Overturning of Chevron Deference
On June 28, the Supreme Court overturned the Chevron Deference, dramatically limiting the federal government’s ability to implement climate regulation. This change has driven a lot of questions around how this decision impacts things like Building Performance Standards (BPS), and other regulations for the Multifamily industry.
The Chevron rule dates to 1984, when the Supreme Court ruled that if a law is ambiguously worded, the specific government agency in charge of conducting that law would be responsible for interpretation. The Chevron Deference gave federal bodies broad authority to interpret and enforce environmental laws, enabling groundwork legislation such as the EPA power plant rule and the Inflation Reduction Act.
The Court’s latest decision limits the authority of those Federal Agencies, and further specifies that lower courts are the proper venue to interpret those laws.
What does this ruling mean for multifamily operators with respect to Building Performance Standards (“BPS”) requirements? What does this ruling mean for your ability to access funds available through the Inflation Reduction Act (“IRA”)? Turns out not, there is not much that will change for our industry.
The important thing to remember is that BPS requirements are set at the local level, think City, County and State. This means that neither Federal Agencies nor Congress engage if a BPS requirement is vague or onerous. In fact in a webinar: Hacking the Code: Building Performance Standard Integration and Implementation hosted by the Department of Energy Better Buildings June 11, 2024 prior to the overturn of Chevron Deference the question was asked if there would ever be a Federal standard to make things easier and the response was it was highly improbable as the EPA and the DOE did not have that authority and would need to defer to local jurisdictions.
Analysts have been studying the impact that the recent court ruling will have on the IRA and the indicators suggest that it is unlikely, albeit somewhat improbable, that there will be change. It turns out that States and local municipalities are already participating in these programs. As such there is no way to dismantle this program even if there is a desire to. It is suggested that if the IRA were to be dismantled it would take at least ten years to do so as there are commitments in place regarding these funds that span into the future.
BPS will not become easier, and it is now more important than ever to be able to apply funding sources to our properties. The overturn will not impact our corporate ESG Goals or those of our European investment funds. The Chevron Deference will not affect our sustainability and compliance requirements. We will not get help with our challenges at the federal level; we will need to look to solutions like GreenT Climate Software to help target our goals, understand our regulator risks, create capital expenditure schedules, and find the funding sources to assist us.
GreenT Climate Software provides a streamlined solution to help you stay current on compliance requirements and manage risk. For more information, please contact us.
