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City Releases "Final" Rules on Compliance With Local Law 97

New York City

Local Law 97, DOB rules, co-op and condo boards, carbon emissions, renewable energy credits.
Dec. 26, 2022

The other shoe has dropped — sort of. After releasing draft rules and holding a public hearing, the city's Department of Buildings (DOB) has issued final, though incomplete, rules on how co-op and condo boards can comply with Local Law 97, the centerpiece of the Climate Mobilization Act. The 26-page document is available here

Major questions continue to linger around the use of renewable energy credits to offset emissions and the creation of funds to support building retrofits, Christopher Halfnight, senior director of policy and research at the nonprofit Urban Green Council, tells Crain's. “I think the rules provide much-needed certainty,” Halfnight says. “We now have a very large down payment on the details, and that’s great. That’s what’s needed for many owners to turn from planning to action.”

Halfnight adds that he's eager to see limits on the use of renewable energy credits, which can be purchased from local solar and wind projects to partially offset a building’s emissions without performing costly retrofits. The credits will not be widely available for purchase in the city until at least 2027. So far the DOB has only restricted the credits to emissions from electricity, meaning the commercial sector would stand to benefit from the credits more so than residential buildings. The real estate lobby maintains that the credits are essential to allow certain properties to comply with the law.

To ensure that building owners are also making retrofits that cut carbon emissions, Halfnight, other environmental advocates and several city lawmakers have urged the Buildings Department to set “reasonable limits” for the credits. DOB spokesman Andrew Rudansky says the agency agrees that limits on renewable energy credits are needed, and that it's working with the New York State Energy Research and Development Authority to study the issue. He adds that DOB officials are digesting public feedback and working to draft a second set of proposed rules, which will be released in the coming months.

Under the 2019 law, most buildings larger than 25,000 square feet must meet caps on their greenhouse gas emissions beginning in 2024 — with increasingly tight limits in 2030 and 2050 — or face hefty fines.

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