Climate & Health Standards

Buildings are one of Portland's largest sources of carbon emissions. In fact, buildings are the largest source of emissions (42%) according to the most recent carbon emissions inventory (2023). Many older multifamily buildings also expose tenants to:

• Poor indoor air quality
• Fossil fuel pollution
• Inconsistent hot water
• High energy costs

Lower-income renters and environmental justice communities are disproportionately impacted because they are more likely to live in older and less efficient housing (which tends to be more affordable) with limited cooling and ventilation.

The policy is intended to address both climate pollution and health inequities.

Portland already requires large commercial buildings to report energy use and carbon emissions annually through the Commercial Building Energy Reporting Program but does not require improvements to meet the City's climate goals. Although the State is also implementing building energy standards for large commercial buildings, these standards are anticipated to reduce carbon emissions from Portland's buildings by less than 5 percent. This policy improves significantly on the foundation set by previous policy and delivers greater carbon emissions and environmental pollution reductions by:

• Establishing strong emissions reduction standards, including the largest multifamily buildings
• Adding tenant protections and anti-displacement measures
• Creating enforcement mechanisms and accountability standards
• Connecting climate goals with public health and housing stability

Yes! Commercial and multifamily building energy benchmarking and reporting requirements are already working in 50 cities nation-wide, like Minneapolis, Chicago, and Austin.

Building carbon performance standards for existing buildings are already implemented in cities like Seattle, New York City, Boston, and Montgomery County, Maryland.

Portland isn't doing anything "new" with this policy – we're catching up to best practices in other jurisdictions.

No, the State passed energy efficiency standards for large commercial buildings, while the City's C&HS proposes carbon performance standards for both commercial and multifamily buildings.

Although Oregon's standards will improve energy performance for some commercial buildings in Portland, the State's policy will not make the significant emissions reductions we need to address climate change.

The State's policy will only reduce Portland carbon emissions by 1%, assuming full compliance. The C&HS puts us on the path to reduce emissions from large commercial and multifamily buildings by 20% every 5 years until zero by 2050 – that's a reduction of ~16% of Portland's total carbon emissions.

That's because City's C&HS policy and State's Building Performance Standard do not share the same goals:

• State - Bring poor performing commercial buildings up to average energy performance by 2030
• City - Reduce commercial and multifamily building carbon emissions 100% by 2050

There are key technical differences between the two:

• The State does not cover industrial or agricultural buildings. The City would not cover those buildings, as well as places of worship, regulated affordable housing, schools, and warehouses.
• The State's Building Performance Standards requires covered commercial buildings that are 35,000 square feet and larger to meet an average energy target based on each building's use and type. For smaller commercial buildings and residential apartments that are 20,000 square feet and larger, the State only requires one-time energy benchmarking and reporting in 2028.
• The City's carbon performance standards will apply to multifamily and commercial buildings that are 20,000 square feet and larger. Each covered building would establish a baseline performance year. The first standard would require a 20 percent reduction in emissions by 2030 relative to its baseline. Subsequent standards would require reducing emissions another 20 percent every five years until zero by 2050. Compliance would be demonstrated through annual reporting of energy use and emissions data to the City.

The Climate & Health Standards for Existing Buildings to generally apply to:

• Large commercial buildings
• Multifamily residential buildings with four or more dwelling units
• Buildings 20,000 square feet or larger

Some building types are excluded, including:

• Industrial facilities
• Warehouses
• Parking structures
• Primary and secondary schools
• Worship facilities

Additional exemptions may apply under limited circumstances, such as regulated affordable housing buildings.

Building carbon performance standards establish measurable emissions reduction targets for buildings over time.

Under this policy, covered buildings would be required to reduce greenhouse gas emissions through phased interim targets leading to zero carbon emissions by 2050.

More specifically:

• Each covered building would annually report energy use and emissions data which would be used to establish a baseline performance year.
• The first interim standard would begin with a 20 percent reduction in emissions by 2030 relative to the baseline performance year.
• Subsequent interim standards would reduce emissions another 20 percent every 5 years until zero emission by 2050.

The intent is to create clear and measurable standards while giving building owners time to plan for upgrades and improvements

The policy uses Greenhouse Gas Intensity (GHGI), which measures building emissions relative to building size.

GHGI calculations are based on:

• Electricity use
• Electricity emissions factor
• Fossil fuel use
• Floor area
  
  City staff already receive reports on emissions from large commercial building owners using a free, web-based tool developed by the U.S. Environmental Protection Agency and have experience running a similar program to the one proposed under this policy update. In addition, the City currently provides an Energy Reporting Help Desk to assist building managers and owners with compliance.

The policy gives some flexibility through:

• Extensions
• Exemptions
• Alternate Compliance Plans for hospitals and institutions with campus energy systems

These pathways are intended only for legitimate technical, operational, or structural constraints and are not intended to create broad loopholes or permanent avoidance of compliance.

The policy includes a carbon pollution impact fee in lieu of a covered building achieving its carbon performance standards

The fee is intended to:

• Deter noncompliance
• Support building retrofit assistance and implementation efforts

The policy is designed so building retrofits are a preferable to simply paying the fee for compliance, making sure that the City advances our climate goals.

The policy includes strong anti-displacement protections intended to ensure climate upgrades do not become a pathway for eviction or housing instability.

Protections include:

• Tenant relocation requirements
• Right to return to the same unit
• Temporary housing requirements
• Transportation assistance
• Moving and storage assistance
• Tenant impact planning
• Restrictions on residential cost pass-through

The policy prohibits costs associated with compliance — including retrofit costs and carbon pollution impact fees — from being directly passed through to residential tenants.

If temporary relocation is necessary, multifamily residential building owners may be required to provide:

• Temporary housing
• Relocation assistance
• Transportation support
• Moving and storage assistance
• Right to return protections

The policy also requires tenant impact plans for projects involving temporary relocation. That doesn't mean tenant relocation is necessary in most situations. Through previous stakeholder engagement, the City determined that building upgrades should be possible without relocation of residential tenants.

The policy includes anti-displacement protections and restrictions on residential cost pass-through to reduce the risk of climate compliance costs being shifted directly onto tenants. Most tenants would also benefit from lower utility bills resulting from more energy efficient building upgrades

The City also intends to support implementation through financial assistance and phased carbon performance standard compliance timelines from 2030 to 2050.

This policy applies to the largest existing commercial and multifamily buildings. New construction is already held to strong energy efficiency standards, including a state requirement that new homes be built with energy-efficient heat pumps instead of ducted air conditioning. 

The energy use reporting policy is already implemented and successfully working in cities like Minneapolis, Chicago, Austin, and the state of Maine. 

Additionally, the City recently completed a year-long pilot project concluding that annual benchmarking and reporting requirements weren't burdensome for landlords. The pilot included five multifamily residential buildings of varying sizes across the city to better understand the impacts of energy benchmarking and reporting requirements on property managers.

The pilot found that property managers spent approximately 3 to 9 hours per building in the first year of establishing energy benchmarking and reporting systems, and less than 2 hours annually thereafter to maintain compliance.

Based on the pilot results and Portland's experience administering the Commercial Building Energy Reporting Program since 2015, the City does not expect these reporting requirements to require additional staffing, increase rents, or require communication with tenants to collect energy data.