Oregon Building Performance Standard: HB 3409 Compliance Guide for Building Owners

Oregon just became the first state in the country to adopt a statewide building performance standard. If you own or manage a commercial or multifamily building over 20,000 square feet anywhere in Oregon, HB 3409 applies to you.

Compliance deadlines start rolling out between 2028 and 2030, but the Oregon Department of Energy is already sending letters to covered buildings. And the state's ECAPP incentive program (the money that helps you pay for upgrades) opens for applications in 2026. If you're waiting until 2028 to think about this, you're already late.

What Is HB 3409?

House Bill 3409 passed in 2021 and established Oregon's statewide Building Performance Standard (BPS). The law requires large buildings to meet energy performance targets or face escalating compliance costs.

Unlike city-level programs in places like NYC or Boston, this is a statewide mandate. It doesn't matter if you're in Portland, Eugene, Bend, or a rural county. If your building meets the size threshold, you're covered.

The program is administered by the Oregon Department of Energy (ODOE). They're setting the compliance pathways, tracking performance, and overseeing enforcement. This isn't a local ordinance with spotty enforcement. It's a state program with teeth.

Who's Covered?

HB 3409 applies to commercial and multifamily buildings in two tiers:

• Tier 1: Buildings 35,000 square feet and larger
• Tier 2: Buildings 20,000 to 34,999 square feet

The square footage is based on total gross floor area. If you've got multiple buildings on a single campus or parcel, the state may aggregate them. Check with ODOE if you're near the threshold with adjacent structures.

What Building Types Are Included?

Pretty much everything:

• Office buildings
• Multifamily residential (4+ units)
• Retail centers
• Hotels and hospitality
• Warehouses and distribution centers
• Mixed-use properties

The only major exemptions are single-family homes, industrial manufacturing facilities, and buildings owned by certain public entities. If you own a typical commercial or apartment building, assume you're in.

Compliance Deadlines

Here's the timeline that matters:

Tier 1 Buildings (≥35,000 sqft)

• First compliance period: 2028
• Second compliance period: 2033

Tier 2 Buildings (20,000-34,999 sqft)

• First compliance period: 2030
• Second compliance period: 2035

If you're a Tier 1 building owner, 2028 is two years away. That sounds like a lot of time until you factor in energy audits, capital planning, contractor lead times, permitting, and actual construction. Two years disappears fast.

How Compliance Actually Works

Oregon's BPS gives you options. You're not locked into one specific path. But every path requires action. You can't just ignore the law and hope for the best.

Option 1: Meet the Energy Use Intensity (EUI) Target

Every building type has a target Energy Use Intensity (EUI) measured in kBTU per square foot per year. If your building's actual EUI is at or below the target, you're compliant. Done.

ODOE publishes the specific targets for each building type. They're based on median performance in the state, so roughly half of existing buildings are already compliant and half need to improve.

To find your building's EUI, you'll need to benchmark your energy use in ENERGY STAR Portfolio Manager. If you've never done this before, start now. It takes time to gather utility data and input building characteristics.

Option 2: Complete a Prescriptive Pathway

If you can't hit the EUI target, you can comply by completing a set of prescriptive energy efficiency measures. Think of this as a checklist: upgrade your HVAC, replace lighting, improve insulation, etc.

The state will publish the specific measures that qualify. Expect things like:

• HVAC system upgrades or replacements
• LED lighting retrofits
• Building envelope improvements (windows, insulation, air sealing)
• Building automation and controls
• Water heating efficiency

This pathway is useful if your building's EUI is stubbornly high due to structural issues (old equipment, poor envelope, etc.) but you can demonstrate you've made significant investments in efficiency.

Option 3: Pay the Alternative Compliance Payment (ACP)

If you can't meet the EUI target or complete the prescriptive measures, you can pay the Alternative Compliance Payment. Think of it as a buyout option, but it's expensive and it doesn't excuse you from eventually complying.

The ACP rate hasn't been finalized yet, but expect it to be structured similar to other states: a per-square-foot annual fee that escalates over time. The intent is to make it cheaper to actually fix your building than to pay the ACP indefinitely.

The ECAPP Incentive Program

Here's the good news: Oregon is putting real money on the table to help building owners comply. The Energy Conservation and Assistance for Public Properties (ECAPP) program will provide grants and low-interest loans for energy efficiency upgrades.

Applications open in 2026. The program is designed to cover a significant portion of eligible project costs, especially for smaller buildings and affordable housing properties.

Why You Should Apply Early

Incentive programs always run out of money. The first round of applicants typically get funded. The late comers get waitlisted or rejected outright because the budget is gone.

If you're planning any major efficiency work, applying for ECAPP funding should be step one. Even if you're not sure exactly what measures you'll implement yet, get on ODOE's radar early. Express interest, attend informational sessions, and stay updated on application requirements.

Enforcement and Penalties

Oregon hasn't finalized the exact penalty structure yet, but the law gives ODOE clear authority to enforce compliance. Expect fines, public reporting of non-compliant buildings, and potential restrictions on property transactions for chronic violators.

Other states with similar programs typically impose penalties in the range of $0.50 to $5.00 per square foot annually for non-compliance. On a 50,000 square foot building, that's $25,000 to $250,000 per year. Not small numbers.

The state will also likely publish a public database of building performance scores. If your building is a laggard, tenants and buyers will know. That's reputational risk on top of financial penalties.

What Building Owners Should Do Now

You've got time, but not as much as you think. Here's what to focus on today.

1. Benchmark Your Building

Get your building into ENERGY STAR Portfolio Manager and calculate your current EUI. You need to know where you stand before you can plan what to do.

If you've never benchmarked before, it's free and relatively straightforward. You'll need 12 months of utility data (electricity, natural gas, etc.) and basic building information (size, operating hours, occupancy). Our free compliance checker can walk you through this.

2. Get an Energy Audit

A professional energy audit will tell you exactly where your building is wasting energy and what improvements will have the biggest impact. Focus on ASHRAE Level 2 audits, which provide detailed analysis and ROI projections for each recommended measure.

Audits typically cost $0.10 to $0.30 per square foot, so a 30,000 square foot building might run $3,000 to $9,000. That sounds like a lot until you realize it could identify $50,000+ in annual energy savings.

3. Prioritize Projects with the Best ROI

Not all efficiency measures are created equal. Some pay for themselves in 2-3 years. Others take a decade or more. Focus on the quick wins first:

• LED lighting: Still the lowest-hanging fruit for most buildings. Payback periods of 1-3 years are common.
• HVAC controls and scheduling: Basic building automation can cut energy use 10-20% with minimal capital investment.
• Envelope air sealing: Cheap to fix, immediate impact on heating and cooling loads.
• Hot water efficiency: Low-flow fixtures, pipe insulation, and efficient water heaters all pay back quickly.

4. Plan Capital Projects Around Compliance

If you're planning any major building upgrades in the next 3-5 years (roof replacement, HVAC overhaul, window replacement), integrate energy efficiency into the scope. It's always cheaper to do it as part of a planned project than as a standalone retrofit.

5. Track ECAPP and Apply Early

When the ECAPP application window opens in 2026, be ready. Have your energy audit done, your project scope defined, and your contractor lined up. The buildings that get funded will be the ones with shovel-ready projects.

6. Stay Updated on ODOE Guidance

The state is still finalizing implementation details for HB 3409. Attend ODOE webinars, subscribe to their mailing list, and check their website regularly. Rules will evolve, and you need to stay current.

How Oregon Compares to Other States and Cities

Oregon is the first state to do this at a statewide level, but the policy framework mirrors what cities like New York, Washington DC, and Boston have been doing for years. The big difference is scale. This isn't just Portland. It's the entire state.

Washington State is considering similar legislation. Colorado has discussed it. Expect more states to follow Oregon's lead, especially in regions with aggressive climate goals.

If you own buildings in multiple states or cities, tracking compliance across all these different programs is a nightmare. Different deadlines, different metrics, different reporting platforms. That's exactly why BPS Check exists: one tool that covers every major jurisdiction in the country.

The Bottom Line

Oregon's building performance standard is real, it's statewide, and compliance deadlines are closer than they appear. If you're a Tier 1 building owner, you've got two years to get your building compliant or have a plan in place.

The buildings that start planning now will have first access to incentive funding, better contractor availability, and a much clearer path to compliance. The ones that wait until the last minute will scramble for money, compete for contractors, and likely pay more for the same work.

Start today. Benchmark your building, understand your EUI, and figure out what improvements you need to make. Use our free compliance checker to see where you stand.