Worried about temperature rise, more frequent and heavy rainfall The City Council enacted Local Law 97 in 2019 as part of a pioneering legislative package aimed at reducing greenhouse gas emissions that contribute to climate change.
The law focuses on large buildings in New York and places limits on their emissions. The city’s one million buildings produce nearly 70% of its carbon footprint, as much of its energy for heating, cooling, and lighting comes from burning fossil fuels.
Now, with only 16 months left to meet the first standards and the threat of fines that can run into the millions of dollars a year for non-compliant buildings, landlords are on high alert.
The good news is that nearly all of the 50,000 buildings covered by the law will be compliant by the first deadline of January 1, 2024, according to city estimates. But still his 2,700 buildings in the city need measures to avoid fines. We’ve adjusted the heating system, replaced leaky windows, and installed energy-efficient lighting.
And the emissions threshold will drop significantly for a second deadline in 2030. This could mean that more buildings will have to make significant changes. In addition to adjusting building systems, you will either have to replace them or pay a hefty fine.
Real estate firms with large portfolios, and often staff dedicated to sustainability initiatives, are generally putting carbon laws together, and many are on track to avoid large penalties in the short term. progressing. But the family businesses that own old buildings that still have oil and gas furnaces in their basements, and the boards that run the city’s housing cooperatives and condominiums, have turned their backs on the wall. Some are trying to figure out what needs to be done and how to pay for a capital project they never expected.
“We really don’t know what our obligations are and what the penalties will be.
Her firm struggled to attract the attention of a consulting firm that conducted energy audits of buildings and helped owners understand how to comply with the law.
Some owners disagree. In May, the owners of two garden apartments in Queens and a mixed-use building in Manhattan sued the city, seeking to block enforcement, arguing that the law would impose “harsh” fines on them and others.
City officials, who would not comment on pending lawsuits, said they sympathize with struggling owners and that fines can be waived or reduced for those who make the effort “in good faith.” To enforce the law, we have suspended funding programs to pay for the kinds of modifications that many buildings require.
But Mayor Eric Adams’ administration has also pledged to enforce the law and hold building owners accountable as part of a broader effort to address climate change. Recent Supreme Court Decisions By curbing the federal government’s ability to control emissions, the fight against climate change at the local level has become critical.
“Local Law No. 97 tells everyone in the real estate business that climate change is your problem,” said Rohit T. Aggarwala, the city’s chief climate officer. “Part of the real estate industry is moving towards a carbon-free future.”
Local Law No. 97 aims to reduce emissions from large buildings by 40% from 2005 levels by 2030 and 80% by 2050. This applies to most structures over 25,000 square feet, which occupy more than half of the city’s built area. The legislation aims to reduce overall energy use and shift from fossil fuels to electricity such as heating.
“The fundamental mission is to introduce a carbon diet into buildings,” says Paul Reale, director of building operations research at the Building Performance Institute at the City University of New York.
Property managers objected to Local Law 97. Because of the cost it imposes, and because it’s aimed at large buildings, leaving small buildings and other categories of real estate off the hook.
Officials in the real estate industry have also questioned the rush to electrify, asking whether the grid can handle the increased demand and warning of possible blackouts. They denounce laws that hold buildings accountable for carbon emissions produced by power plants that provide electricity and still rely on fossil fuels.
“It’s out of the control of the building owner,” said Zachary Steinberg, senior vice president of policy for the New York Real Estate Commission, a lobbying group.
New York legislation has inspired similar legislation in other cities, including Boston and Washington. The law goes hand in hand with the “Electrify Everything” movement sweeping local governments across the country.
In general, newer buildings seem to be more legally compliant than older buildings. Many already rely on electricity for heating, and in some cases the costs can be passed on to tenants who consume much of the electricity used in the building. Being able to advertise their buildings as low-carbon benefits owners, as many companies want to lease space in properties that are in line with their sustainability goals.
“This is adding property value,” said Jimmy Calchietta, founder and CEO of Kotcon Group, an engineering firm with a burgeoning business of doing energy audits for buildings.
For example, the Brookfield property recently announced It plans to use hydroelectric power to operate the One Manhattan West office building.
Durst Organization, one of the city’s oldest real estate developers, has most of its buildings met 2024 standards, but One Bryant Park, a midtown Manhattan skyscraper and home of Bank of America said he expects to be fined $2.4 million annually. and investment banking.
When completed in 2010, One Bryant Park was hailed as a model for eco-friendly construction. However, a 51-story building is fully occupied and consumes a lot of energy. Bank of America has a 24-hour trading floor, and Durst Cycle offers plenty of fresh air.
Douglas Durst, president of the developer, noted that buildings with low energy consumption and low population density may go unpunished for inefficiency.
It is up to the Department of Buildings and its new Office of Building Energy and Emissions Performance to create the rules of law and enforce them. The office is working on complaints from 89 buildings that the city says exceed emissions limits by more than 40 percent. In addition, 21 non-profit hospitals have appealed and 9 cases have been processed.
The city offers free guidance to building owners and managers through a program called . NYC Accelerator. However, loan program The low-cost loan offering was put on hold for revision after funding only two projects. It is unknown when the program will resume.
Aggarwala said the reason for the suspension was the growing pains of the new program, and said funding was available from other sources.
Real estate executives have sought alternative ways to comply with Local Law 97. City officials said carbon trading, an arrangement for building owners to purchase credits from low-emission properties, is out of consideration. However, owners may be able to offset their carbon footprint by purchasing renewable energy certificates to fund projects that provide clean energy to five municipalities. The so-called He REC has a limited number and is not expected to be available for the foreseeable future, city officials say.
“There’s a lot of whip on District Law 97, but not a lot of carrots,” said Real Estate Commissioner Steinberg. “We need to have a serious discussion about the tax cut program.”
Environmental activists and others are wary of loopholes that could prevent owners from reducing their buildings’ emissions.
“We have to act urgently,” said John Mandick, chief executive of the Urban Green Council, which includes environmentalists and property developers. ‘The climate is not waiting’
