Local Law 97 – Implications on NYC Buildings

By Samuel E. Botta, CPA, Partner

To reduce greenhouse gas emissions and make the city carbon neutral by 2050, New York City enacted Local Law 97 (LL97) – one of the most ambitious plans in the nation. As a result, buildings are now required to meet new energy efficiency and greenhouse gas emission limits beginning in 2024, with stricter limits coming into effect in 2030.

Buildings Affected

LL97 generally covers the following NYC buildings:

• Buildings that exceed 25,000 square feet
• Multiple buildings (two or more) on the same tax lot that together exceed 50,000 square feet
• Multiple buildings (two or more) that are owned by a condominium association that are governed by the same Board of Managers which together exceed 50,000 square feet

Industrial facilities that generate power and steam, real property consisting of three stories or less, buildings owned by New York City, housing developments or buildings on land owned by the New York City Housing Authority, certain religious places of worship and certain buildings that participate in a project-based federal housing program or are owned by a housing development fund are exempt from the LL97 requirements.

Implications of Non-Compliance

Starting this year, certain limitations on carbon emissions will become effective and impacted buildings must start reducing annual emissions for calendar years 2024 through 2029. Even more stringent standards will begin to take effect in 2030. New York City’s goal is to reduce carbon emissions 40% by 2030 and net zero by 2050.

Beginning in 2025, building owners must provide their annual emissions report, and if the building exceeds the cap on their carbon emissions limit, a civil penalty will be imposed based on the excess of the actual emissions for the year over the annual emissions limit. The first reports are due for submission by May 1, 2025. A penalty of $268 is charged for each metric ton of carbon dioxide above the limit. The penalty is expected to be higher in 2030. The first reports are due for submission by May 1, 2025.

Steps to Take Today to Prepare for LL97

Although the deadline to submit initial annual emission reports is not until May 1, 2025, building owners and Co-op and Condominium Boards should take steps to avoid potential penalties for non-compliance with LL97. Engaging energy consultants can help determine a building’s annual carbon emission levels and offer ways for buildings to be more energy-efficient.

Additional Information

Refer to the NYC website Building Energy Snapshot | NYC Accelerator, where any property can be searched to see projected penalties for non-compliance with LL97.

Contact Us

For more information, please contact your client engagement team or:

Samuel E. Botta, CPA
Partner
sbotta@pkfod.com | 646.699.2857