NYC Building Owners Face $200M in Annual Climate Rule Fines
Up to 3,700 NYC buildings won't be in compliance with emissions rules in 2024.
New York City building owners who are not in compliance with NYC’s emissions-reduction law by the end of this year are facing more than $200M a year in penalties, according to an estimate in a report commissioned by the trade group Real Estate Board of New York (REBNY).
Local Law 97 (LL 97), enacted in 2019, aims to cut greenhouse gas emissions from NYC buildings by 40% by 2030 and 80% by 2050. The law sets emissions reduction targets for building owners, with fines for non-compliance kicking in on Jan. 1, 2024 and increasing in 2030.
Level Infrastructure, an engineering consulting firm that conducted REBNY’s study, found that up to 3,700 NYC properties could be hit with fines exceeding $200M per year under LL 97—numbers that it says will surge to 13,500 buildings and $900M/year in penalties by 2030.
REBNY is calling on the city to revise the LL 97 penalties, which it calls “unfair” and “damaging to the local economy.” According to the group’s study, if every NYC building were to cut its energy consumption 30% by 2030, more than 8,000 properties would still face fines of $300M per year.
Level Infrastructure’s report projects that more than 60% of the NYC buildings that will be out of compliance in 2024 will be residential properties. Apartment, co-op and condo landlords will be impacted the most because of “their lack of resources to fund and coordinate compliance,” the report said.
Some NYC apartment owners are deploying new technology to avoid the looming penalties, including investing in renewable energy power storage and carbon-capture systems.
Glenwood Management has installed the first carbon-capture system to be deployed in a high-rise building at the Grand Tier, a 30-story apartment tower it owns at Broadway and 64th Street in Manhattan, GlobeSt. reported.
Glenwood plans to install the system from startup CarbonQuest—which scrubs carbon dioxide from the exhaust of gas-fired boilers—across a 2.5M SF portfolio of five NYC apartment buildings in what the company says is the world’s first large-scale application of carbon-capture technology in buildings.
CarbonQuest’s system at the Grand Tier deploys compressors and piping, located near the boilers in the 20-year-old building’s basement, which separate carbon dioxide in the flue exhaust from nitrogen and oxygen. In a multi-stage process, the system liquefies the CO2 and stores it in a metal tank.
Glenwood said its NYC buildings, based on their current carbon emissions, would incur an estimated $7M in LL 97 penalties between 2024 and 2029, and $15 million in penalties in the years ranging from 2030 to 2034. CarbonQuest’s carbon-capture system is expected to reduce emissions at Glenwood’s portfolio properties enough to avoid fines entirely, the company said.