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Fighting Climate Change Through Local Law 97 in New York City- NYC


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Reducing greenhouse gas emissions is vital for New York City's efforts against climate change, with buildings contributing significantly. The Climate Mobilization Act, particularly Local Law 97 (LL97), mandates emission cuts for large buildings. Despite progress, many buildings struggle to comply, especially those in disadvantaged communities. Financial analysis estimates significant investment required, with potential job creation. Government incentives and programs aim to facilitate compliance, including tax refunds and subsidies. Central strategies involve decarbonizing energy systems, while financing initiatives and technical support aid building owners. Enforcement measures ensure compliance, with collaboration among various stakeholders crucial for success. Overall, achieving LL97's goals demands concerted efforts from government, utilities, financing institutions, and communities alike.


From the Office of Mayor Eric Adams: The Analysis by the City demonstrates that buildings are coming into compliance with LL97 but that the path to compliance is not easy for all buildings. The Department of Buildings (DOB) used building energy benchmarking data to examine how many buildings that were over their emissions limits in 2019 moved into compliance by 2022. These data revealed that about half of non-compliant buildings in 2019 have since moved into compliance, for a total of 89% compliance with 2024 targets. However, a majority (63%) of large buildings are currently over 2030 targets. Buildings that moved into compliance were generally in relatively advantaged communities (i.e., outside State-defined disadvantaged communities, or DACs), suggesting that building owners, especially those in DACs, may need additional support to achieve compliance.


New financial analysis conducted by the City reveals that roughly 15,000 buildings will need

an investment of $12-15 billion to comply with 2030 LL97 emissions limits at current costs and with current technology. Of that, only $5-6 billion would pay for itself through energy savings. Roughly 25% of buildings that have to make investments will find their costs fully covered by energy savings. If undertaken, this work would generate up to 140,000 jobs.


The City’s analysis suggests that with a combination of State and utility company energy

efficiency (EE) incentive programs and reasonable investments from building owners, virtually all multifamily buildings and most commercial buildings could achieve their 2030 targets. This will require the City, State and Federal governments to align various programs to target assistance towards buildings needing significant upgrades to comply with LL97.


Buildings that have to do work to comply with LL97 could receive $625 million in Federal tax

refunds and subsidies from the Inflation Reduction Act. Further, the opportunity exists to use

the J-51 tax abatement approved by the New York State Legislature to help low- and moderate-income rental buildings, coops, and condos comply with the law. Close to 1,300 coops and condos across the City currently over their 2030 limits could be eligible to receive the J-51 tax abatement.


Finally, the New York State Public Service Commission (PSC) recently directed

utilities and the New York State Energy Research and Development Authority (NYSERDA) to

propose plans for offering $5 billion in EE programs for 2026-2030. A reasonable share of

this funding should be directed towards LL97 compliance in multifamily buildings that must

undertake deep retrofits to comply with LL97. Achieving LL97 will require a comprehensive mobilization involving decarbonization of central systems; financing and funding; technical advice and innovation; and enforcement. To accomplish it, the City is working as follows:


Decarbonization of Central Systems:


  • Supporting the on-time achievement of the State’s historic Climate Leadership and

Community Protection Act (CLCPA) targets for renewable electricity, which would lower New

York City’s GHG emissions and make compliance easier for all buildings;


  • Collaborating with Con Edison on the decarbonization of its steam system, including

exploring the potential use of biogas produced within the City from sewage and food waste


Financing and Funding:

  • Asking the PSC to ensure that a large share of the $5 billion that will be invested statewide in EE directly support LL97 compliance for buildings that will not be able to cover costs with energy savings

  • Ensuring that City property tax programs, most notably J-51 tax abatements, the Industrial & Commercial Abatement Program, and the NYC Industrial Development Agency’s Manhattan Commercial Revitalization Program, can be fully leveraged to assist with deep retrofits

  • Ensuring that building owners know how to access the $625 million in Inflation Reduction Act (IRA) tax credits that this analysis shows can be claimed as part of LL97 compliance work

  • Working with the US Department of Energy to create a loan program dedicated to those buildings that must comply with LL97, especially buildings that might have difficulty accessing market-rate loans in the current interest rate environment.


Technical Advice and Innovation:

  • LL97 Mobilization Council: Creating an ongoing LL97 Mobilization Council to monitor

how mobilization is proceeding, and to foster collaboration among building owners and

managers, financing sources, retrofit companies, and the city’s workforce.

  • Enhanced Technical Assistance: Enhancing NYC Accelerator, the City’s LL97 technical assistance program, to be a one-stop-shop to help building owners understand retrofit and financing options and navigate program requirements. This work will include partnering with City Council members to bring technical assistance in their districts directly to building owners who need to do work to comply with LL97.


Enforcement:

  • Rules: Publishing the next LL97 rule package, which maintains strong compliance incentives

while providing out-of-compliance buildings with a clear and enforceable path to achieve

compliance and avoid penalties.

  • Streamlined Compliance and Reporting: Collaborating with City Council to bring other City

energy-related regulations into alignment with LL97, reducing paperwork and streamlining

compliance timelines.


Mobilizing New York City’s large buildings to reduce their emissions and fight climate change requires an all-hands-on-deck approach. The City, State (NYSERDA, PSC), Federal government, utilities, financing institutions, advocates, labor, nonprofit partners, design and engineering firms, building owners, and communities can work together to meet the ambitious and essential goals of LL97.

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