This story was originally published in Multifamily Executive.

The city of New York has approved a new bill (Intro. 1632A, authored by council member Dan Garodnick) that will make the city the first in the country to require buildings over 25,000 square feet to post their energy-efficiency scores, and associated grades, near their public entrances.

Similar to the way health codes in restaurants work, buildings will be assigned a letter grade based on their energy performance and score, and landlords will be required to post that grade, along with the energy score, at the building's entrance where it's visible to tenants and visitors.

Since 2016, the city has required large commercial and residential buildings over 25,000 square feet to be benchmarked, an annual process in which the buildings measure their energy and water consumption. Building owners are required to report energy-performance data to the city, which then publishes the information online, but until Intro. 1632A, owners had not been required to present the information to prospective tenants or buyers.

Currently, buildings contribute nearly 70% of greenhouse gas emissions in New York City and roughly 19% of energy-related carbon emissions in the United States. Buildings that annually benchmark energy usage have already demonstrated 8% emissions decreases, according to research from the city.

The New York initiative will hopefully help consumers make more informed decisions about their housing choices by taking the energy efficiency of a building into account. Landlords and building owners will also be encouraged to make energy upgrades to achieve higher scores and attract environmentally conscious tenants.

Buyers and renters might be willing to pay a premium for more energy-efficient spaces. According to a 2015 report by the Danish Energy Agency, each letter grade improvement in energy efficiency corresponds to a statistically significant increase in sales prices for homes.

"These grades will showcase energy-efficient buildings, which are not only better for the environment, but are better for New Yorkers’ wallets,” said Donna De Costanzo, director of Northeast Energy and Sustainable Communities at the Natural Resources Defense Council, in a statement. “In addition to cutting climate pollution from the city’s largest source, prospective renters and buyers will now be able to more easily incorporate building energy costs into their decisions.”

This story was originally published in Multifamily Executive.