Article 1: What is Local Law 97 and Who is Impacted
Local Law 97 On April 18, 2019, the New York City Council passed the Climate Mobilization Act (the “Act”). The mainstay of the Act is Local Law 97, which was designed to gradually reduce city-wide greenhouse-gas emissions in buildings over 25,000 gross square feet by as much as 40% by the year 2030 and 80% by 2050. Building owners take note: buildings which fail to comply with the Act’s emissions targets by 2024 (or which fail to report annual emissions) are subject to financial penalties. Roughly 50,000 buildings, comprising nearly 60% of the City’s building area, will be affected.
Urban Green Council, a non-profit helping to transform buildings for a sustainable future in New York City, CEO John Mandyck has said, “This will be the largest disruption in the history of New York City real estate. We get that it’s tough and that billions of dollars will need to be spent to reduce carbon emissions. But new technology and new business models will be invented to help buildings get there.”1
Included in the Act are specifics for the kinds of buildings covered, means of compliance, penalties for failure to comply, exceptions to the Act, further regulations to be enacted (for 2035 and beyond) and programs to aid building owners with compliance. Below is a summary of the administrative body created to implement the Act and the buildings which are covered and exempted by the Act.
OBEEP The Act also established the Office of Building Energy and Emission Performance (OBEEP), which is tasked with the regulation and enforcement of the Act. Enforcement of the Act’s requirements will commence on January 1, 2024 and will be implemented in three phases: 2024 through 2029 (Phase 1), 2030 through 2034 (Phase 2) and 2035 through 2050 (Phase 3). Each stage will usher in increasingly stringent emissions limits and penalties, with Phase 1 intended to capture the most carbon-intensive 20% of buildings in each use group and Phase 2 intended to capture the most carbon-intensive 75% of buildings in each use group.
Covered Buildings Local Law 97 applies to (a) single buildings larger than 25,000 gross square feet, (b) two or more buildings on a single tax lot that exceed 50,000 gross square feet and (c) two or more buildings held as a condominium governed by the same board of managers that together exceed 50,000 gross square feet.
Exempt Buildings Local Law 97 exempts the following buildings from its purview: (a) industrial facilities primarily used for the generation of electric power or steam, (b) buildings of three stories or less which have HVAC or hot-water-heating systems serving more than two dwelling units, (c) City owned and certain cultural buildings, (d) housing developments and buildings on land owned by the New York City Housing Authority, (e) buildings that contain at least one rent-regulated unit, (f) houses of worship owned by religious organizations, (g) properties owned by a housing development fund company organized pursuant to the New York Business Corporation Law and the New York Private Housing Finance Law and (h) buildings that participate in project-based federal housing programs.
Fortunately, the Act does provide potential relief for certain building owners as well as financial assistance to building owners incurring expenses to comply with the Act, as will be discussed in Article 2 of this series: Relief from the Act? What Owners Must do by 2021.
For more information please reach out to:
Brendan Schmitt at +1 212 592 1689 or bschmitt@herrick.com
