In pursuit of New York City’s goal to reduce greenhouse gas emissions 80 percent by 2050 (a goal known as “80×50”), the City Council is considering multiple bills this session that aim to reduce greenhouse gas emissions from city buildings. Buildings—through their electricity use, heating, and cooling—account for at least two thirds of all greenhouse gas emissions generated in New York City. Thus, any plan to meet the 80×50 goal will require substantial decarbonization in the building sector. While some stakeholders have voiced concerns about the feasibility and financial cost of the proposed laws, there is significant evidence that building energy efficiency upgrades can provide a favorable return on investment, as well as environmental and public health benefits. The Urban Green Council recently published an influential report in collaboration with an array of environmental and real estate organizations finding that legislation would speed New York City’s transition to a lower carbon economy and promote broad new categories of green jobs.

The most consequential City Council bill is Intro. 1253, which would require buildings over 25,000 square feet—which equates to about 50,000 buildings that generate approximately 30% of the City’s greenhouse gas emissions—to meet strict limits on their carbon dioxide emissions. The bill would set emissions limits for buildings based on occupancy group, beginning in 2022. The limits would become more stringent for years 2024 through 2029, with limits in 2030 and beyond to be established by the Department of Buildings. Retro-commissioning requirements enacted under Local Law 87 of 2009, which currently apply to buildings above 50,000 square feet, also would be expanded to apply to all buildings over 25,000 square feet. To prevent rent-regulated building owners from incurring costs that could be passed on to tenants through a Major Capital Improvement (“MCI”) rent increase, the City Council bill exempts buildings with rent-regulated units from the upgrade requirements. However, rent-regulated buildings are still subject to the expanded retro-commissioning requirements, which would result in small-scale building improvements. The goal is to achieve a 40-percent reduction in greenhouse gas emissions from covered buildings by 2030. Given the attention paid to Intro. 1253 by stakeholders across the real estate and environmental communities, the details of the proposed program may be refined as the bill moves through the City Council.

One mechanism to help pay for the energy efficiency upgrades required under Intro. 1253 is Property Assessed Clean Energy (“PACE”) financing. Intro. 1252 would establish a PACE program through which property owners can obtain loans to finance “the installation of renewable energy systems and energy efficiency improvements, related energy audits and renewable energy system feasibility studies, and the verification of the installation of such systems and improvements.” The amount that property owners could borrow varies based on whether an individual or entity (corporation, nonprofit, etc.) owns the property, and is limited by the value of the real property, the project costs, and other factors. A critical feature of PACE programs is that the loan attaches to the property, rather than the property owner. The bill requires that property owners repay the loan through a charge on their property tax bills. PACE financing has been adopted in several municipalities around New York State.

As an incentive to improve building energy efficiency, Intro. 1251 would revise the building energy efficiency grading system previously established in Local Law 33 of 2018, which (beginning in 2020) will assign a letter grade based on a building’s energy efficiency score to buildings over 25,000 square feet. Letter grades and the underlying energy efficiency score are to be posted at buildings’ public entrances, similar to restaurant grades. The Department of Buildings will assign the energy efficiency score based on an online benchmarking tool into which building owners input energy and water use data and which compares the building’s energy use to other buildings’ information. The revisions set forth in Intro. 1251 are intended to align the grading system with other applicable grading systems such as Energy Star.

In the quest to achieve the 80×50 goal, City Council members also have introduced several bills to require solar panels, wind turbines, and/or a green roof on public and/or private roofs. Intro. 276 would require new buildings in certain occupancy groups to cover at least 50 percent of their roofs with a green roof and/or solar panels. The occupancy groups include: A-1 to A-4 (assembly uses like restaurants and museums), E (education), F-2 (low-hazard factory), I-1 and I-2 (institutions such as hospitals), and R-1 to R-3 (residential). Intro. 1032 would require new and existing buildings in certain occupancy groups to cover 100 percent of their roofs with a green roof, wind turbines, and/or solar panels. The occupancy groups include B (business uses like offices), I-4 (care facilities for people who need assistance in emergencies), M (mercantile uses like department stores), and S-2 (low-hazard storage). Intro. 141 would require City-owned buildings to cover at least 50 percent of their roofs with a green roof or detention system to slow stormwater runoff. These bills, like the energy efficiency bills, are not without controversy among certain stakeholders. However, the PACE financing available through Intro. 1252 would provide one way to help cover the cost of renewable energy or green roof installations.

With the building sector accounting for at least two-thirds of all greenhouse gas emissions generated in New York City, and with two out of every three people in the world expected to live in cities by 2050, urban buildings represent an important target of greenhouse gas reductions. In recognition of that fact, New York is one of 19 cities around the world to sign the 2018 Net Zero Carbon Buildings Declaration: a commitment to enact laws that ensure all buildings operate as carbon neutral by 2050.  If enacted, the City Council bills introduced this session would extend New York City’s leadership on energy efficiency and greenhouse gas reductions. With continued thoughtful and creative input from all stakeholders, New York City can make great progress toward its 80×50 goal.

For more information about the City Council bills and the City’s energy efficiency and climate change initiatives, please contact Jeff Gracer or Alexis Saba.