New York City’s Local Law 97 became effective January 1, 2024, as a critical component of the city’s Climate Mobilization Act of 2019, aimed to reduce the city’s greenhouse gas emissions by up to 40% by 2030 and 80% by 2050 in comparison to the benchmark from 2005.
Local Law 97: Reducing NYC’s Emissions
This law targets larger residential and commercial properties, including buildings with more than 25,000 square feet, which are the primary contributors to the city’s carbon pollution. However, certain buildings, such as city-owned properties, religious places of worship, and federal assistance structures are exempt. It is estimated that approximately 50,000 buildings in the city will be affected by this law.
To address this challenge, the law mandates substantial reductions in carbon emissions by setting specific emissions limits. Following legal requirements, it will become mandatory for covered buildings to file annual reports, certified by registered professionals, to the Department of Buildings. To satisfy these new emission limits, building owners will need to improve the current energy infrastructure of buildings and implement measures to mitigate the carbon emissions produced by their operations. In accordance with Local Law 97, the initial annual compliance report, reflecting the total emissions produced during the calendar year 2024, shall be submitted to the Department of Buildings no later than May 1, 2025.
If a property owner or operator submits a report indicating that a covered building exceeded its annual building emissions limit, strict civil penalties will be imposed; the penalty will be calculated as the difference between the building emissions limit and the actual reported building emissions for that year, multiplied by $268. Additionally, there will be civil penalties for the failure to file a report or for providing a false statement.
New York City’s assessments anticipate that, without the willingness to be proactive to advance building performance, up to 25% of buildings could fail their emission standard for 2024. Furthermore, there is a concern that by 2030, as many as 80% of buildings may not comply with the regulations. Therefore, building owners must take progressive measures to improve their building’s energy efficiency.
Local Law 97 may create an opportunity for landlords, especially those of older buildings, to invest in energy-efficient technologies to reduce their carbon footprint and avoid penalties. The law encourages the use of solar panels, green roofs, and high-efficiency boilers. The goal of this initiative is to make New York City’s real estate more sustainable and energy efficient.
To assist building owners in complying with newly implemented regulations, the City has instituted multiple programs. One such initiative is the NYC Retrofit Accelerator, to provide building owners with free energy audits and financial incentives to facilitate the implementation of energy-efficient upgrades. Other programs such as the New York State Energy Research and Development Authority offer financial options for energy productivity development. Property assessed clean energy (PACE) loans provide financing sources for energy efficiency projects where the debt remains with a building even after its sale. Additionally, to offset the costs of improvements, it is important to explore rebates from utility companies. New York City indicates that, by leveraging these programs, building owners can reduce their energy consumption, lower their costs, and contribute towards a more sustainable future.
Takeaways
By implementing Local Law 97, New York City plans to transform the city into a more sustainable environment. Building owners, managing agents, condominiums, and co-op boards should be aware of their building’s classifications and potential compliance obligations and take steps to ensure that their buildings meet the new standards. They may also explore opportunities to improve a building’s energy efficiency and performance, as well as potentially save money on operational and maintenance costs.
Author: Alicia Mynarska | [email protected]
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