Compliance Paths for Large Rent-Regulated Buildings Under Local Law 97

DOB releases Article 320, 321 Filing Guides.

NYC’s climate law mandates that buildings of 25,000 square feet or larger comply with stringent guidelines aimed at reducing greenhouse gas emissions. By putting limits on buildings’ carbon usage, Local Law 97’s intent is to help achieve zero carbon emissions for the city by 2050. According to DOB, the law covers close to 50,000 buildings across the city, and those buildings account for 60 percent of New York City’s building area and half of the city’s building emissions.

This year, the emissions limits, established by the City Council in 2019, went into effect on Jan. 1.

It’s important to note that buildings that include rent-regulated housing are not exempt from the requirements of Local Law 97 but may be treated differently under the two articles that make up the law as outlined in Title 28 of the NYC Administrative Code:

• Article 320 establishes Building Energy and Emissions Limits for buildings starting in 2024 and outlines the implementation of such limits; and
• Article 321 establishes Energy Conservation Requirements for Certain Buildings that are not covered under Article 320.

In recent months, DOB released two information guides for buildings subject to Local Law 97: Article 321 Filing Guide (Prescriptive Energy Conservation Measures for Certain Covered Buildings) and the Article 320 Filing Guide (Requirements for Reporting Annual Greenhouse Gas Emissions for Covered Buildings). We’ll go over the difference between the two guides and give you a basic understanding of the compliance requirements for rent-regulated buildings under both guides.

Article 320 vs. Article 321

The difference between application of the Article 320 and Article 321 guides is in the types of buildings they apply to and the specific pathways and requirements for compliance with Local Law 97. In effect, Article 320 applies to a broader range of buildings, including those with fewer rent-regulated units, and Article 321 applies to buildings with more than 35 percent rent-regulated units.

Article 320. This classification covers most buildings larger than 25,000 gross square feet or on lots with multiple buildings totaling over 50,000 GSF. Article 320 applies to general building types such as residential, commercial, or industrial buildings that don’t meet the more specific requirements of Article 321. Also, buildings with one, but no more than 35 percent rent-regulated units, fall under Article 320 after 2026.

Under Article 320, compliance is largely focused on reducing greenhouse gas (GHG) emissions by adhering to emissions limits based on building size and type.

Article 321. These buildings have the same size thresholds as Article 320 and are either houses of worship or meet certain categories of low-income housing or rent-regulated accommodations. For large rent-regulated buildings, this category specifically applies to buildings where more than 35 percent of the units are subject to rent regulation.

These buildings remain under Article 321 as long as they maintain this level of rent-regulated units. It’s important to note that buildings initially covered by Article 321 may shift to Article 320 if the proportion of rent-regulated units drops below 35 percent.

For applicable rent-regulated buildings under Article 321, owners can comply by following what DOB refers to as a prescriptive pathway for compliance. Instead of meeting emissions targets, owners can comply by implementing specific energy conservation measures rather than simply tracking emissions and meeting emission limits. There is also the option for a performance-based pathway, but the prescriptive measures are more emphasized in Article 321 to meet energy efficiency goals.

Registered design professionals. While some Article 321 compliance pathways don’t require the assistance of a registered design professional (RDP), almost all Article 320 compliance pathways do. According to the DOB, an RDP must certify the various computations that go into an emissions report, which can include detailed floor area takeoffs, calculations to compare GHG emissions limits with GHG emissions generated, and equations to determine applicable deductions.

DOB strongly encourages building owners to work with an RDP to fully understand the potential impacts of LL97 compliance. The city-sponsored NYC Accelerator provides free technical assistance to help owners comply with LL97. An Accelerator case manager can connect owners with service providers, incentives, and information on financing. Information on the NYC Accelerator program can be found at https://accelerator.nyc.

Both guides are part of the broader LL97 initiative aimed at reducing citywide emissions, but they cater to different types of buildings with distinct compliance needs.

Article 321 Compliance Pathways

Under Article 321, there are two primary compliance pathways for building owners to follow in order to meet the requirements of LL97. The prescriptive pathway focuses on specific required upgrades such as radiator controls and insulation that must be installed to comply with the law. The performance-based pathway involves meeting performance goals through energy efficiency improvements. This pathway offers flexibility, allowing building owners to choose their methods for achieving energy reductions, but requires more ongoing monitoring and reporting of energy use.

The prescriptive pathway is a simpler, more straightforward approach as it requires following a checklist of actions for owners without needing to calculate precise emissions reductions. It requires building owners to implement specific energy conservation measures (ECMs) that are predefined by the law. With this compliance pathway, the ECMs are required regardless of a building’s current energy performance.

Energy conservation measures. For buildings that are subject to Article 321, where an owner chooses to follow the Prescriptive Energy Conservation Measures path, the following must be fully implemented no later than Dec. 31, 2024. Here’s what’s needed to comply under this pathway:

• Adjusting temperature set points for heat and hot water to reflect appropriate space occupancy and facility requirements.
• Repairing all heating system leaks.
• Maintaining the building’s heating system, including but not limited to ensuring that system component parts are clean and in good operating condition.
• Installing individual temperature controls or insulated radiator enclosures with temperature controls on all radiators.
• Insulating all pipes for heating and/or hot water.
• Insulating the steam system condensate tank or water tank.
• Installing indoor and outdoor heating system sensors and boiler controls to allow for proper set-points.
• Replacing or repairing all steam traps such that all are in working order.
• Installing or upgrading steam system master venting at the ends of mains, large horizontal pipes, and tops of risers, vertical pipes branching off a main.
• Upgrading lighting to comply with the standards for new systems set forth in section 805 of the NYC Energy Conservation Code and/or applicable standards referenced in the energy code on or before Dec. 31, 2024.
• Weatherizing and air sealing where appropriate, including windows and ductwork, with focus on whole-building insulation.
• Installing timers on exhaust fans.
• Installing radiant barriers behind all radiators.

Report deadline. Unless a deadline extension is granted by the DOB, the one-time Article 321 compliance report is due by May 1, 2025. Remember that all the energy conservations measures under the prescriptive pathway must be completed by Dec. 31, 2024.

Even after submission the one-time Article 321 report, buildings must continue to submit annual Benchmarking and decennial Energy Efficiency Reports as applicable. And if a building ever loses its Article 321 eligibility it will become subject to annual Article 320 reporting.

Also, DOB has created an Excel workbook to be used for reporting Prescriptive Energy Conservation. The excel file or template can be found at www.nyc.gov/assets/sustainablebuildings/downloads/excel/article_321_templates.xlsx.

Owners are required to use the template for documentation of four PECMs for each covered building:

• PECM #4 – Radiator Temperature Controls

• PECM #7 – Indoor/Outdoor Temperature Sensors

• PECM #8 – Steam Traps

• PECM #9 – Steam System Master Venting

DOB says a service notice with instructions on how to submit the completed workbook will be posted in the future.

Compliance Deadlines for Large Buildings in 2025

> Common Area Lighting Upgrades

Local Law 88 of 2009 requires upgrades in line with the NYC Energy Conservation Code by Jan. 1, 2025, in all commercial buildings greater of 25,000 square feet and in the common areas of residential buildings greater than 25,000 square feet. It also requires that submeters be installed in commercial tenant spaces larger than 5,000 square feet in the same time frame.

Owners will be required to submit an attestation from an RDP (Registered Design Professional), Special Electrician, or Master Electrician confirming that your lighting complies with the Energy Code that was in effect when you performed the installation. An attestation of compliance is due May 1, 2025. Fines for failure to comply start at $1,500 per building.

> LL97 Reports

All LL97 reports are due on May 1, 2025. Under Article 320, large market-rate buildings covered by Local Law 97 with no more than 35 percent of units that are rent-regulated are required to file a report with the DOB by May 1, 2025, detailing their annual greenhouse gas emissions and then by May 1 of every year after. The report must be certified by a registered design professional. 

Under Article 321, rent-regulated buildings in which more than 35 percent of the units are rent-regulated that are required to undertake prescriptive measures are also required to submit a report of compliance with the DOB by May 1, 2025.

The DOB will impose fines of $.50/sq ft per month for LL97 reports that are filed late. You can gain an exemption from late fines only if your RDP files an affidavit stating that they were unable to complete the report on time.