Many New York City co-op boards find themselves in a double bind. While they're struggling to pay rising property taxes, they're also facing costly retrofits to reduce their buildings' carbon emissions enough to satisfy looming city and state laws — Local Law 97 in New York City, and the state's Climate Leadership and Community Protection Act (CLCPA).
State Sen. Kevin Parker (D-Brooklyn) has an idea co-op boards are going to love.
Parker's has introduced a bill in the state Senate, S9603, that will provide relief from real property taxes for capital improvements that reduce building carbon emissions. The proposed legislation is two-fold:
Tax exemption. The bill creates a tax exemption equal to any increase in assessed value for the eligible improvements. The exemption lasts for 20 years provided the work is begun after Dec. 31, 2021 and is completed within 60 months. All taxes on the property must be current, and no resident can be evicted in order to complete the improvements.
Tax abatement. The bill creates a tax abatement equal to the emission reduction brought about by a retrofit. The abatement remains in effect for a period of time that varies, based on the emission reductions. The sliding scale ranges from two years for an emission reduction of 2-5%, up to 20 years for an emission reduction greater than 30%. The abatement cannot exceed the taxes owed for any year.
Parker offers the following justification for the bill: "New York State has an urgent need to reduce emissions from the building stock through energy-efficiency measure and efficient electrification in order to meet the greenhouse gas emission goals established by the CLCPA... At the same time, New York City has adopted Local Law 97... Realizing these goals will require buildings to both reduce their total energy use and move to lower-carbon energy sources, this legislation is intended to (create) an incentive for a property owner to create real meaningful reductions in the emissions profile of the building. This type of tool is needed (because) those investments may not make financial sense in the absence of an incentive."
The list of "eligible" improvements is long, including upgrades to the building envelope, insulation, windows, heating and cooling and domestic hot water systems, energy-efficient appliances and fixtures, thermostats, wiring upgrades, solar panels, green roofs, waterproofing, plus the costs of labor, materials and supplies.
The bill, if it becomes law, will also establish an Energy Efficiency Board to establish rules and regulations to administer the program.
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