California’s Real Estate Energy Compliance FAQs: Why Is It Necessary?

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The number one question that developers ask energy consultants is the following: ‘why do we have to do this?’  We understand this question – from the bottom of our hearts, we get it. The codes are strict. The penalties are severe. It can be overkilled in some places. However, and in the simplest form, the reason you have to do it is because you have to. If you don’t, you won’t get your Certificate of Occupancy.

So that we don’t sound like a scolding parent trying to end a discussion with “because that’s just how it is,” we have decided to extrapolate on this answer with this post. Here, we will discuss the reasons behind the necessity to follow these steps carefully, as well as certain tips that developers can take with them during the process.

This is the second post in our ongoing series on frequently asked questions about energy compliance in development projects throughout California. In this series, we cover the three most frequently asked questions in development projects and our answers to each. If you have found this post of use, you may want to check out the rest of this series.

Follow the links:

Part 1 ‒ The Top 3 FAQs About Energy Compliance in California’s Development Projects

Part 2 ‒ California’s Real Estate Energy Compliance FAQs: Why Is It Necessary?

Part 3 ‒ California’s Real Estate Energy Compliance FAQs: The Steps to Compliance

Part 4 ‒ California’s Real Estate Energy Compliance FAQs: How Much Does Compliance Cost?

Part 5 ‒ The Risks of Not Passing California’s Real Estate Energy Codes



The reasoning behind

As to not stay too long on the obvious, the reasoning behind these codes is to hopefully create a more sustainable society by reducing energy wasting in real estate projects. The outcome tends to be a more expensive initial investment in order to reach a fairly similar bottom line to non-sustainable projects, but it does not necessarily have to be so.

Sustainability is a growing trend across America, and taking advantage of the direction that the code is pushing on development projects could mean leveraging investments out of an energy compliance money pit and into a long-term growth opportunity. 


Product quality

Increasing the sustainability of a product is adding value to the property for all parties involved. To the tenant, adding efficient features means a space that offers a higher quality of living. To the property owner, adding energy efficient features means that the maintenance costs, the usage fees, and the lifecycle of the systems are all improved for the better. In addition to this, a higher rate of tenant satisfaction means a greater lifetime value from the tenant, as the retention rate, rate of occupancy, and appreciation of rent are all increased.

For the development organization, this means that the property is leveraging quality for value. The investment does not necessarily have to take away from the budget, but instead it can shift the economic model to create an optimized yield.


Brand enhancement

Sustainability can be leveraged to increase a development organization’s brand and drive better project opportunities in the long run. A development project is a developer’s most prominent brand communication channel, and by increasing the quality of the product through sustainable practices, the developer can express their own quality as an enterprise to all of the related brand publics.

Please join us in our next article concerning the second most asked question we get as energy consultants.

Next –> California’s Real Estate Energy Compliance FAQs: The Steps to Compliance

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