As fines for non-compliance accrue across major US cities, the real challenge for building owners is bridging the gap between outdated systems and the verifiable data modern regulation demands.
The building performance compliance window that owners spent years treating as a moving target has stopped moving.
Now, in 2026, across more than 40 US cities, property owners who take a “wait and see” approach are now very much a sitting duck.
In Boston, Building Emissions Reduction and Disclosure Ordinance (BERDO 2.0) imposes fines of $1,000 per day on non-compliant buildings, while New York City's Local Law 97 charges $268 per metric ton of excess CO2—a figure brought into sharp focus by the city’s estimated 63% of building stock thought to be at risk of exposure.
Elsewhere, compliance reporting cycles are concluding or reaching full swing. In Washington D.C., the city’s first Building Energy Performance Standards (BEPS) cycle could see penalties reach as much as $1 million for large properties that breach targets. California's updated 2025 Energy Code is in full effect, setting aggressive efficiency floors that apply at every level of the building stack.
These are not projections, but line items. And for those who assumed that regulatory complexity would buy them more time, the price of doing nothing could prove to be the most expensive misstep they make as a building owner.
Compliance pressure is real, but the deeper issue is structural: most buildings are not performing the way they were designed to, and the gap between design intent and actual operational output is where emissions accumulate and penalties accrue.
The World Economic Forum estimates that over 80% of the buildings that will exist in 2050 are already standing today. That means the decarbonization challenge will still exist well after the embodied carbon cost of a building has been paid, and through the entire life cycle of the asset.
A building’s systems, then, play a critical part in enabling owners and operators to rise to the challenge. But with patchwork frameworks of systems, varying quality of tech, and aging equipment all to be factored into the equation, the question must be asked whether most buildings today are capable of meeting these performance standards today, and indeed the future—not when they were commissioned.
In my experience, the answer is usually no—and not because the equipment is inadequate. It's because the data layer that sits between the physical plant and the people responsible for managing performance is fragmented, inconsistently labelled, and often invisible in any usable form.
An HVAC system that doesn't communicate with the metering infrastructure, or a building management system (BMS) that surfaces data without context, cannot produce the kind of evidence-based operational decisions that compliance now demands.
Regulations like Local Law 97 and BERDO 2.0 are more than just a set of emissions targets—they require building owners to demonstrate, with verifiable data, that their properties are performing within defined parameters. That creates a documentation obligation alongside an operational one.
Three things determine whether a building can meet that obligation:
This is the difference between a building that has been optimized once and a building that is informed, connected, and flexible enough to stay optimized as conditions change.
The instinct, when a building is out of compliance, is to replace: new BMS, new controls platform, new metering infrastructure. In some cases, that's the right call. But in most cases it isn't, and the cost and disruption of a rip-and-replace project creates its own compliance risk—including the gap between decommissioning the old system and commissioning the new one.
Most buildings already have the physical assets needed to reach compliance. What they lack is the connective tissue: the data infrastructure that makes those assets legible, interoperable, and manageable at the operational layer.
Addressing that problem—properly diagnosing what's in the building, naming the data correctly, and connecting systems that were never designed to talk to each other—is a faster and more durable path to compliance than replacement.
It also produces a materially different outcome. A building whose systems have been properly connected and whose data layer has been built on a clear, consistent model becomes far more capable of maintaining it, because the operational picture is always current based on a to-the-minute evidence trail.
There is a version of this argument that building owners have heard before, framed as future risk: "Regulations are coming. Start planning." This is long gone. As mentioned, BERDO 2.0 fines are running now, while Local Law 97 penalties are accruing now. Operators in D.C. could face a rude awakening once the cycle closes.
For owners of covered properties in these jurisdictions, the question is now about how they absorb that cost as ongoing fines—passive, compounding, and producing nothing—or as a targeted investment in building performance that eliminates the penalty exposure.
The buildings that get there fastest are the ones that already know what they have, connect it properly, and build in the capacity to adapt. And that work can start immediately, with the systems already in the building.
Shayne Taker is a Director at OTI (Operational Technology Integrators), a North American master systems integrator specializing in connecting building technologies across HVAC, lighting, metering, and energy management. Shayne works with commercial real estate owners and operators to develop integration strategies that deliver measurable carbon reductions, cost savings, and verifiable ESG performance.
