Local Law 97 is going to be costly to New York City landlords, according to a report on projected fines when the regulation comes into effect.
More than 3,700 properties may run afoul of the law and penalties could soar above $200 million as soon as next year, according to the study conducted by Level Infrastructure and commissioned by the Real Estate Board of New York.
Penalties are expected to worsen drastically by 2030, the earliest year identified in the law’s goals. The study projected owners of more than 13,500 properties may be fined a cumulative $900 million annually.
The goal of Local Law 97 is to reduce greenhouse gas emissions across city buildings by 40 percent by 2030 and 80 percent by 2050. The limits begin taking effect next year and penalties increase strongly at the start of the following decade.
For owners, trying to come into compliance may be a struggle for the next few years. The study said more than 11,000 buildings will still be out of compliance by 2030 if every building reduced energy consumption by 15 percent, while more than 8,000 buildings would be out of compliance if every building reduced energy consumption by 30 percent.
Building owners facing the longest odds are multifamily rentals, along with co-op and condo landlords, due to a general lack of resources. Of buildings expected to be out of compliance next year, the study cast owners in the sector as making up more than 60 percent. That share increases to 66 percent by 2030.
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REBNY senior vice president Zachary Steinberg in a statement called on the city to “take action over the next 12 months to avoid damage to our local economy and unfair penalties to property owners in 2024.”
The clock is ticking on landlords, who have been scrambling to come into compliance with the law before the penalty phase begins.
Glenwood Management has the city’s first carbon-capture rig in a residential building, even though the law doesn’t explicitly cite carbon capture as a means of reaching the goal. Alloy Development is electrifying a building by using the power of community solar panels and batteries to store intermittent output. In Williamsburg, a landlord is at odds with residents as he tries to put a lithium ion storage battery on his building’s rooftop.