This Spring, we wrote about the Climate Mobilization Act, a package of seven related bills targeting climate change that was passed in April. A few days later (on Earth Day), the Mayor announced a related proposal, touted as a NYC Green New Deal.
We’re reviewing the major bills that will impact your properties, along with some updated language and links.
Click on a particular piece of legislation to learn more about that specific rule:
Previously, 1032-A was passed by the council, requiring a sustainable roofing zone for work involving the “replacing of an entire existing roof deck or roof assembly.” Basically, new construction projects and buildings undergoing “certain major renovations” will have to include a sustainable roofing zone.
With the new law, HPD will now study the potential impact of complying with this rule for different types of buildings, especially smaller properties or buildings involved in specific housing programs. Certain buildings may be able to hold off on compliance for 5 years after the effective date.
Based on the initial pass date, this law will likely go into effect in the Fall (likely October), so stay tuned for enforcement rules. The city also passed a separate but related resolution calling on the State legislature to increase the real property tax abatement for green roof installation to $15/square foot. We’ll let you know if this makes its way through the state.
You should review Local Law 94-2019 for more specifics about green roofs and solar photovoltaic electricity generating systems.
Based on the above rule, the Office of Alternative Energy will be required to maintain a website featuring contact information, links to details regarding green roof system installation, and other resources and materials for sustainable roofing. This effective date is 120 days from signing (as opposed to the green roof requirement itself), so the website should be active in late Summer, before the green roof requirement will be enforced.
Energy Grades and Loans
You may recall that Local Law 33 of 2018 will require owners of covered buildings to submit annual energy scores starting in 2020. The Benchmarking tool will be used to calculate energy efficiency scores, and the city-issued grade will be in accordance with a set range.
As of April 18, 2019, grade ranges for all building energy efficiency scores have been adjusted, with high and low grades getting an increased range size.
For example, a score of 85 or higher will now land a building an A grade – previously the required score for an A was 90. On the other end of the spectrum, anything lower than 55 will result in a D grade. The previous cutoff score was 20.
The rules for F (noncompliance) and N grades (not feasible to obtain a score, or given an exemption) remain the same.
This rule is in place now, so energy scores submitted during the first required round in 2020 will be graded using these new ranges.
This bill establishes PACE: Property Assessed Clean Energy Program. The city will use funds (and possibly get help administering said funds from a for-profit or non-profit organization) to establish PACE, designed to distribute and manage long-term financing for energy efficiency improvements. NYC owners will be eligible for loans to finance installations for renewable energy systems and energy efficiency improvements for their buildings located within the city limits.
Details about the loan program (eligibility, application processes, etc.) are forthcoming – we’ll post them here as soon as they’re released.
Local Law 97-2019: Emission Limits & The Office of Building Energy and Emissions Performance
This is a big one, so it gets its own section.
The Council is establishing an office at the DOB (the Office of Building Energy and Emissions Performance) to deal specifically with energy and emissions.
According to the new law, the office will have several responsibilities, including:
- Overseeing implementation of building energy and emissions performance laws and policies for existing buildings, new construction, and major renovations
- Establishing or administering protocols for assessing annual energy use in buildings
- Monitoring buildings’ energy use and emissions, and reviewing building emissions assessment methodologies
- Building emissions limits, goals, and timeframes to further the goal of achieving a 40% reduction in aggregate greenhouse gas emissions from covered buildings by calendar year 2030, relative to such emissions for the calendar year 2005
- Creating an online portal for the submission of annual emission assessments from building owners
- Auditing said submissions, as necessary
- Determining recommended penalties for noncompliant buildings (buildings that emit higher greenhouse gases than mandated, or buildings that fail to submit reports)
- Reviewing applications for alternative methods of compliance (adjustment of emissions limits, deductions for the purchase of greenhouse gas offsets/renewable energy credits, deductions, and other adjustments)
- Overseeing cross-departmental (DEP, HPD) participation and cooperation
Basically, this is the office that would be overseeing annual emission assessments submitted by building owners, including enforcement for failure to submit assessments or for exceeding set emission levels.
Requirements & Penalties
The full copy of LL 97 outlines specific emissions limits for each group of covered buildings. Page 9 of the law is where you’ll find calculations for building occupancy groups based on the gross floor area (sf). These limits go into effect starting January 1, 2024.
These limit calculations will change for calendar years 2030 – 2034, and again from 2035 – 2050. Calculations for these years will be released no later than January 1, 2023.
By May 1, 2025, and May 1 of each year thereafter, owners of covered buildings must file reports certified by a registered design professional, designating compliance or noncompliance with emission limits.
The law also notes penalties for various components of the law:
- If the building exceeds its annual emissions limit: civil penalty not more than an amount equal to the difference between the emissions limit and the reported emissions, multiplied by $268.00
- If the owner fails to submit an annual report as required: not more than the gross floor area of said building, multiplied by $0.50 for each month that the violation is not corrected within 12 months following the deadline (an owner shall not be liable for a penalty for a report demonstrating compliance with emission requirements if such report is filed within 60 days of the due date)
- False Statements: A violation of this section shall be a misdemeanor and subject to a fine of not more than $500,000 or imprisonment of not more than 30 days, or both. A person who violates this section shall also be liable for a civil penalty of not more than $500,000
There are also explicit factors for evaluating penalty determinations, including past compliance history, good faith efforts, and more – the more you attempt to comply with these regulations, the less severe any possible penalties will be.
Specific buildings may also be eligible for adjustments to emissions limits – these can be found on pages 16 – 18 of the law.
Who has to comply?
The term “covered building” is defined in this law as:
a building (i) containing one or more dwelling units with a legal regulated rent pursuant to the emergency tenant protection act of
1974, the rent stabilization law of 1969 or the local emergency housing rent control act of 1962, (ii) containing one or more dwelling units required by law to be registered and regulated pursuant to the emergency tenant protection act of 1974 or the rent stabilization law of 1969, (iii) buildings developed with subsidies received pursuant to section 1701q of title 12 of the United
States code and (iv) buildings participating in a project-based assistance program pursuant to section 1473f of title 42 of the United States code , (v) real estate owned by any religious corporation located in the city of New York as now constituted, actually dedicated and used by such corporation exclusively as a place of public worship and, as it appears in the records of the
department of finance, (i) a building that exceeds 25,000 gross square feet or (ii) two or more
buildings on the same tax lot that together exceed 50,000 gross square feet (9290 m2), or (iii) two or more buildings held in the condominium form of ownership that are governed by the same board of managers and that together exceed 50,000 gross square feet (9290 m2).
Outside of some specific types of buildings, the city is still using the 25,000 gross square feet threshold for compliance here.
There are some exceptions:
- Real property, not more than three stories, consisting of a series of attached, detached or semi-detached dwellings, for which ownership and the responsibility for maintenance of the HVAC systems and hot water heating systems is held by each individual dwelling unit owner, and with no HVAC system or hot water heating system in the series serving more than two dwelling units, as certified by a registered design professional to the department.
- An industrial facility primarily used for the generation of electric power or steam
- A covered building as defined in article 320
If you have questions about whether or not your building will have to comply with emission limits and reporting, you’ll be able to get help from the DOB’s resource and support groups (similar to the Benchmarking Help Center). Expect these, along with other guidelines and clarifications, to be launched over the next few years.
Mayor de Blasio’s Green New Deal for NYC still needs legislation to specify details – especially for the mandate to cut emissions at buildings across the city by implementing retrofits. These rules are likely to be presented and passed over the next few years, so there’s no immediately required actions outside of already-passed legislation. In fact, the OneNYC-2050 Action plan outlines emission cuts legislation for covered buildings by calendar-end 2020, and small & affordable buildings by calendar-end 2021. That said, it’s not a bad idea to take stock of current emissions per building, current plans for sustainability, and areas for improvement across your portfolio – enforcement may be years away, but it’ll be here before you know it.
About the Author
Kristen Hariton is the Vice President, Product Engagement at SiteCompli, focused on exploring new solutions and innovations in property operations tech. When she's not sharing the latest industry trends, changes, and updates, she's planning her next adventure to Walt Disney World.