A Lengthy Look into Local Law 97
Over the past few months, we've covered new buildings, repurposed buildings, and how the city can regulate them. This week, we'll tackle a more significant issue — the million-plus buildings already existing across New York City.
Specifically, we'll discuss the city's new emission reduction goals and existing buildings' role in creating a more sustainable New York for New Yorkers in their own backyards.
It's no secret — the climate is changing because of us. As more private planes take to the sky and as more become accustomed to the comforts of central air conditioning, New York City saw the highest levels of rain in a century during September and set new heat records throughout the summer. When Hurricane Ida slammed New York City in September 2021, thirteen people died in flooded basement apartments. Extreme weather is worsening — and it's endangering New Yorkers.
This won't be a piece about basement apartments, I promise. Instead of climate change mitigation, we'll focus on climate change prevention. We'll discuss the steps city officials took and will take to ensure New York City makes a seamless and equitable transition to renewable energy.
In 2019, Mayor Bill De Blasio signed the Climate Mobilization Act into effect. The new legislation, which received overwhelming support from the City Council, aimed to cut carbon emissions in New York City. The framework plans to bring New York City in compliance with the state's Climate Leadership and Community Protection Act, which aims to achieve net zero electrical emissions statewide by 2040.
A significant provision of the Climate Mobilization Act, known as Local Law 97, limits the amount of greenhouse gasses that large buildings can emit annually. Buildings over 25,000 square feet are on the hook for installing energy-efficient heating, ventilation, air conditioning (HVAC), and electrical systems across their portfolios.
When the program first takes effect in 2024, hotels can emit 9.87 kilograms of CO2 per square foot annually. Offices are limited to 7.58 kilograms per square foot annually; multi-family homes can emit 6.75 kilograms per square foot. With time, those regulations will become more stringent – buildings must cut emissions by 60% by 2030. By 2050, emissions will ideally sit 85% below 2024 levels.
They Didn’t Throw Away Their Shot…
Perch Harlem in Hamilton Heights produces 80% less carbon than buildings of similar size thanks to insulated walls and thick windows.
Photo Courtesy of Synapsed
Local Law 97 will impact 50,000 buildings across the city. By 2030, 60% of all floor space in New York City will require sustainability-minded upgrades to HVAC and electrical systems. Buildings must create plans to reduce their energy consumption on a building level. The city recommends repairing leaks in heating systems, upgrading light systems, weatherizing windows, and many more improvements.
By 2024, over 34,000 office and market-rate apartment buildings must submit compliance plans to retrofit buildings, reduce energy waste, and lower energy demand through electrification. By 2025, they must implement those plans to meet benchmarked cuts. If landlords don't comply, they'll be fined. If buildings don't report their emissions usage, the city will charge $0.50 per square foot every day the report is late. If they exceed allowed emissions caps, the city can fine them $268 for every ton of emissions over their limit.
Many buildings could face fines — a study published in January 2023 found that 3,700 buildings may be out of compliance with standards as soon as they're active next year. If that trajectory continues, nearly 13,500 buildings will be out of compliance under stricter regulations by 2030. By that estimate, non-compliant landlords would be on the hook for almost $900 million in fines under 2030 regulations.
However, enforcement won't affect every building the same way. Rent-regulated apartments, public housing, individual homes, small apartment buildings, power plants, city buildings, and most houses of worship do not need to comply with the stringent standards in Local Law 97. Instead, they'll need to file a one-time emissions usage report and show they've adopted "prescriptive energy conservation measures" like adjusting hot water temperature points, repairing heating leaks, and insulating pipes to retain heat.
Sustainable on the Sea…
255 Columbia near the Brooklyn Waterfront uses 75% less energy than its peers thanks to extra insulation and sealed windows.
Photo Courtesy of HPI
Emissions reductions across the board aren't surprising — New York City took incremental steps over a decade to better understand how its buildings affect the environment. In 2009, Mayor Michael Bloomberg signed multiple pieces of legislation to promote sustainability across the city's million buildings. The legislation, known as the Greener, Greater Buildings Plan, aimed to reduce the city's emissions outputs by 30% by 2030 through four critical policies known as Local Laws 84, 85, 87, and 88.
86 got stuck in traffic. I'm kidding; nobody knows what happened to it.
Local Law 84 created an energy benchmarking system and measured the efficiency of all buildings over 50,000 square feet. The measurement system, developed by the U.S. Environmental Protection Agency, provides letter ratings, A-F, to structures across the city. Like Local Law 97, the city tightened benchmarking guidelines over time — buildings were expected to improve their energy efficiency to maintain high ratings.
Local Law 85 requires all renovations to comply with the most recent energy guidelines issued by the city. Previously, renovations that affected less than 50% of the overall property didn't need to update building systems to align with efficiency standards. Owners would need to install new HVAC, water heaters, and electric systems to reduce the "building heat envelope" — or to lower the amount of energy seeping out of the building.
Local Law 87 requires all buildings over 50,000 square feet to submit an "Energy Efficiency Report" every ten years. The report aims to identify opportunities to reduce the building's energy consumption without negatively affecting its operations. Officials may ask property owners to update or "retrofit" their systems to ensure all HVAC, electrical, and plumbing systems comply with design standards and remain in working condition.
Local Law 88 requires non-residential buildings over 25,000 square feet to upgrade lighting to meet current New York City Energy Conservation Code standards by 2025 and install meters to track monthly progress. Residential buildings over 25,000 square feet must upgrade lighting and monitor usage in common areas like hallways, lobbies, and gyms.
At Ocean Drive, rents range from $2,500 for a studio to more than $5,000 for a three-bedroom. Since Catsimatidis did not seek out tax breaks from 421a and did not rezone the property, he did not need to add affordable housing. When asked about the project's target demographic, Catsimatidis responded that he welcomes "Whoever is doing well in business and wants to live on the ocean."
However, the luxe amenities and high prices at Ocean Drive mark a significant turning point in subway inaccessible development. Before Catsimatidis built his new megaproject, most residential buildings along the Coney Island waterfront were apartment complexes administered by NYCHA. Most residents around Ocean Drive earn less than the average New Yorker.
Given New York City's dependence on public transit, individuals will pay premiums to live near subways. Apartment buildings within a tenth of a mile from the subway can charge 8% more than further options. While high earners can often commute easily, lower-income individuals often live far from transit. Let's take a look at the subway desert map again.
Toren Deserves a Trophy…
Toren on Myrtle Avenue in Downtown Brooklyn provides power and water to all 240 units through a co-generation plant.
Photo Courtesy of SOM
There's been a dedicated push for sustainability in New York City for over a decade. In 2016, Mayor Bill De Blasio strengthened the framework created by Bloomberg by tightening the efficiency grading scale and ensuring the city adheres to set deadlines. The Greener, Greater Buildings Plan passed by Mayor Bloomberg set the foundation for Local Law 97, which passed in 2019. Cutting greenhouse gasses remained a consistent goal across city administrations with vastly different points of view.
The consistency is notable because Local Law 97 is not very popular with city power brokers. Unlike other programs we've discussed, buildings will not receive tax breaks or incentives for upgrading their systems. Local Law 97 lacks a carrot-on-a-stick to encourage rule-following. The city told building owners to borrow money against the value of their buildings to fund their renovations — a tight timeline and historically high interest rates make this solution unpopular. Unhappy executives are less likely to give more money — elected officials across the city and state depend on real estate titans for campaign cash.
People opposing Local Law 97 made their voices heard. Leaders tied to the notoriously powerful Real Estate Board of New York (REBNY) directed hundreds of thousands of dollars to push a statewide bill that would provide tax breaks to offset the cost of improvements. In 2021, then-Governor Andrew Cuomo buried two paragraphs that would repeal Local Law 97 in his 4,000-page annual budget proposal. Both repeal efforts failed.
Those most affected by costs associated with Local Law 97 likely couldn't fund public relations campaigns and lobby the Governor for a repeal. REBNY affiliates are prominent real estate companies with vast portfolios. Major landlords have teams dedicated to sustainable development and maybe even set internal benchmarks. They will likely be able to fund improvements without much issue.
In contrast, mom-and-pop landlords and co-op boards must complete more repairs in older, less efficient buildings with a smaller operating budget than many billionaire REBNY affiliates. The city pledged to reduce fines on property owners making "good faith efforts" to comply with the law.
Opponents who lack the political clout of REBNY leaders took their objections to court — two co-op board presidents in Queens teamed up to dispute the constitutionality of Local Law 97. They argue the statewide Climate Leadership and Community Protection Act of 2019 created a different emissions reduction plan, which, as state law, takes precedent to Local Law 97. The plaintiffs further claim the law is too vague and constitutes an unregistered tax.
The co-op officials contend that the $20,000 per unit upgrade cost seems unreasonable compared to the $136 per unit annual penalty. Why should they choose between a $50 million construction bill or a rounding error on yearly budgets? The co-op leaders are represented by litigator Randy Mastro, a legendary litigator who represented then-New Jersey Governor Chris Christie in the BridgeGate probe. Mastro is being paid by an unnamed source, not the co-op officials. (Is it REBNY? A rich uncle? REBNY? Who knows…)
Last week, a city judge moved to dismiss the suit. But, it hasn't all been difficult for Local Law 97 opponents. Recently, Mayor Adams and multiple Council Members floated a plan to push fines off until 2026 — providing buildings an extra year to submit sustainability frameworks and two more years until the city will issue fines. The proposal outraged environmental advocates who decried the Mayor's idea as detrimental to ecological progress.
Local Law 97 is a complicated issue — it somehow contorted to roil and annoy progressive advocates, real estate developers, and policymakers simultaneously. That's hard to do.
Local Law 97 appears to be the product of a successful negotiation (as long as the law remains in effect). City officials found ways to curb greenhouse gas emissions, landlords could make upgrades on a reasonable timeline, and environmentalists successfully advocated for those action steps.
Nobody got everything they wanted in the negotiations, but does anyone? That's best summed up by Larry David in season seven of Curb Your Enthusiasm, where he says, "a good compromise is when both parties are dissatisfied." And boy, like Larry David, New Yorkers are constantly dissatisfied.
Thanks for staying through this longer explanation. We’ll be back soon with an exciting elections-based edition, so keep an eye out!
Our “Hit and Miss” of the week will focus on sustainable buildings.
The Prize of Park Avenue..
Photo Courtesy of
J.P. Morgan Chase & Co.
Our “Hit” this week is under construction just blocks from Grand Central Terminal. J.P. Morgan Chase & Co. is building a new, all-electric headquarters on Park Avenue. The 1,400-square-foot green building will open in 2025, featuring thick windows, an ultra-efficient water system, and automatic solar shades connected to the HVAC system to minimize energy usage.
Durst, BofA:
Do Better.
Photo Courtesy of
the Durst Organization
Just down the street, our “Miss” of the week often gets some false praise. One Bryant Park often ranks as one of the top sustainable buildings in New York City thanks to its on-site power generator and a cooling system powered by ice made during low-energy periods. However, the gas-powered generator doesn’t align with new regulations. Despite the Durst Organization’s best efforts, the Bank of America headquarters must make serious upgrades to comply with Local Law 97.
