Uncertainty for NYC's 'Most Important' Climate Law

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Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning, everyone. On the short week before Thanksgiving, we'll do our climate story of the week here on day one, the future of a major New York City climate law hangs in the balance and so does what the building you live in might have to do if you're in the city.

Here's the story. City Council passed Local Law 97 in 2019, as part of Mayor de Blasio's New York City Green New Deal, and it was supposed to put a cap on carbon emissions from buildings, the largest source of greenhouse gas emissions in our area is from buildings. A handful of City Council members told Gothamist that this legislation was the most important they had ever passed in their careers.

A group of advocates and City Council members were among 400 people who showed up on the last day of the public comment period, however, just the other day, to ask Mayor Adams and the Department of Buildings to set enforceable standards. Let's talk about this as we are joined by Rosemary Misdary, WNYC and Gothamist Metro Science Reporter covering climate. Hi, Rosemary, so glad you could join us. Can you hear me?

Rosemary Misdary: Yes, I can. Good morning, Brian. Thanks for having me on.

Brian Lehrer: Sure. Now, by way of background, remind everybody, what is Local Law 97 intended to do, and how is it intended to cut carbon emissions from New York City buildings.

Rosemary Misdary: Local Law 97 is the most significant law the city has to cut greenhouse gas emissions. Essentially, there's a timeline attached to it. It kicks in about 2024 and has a five-year warmup period. By 2030, buildings, 25,000 square feet or larger have to cut their emissions by 40%, and then by 80% in 2050, although the proposed rules have changed that second part, to requiring zero emissions by 2050.

Brian Lehrer: Three years since the law passed, what guidance have building owners and managers received about how they should comply with the law?

Rosemary Misdary: Up until this point, they had received no guidance until the proposed draft rules had been announced. The law is actually very flexible, it doesn't really tell buildings what to do, aside from you have to cut emissions by this much by this certain year. This flexibility is supposed to give buildings the power to figure out how to do it more easily. They have a lot of options. They can insulate their pipes, they can fix heat leaks, they have a whole list of things that they could do pick and choose to meet all these requirements. There isn't a specific strict guidance on how to follow the law, that's left up to the buildings to figure out how they're going to do it.

Brian Lehrer: What are these potential loopholes that cause 400 people to flood this virtual Department of Buildings meeting on the last day of the public comment period last week to express their concern?

Rosemary Misdary: There are a few. There are loopholes around undefined terms. They have terms like good faith effort. If a building owner is showing good faith effort, they can be let off the hook, but there's no definition. Like you could say, "I'm trying to make an effort," and not actually be making an effort, and then you get let off the hook, and that's one of the things that activist and City Council want the Department of Buildings and the mayor to put a stricter definition on, what is good faith effort. That's one of the concerns they have might be a loophole and might also interfere with the enforcement because there's a penalty of $268 per metric ton of exceeded admissions.

Then there's another loophole which is the purchase of offsets. It is limited to 10% of the exceeded emissions, but there is no definition on what an offset can be. For example, an offset might be paying for a bunch of trees to be planted elsewhere, but it also could be something that might not be totally connected, or really an offset. They want them to put stricter definitions on what can be part of that offset.

The biggest loophole or the biggest concern that might be a loophole is what they call RECs, which stands for renewable energy credit. Basically, it's a way of subsidizing using renewable energy sources. In essence, it's a certificate that represents the purchase of one kilowatt of renewable energy, but it's not actually energy that the building owner would have used, they purchase it, and they can claim all the benefits of that renewable energy credit to offset the emissions they've created.

The original law place no limits. You could basically buy your way out of having to do the expensive retrofits, and it's cheaper than the penalties. There is a concern that, if a wealthy building owner can just pay their way out of it, and it's a more of a concern for a commercial building because the renewable energy credits do have some restriction, you can only use it for electricity usage.

For example, this affects more residential buildings who use fuel or natural gas for heat and hot water. You can't use renewable energy credit for your heat and hot water use in a residential building if it comes from natural gas. For most residential buildings, natural gas accounts for more than half of their energy usage. There is a concern that wealthy commercial building owners would just be able to buy out of this.

Brian Lehrer: Listeners, we have time for a few phone calls about New York's landmark climate legislation to cut emissions from buildings and its implementation and enforcement with these developments in the past week, that our reporter Rosemary Misdary was just explaining. Building owners and managers, you're invited in, 212-433-WNYC.

What guidance have you received about how to go about making your buildings greener? Help us report this story on that level. Do you feel you can or cannot afford it? 212-433-9692. Or what it would take for your building. Climate activists or other concerned citizens, how do you want the city to enforce this law? 212-433-WNYC, 212-433-9692, or tweet @BrianLehrer. You acknowledge in your Gothamist article that retrofitting buildings to reduce emissions isn't cheap.

You were just talking about how wealthy landlords might be able to duck out of some of these requirements with the renewable energy credits buying their way out.

You also write, "While wealthy landlords can skirt the law with money low-to middle-income homeowners and co-ops and condos large enough to fall under the regulation cannot afford such luxury." How is that playing out as far as you've been able to determine in your reporting?

Rosemary Misdary: A lot of these energy efficiency retrofits, they pay for themselves in the long run, but the upfront cost is pretty steep. Right now, there really isn't, and that's one of the things City Council called on the mayor to do, is to provide some assistance for these low-to-middle-income co-ops and condo boards to be able to comply with these laws.

One building I spoke to which was Glen Oaks Village in Queens, they have 10,000 people living there, almost 3000 units. To do all those retrofits would cost $22 million. For somebody who paid $250,000 for their unit, and who are mostly workers who work at the nearby hospitals, near Queens Glen Oaks village, that's not something they can afford. It's one of the things that they want the mayor to do, but there hasn't been much.

Brian Lehrer: How can the city, according to them, address those concerns about affordability and still move in a green direction?

Rosemary Misdary: One thing that I spoke to co-ops and condo boards, they said a tax abatement would help, more time. Also finding funds in the city to help support all of these retrofits that you need to put in, especially, for example, one major retrofit they have to put in is new boilers. You have to put in the electrical heat pumps, which costs money and a lot of them don't have to be changed right now. You're asking them to retire systems that still have a lot of life in them. For Glen Oaks Village, they told me that to replace one of the boilers, it would cost over $9,000 for each resident which they do not have.

Brian Lehrer: Unresolved as of now. Joy in Manhattan, you're on WNYC. Hi, Joy.

Joy: Oh, hi. Well, now I have two questions. I called with one, which is how they actually measure the emissions because I know this is a really complicated issue when dealing with greenhouse gas emissions in general. I'm wondering how the city expects buildings to do it. I'll also throw in the other question, which is, I thought I saw some signs on the street about getting help from the city with doing this. I did not follow it up, but I'm interested in what that's about too. Maybe that was just technical guidance, not money.

Rosemary Misdary: I think what they're talking about is technical guidance. The city has NYC accelerator, which is a place where building owners, homeowners can go get one-on-one help and figure out how can they make their buildings or homes more energy efficient. Other than that, there really isn't much support for that. As for how to calculate your emissions, the department of buildings and the proposed rules did come up with an equation.

The equation is based on, okay, what your energy usage is, it's based on your energy usage, your square footage, and also your occupancy class. Whether you're residential, whether you're commercial. It's and it's different for each building. If you go online, the city does have a calculator for this. You can plug in all of your parameters and find out all this information.

Brian Lehrer: I hope that's helpful, Joy. Thank you for calling in. Here's Georgie in Brooklyn who I think wants to talk about their building. Georgie, you're on WNYC.

Georgie: Oh, hi. Thank you for having me. Longtime fan. I work with 350 Brooklyn. We're an environmental Oregon, Brooklyn that works at the counter, the global climate crisis. We were part of the announcement on Monday, the controller's report where we brought a case study in. It showed a building that we networked with at on Bergen Street, an 1860s building from the Civil War era that made upgrades to a high-performance building. Over seven, the past 17 years, they have saved $664,000 in energy bills.

Without upgrades, they would have spent two or three times that amount. I just wanted to make a strong case that people who argue it's not an affordable option. Even the co-op that you had mentioned earlier the 22 million-dollar in upgrades, that averages out to $7,500 per unit if there's 3000 units. The argument that it's not affordable, I think that upfront cost, maybe there's a way [unintelligible 00:13:01] that, and then in the end you're saving money.

Brian Lehrer: Thank you very much. Georgie is making the point that you were describing before, Rosemary, about how it's projected that this kind of retrofit and upgrade would save buildings money in the long run. I guess one of the questions might be how long will that take before a complex like Glen Oaks Village in Queens. How long would it take before they break even if they have to assess their residence $7,000 to $9,000 a piece up front?

Rosemary Misdary: I'm not sure what that number is, but I also want to say that $7,000 per unit may seem not much to some people, but I think that saying that as a blanket statement, it's not applicable to everybody. I think some people $7,000 would be very difficult to shell out, even though they are homeowners, they're not millionaires. This might be something difficult for them to afford. As I had mentioned earlier, these retrofits do pay for themselves in a matter of years. That is true.

Brian Lehrer: Again, yet to be resolved, this is on the city at this point. Let's take a call from Steward who says he is a professor of real estate at NYU. Steward, you're on WNYC.

Steward: Good afternoon or good morning. Thank you for having me on. I'm a professor of sustainability at the Shack Institute of Real Estate in NYU. I've done some statistical analysis of 2,500 condo and co-op buildings in New York City and recognize that by 2035, only 7% will have encountered a fine. In most cases, the fine comes to about 4 cents per square foot per year, which doesn't result in a business case for investment and energy efficiency.

What I also see is that if the state effort to decarbonize the utility grade are all successful, building owners can do nothing and their fines will go down by the time the fine rate increases in 2030. There is overall, I would say, very little incentive for most buildings to invest in energy efficiency upgrades. The law is described as one of the most ambitious of any city in the world. That might be true, but it's a very sad statement.

Brian Lehrer: You would like to see the penalties increase from what the law currently requires.

Steward: I'm not saying that we should increase the penalties. I'm saying we should have a more effective stimulus for investment and energy efficiency.

Brian Lehrer: Thank you very much. Rosemary, we're almost out of time, but I'm curious if that reflects anything else that you've run into in your reporting. Then also tell us since the public comment period has ended with this flourish of comments last week, what happens next?

Rosemary Misdary: Well, first, I would like to say that for the initial period that kicks in before 2030, that kicks in 2024, most buildings will comply without doing anything. About 30% will be non-compliant. That number jumps up according to the comptroller's report to more than 70% when 2030 comes along. The thing is that the downstate electrical grid is only 5% renewable energy sources. There is about maybe 20%, 25% that's hydro. We are dependent on a lot of big projects like the one for bringing transmission lines from Quebec for renewable energy. These projects haven't been started yet and they're not coming for a while.

The current grid is mostly fossil fuels. While that is still the case and even though [unintelligible 00:16:57] says we're on track to have a emissions-free grid by 2040, right now, it's not emissions-free. Having 5% renewable energy on your electrical grid is a far cry from where we need to be. So for buildings to not do anything and just be energy efficient, if there's still on natural gas, they're still creating emissions. That's one thing that has to go is our dependence on natural gas for heat and hot water

Brian Lehrer: Moving eventually to electricity at a much greater rate. Let me tack on one other question here because what you just said prompts me to think, we've been talking so much about retrofitting existing buildings under local law in 97. What about new buildings? You know that Governor Hochul and Mayor Adams in order to help ease the affordable housing shortage in New York, want a lot of new development to take place, especially with density around train stations and things like that.

In general, that development is considered environment-friendly and climate-friendly. Have you been able to report out whether developers find this law daunting to them? Will it be harder to get sustainable development in the city because developers will just want to go elsewhere because they won't have to meet these requirements when they start putting bricks and mortar in the ground?

Rosemary Misdary: There are no laws on the book or codes on the book that I'm aware of for new buildings. I do know that there is a big push for the new buildings to be built for all-electric. It actually, it makes more sense because it's cheaper to build a building all-electric because you can than it is to take a building, building that's already like not all-electric and have to retrofit it. We're talking all new pipes, all new systems, this is a lot of money. It makes sense for a new building to do that. There's also a lot of subsidies for making it all electric. There's a lot of incentives is what I'm saying for a new building to be all-electric.

Brian Lehrer: There's our climate story of the week, folks, an update on the battle over implementation of New York City's Local Law 97, which requires a lot of retrofit fitting for existing buildings of a certain size and up to make them more sustainable. Rosemary Misdary WNYC and Gothamist Metro Science Reporter covering climate. Thanks so much for filling us in.

Rosemary Misdary: Thank you very much, Brian, for having.

 

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