NYC Landlords Pick Fines Over Climate Law Compliance

For some New York City property owners, there’s still not enough incentive to limit carbon emissions.

Dozens of landlords are planning to pay fines for failing to comply with Local Law 97, rather than retrofit their properties to reduce emissions, according to responses by more than two dozen building sector executives to the Center for an Urban Future reported by Crain’s.

Some owners think the bottom line looks better if they absorb the fines that will be levied against them for failing to meet decarbonization goals dictated by the law. Retrofitting properties’ lighting, insulation and various systems can be a costly endeavor in itself.

“It’s a tough sell,” Center for an Urban Future policy director Eli Dvorkin told Crain’s. “For many building owners, it just comes down to pretty basic math, and right now the payback period for those investments is long and getting longer with higher interest rates and rising costs for borrowing.”

Building owners are set to pay $268 per ton of carbon dioxide emissions that exceeds a property’s 2024 limit, varying by building. Owners are required to file reports with the city by Mary to demonstrate compliance; emission reduction targets are set to grow at the end of the decade.

So far, a vast majority of buildings required to meet emissions targets are in compliance with the law. The Department of Buildings claims fewer than 11 percent are out of compliance with 2024-26 emissions targets.

To ensure future compliance, however, Dvorkin suggested the city may need to impose higher fees for violating the decarbonization law, something the Real Estate Board of New York opposes.

Another possibility is for the city to increase incentives and financial assistance to help property owners comply with the law, such as providing additional funds and tax credits.

“The green economy isn’t just going to build itself,” Dvorkin added.

The aim of Local Law 97 is for the city to cut emissions 40 percent by 2030 and 80 percent by 2050 from 2005 levels.

— Holden Walter-Warner