Propmodo Daily

By Franco Faraudo · Apr. 15, 2024

Greetings!

The European Union already had some of the most aggressive regulations when it comes to building efficiency. But on Friday, they released an update to their rules that will require even more redevelopment to comply. In today’s email, we look at the specifications of the revised directive and what it could mean for the countries required to comply with it.

Also, the pandemic saw a surge of companies moving their headquarters from California to Texas for cost savings and a pro-business climate. This trend has cooled recently due to economic challenges and Silicon Valley’s burgeoning AI industry, but will that be enough to help California and New York retain their status as America's business hubs? In a new article, we take a closer look at the wave of corporate HQ relocations.

This week in Propmodo Technology, sponsored by Builders Patch, we're tackling multifamily development. Learn how sustainable trends like passive house and 3D printing are changing construction. Discover AI's impact on development finance, and explore the viability of franchise models within modular housing.

Now, let's dig in!

How the EU Plans to “Phase Out” Inefficient Buildings

The European Union already had some of the most stringent requirements when it comes to sustainable and energy-efficient buildings. On Friday, they upped the bar even further. Under the new revised directive, the EU Council has moved up the timeline for when they expect buildings to be emission-free: “Under the new rules, by 2030 all new buildings should be zero-emission buildings, and by 2050 the EU’s building stock should be transformed into zero-emission building stock.”

There were also some important requirements for residential buildings that will affect not only the way buildings are built but also how residents use energy in their homes: “Member states will also make sure that the average primary energy use of residential buildings will be reduced by 16 percent in 2030 and by 20-22 percent in 2035.”

The Council admitted that getting to this lofty goal in time will not be easy. “Almost 75 percent of that building stock is inefficient according to current building standards,” the directive said. Adding, “However, the weighted annual energy renovation rate is persistently low at around 1 percent. At the current pace, the decarbonization of the building sector would require centuries.”

EU countries are advised to do whatever they can to coerce their populations into making these changes, leaving the possibility of fines on the table. “Member States shall deploy pre-emptive and reactive measures to ensure the quality of the overall energy performance certificate framework. Those measures may include additional training for independent experts, targeted sampling, obligation to re-submit energy performance certificates, proportional fines, and temporary or permanent bans for experts,” the legislation reads.

To make sure that states will actually abide by these rules the EU requires random sampling of buildings to “ensure at least 90 percent of valid issued energy performance certificates with a statistical confidence of 95 percent for the evaluated period, which shall not exceed one year.”

There are lots of other regulations packed into the 118-page document, including adding one EV charging station for every five parking spaces and mandatory bike parking. These regulations will hopefully help the EU reach its sustainability goals, but in the meantime, they will create a significant cost burden for property owners. Richer countries will likely create incentives and agencies to help support the transition. Those with fewer resources will have to find ways to support the transition to lower-emission buildings, or else they will risk being brought in front of the Court of Justice, which can issue penalties or even threaten a country’s membership status.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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