On April 18, 2019, the City Council passed the Climate Mobilization Act. Noting that buildings account for approximately two-thirds of greenhouse gas emissions in New York City, the City Council enacted the Climate Mobilization Act and other laws with the aim to make the city carbon neutral by reducing the emissions produced by the city’s largest buildings by 40% by 2030 and by 80% by 2050.
We will address how the Climate Mobilization Act affects property owners, commercial tenants, and other stakeholders in the real estate industry, and how we can prepare to comply with these regulations. In this alert, we specifically address Local Law 33, a predecessor to the Climate Mobilization Act, which implemented an energy efficiency rating system in 2018.
Local Law 33 applies to:
- Buildings that exceed 25,000 gross square foot;
- Two or more buildings on the same tax lot that together exceed 100,000 square feet;
- Two or more condo buildings governed by the same board of managers that together exceed 100,000 square feet; and
- Certain city-owned buildings.
Local Law 33 applies to most commercial buildings and larger residential buildings. It does not apply to 1-3 family homes. To confirm whether the law applies to their property, building owners and managers can check the NYC Benchmarking Law Covered Buildings List by CLICKING HERE and selecting the relevant year under the first tab.
Covered buildings must submit benchmarking data by May 1 every year. Benchmarking data is based on consumption reports from private utility companies and the Department of Environmental Protection (DEP). Each building is then an assigned energy efficiency grade based on an energy efficiency score assigned through a benchmarking tool that assesses the energy use of the building relative to similar buildings in similar climates.
- Scores equal to or greater than 85 are A grade
- Scores between 70 and 85 are B grade
- Scores between 55 and 70 are C grade
- Scores less than 55 are D grade
- Buildings that fail to comply are F grade
- Buildings that cannot feasibly be scored are N grade.
Each year, energy grades will be provided via the DOB NOW portal starting October 1 and are updated every year based on the energy benchmarking data provided. Owners are required to publicly display their grades by October 31 each year and must continue to display them year-round. Buildings that fail to comply may face an annual fine of $1,250 and a DOB violation.
The purpose of Local law 33 is to increase awareness and transparency of building energy efficiency and allow owners and other stakeholders to make informed decisions regarding their property interests.
Note that energy efficiency grades are based on energy performance, and not emissions. In our next alert, we will address Local Law 97, which sets new standards for emissions.
The foregoing is not intended to be comprehensive nor constitute legal advice. If you would like to discuss your specific circumstances or would like more information, feel free to contact us at (212) 625-8505.