NYC is the nation’s largest commercial real estate market, and the city has enacted one of the most aggressive climate acts to date. So, why have there only been three C-PACE financings since 2021? The answer is twofold: 1) the program doesn’t allow PACE to be used on new construction & gut renovation projects, and 2) an onerous savings-to-investment ratio (SIR) requirement disqualifies most retrofits given the high costs of construction in New York.

To make NYC’s C-PACE program more user-friendly, NYSERDA and NYCEEC (the relevant authorities) must release new construction guidelines as soon as possible; the DOF amended the local ordinance to include these projects last November. Additionally, they must make it easier for retrofits to qualify.

Small tweaks will make a huge difference

In an ideal world, the new construction qualification process would include tiered eligibility percentages from 20% to 35% based on performance thresholds, the program would expand to include water conservation and resiliency measures, and the SIR requirement would be eliminated. However, as a near term fix, the SIR requirement should be modified with an expanded list of pre-qualified improvements including building enclosure and vertical transportation measures, and the ability to use financial savings in the calculation.  

NYC has thousands of buildings that need energy retrofits, and many new projects are struggling to secure financing. A more functional C-PACE program will help drive us to the next chapter in NYC’s climate response.