A Deeper Dive Into NYC’s Climate Mobilization Act and Local Law 97

NEW YORK CITY—Earlier this year, The Climate Mobilization Act was passed in New York City Council and the city’s real estate market is expected to undergo a vast change to push back against climate change. There are 11 pieces of legislation that are part of the Act, but the centerpiece is Local Law 97 of 2019, which establishes strict carbon emissions limits for New York City buildings larger than 25,000 square feet.

Local Law 97 is the most aggressive climate legislation to date for buildings of this size and is setting the precedent for a more sustainable future. The new law places buildings on route to meet the city’s goal to reduce overall carbon emissions 40 percent by 2030 and 80 percent by 2050. Starting in 2024, building owners who don’t comply and stay within the limits will be heavily fined.

Buildings are the largest offender of greenhouse gas emissions, representing nearly 70 percent of New York City’s total emissions. This new legislation will affect 50,000 existing residential and commercial buildings—and is just the first step towards full implementation across the country. As New York spearheads its own sustainability efforts, it’s also setting the standard for greener, more energy conscious buildings across the U.S.

What does this mean for the building owners/?

One of the largest concerns with Local Law 97 is whether or not  buildings will be able to adapt in time and what the will cost for compliance will be. The first deadline for New York City buildings is 2024, which requires immediate action and planning to identify retrofits, commissioning, and energy efficiency upgrades that need to be worked into the budget.  This is a costly and time intensive process for both new and existing buildings where energy efficiency was not originally implemented in the blueprints.

The requirements and limits are strict and will only become more stringent over time. For every metric ton over the limit, a fine of $268 will be implemented on an annual basis and additional fines will be added for false or inaccurate reporting.  Buildings will need to submit a report each year to calculate carbon emissions limits for all covered buildings, prepared by a registered design professional, showing their calculated limit as well as their carbon emissions for the previous year.  Buildings that emit carbon over their calculated limit are then subject to a fine.

Real estate industry leaders, including decision-makers who participated in discussions leading up to the legislation, fear that the law will further hurt the already struggling residential market. However, looking beyond the crunched deadlines, there are new technologies and solutions emerging that are making it easier to stay within limits and save these buildings a significant amount in energy and maintenance costs.

A solution to meet requirements and facilitate operations

One of the greatest challenges building operators are facing now is figuring out where to start in their energy efficiency and sustainability strategy. Being over 25,000 square feet, many of these buildings are large, have a number of technologies and systems that the maintenance and engineering staff need to monitor, often without transparency or a clear understanding of where the greatest inefficiencies lie.

In order to gain knowledge and transparency into how a building operates, solutions like Monitoring-Based Commissioning (MBCx) systems with built-in commissioning metrics and fault detection analytics are emerging and making these targets more accessible to achieve.

MBCx systems were made to meet both immediate and long-term reduced greenhouse gas emission goals while avoiding extra fees and accumulating savings. Real-time analytics monitor all areas and systems within a facility, while intelligent alerts identify the highest priority issues that are costing facility managers the most in both energy and maintenance.

With these insights, staff receive clear directions enabling faster time to resolution, enhanced operational efficiency and decreased energy use for a reduced carbon footprint. This determines which issues provide the greatest potential for energy and opportunity savings by combining real-time analytics with intelligence that is capable of identifying the highest priority issues that are the costliest in both energy and maintenance.

When taking it into account what non-compliance could cost, the return on investment of an MBCx system can not only help to avoid fines but can also create added energy and maintenance cost savings. For example, a 600,000 square foot commercial building that goes 15 percent over its allowable emissions limit for instance, would be fined $204,055 each year while a hospital that goes the same 15 percent over the limit would be fined $574,297 each year. Other fields that are susceptive to hefty fines include hospitality and residential buildings which run the risk of surmounting up to $300,000 in fines. Not only will an MBCx system help you avoid those fees but it can also save upwards of 10 percent of the overall electrical bill by identifying existing and potential issues and determining what the opportunity savings can be if the issue is resolved.

A greener future

Mandating limits on greenhouse gas emissions with strict timelines, high fines and a greater financial benefit with compliance makes Local Law 97 a feasible first step to getting New York City and the rest of the nation to become far more sustainable. These new regulations are difficult to meet with existing approaches,  which is why the commercial and industrial real estate industry will need to wholly modernize and adapt, much to their own benefit in the long run. Incorporating technologies like MBCx and other smart building control solutions create the framework for enhanced operational efficiency and reduce energy use, making carbon footprint reduction a reality.

The truth is some buildings that fail to strategically modernize will likely fail to meet these goals and although this law is the first of its kind, it certainly won’t be the last. Cities around the world are mobilizing to tackle the challenge of lowering building emissions in attempts to make our planet more environmentally conscious and leaving a brighter, healthier planet for the next generations which is why it’s important to identify the solutions that can help you strategically and more effectively stay in compliance.

Mark Pipher is VP and general manager of FacilityConneX and Robert LoForte is director of commissioning at MIH Systems Group. The views expressed here are the author’s own and not that of ALM’s real estate media group.