The 2026 Compliance Cliff: Is Your Building Ready?

The 2026 Compliance Cliff: Is Your Building Ready?

If you manage commercial or multifamily buildings in major U.S. cities, the next six months will determine whether you face smooth compliance or costly penalties. Between May and June 2026, some of the nation’s most aggressive Building Performance Standards (BPS) hit their first major deadlines—and property owners who aren’t prepared could be looking at penalties ranging from hundreds to hundreds of thousands of dollars annually. 

This isn’t theoretical. New York City’s Local Law 97 has already begun assessing penalties of up to $268 per ton of carbon emissions for buildings that exceed their caps. And NYC is just the beginning. 

The May-June Convergence

Four of the nation’s largest real estate markets have benchmarking and performance deadlines concentrated in a six-week window: 

May 1, 2026 

• New York City: Annual reporting under Local Law 97 for buildings over 25,000 sq ft (grace period until June 30) 

• Washington, DC: BEPS compliance verification and benchmarking reports 

May 15, 2026 

• Boston: BERDO emissions reporting for buildings over 20,000 sq ft (some requirements at 35,000 sq ft) 

June 1, 2026 

• Chicago: Energy benchmarking for properties 50,000+ sq ft 

• Los Angeles: EBEWE benchmarking for buildings over 20,000 sq ft 

• California (statewide): AB 802 benchmarking for buildings over 50,000 sq ft 

• Washington State: Initial compliance for buildings over 20,000 sq ft 

• Colorado: First reporting cycle (interim performance requirement waived) 

If your portfolio spans multiple cities, you’re likely managing overlapping compliance obligations with different metrics, different reporting platforms, and different enforcement —all due within weeks of each other. 

What’s at Stake: Understanding Enforcement

New York City: The High-Water Mark 

Local Law 97 sets the bar with penalties up to $268 per ton of CO₂ equivalent over your building’s emissions limit. For a 200,000 square foot office building running 15% over its energy use intensity target, that translates to tens of thousands of dollars in annual penalties—compounding every year until the building reaches compliance. 

The law requires covered buildings to achieve: 

• 40% emissions reduction by 2030 

• 80% reduction by 2050 

• Net zero by 2050 

Boston: Tightening Standards 

BERDO (Building Emissions Reduction & Disclosure Ordinance) takes a ratcheting approach. Standards tighten over time, meaning a building in compliance today might not be in 2028 without improvements. Noncompliance is enforceable and reportable. 

Washington, DC: Performance or Improvement 

DC’s Building Energy Performance Standards require buildings to either: 

• Meet the median ENERGY STAR® score for their building type, OR 

• Reduce energy use by 20% 

Buildings that fail to meet standards face penalties, though DC has shown some flexibility for buildings demonstrating good-faith improvement efforts. 

Other Cities: Enforcement Ramping Up 

Chicago, Los Angeles, and California’s statewide program are currently in benchmarking-and-transparency phases, but historical patterns show these programs evolve quickly from reporting requirements to performance standards with financial teeth. 

Three Compliance Pathways

Property owners generally have three options for reaching compliance: 

1. Operational Optimization (Fastest, Lowest Cost)

For most buildings, simple operational changes can cut energy costs 10-20% within the first year. Common wins include: 

• Fixing demand spikes through load scheduling 

• Correcting schedule drift in HVAC systems 

• Optimizing building management system setpoints 

• Implementing real-time energy monitoring to catch waste 

These fixes often require minimal capital investment and can move buildings significantly closer to compliance with thresholds. 

2. Capital Improvements (Medium Term)

Buildings that can’t reach compliance through operations alone typically need: 

• HVAC system upgrades or replacements 

• Building envelope improvements (windows, insulation, air sealing) 

• Lighting retrofits to LED 

• Controls and automation upgrades 

Timeline: 12-36 months, depending on scope and project financing. 

3. Renewable Energy Credits or Offsets (Supplemental)

Some jurisdictions allow buildings to purchase renewable energy credits (RECs) or carbon offsets to supplement on-site improvements. However, most programs require substantial on-site reductions first—offsets typically can’t be used to meet 100% of requirements. 

The Multi-Jurisdiction Challenge

Property owners with portfolios across multiple cities face a coordination challenge: 

Different Metrics 

• NYC uses carbon intensity (tons CO₂e per sq ft) 

• Washington State uses site EUI (energy use intensity in kBtu per sq ft) 

• DC uses ENERGY STAR scores or 20% reduction benchmarks 

• Boston uses emissions reporting with building-specific targets 

Different Platforms 

• Most jurisdictions require EPA’s ENERGY STAR Portfolio Manager 

• NYC has additional reporting through its Department of Buildings portal 

• State programs may have separate submission systems 

Different Timelines 

Compliance cycles don’t align, meaning year-round attention to building performance rather than a single annual sprint. 

What to Do in the Next 90 Days

If you’re approaching any 2026 deadline: 

Immediate (Next 30 Days) 

1. Inventory your obligations – List every property, its square footage, and which ordinances apply 

1. Check your baseline data – Ensure you have 12 months of utility data uploaded to Portfolio Manager 

1. Run preliminary calculations – Understand where each building stands relative to its target 

1. Identify high-risk properties – Focus attention on buildings furthest from compliance 

Short-Term (30-60 Days) 

1. Conduct energy audits on high-risk properties to identify operational fixes 

1. Implement quick wins – Schedule optimization, setpoint adjustments, demand reduction 

1. Begin capital planning for buildings that need major improvements 

1. Engage specialists if needed (energy engineers, commissioning agents, compliance consultants) 

Medium-Term (60-90 Days) 

1. Execute operational improvements and verify results through monitoring 

1. Finalize compliance reports for May/June deadlines 

1. Submit on time – Late submissions often trigger automatic penalties 

1. Document everything – Many jurisdictions offer relief for good-faith efforts and documented progress 

Looking Beyond 2026

2026 is just the beginning. Key upcoming milestones include: 

2027-2029: Additional cities implementing first-time requirements 

• Cambridge, MA 

• Denver, CO 

• Evanston, IL 

• Montgomery County, MD 

• Newton, MA 

• Oregon (statewide) 

2030: Major tightening of existing standards 

• NYC’s 40% reduction target goes into effect 

• Many cities implementing second-phase performance standards 

2031 and Beyond: Seattle’s Building Emissions Performance Standards kick in 

The National BPS Coalition now includes 30+ cities committed to adopting building performance standards. If you don’t have exposure today, you likely will within the next 24 months. 

The Bottom Line 

The 2026 compliance cliff is real, but it’s not insurmountable. Property owners who act now have multiple pathways to compliance. Those who wait until deadlines approach will face compressed timelines, higher costs, and limited options. 

The buildings that perform best aren’t necessarily the newest—they’re the ones with owners who understand their data, optimize operations continuously, and plan capital improvements strategically. 

The question isn’t whether building performance standards are coming. They’re here. The question is whether your buildings are ready.