NYC building owners who will face fines if they don’t comply with the city’s Local Law 97 carbon emissions caps beginning in 2024 have been given a bit of wiggle room by city officials.
The city has announced that a “good faith effort” to abide by the new law could give building owners an extra two years to comply while lowering “interim” penalties.
NYC ‘s definition of a good faith includes the filing of a long-term decarbonization plan along with an annual compliance report. The long-term blueprint must specify retrofits, how much they will reduce emissions through 2050 and how they will be funded—details to be verified by an independent “energy audit” of the property.
Building owners who provide a long-term plan may get up to two years to enact the plans and lower penalties than they would have faced without one. Owners who opt for the good faith plan will not be permitted to use renewable energy credits as offsets, the city said.
Local Law 97 (LL 97), enacted in 2019, aims to cut greenhouse gas emissions from NYC buildings by 40% by 2030 and 80% by 2050. The law sets emissions reduction targets for building owners, with fines for non-compliance kicking in on Jan. 1, 2024 and increasing in 2030.
NYC is estimating that 63% of buildings in the city are not in compliance with the 2030 benchmarks in LL 97 and the nearly $15B in retrofits are needed across the city.
Owners of large buildings are facing fines of $268 per ton of carbon dioxide emissions that are above the allowance for their buildings.
A Wall Street Journal analysis of 128 properties, including assets owned by the three largest publicly traded landlords in the US, found that their fines could cumulatively exceed $50M in the first five years of the LL (& enforcement.
Level Infrastructure, an engineering consulting firm that conducted a survey earlier this year for REBNY, found that up to 3,700 NYC properties could be hit with fines exceeding $200M per year under LL 97—numbers that it says will surge to 13,500 buildings and $900M/year in penalties by 2030.
REBNY has called the LL 97 penalties “damaging to the local economy.” According to the group’s study, if every NYC building were to cut its energy consumption 30% by 2030, more than 8,000 properties would still face fines of $300M per year.
Level Infrastructure’s report projects that more than 60% of the NYC buildings that will be out of compliance in 2024 will be residential properties. Apartment, co-op and condo landlords will be impacted the most because of “their lack of resources to fund and coordinate compliance,” the report said.