By Elizabeth Gleason
Massachusetts is often regarded as a national leader in the fight against climate change. The state has some of the most rigorous climate laws in the country, such as the Next Generation Roadmap Act passed in 2021, which requires Massachusetts to reduce greenhouse gas emissions by at least 50 percent by 2030. Earlier this year, the Healey-Driscoll Administration unveiled the nation’s first Office of Energy Transformation, tasked with guiding the state’s clean energy transition. The state is also a leader in climate tech, ranking third in the country for number of climate tech startups with 340.
Real estate is often brought into these discussions around climate change policies and initiatives given the industry’s potential to impact greenhouse gas emissions. In Boston, buildings account for approximately 70 percent of greenhouse gas emissions, making the real estate industry a particular focus of the city’s decarbonization efforts.
The below outlines some of Boston’s most recent environmental regulations for real estate and what the IMG Real Estate team is tracking in the industry as the city and state work towards meeting their ambitious climate goals.
Boston’s Building Emissions
Reduction and Disclosure Ordinance (BERDO)
Originally passed in 2013, Boston’s Building Emissions Reduction and Disclosure Ordinance (BERDO) is a local law meant to curb air pollution and greenhouse gas emissions. The ordinance requires building owners to report their total energy and water use, and sets emissions standards for buildings that decrease over time, with all buildings expected to reach net-zero emissions by 2050.
While BERDO has been amended since its initial inception, with the most recent version referred to as “BERDO 2.0,” current regulations apply to residential buildings with 15 or more units, non-residential buildings that are 20,000 square feet or larger, and any tax parcel with multiple buildings that equate to at least 20,000 square feet or 15 units.
BERDO is currently a hot topic in Boston’s real estate industry given that 2025 will be the first year of enforcement for many buildings subject to the ordinance, which includes buildings 35,000 square feet or larger and residential buildings 35 units or more. Buildings between 20,000-34,999 square feet and residential buildings 15-34 units have until 2030, meanwhile.
Many members of the local real estate community have spoken up regarding these deadlines and have expressed concerns that BERDO regulations will increase the cost of development. The costs of not meeting the regulations are steep: building owners who fail to comply with emission standards could face fines of up to $1,000 per day. To avoid these penalties, some developers have chosen to buy energy credits or enter power purchase agreements to offset any gaps in emission standards.
Net-Zero Carbon Zoning Initiative
To support the city’s efforts around BERDO to reach net-zero emissions by 2050, Boston Mayor Michelle Wu introduced a Net Zero Carbon Zoning Initiative this year. The proposal would add a net zero emissions standard for new development projects filed after July 1, 2025 that are at least 20,000 square feet, 15 units or more, or involve additions of at least 50,000 square feet or more to existing structures.
The Boston Planning and Development Agency (BPDA) approved the initiative in June, sending the proposal to the Zoning Commission. While many expected the Zoning Commission to pass the initiative without fanfare, the Zoning Commission ultimately rejected it. At least seven of the 10 commissioners must vote in favor of a proposal for it to pass, and the Net Zero Carbon Zoning Initiative only secured six votes.
This outcome was surprising to many in the real estate community – not only because the BPDA had approved the initiative without debate, but also because it is rare for the Zoning Commission to disagree with the Mayor. However, several commissioners expressed concerns that the cons of the initiative could outweigh the pros, creating additional costs for developers in an already challenging economic environment. Mayor Wu plans to return to the Zoning Commission to address their concerns in an effort to ultimately pass the Net Zero Carbon Zoning Initiative.
Balancing Economic and
Environmental Considerations
Although the city and state are leaders in national efforts to curb greenhouse gas emissions, sentiments around BERDO and Mayor Wu’s Net Zero Carbon Zoning Initiative highlight a desire to balance environmental efforts with economic considerations.
To be sure, the real estate community has voluntarily introduced several design changes with the environment in mind. Passive House, a type of building certification that uses an innovative design for space heating and cooling and significantly reduces a building’s energy use, has been increasingly popular among developers building new properties across Greater Boston. Developers have also worked to retrofit existing buildings through green initiatives like upgrading insulation and transitioning to cleaner energy sources such as solar panels to improve energy efficiency and decrease long-term costs.
Moving forward, policymakers and the real estate community will have to work together to ensure thoughtful implementation of environmental regulations that prioritize the clean energy transition while also recognizing current economic realities and limitations.