City Policy Is Driving Building Transformation. City Climate & Resilience Policy Tracker

Research paper by JLL (2025) | Policy, Insurance, Standards, Social Impact

Curator: Michael Zuriff

Washington DC, USA

This post is accessible to all readers.

Why we recommend it: This publication provides real estate leaders with clear insight into how accelerating climate regulation is reshaping risk and value. It highlights where policy is tightening, how performance standards and electrification mandates affect assets, and why early investment in retrofits, resilience, and low-carbon strategies strengthens compliance, protects valuations, and positions portfolios for long-term competitiveness.

JLL’s city climate and resilience policy tracker is a multi‑year research project designed to help investors and occupiers navigate increasingly complex city‑level climate regulation and its impact on real estate. It builds on JLL’s 2022 study of 35 cities and now covers 75 global markets, providing a more comprehensive view of how regulation is reshaping risk, value, and capital allocation. The tracker has three core aims: to profile and benchmark cities’ climate commitments, regulatory frameworks, and delivery mechanisms; to identify leading practices on retrofitting, electrification, and resilience; and to translate emerging regulation into actionable investment intelligence so stakeholders can future‑proof portfolios, manage transition risk, and capture value from low‑carbon transformation. By categorizing the identified cities by stages of implementation, from Emerging Implementors such as Dallas and Rome to Global Accelerators such as New York and Paris, real estate leaders are able to easily understand the opportunities in each market.

Key takeaways:

- This document provides a comprehensive, multi‑year view of how rapidly evolving climate regulation is reshaping real estate risk, value, and capital flows. Designed to guide investors and occupiers through increasingly complex city‑level requirements, the project benchmarks climate commitments, regulatory frameworks, and delivery mechanisms while highlighting leading practices in retrofitting, electrification, and resilience. Its purpose is to translate emerging policy into actionable intelligence so stakeholders can future‑proof assets, manage transition risk, and position portfolios to benefit from the low‑carbon shift.

- Since 2022, global policy has moved decisively from target setting to implementation. Although regulation still trails climate science, cities are accelerating action, particularly around buildings, which account for roughly 60% of urban emissions. JLL’s analysis shows that 82% of global commercial real estate investment over the past decade has flowed into markets with net‑zero‑by‑2050 commitments, demonstrating the extent to which capital is now exposed to regulatory pathways. Leading cities such as New York, Seattle, London, Oslo, Paris, and Sydney are translating policy maturity into market transformation through mandatory performance standards, integration of energy transition goals into planning systems, and more explicit responses to physical climate risks.

- Across the 75‑city sample, 41% now reference enforceable building performance standards, a sharp increase from 2022. These frameworks impose tightening thresholds for energy use or carbon intensity and apply escalating penalties for non‑compliance, making regulatory exposure a material financial risk that directly influences underwriting and asset valuation. New York City’s Local Law 97 exemplifies this shift, capping emissions for more than 23,000 buildings. While most covered assets have begun compliance efforts, JLL estimates that up to 81% could still face penalties by 2030 without significant upgrades. Europe’s revised Energy Performance of Buildings Directive introduces minimum performance standards requiring renovation of the worst‑performing commercial stock by 2030 and 2033, reflecting the urgency created by an aging, inefficient building base. Tokyo’s Cap and Trade Program continues to raise ambition, supported by a digital carbon trading platform that expands market participation.

- Cities are also advancing embodied carbon regulation, with London, Vancouver, Amsterdam, and California adopting whole‑life carbon assessments, intensity caps, and material‑focused pathways that influence design and construction choices. Parallel efforts link building policy to the broader energy transition through electrification mandates, fossil‑fuel phase‑outs, and rooftop solar requirements, supported by regional renewable energy strategies and procurement models.

- Resilience is emerging as a defining differentiator. More than 60% of tracked cities now reference adaptation strategies, with jurisdictions such as Miami Beach and Paris moving from planning to implementation of flood, heat, and elevation measures. As insurers and lenders increasingly price physical climate risk, cities that embed resilience into regulation will better safeguard infrastructure and maintain investment attractiveness.

- For real estate leaders, the tracker underscores a decisive shift: climate policy is now centered on enforceable delivery. Competitive advantage will depend on navigating multi‑layered regulation, aligning assets with tightening performance standards, accelerating electrification, and investing early in resilience and embodied‑carbon solutions to secure compliance and long‑term value.

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