Mayor Expands City's Green New Deal to Rent-Regulated Buildings

Mayor Bill de Blasio recently signed into law a bill that requires some rent-regulated buildings to abide by strict carbon emission caps. The bill, which was spearheaded by Queens Council Member Costa Constantinides, increases the threshold for rent-regulated buildings to be exempted from the city’s Green New Deal emissions reduction requirements. Under the new law, about 1,000 more buildings will have to comply with emissions regulations starting in 2026. The move will reduce about 190,000 tons of climate-harming carbon dioxide per year by 2030, Mayor de Blasio said.

Under Local Law 97, which was approved in 2019, buildings with one or more rent-regulated units were exempted. That law, which applies to properties larger than 25,000 square feet, aims to cut citywide greenhouse-gas emissions 40 percent by 2030 and 80 percent by 2050.

Under this new law, buildings that are up to 35 percent rent-regulated are required to meet the Green New Deal standards. This newly added group of buildings has an extra two years to comply with the initial emission limits. Specifically, these buildings have until Jan. 1, 2026, to meet their emissions cap and then until May 1, 2027, to submit an initial report documenting their compliance.

At the time of initial passage, city officials were concerned that owners would respond to Local Law 97 by passing the cost of green retrofits onto tenants through the Major Capital Improvements (MCI) program. But when state legislators amended the MCI program in June 2019, the city could include a specific subset of rent-regulated buildings without worrying about added costs to tenants. Under the Housing Stability and Tenant Protection Act of 2019, buildings can qualify for MCIs or rent increases granted in exchange for building-wide improvements only if more than 35 percent of their apartments are rent stabilized.

In response to the amended law, the Real Estate Board of New York issued a statement criticizing the city for “enacting legislations with little understanding as to how it will be implemented, who it will impact, and whether it will result in meaningful carbon emission reductions.” The group said that without the proper analysis the city is “setting owners up for failure, forcing them to pay fines instead of helping these cash-strapped rent-regulated buildings invest in making environmental upgrades. All of this is occurring at a time when rent-regulated building owners are facing mortgage and tax defaults due to the COVID crisis.”

Local Law 97’s Emission Limits

Local Law 97 sets detailed requirements for two initial compliance periods: 2024–2029 and 2030–2034. It also requires the city to clarify the requirements for future periods through 2050. Buildings over 25,000 gross square feet must meet annual whole-building carbon intensity limits during each compliance period based on building type or prorated for mixed-use buildings.

To comply, building owners must submit an emissions intensity report stamped by a registered design professional every year starting in 2025 or pay substantial fines. The law sets emissions intensity limits (metric tons of CO2e per square foot) for 10 building categories based on Building Code occupancy groups. And a building’s annual emissions limit equals its emissions intensity limit multiplied by its gross floor area.

Analyzing Your Building’s Emission Limit

To do a preliminary analysis of your building’s carbon emissions limit, use EPA’s Energy Star Portfolio Manager. This tool, required by the city for building owners to store and submit energy data for Local Law 84, is able to convert a building’s energy use into carbon emissions.

All buildings over 25,000 square feet should have submitted their Energy Star Benchmarking data to the city by May 1, 2019, for Local Law 84 compliance. This is a good starting place to see how your building compares to the Local Law 97 emission limits. When making the calculations, make sure you are using the same units. Energy Star typically displays emissions in kilograms of carbon dioxide equivalent (KgCO2e), and the law lists the limits in metric tons of carbon dioxide equivalent (mtCO2e).

Once you’ve found your total carbon emissions in Portfolio Manager, you’ll need to calculate your carbon emissions limit to find out if you comply or not. To calculate your emissions limit, find your type of building in the table below and multiply the limit by the gross square footage of your building. This is the carbon emissions limit for each compliance period.

If your total is higher than the limit, you are not in compliance. To calculate your annual fine, first convert your building’s carbon footprint from Kg to metric tons by dividing by 1,000, then multiply the difference between the limit and your actual carbon footprint by $268.

Carbon Emissions Limits

Here are the 2024 and 2030 carbon emissions limits for multifamily apartments, offices, and hotels. The law provides limits in metric tons of carbon dioxide equivalent. The following table expresses these numbers in kilograms of carbon dioxide equivalent (one metric ton equals 1,000 kg).

                                                                                                                        Carbon Limit (kgCO2e/sf)

Occupancy Group                            Space Use                                           2024–2029           2030–2034

R2 - Residential                                 Multifamily Housing                                 6.75                        4.07

R1 -  Hotel                                           Hotel                                                      9.87                        5.26

B - Business                                        Office                                                     8.46                        4.53