two buildings with similar utility bills may face different compliance outcomes depending on where they are located. Knowing which metric applies, and how the building currently performs against it, can form a useful foundation for compliance planning. The qualified energy consulting expertise at Rimkus can help interpret benchmarking results in the context of specific local requirements.
How the compliance process works
Most active BPS programs move through the same general phases, from establishing a performance baseline and identifying gaps to making improvements and filing compliance documentation. The specific requirements at each phase, including deadlines, acceptable pathways, and required forms, vary by jurisdiction.
Benchmarking and target comparison
Most active BPS programs start with benchmarking. Property managers typically enter 12 months of utility data across all fuel types into ENERGY STAR Portfolio Manager, and the platform calculates the relevant performance metric (EUI, GHG intensity, or ENERGY STAR score, depending on the jurisdiction) and compares it against the building’s applicable target.
That comparison happens within a fixed reporting window. Annual reporting deadlines vary: New York City and Washington, D.C. use May 1, Seattle uses June 1, and Boston uses May 15, though these dates are subject to change and should always be confirmed with the applicable program administrator. If the building meets its target, it is generally compliant for the current period. If it does not, the next steps begin.
Energy audits and operational improvements
When a building misses its target, an energy audit is typically the next step. Many jurisdictions reference American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) Standard 211 as a framework for conducting and documenting commercial building energy audits.
Before committing to capital investments, retro-commissioning is often worth considering. Retro-commissioning means testing and fine-tuning a building’s existing systems so they operate as efficiently as possible, without replacing major equipment. It often corrects operational waste at considerably lower cost than a full system upgrade. In New York City, Local Law 87 requires covered buildings to complete both an energy audit and retro-commissioning on a 10-year cycle.
Audits and retro-commissioning also help identify whether underperformance comes from how a building is operated or from equipment that may need replacing. That distinction can affect both the cost and the timeline of the compliance path.
Capital improvements and reporting
Capital improvements are typically the last resort in BPS compliance, deployed when operational changes alone may not be sufficient to close the performance gap. Common projects include heating, ventilation, and air conditioning (HVAC) system replacements, building envelope upgrades, lighting system overhauls, and electrification of gas-fired equipment.
Not every building will pursue all of these projects, and not every program requires them. Many active BPS programs also offer ways to achieve compliance outside of direct performance improvements. Options can include prescribed improvement measures, phased implementation plans, hardship exemptions, and, in some programs, the use of renewable energy credits. Reserve studies can help property managers align capital improvement timelines with available budget and long-term asset planning.
Most capital decisions in BPS compliance are made with multiple reporting cycles in mind, not just the one immediately ahead.
BPS compliance and long-term asset strategy
Building performance standards are not a one-time regulatory hurdle. They reflect a broader shift in how governments are approaching energy use in existing buildings, and requirements in most active programs are generally expected to tighten over time. For most commercial portfolios, the gap between current performance and future requirements may already be meaningful.
For property managers, the practical question is not just whether a building is compliant today but whether it has a clear path forward. Penalties, financing conditions, and tenant expectations are increasingly factoring in BPS performance. Acting early, with a clear understanding of where each asset stands, may leave more options than waiting until a deadline is close.
For organizations ready to take that step, Built Environment Solutions can support compliance planning and capital improvement decisions across portfolio assets. Contact Rimkus to discuss specific requirements.
Frequently asked questions
What role do tenants play in BPS compliance?
Tenants may be asked to share utility data to support benchmarking, and operational improvements often involve coordination with occupants. Their energy consumption patterns can affect a building’s performance metrics.
What incentives are available for building owners who meet or exceed BPS targets?
Some jurisdictions may offer grants, rebates, expedited permits, or fee reductions for buildings that meet or exceed performance targets. Available incentives vary by program and are subject to change.
How do energy codes and building performance standards relate to sustainability goals?
Energy codes generally set baseline efficiency requirements for new construction. Building performance standards generally establish ongoing operational targets for existing buildings, addressing the portion of the built environment that codes alone may not fully reach.
Authored by: Rimkus Built Environment Solutions Marketing Team
Published April 10, 2026.
This article is intended to provide general information and insights into prevailing industry practices. It is not intended to constitute, and should not be relied upon as, legal, technical, or professional advice. The content does not replace consultation with a qualified expert or professional regarding the specific facts and circumstances of any particular matter.