If you own commercial property in any of these 10 cities/states, your building may be subject to carbon emissions limits with real financial penalties:

NYC (Local Law 97), $268/metric ton over the limit, active since 2024. Boston (BERDO), daily fines for non-compliance. Washington DC (BEPS), performance standards for buildings over 10,000 sq ft. Plus Washington State, Denver, Oregon, Philadelphia, Montgomery

County MD, Chicago, and LA.

These are called Building Performance Standards (BPS). They set emissions caps based on your building type and size. Go over the cap, you pay penalties. The limits get stricter over time.

What catches most investors off guard:

1. The thresholds are lower than you think. In most jurisdictions, buildings over 20,000-25,000 sq ft are covered. That's not just skyscrapers. That's your average office building or mid-size multifamily.

2. The compliance periods have already started. NYC's first period began in 2024. If you bought a building last year without checking this, you may already be accumulating penalty exposure.

3. Due diligence should include this. A building that's 200 tons over its NYC limit is looking at $53,600/year in penalties, and that's the easy period. Limits tighten significantly in 2030.

4. It affects valuation. A non-compliant building needs capital improvements to get compliant. That's a negotiation point on acquisition and a liability on the balance sheet.

If anyone has questions about a specific jurisdiction, happy to dig into the details.