New York City Local Law 97

Master Keys

• Enforcement of New York City's Local Law 97 has begun and restrictions tighten further in 2030
• More than half of all properties are outside their 2030 requirements
• C-PACE is the best way for property owners to finance qualifying improvements

Many cities talk about fighting climate change, some even incentivize it, but New York went a step further with Local Law 97 and is ready to issue substantial fines for property owners that fail to reduce their carbon footprint.

2030: Local Law 97's Looming Deadline

The overarching goal of Local Law 97 is to make New York City a net-zero city by 2050 by introducing carbon emission caps, then lowering them incrementally between the law’s passage in 2019 and its targeted conclusion in 2050.

The first compliance period began in 2024 and over 90% of properties subject to the new regulation met their target. This is undoubtedly great news, but it may have given some owners a false sense of security: Even for buildings that passed the 2024 test with room to spare, hitting the next emissions target will be much more challenging.

The next compliance period runs from 2030 to 2035, and the drop from the 2024 limit to the 2030 limit is the largest of the program. In 2030, success is defined by a 40% reduction in emissions from 2019 levels.

Even if they’re currently in compliance with Local Law 97 guidelines, property owners need to be clear-eyed about whether they are on track to meet their obligations or if they should be investigating improvements to their property. 

C-PACE and Local Law 97

Expansions to both state and city rules regarding C-PACE eligible improvements will help owners bridge the gap between where they need to be in a few short years.

NYC’s hot summers and frigid winters make building envelope upgrades a critical element of any decarbonization strategy. The better the building maintains its temperature, the less heating and cooling will be required, which means a drastic reduction in power needed to keep the building at a comfortable temperature.

Another upgrade with year-round benefits is electrifying a building’s HVAC system using heat pumps. The early versions of heat pump technology worked well in temperate climates, but as the temperatures dropped to near or below 0 degrees Fahrenheit, they struggled to keep up.

Now, air source heat pumps mean systems are capable of efficient heating and cooling even in extreme conditions. During normal function, air source heat pumps deliver impressive efficiency gains, producing three to four times as much heat energy as the electricity they consume.

High-efficiency air source heat pumps and building envelope upgrades like closed-cell insulation, ENERGY STAR windows, and cool roofs are just of the few improvements that can be covered at up to 100% in New York City by using C-PACE financing from PLG.  

Previous city and state leadership seemed willing to kick the can down the road enforcing Local Law 97, but that’s no longer the case. Owners and developers need to be aware of what’s coming in 2030 and have a plan to meet their new obligations.

Fortunately, expenses are very likely to be covered by C-PACE, giving borrowers a long-term financing option to keep costs from hitting all at once. No one is more experienced in the NYC market than PLG is; we’re here to help make real estate professionals understand their obligations under Local Law 97 and find creative ways to reach compliance.