After an extended period of anticipation and concern about the May 1, 2024 effective date of Local Law 97, the rules and guidelines (Local Law 97 Rules and Guidelines) have been released by the New York City Department of Buildings (“DOB”). Since the announcement of Local Law 97, Rosenberg & Estis has received numerous inquiries from owners and managers of buildings, condominiums and cooperatives in New York City about what Local Law 97 means to them regarding cost, liability and timing. Local Law 97 is an aggressive plan to cut harmful emissions in New York City by requiring all buildings in excess of 25,000 square feet to reduce their carbon emissions by 40% in 2030 and by 80% in 2050.
To encourage owners of applicable buildings to comply, the DOB announced monetary penalties that are intended to exceed the cost of necessary capital improvements. Fortunately, the rules provide for a “Good Faith Efforts” period that will assist buildings working toward compliance but that have been unable to commence the capital improvements necessary within the required time period. Additionally, there are a number of financing options as well as potential tax credit programs in the public and private markets.
Please take note that the DOB’s Proposed Rules:
- Establish the maximum penalty for failure to file the annual building emissions report by May 1 (starting 2024) of each year;
- Define criteria for how owners can show “Good Faith Efforts” during the 2024-2029 compliance period, namely by demonstrating steps towards reducing carbon emissions levels, sharing plans to reach compliance levels by target dates, as well as accepting mitigated penalties within a retroactive enforcement period should they fail to comply.
The DOB will hold a public hearing to address these guidelines on October 24, 2023. Rosenberg & Estis will continue to provide timely updates as these rules and guidelines advance and develop. We are currently preparing a comprehensive series of articles that will provide further analysis of Local Law 97, the available financing and tax credit/grant options that can be used for compliance, and recommendations for condominium/cooperative best practices for implementing and paying for the necessary capital improvements. If you have any questions, please feel free to contact your trusted Rosenberg & Estis, P.C. attorney or Adam R. Sanders, Member with the Transactions Department, or Michael T. Carr, Member with the Litigation Department, who authored the above.