NYC To Waive Fines For Landlords Who Make 'Good Faith Efforts' To Reduce Emissions

New York City is removing some teeth from Local Law 97, the rule that dictates building owners must start paying fines next year if they don't meet certain emissions benchmarks.

Under the original legislation, properties that are 25K SF and larger need to reduce carbon emissions below certain levels or face fines of $268 for every ton of emissions over their limit. Updated guidance released by the New York City Department of Buildings on Tuesday says that if property owners show they have a decarbonization plan and are making progress, they can dodge the first wave of penalties.

The city was expected to pull in as much as $200M when Local Law 97’s fines kick in next year, a January study from the Real Estate Board of New York showed. But building owners are doing better than expected at meeting the 2024 benchmark, according to statistics published by the DOB. 

Approximately 89% of properties where Local Law 97 applies were already below their 2024 limits, according to data from 2022, the DOB reported. However, few are on track to hit their 2030 goals: Roughly 37% are projected to reach the emissions reductions required by 2030, while 63% are projected to miss those targets.

“The data shows that our administration’s efforts are already working, and we’re going to continue moving forward,” Mayor Eric Adams said in a statement introducing the changes. “Building owners are learning every day that complying with Local Law 97 and going green will save green, and we are addressing climate change from all angles in New York City.”

Under the new rules, property owners can avoid fines if they can show they are making “good faith efforts” to reduce carbon emissions, either through ongoing work to reduce emissions or with a long-term carbon reduction plan.

Owners have to show that they might miss their 2024 deadline but are on track to hit targets by 2027 and would reach their 2030 goals on time. Moves like swapping out gas radiators for heat pumps or other efforts to replace fossil fuel-based equipment with electric-based equipment will count in owners’ favor.

Other options include buying renewable energy credits or simply paying the fines. However, buying RECs — which studies show don't necessarily result in more green energy production — doesn't count as a good faith effort under the DOB’s new guidelines.

The new rules are disappointing for environmental advocates, who said the changes represent a step backward. A coalition of environment-focused nonprofits including Food & Water Watch, New York Communities for Change and the the No North Brooklyn Pipeline Campaign put out a statement rebuking the announcement and scheduled a protest on the steps of City Hall for Thursday afternoon.

“It’s been a summer of unrelenting heat waves, flooding and other dangerous climate events, yet Mayor Adams wants to give a huge gift to New York’s top corporate polluters — the real estate lobby, who are his largest campaign donors,” the coalition said in a statement issued prior to the rally. “We call on Mayor Adams to withdraw his proposal to gut Local Law 97.”