How Will Co-ops and Condos Pay for Greener Buildings?

At a packed hearing last December, the New York City Council opened debate on a controversial new bill called Intro 1253. The bill, sponsored by Councilman Costa Constantinides, a Queens Democrat, proposes new carbon emissions caps and energy performance requirements for large buildings starting in 2022. Its goal is to reduce carbon emissions from buildings, the city’s worst polluters, by 40 percent (from 2005 levels) by the year 2030. The question is: how will co-op and condo boards pay for retrofits the bill would require?

“The goals are ambitious and noble,” says attorney Geoffrey Mazel, a partner at Hankin & Mazel. “But this is an unfunded mandate. It means that co-ops and condos have to pay for it, and the bill doesn’t provide any relief from the city or any incentive program.”

Intro 1253 is designed to jump-start the city’s ambitious “80x50” mandate – that building emissions be cut 80 percent (again, from 2005 levels) by the year 2050. To meet the bill’s proposed carbon emission caps, some boards would have to perform major upgrades to their building’s heating and ventilation systems, while other buildings might need minor upgrades, or none at all. The bill offers loans, and it exempts buildings undergoing economic hardships or with rent-regulated apartments. The bill would also create a new Office of Building Efficiency Performance within the Department of Buildings, where energy-usage reports will be filed.

Intro 1253 grew out of the nonprofit Urban Green Council’s (UGC) Blueprint for Efficiency, the product of nearly a year of meetings between 70 stakeholders who will be affected by stricter energy-efficiency requirements. Russell Unger, UGC’s chief strategy officer, is confident that Mazel’s concerns about funding will be addressed. “There will be a growth in already existing incentive programs, and there will be new programs,” Unger says. “For instance, the NYC Retrofit Accelerator will have a major expansion. There is a broad understanding that buildings do need help.”

Though supportive of certain parts of Intro 1253, UGC has reservations. The UGC is dismayed that buildings with rent-regulated apartments would be exempted – a provision designed to protect tenants from rent hikes after landlords perform required retrofits. “We recommended that all buildings are treated equally,” Unger says.

The bill incorporates the Blueprint’s recommendation to form a committee to develop a performance metric that works for all facets of the city’s varied building stock. “The bill doesn’t make a distinction between a densely occupied residential building and one where there is a lot more square footage per person,” Unger says. “We need a new metric system. Once you have a basis to compare the buildings, then you could set up the requirements.”