What is Local Law 97 and How Do I Avoid Fines?

*This post was originally published on September 7th, 2021. 

When New York’s City Council passed the Climate Mobilization Act, our clients were left wondering how the Act’s sweeping set of new regulations aimed at dramatically reducing the city’s greenhouse gas emissions will affect their properties. The overall goal of the Act is pretty lofty: to make the city carbon neutral by 2050. At the center of this ambitious “Green New Deal for New York” is Local Law 97, which sets strict limits on large and medium sized buildings’ carbon emissions. Simply put: Local Law 97 means that, starting in 2024, the vast majority of all large and mid-sized buildings will be required to dramatically cut their carbon emissions or face some serious fines. Needless to say, understanding the ins and outs of Local Law 97 quickly became a big priority for our clients.

We took on the most frequent questions we’ve received from clients on the Law to help you get to know how it might affect your property too and, with 2024 right around the corner, how you can start planning now to get into compliance now.

What buildings are affected by Local Law 97?

Buildings account for upwards of 70% of all greenhouse gas emissions in New York City. Local Law 97 aims to reduce those emissions by up to 80% by targeting the largest buildings in the city. That means that, with a few exceptions, all buildings over 25,000 gross sq. ft. fall under the new regulation. Multiple buildings on the same tax lot or owned by the same condo association that amount to more than 50,000 gross sq. ft. total will also be affected.

In general, if your building or properties are subject to the NYC Benchmarking Law, you’ll also need to concern yourself with the new emissions law. While affordable housing is not exempt under the new law, some restricted-income buildings owned by limited-profit companies may be exempt until 2035 and residential buildings where more than 35% of units are rent-regulated, HDFC cooperatives, or participate in project-based federal housing programs are off the hook entirely for now. With those exemptions, essentially all large and mid-sized buildings in New York City fall under Local Law 97.

What do I have to do?

The overall goal of Local Law 97 is to reduce the city’s big building carbon emissions by 40% by 2030 and a whopping 80% by 2050. Accordingly, all buildings covered under the law will have to meet new energy efficiency standards and emissions limits by 2024. The specifics of those standards and limits are determined by your building's occupancy group, but will universally become more stringent as we get closer to 2050. Starting in 2025, owners of buildings that fall under Local Low 97 must submit an annual report detailing their structure’s carbon emissions for the previous year by May 1st. Failure to submit a report, or turning it in late will cost you and, obviously, so will going over your emissions limits. Before you get working on your first report, you can check how your building is tracking toward the upcoming benchmarks at Energygrade.com.

How bad are the fines?

Given the size and scope of the Climate Mobilization Act, it’s no surprise that the city baked in some hefty fines to ensure compliance with the new regulations. Not turning in a report will cost you $0.50 per square foot per month until it’s received. Going over your building’s emission ceiling will earn you a fine of $268 per metric ton of emissions over the limit.

To show you just how bad that could get, let’s use the example of a 58,400-square-foot residential property. Under Local Law 97, this building needs to limit its carbon emissions to 6.75 kilograms per sq. inch, or 392 tons per year in total. If that building winds up emitting 7.72 kg per sq.inch, that means it’s produced 451 tons of carbon, putting it 56 tons over the limit. Each one of those 56 tons will cost that building owner $268 for a total fine of $15,276!

How Do I Avoid Getting Fined?

Avoiding fines under Local Law 97 is simple: file a report each year and dramatically cut your building’s carbon emissions. If the second half of that sounds difficult, if not impossible: consider the fact that for most buildings in New York City, space heating and hot water account for well over half of all energy consumption. With the right technology, monitoring, controlling, and managing your building’s central heating system can help you cut your carbon emissions, avoid fines, and ultimately save money. Using industry-leading advanced technology, backed by a team of trained boiler experts, Runwise is the most cost-effective way to cut your building’s carbon emissions and get it into compliance with regulations like Local Law 97. Runwise’s unique, wireless system can be installed in a day and works in any centrally heated building. In addition to helping you avoid steep fines, Runwise will save you on heating costs by maximizing your heating system’s efficiency. So why wait for 2024? Find out how HeatSmart can make your building greener and start saving you money today.

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