NYC’s Green New Deal: What Multifamily Investors Need to Know
Thousands of buildings in New York City will have to cut the amount of energy that they use over the next decade.
Thanks to the recently enacted Climate Mobilization Act, medium and large buildings by 2030 must reduce their emissions by 40 percent. The law further calls for an 80 percent reduction in greenhouse gas emissions for New York City by 2050, compared to 2005 levels.
“New York City is the first city in the world to require all large existing buildings of 25,000 square feet or more, of which there are 50,000 citywide, to make efficiency upgrades that lower their energy usage and emissions — or face steep penalties,” officials said.
Property owners, developers and city officials are trying to understand the scope of the law and the cost of compliance. Here are some of the most important parts of the law for property owners:
Most buildings over three stories tall already have to submit annual reports on their energy and water use, under New York City’s Benchmarking Law.
Starting in 2024, buildings covered by the new law will face fines if their carbon emissions are higher than certain limits. However, most buildings are likely in compliance with the first deadline.
“Limits from 2024 to 2029 will affect the most carbon-intensive 20 percent of buildings,” according to Urban Green, an advocacy group for sustainability in New York City. “Limits from 2030 to 2034 are set to affect the most carbon-intensive 75 percent of buildings, with 25 percent under the cap.”
Some apartment buildings, such as those that include one or more rent-regulated apartments, can comply with the law by implementing a set of less-costly, energy-saving “alternative measures,” including repairs, new insulation and upgraded systems.
New York City will also no longer allow all-glass facades in new construction unless they meet strict performance guidelines.
Solar Panels, Green Roofs Required?
The bill also requires solar panels or green roofs, but the final rules still need to be written.
Any new construction building, or existing building undergoing certain major renovations like a roof replacement, with more than 200 square feet of usable roof space will have to include either a partial green roof or solar panels with a capacity of at least four kilowatts, according to an analysis of the law by Brightpower, an energy retrofit company.
The law also includes a tax abatement for green roofs of $15 per square foot.
Another section of the law requires the city’s housing agency to study whether the cost of these rooftop improvements will make housing less affordable, and will allow the agency to limit such requirements for certain buildings.
New Financing Available
The package of bills creates a new tool for property owners to pay for renovations: a Property Assessed Clean Energy program (PACE).
The program will offer long-term loans to pay for energy efficiency and renewable energy projects, requiring little or no down payment from borrowers. Borrowers use the money they save on their utility bills to make their debt service payments.
Multifamily property owners and investors will be watching carefully as more details emerge about the Climate Mobilization Act and its mandates.