New York's Cooperative and Condominium Community

Habitat Magazine Business of Management 2021

HABITAT

GREEN IDEAS

HOW NYC CO-OPS/CONDOS SAVE ENERGY

Green Roofs Failing to Sprout on City’s Co-ops and Condos

New York City

Green roofs, carbon emissions, co-op boards, PACE loans.
June 18, 2021

In late 2019, city and state leaders boosted incentives for building owners who turn their rooftops green by installing gardens. Since then, according to the Department of Buildings, exactly 11 buildings have applied for the property-tax credit through April, Crain’s reports. That’s 11 applications, not approvals. Why the anemic response? 

“I wouldn’t call this program an incentive,” says Alan Burchell, founder of rooftop-renovation specialist Urbanstrong. “It’s barely incentivizing anything.”

The cost of retrofitting a brownstone or townhouse building with a relatively small roof starts at $65 per square foot, Burchell says, and can easily go beyond $90 per square foot. Therefore, the typical tax rebate of $5.23 per square foot isn’t enough to move the needle. Nor is the relatively generous $15 per square foot in parts of the city where heat islands are severe.

“The incentive makes more sense for buildings with large rooftops,” Burchell says, adding that such buildings constitute “a relatively small number” of residential buildings.

The benefits of green roofs are numerous. They absorb rainwater and keep the city’s overtaxed sewer system from flooding; they prolong the life of roofs; they absorb heat and reduce the cost of cooling buildings; they’re beautiful. Despite the daunting economics, new buildings and buildings that undergo a total roof replacement are now required, under Local Law 92-94, to install solar panels or a green roof, or a combination of the two.

There is good news. Another financing option is a Property Assessed Clean Energy (PACE) loan, a new program that launched with a bang this week when an $89 million PACE loan closed at a Wall Street office tower. PACE loans allow building owners, including co-op boards, to finance up to 100% of the cost of energy-saving retrofits. Unlike conventional financing, long-term PACE loans are repaid in installments through a charge on the subject property’s tax bill over the life of the retrofit, which can be 20 to 25 years. Loans are sized according to projected energy cost reductions, so building owners can begin realizing savings from day one – with no upfront outlay of funds. In effect, the retrofit pays for itself. 

There is also some confusion hampering green roof development. “City web pages about the green rooftop program should be simpler and clearer,” says Emily Maxwell, director of the Nature Conservancy’s cities program. The city, she adds, should take the lead by making rooftops on public buildings green. That would lure more consultants and contractors into the arena, she says, and give New Yorkers a better chance to experience the benefits of green rooftops.

In the end, it comes down to persuading the government that the benefits of the renovation projects exceed the upfront costs. The Nature Conservancy says it will be asking the state Legislature to boost tax incentives next year. “I commend the city and state for improving the program,” Maxwell says. “Let’s keep the improvement going.”

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