NYC Marches Forward with its own 'Green New Deal' | Practical Law

NYC Marches Forward with its own 'Green New Deal' | Practical Law

In a major win for climate change advocates, the New York City Council has passed a monumental package of bills, known as the Climate Mobilization Act, aimed at aggressively reducing the city's carbon footprint by requiring the city's largest buildings to cap their greenhouse gas emissions and retrofit with energy-efficient improvements.

NYC Marches Forward with its own 'Green New Deal'

Practical Law Legal Update w-020-0835 (Approx. 4 pages)

NYC Marches Forward with its own 'Green New Deal'

by Practical Law Real Estate
Published on 22 Apr 2019 • USA (National/Federal)
In a major win for climate change advocates, the New York City Council has passed a monumental package of bills, known as the Climate Mobilization Act, aimed at aggressively reducing the city's carbon footprint by requiring the city's largest buildings to cap their greenhouse gas emissions and retrofit with energy-efficient improvements.
On April 18, 2019, the New York City Council adopted a bundle of bills and resolutions, known as the Climate Mobilization Act (the Act), that paves the way for reducing the city's carbon emissions. The newly-created Office of Building Energy and Emission Performance will work with owners of the city's largest buildings to cut their greenhouse emissions and retrofit their properties for energy efficiency.

Background

The Act is a bundle of legislation first introduced last November that aims to aggressively slash carbon emissions across the city's boroughs. The Act's passage was years in the making, pitting climate change advocates against many of the city's biggest real estate players, including The Real Estate Board of New York. In formulating the Act, council members solicited input from environmental advocates, engineers, architects, and builders. The council passed the Act by a 45 to 2 vote, and Mayor Bill de Blasio stated he would sign the bill into law.

The Act

The goal of the Act is to reduce greenhouse gas emissions citywide by 40% by 2030, and by 80% by 2050 (Council of City of NY Intro No. 1253). To accomplish this goal, the Act:
  • Establishes the Office of Building Energy and Emission Performance.
  • By December 31, 2024, requires energy-efficient retrofits of covered buildings, such as upgrading or replacing:
    • temperature control mechanisms;
    • lighting systems; and
    • windows and insulation.
  • Beginning in 2024, caps greenhouse gas emissions from covered buildings in accordance with the intensity limits specified in the Act.
  • Establishes reporting requirements for covered buildings.
(Council of City of NY Intro No. 1253.)
The Act defines a "covered building" as:
  • A single building with more than 25,000 gross square feet.
  • Two or more buildings on the same tax lot with a combined area of more than 50,000 gross square feet.
  • Two or more buildings held as condominiums under the same board of managers with a combined area of more than 50,000 gross square feet.
(Council of City of NY Intro No. 1253.)
Covered buildings, which account for 30% of citywide emissions, include the Empire State Building and Trump Tower. Some building owners will be eligible for Act compliance assistance loans (Council of City of NY Intro No. 1252).
Under the Act, certain buildings have adjusted compliance requirements, including:
  • Hospitals.
  • Rent-controlled units.
  • Houses of worship.
  • Senior and low-income housing.
(Council of City of NY Intro No. 1253.)
Owners of covered buildings in violation of the Act face a civil penalty of not more than:
  • The difference between:
    • the building emissions limit for such year; and
    • the reported building emissions for such year.
  • Multiplied by $268.
(Council of City of NY Intro No. 1253.)
There are additional measures in the Act concerning:

Opposition to the Act

The Act faced stiff opposition from the Real Estate Board of New York and other real estate developers. The opposition argued that the Act unfairly and inequitably imposes the burden of reducing emissions on the city's largest buildings, a small segment of the city's overall building stock, and that the Act's emissions reduction goals cannot be achieved without a more citywide effort. Council members intend to tackle reducing emissions from smaller buildings but acknowledge that it will require a more individual approach so as not to cause rent increases or impose unaffordable costs on smaller, mom-and-pop owners.

Practical Implications

Owners of the city's largest buildings are expected to spend billions to comply with the Act, but they are also expected to see long term operating cost savings. Supporters of the Act also point to potential job creation in the city departments overseeing compliance with the Act and in the construction sector as retrofitting work is carried out. However, given the long lead time before the Act's requirements take effect, it will be years before the Act's success in reducing emissions is potentially measurable.