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What the Climate Mobilization Act Means for Developers, Designers, and Construction Teams

Image of central park and New York City buildigns

The construction industry has been increasingly focused on meeting ever-tightening codes and achieving higher ratings in sustainability certification programs (e.g., LEED, Passive House, etc.). These standards do a good job of raising the bar, but there is a new bar in town and we’re not talking about whiskey.

Local Law 97

NYC’s Local Law 97 of 2019 establishes carbon emissions limits for buildings 25,000 square feet and larger. These emissions limits, which are based on current building performance data, will begin in 2024 and will rachet down in 2030 and beyond. While we continue to work with building owners and portfolio managers of existing buildings (“What Does the Climate Mobilization Act Mean for Building Owners?”), we need to make sure that new buildings and major renovations are set up for success. Developers, designers, and construction teams must take LL97 into account during design, construction and turnover to protect the value of these new assets.

A developer or asset manager’s least favorite word is probably uncertainty, and now there’s a whole new host of uncertainties to think about:

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What Does NYC’s Climate Mobilization Act Mean for Building Owners?

Image of Existing Buildings in NYC

On April 18th, Introduction 1253-2018 was approved by the New York City Council along with several other major pieces of legislation as part of a Climate Mobilization Act. The Urban Green Council describes it as “arguably the most disruptive in our lifetime of the NYC real estate industry.” We agree. While it will take some time to more precisely gauge impact across the industry, here is an initial primer.

Update: On May 18th Intro 1253 was passed into law as Local Law 97 of 2019.

Context

Previous building energy legislation in NYC has focused primarily on providing the market with access to information in the form of benchmarking and audits. In response to increasing demands for more urgent climate action, this new local law will actually require energy performance levels – and significant retrofits in some cases – in most existing buildings over 25,000 square feet between now and 2030 and deeper reductions beyond 2030.

How Does Local Law 97 Work?

The law establishes targets for carbon-emissions intensity per square foot for buildings based on occupancy class. For instance, multifamily buildings, office buildings, schools, and storage facilities will have different intensity targets. Mixed-use buildings will have their targets set based on a weighted average of their different spaces. Across all segments, these targets will get ratcheted down over time. Building on the type of data submitted as part of annual benchmarking, all tenant and owner energy used at a particular building will be converted to carbon intensity per square foot.

Starting in 2024, buildings will be fined on an annual basis for carbon footprint that exceeds their targets. Based on their performance today, approximately 20% of buildings exceed the 2024 – 2029 targets while approximately 75% of buildings exceed the 2030 – 2034 targets, according to the City Council’s press release. As an alternative to this performance-based framework, rent regulated multifamily buildings with at least one rent stabilized apartment will be required to implement a prescriptive list of upgrades by 2024. These upgrades include indoor temperature sensors providing feedback to boilers and apartment thermostatic controls.

What Will It Mean to the Market?

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