Commercial property owners in Chicago, many of whom are already grappling with soaring office vacancies and high interest rates, are being pushed to take on another burden. However, it would be a short-term financial hit aimed at solving a much larger issue: climate change.
A recent report from the Urban Land Institute Chicago called on city officials to implement measures that would curb greenhouse gas emissions from buildings, the Chicago Tribune reported.
The report proposes that the city should emulate New York’s approach by setting emissions limits on specific buildings, with these limits progressively becoming stricter over time.
“This one’s hard for me, because this is going to be a cost for building owners, but it’s an essential element of getting toward net zero (emissions),” Mary Ludgin, a senior adviser at Chicago-based real estate investment management firm Heitman, told the newspaper.
The report highlights the financial constraints faced by commercial property owners and advocates for realistic timelines alongside any new emission-reduction targets for existing buildings. In addition, it emphasizes the need for robust technical and financial assistance programs to support building owners and developers in this transition.
These recommendations are part of a comprehensive report involving input from 50 stakeholders representing various sectors of the real estate industry. Among the proposed measures are the expansion of energy-usage reporting requirements for Chicago buildings, the introduction of carbon emission reporting and the establishment of a well-funded city department of environment.
Jared Policicchio, Chicago’s deputy chief sustainability officer, stressed that buildings account for 70 percent of greenhouse gas emissions in the city. He also mentioned ongoing discussions within the Chicago City Council regarding the Clean and Affordable Buildings Act, which aims to restrict natural gas use in most new buildings.
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While the report did not specify the buildings subject to emissions limits, it noted the potential challenges, including the financial burden and disruptions when implementing energy-efficient upgrades. However, it also highlighted success stories such as the Chicago Mercantile Exchange, which achieved substantial energy savings through efficient upgrades, the outlet reported.
At a launch event attended by approximately 90 people, Ludgin highlighted the favorable landscape for accessing government funding for such upgrades, including grants provided through the 2022 Inflation Reduction Act.
—Quinn Donoghue