On April 18, 2019, the New York City Council passed the Climate Mobilization Act, with the goal of making the city carbon neutral by 2050. In our prior alerts What Does A Building’s Energy Efficiency Grade Really Mean? and Understanding Local Law 97: The Energy Efficiency Law Poised to Shape New York Real Estate we addressed Local Law 33, a predecessor to the Climate Mobilization Act intended to increase awareness, and Local Law 97, which set standards and penalties for building emissions starting January 1, 2024.
In this alert, we address what Local Law 97 means for building owners, commercial tenants, and condominium and cooperative apartment owners, and how they can prepare to get into compliance with these new laws.
In general, more efficient buildings will have lower emissions, so buildings with higher energy efficiency grades under Local Law 33 are more likely to be compliant with Local Law 97 emissions requirements. However, emissions are a distinct metric, so a high grade is not dispositive of Local Law 97 compliance. To be sure, building owners and coop and condo boards are encouraged to work with a registered design professional to inspect their buildings. These professionals can confirm whether a building is subject to the law and, if so, the best measures for that building to reduce emissions.
A key strategy recommended by the Local Law 97 Advisory Board is beneficial electrification. Beneficial electrification refers to the use of high efficiency electrical equipment to replace direct fossil fuel use and other low efficiency electrical equipment common in many New York City buildings. Heat pumps, for example, are more efficient than conventional gas, oil, or electric resistance heating, so upgrading a building’s heating system will reduce emissions. For buildings that are not prepared to replace their entire HVAC system, they may be able to simply upgrade an existing boiler or furnace or improve insulation to make HVAC systems more effective. In addition to upgrading from traditional HVAC systems, owners may also consider investing in LED lighting, weatherproofing, and installing more energy efficient appliances.
Building owners and boards can generally reduce emissions and increase efficiency by implementing beneficial electrification and upgrading their utility systems as described above. Buildings with commercial tenants may be able to share the burden of making compliance upgrades with their tenants.
Commercial tenants may be required under the terms of their lease to make some improvements or cover their proportionate share of the cost of building wide improvements. Commercial tenants should ask their landlord what Local Law 97 related improvements are planned and review their leases to determine the tenant’s responsibility.
Apartment owners may also see assessments associated with building wide improvements. While the nature of these improvements will be up to the board, individual apartment owners can improve the efficiency of their units with LED lighting and more energy efficient appliances.
Building owners who are concerned about their ability to get into compliance before the 2024 deadline are encouraged to seek assistance. Because the primary goal of Local Law 97 is to lower emissions from New York City’s biggest buildings, rather than imposing unnecessary penalties for noncompliance, the Advisory Board has recommended ways assist building owners with compliance through technical and financial support, deductions, offsets, credits, extensions, and adjustments.
Check out the following resources:
- The Sustainability Help Center provides assistance in understanding local sustainability laws and compliance requirements, including help determining which laws apply to your property, what reporting is required, and by what date.
- The NYC Accelerator works with buildings across the five boroughs to find contractors, provide financial and technical assistance, and generally navigate options to make buildings more sustainable.
- PACE financing helps finance sustainability and energy efficiency upgrades.
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.