New York Details Building Efficiency Enforcement, Funding Plans

New York City unveiled a four-part plan on Tuesday that sharpens how it will enforce and help offset the costs of its tough new building emissions standard.

The law, known as Local Law 97, requires about 50,000 buildings to cut their emissions over several compliance periods, starting next year, with a goal of hitting net zero by 2050. Buildings are New York City’s largest source of carbon emissions, accounting for two-thirds of the city’s output and 6% of the state’s overall emissions.

A central piece of the new plan is a framework for mediated resolutions for buildings that fall out of compliance with the rules, a city official told reporters on Monday. To qualify, a building must have either suffered from an unforeseen event, such as a natural disaster or fire, or demonstrated a good-faith effort to comply, the official said.

Property owners have been awaiting details of what the city will consider a good-faith effort to meet the emissions goals.

The Department of Buildings’ enforcement rules aren’t out yet, but the official said a building will be able to show good faith if it has submitted a compliance report, benchmarked its energy and water use, upgraded its lighting, and can either prove that work to meet the emissions limit is underway or the building owner has a long-term decarbonization plan.

To prove that work is underway, a building owner must have approved plans and permits from the Department of Buildings, a relationship with a contractor to do the job, and a firm schedule for completion, the official said. Another way to prove work is underway—available for buildings that can’t electrify without upgrading their electrical system—is to demonstrate that the owner is engaged with Consolidated Edison for those upgrades.

Satisfying the long-term decarbonization plan component requires a building to submit a plan that extends through 2050. For every compliance period, the owner must show what it’s doing to decarbonize, what kinds of emissions reductions they expect to realize, and how they plan on financing that work. If a building hits those targets, it can get two more years in the 2024-2029 compliance period to meet the emissions limits for 2030.

The city is also trying to make compliance easier by working with Consolidated Edison—the city’s largest power provider—to decarbonize its citywide steam system.

Doing so would make compliance with Local Law 97 easier across the board because the system serves many large buildings in Manhattan and Brooklyn, including buildings that are facing the highest compliance costs, according to another city official who also spoke on Monday. The city is exploring whether biogas from sewage and food waste could be used to partially decarbonize the steam system, the second official said.

The city is also working on finding money to help fund building transitions.

One key source could be the Greenhouse Gas Reduction Fund, a $27 billion program in last year’s federal climate law—the Inflation Reduction Act—that steers money into nonprofit banks to support projects that cut carbon emissions. The city is working on its application for its slice of that money, the official said.

New York will also ask the statewide Department of Public Service to steer some of the $5 billion it’s making available for energy efficiency programs to be used to help buildings that aren’t in compliance with the emissions law and also face significant costs, according to the official.

Other parts of the new plan include outreach to buildings known to be at risk of noncompliance, in partnership with New York City Council Member James Gennaro (D), and a one-stop website listing federal, state, city, and utility programs that can help buildings pay for upgrades.

About 15,000 buildings across the city will have to make some investments to comply with the next, tougher set of emissions goals that take effect in 2030, the official said. The total cost of compliance with those standards will be between $12 billion to $15 billion, but the effort will create up to 140,000 jobs, the city official said.

Rohit Aggarwala, commissioner of the New York City Department of Environmental Protection, said in an interview last month that more buildings have already come into compliance with the emissions law than the city had initially predicted.

But the state’s powerful real estate sector continues to push back, arguing that the law could lead to higher rent for apartment dwellers or even push businesses out of the city.