Introduced as part of the Climate Mobilization Act as part of the Mayor’s New York City Green New Deal, Local Law 97 (LL97) is an ambitious plan intended to reduce emissions in the U.S. Why was this law needed? Because about 66% of NYC’s greenhouse gas emissions come from buildings. The law is part of Mayor de Blasio’s plan to make NYC carbon neutral by 2050.
This groundbreaking law has provisions intended to reduce the city’s buildings’ carbon emissions 40% by 2030 and 80% by 2050.
The law goes into effect beginning in 2024, when all NYC buildings over 25,000 square feet will need to adhere to its requirements, which include carbon reporting and capping emissions. Building owners and facility managers should keep the following in mind:
Who’s affected
About 3.15 billion square feet — or 60% of NYC’s building area — is affected by this law. It includes buildings exceeding 25,000 gross square feet; two or more buildings on the same lot that combined exceed 50,000 square feet; two or more condo association-owned buildings governed by the same board of managers that combined exceed 50,000 square feet.
Enforcement and Penalties
To advise the city on how to successfully meet these robust sustainability goals, the law established the Local Law 97 Advisory Board and Climate Working Groups. The 16-member board and eight climate working groups will help develop the law’s provisions.
As it stands, any building covered by the law that’s over carbon emission limits will incur a penalty of $268 per year per metric ton. Building owners or operators who fail to file a report incur a $0.50 per square foot fine monthly until they submit the report. Falsifying reports results in a $500,000 fine and up to 30 days imprisonment.
Here’s an example using the Dominick Hotel. The hotel’s energy efficiency, should it remain the same in 2024 as it is now, would push it to 183,380 tons (or 91.69 metric tons) of carbon over its limit. The financial penalty, at $268 per metric ton would result in its owners paying a $24,572 fine each year it’s that far over the limit.
Steps to reduce carbon emissions
To reach a 40% carbon emission reduction by 2030 will require buildings to trim 25% carbon from current levels. Beginning May 1, 2025, buildings must submit an annual emission report stamped by a registered architect, professional engineer, or design professional.
Emission intensity limits are based on 10 building categories which are themselves based on the following building code occupancy groups:
- Assembly
- Business
- Educational
- Factory
- Health
- High hazard
- Hotels
- Institutional
- Mercantile
- Multifamily
- Storage
- Utility/miscellaneous
Calculate your building’s carbon emission by multiplying its square footage by its emission limit. So a 346,000 square foot hotel’s carbon emissions limit — in 2024 — would be 3,415,020 kg of carbon (346,000 x 9.87). Determine your building’s current emission intensity based on the most recent benchmarking submissions. Search by street address or BBL (borough-block-lot) number on the metered.nyc website then look for the CHG Emissions/sq.ft. To find your building’s annual carbon emissions for the year you need, multiply the emissions intensity by the building’s total square footage.
You can also install real-time monitoring and automated building management systems or retrofit buildings. These systems help identify current energy loads and emissions and identify equipment or operational processes that would benefit from upgrades, replacement, or adjustment.
If you’re not sure how to start or have additional questions, NYC offers a free service: NYC Accelerator. This program works with asset managers, building operators and building owners to offer advice and guidance on appropriate energy-efficiency upgrades designed to reduce carbon emissions.
Not All Smooth Sailing
While climate activists hail LL97 as a revolutionary solution for reducing carbon emissions. Its hefty penalties (which max at $5 million annually) elevate it above other solutions. But building owners argue that even LEED Platinum buildings may struggle to comply with LL97 primarily because plug load demand will fluctuate based on each tenant.
Similarly, CRE professionals have expressed concerns that the law won’t achieve its intended goals, saying it:
- Won’t capture the least efficient buildings, especially the more than 230,000 buildings built before 1920 that are less efficient, low-density, and low-rise.
- Uses an unadjusted carbons emissions cap as the metric, which some argue is flawed, because it’s based on total square footage and generalized occupancy type.
- Doesn’t account for occupancy density, energy consumption in tenant-controlled spaces, owner-made efficiency improvements, and carbon intensity of energy inputs like electricity or district steam.
Technical Amendments to LL97
Since its original passing, City Council has passed amendments to LL97 under Local Law 147 of 2019 and Local Law 95 of 2020 to address earlier concerns. Those amendments include:
- Clarifying that the Department of Buildings can revise 2030 standards by rule, including using a different metric
- Permitting carbon emissions from electricity to be based on time of use
- Extending credits for GHG offsets and energy storage to later compliance periods
- Requiring some previously exempt affordable housing to comply with the prescriptive package of low-cost energy savings measures
- Revising the treatment of natural gas fuel cells
If You Haven’t Started Your Plan Yet, You Should
While the first building emissions report isn’t due for nearly three years, in May 2025, building owners shouldn’t wait to evaluate their buildings’ current energy efficiency. First, it can take several years to reduce emissions in buildings among the top 20% emitters. Second, by taking steps sooner, rather than later, to reduce emissions, owners will see reduced operating costs as energy efficiency increases.
Reducing building emissions does require a significant investment, but implementing changes over time also spreads costs — and allows owners to begin seeing costs savings more quickly. You can start by adjusting temperature settings for hot water and space heating.
- Maintain heating systems and inspect them regularly to find and repair leaks.
- Insulate pipes in space heating, hot water systems, steam condensate tanks, and/or water tanks.
- Use heating system sensors and boiler controls.
- Inspect, repair or replace steam traps.
- Upgrade lighting to ensure it meets the NYC Energy Conservation Code and any other codes.
- Weatherize and weather seal where appropriate.
- Use timers for exhaust fans.
- Add radiant barriers behind radiators and individual controls or insulated enclosures.
Are you a commercial real estate investor or looking for a specific property to meet your company’s needs? We invite you to talk to the professionals at CREA United: an organization of CRE professionals from 92 firms representing all disciplines within the CRE industry, from brokers to subcontractors, financial services to security systems, interior designers to architects, movers to IT, energy management professionals, and more.
