Energy Efficiency Fixes Don't Happen Overnight

What’s the biggest challenge facing your co-op and condo clients?

I think the biggest challenge for property owners and management companies is the Climate Mobilization Act, which will require many buildings to reduce their carbon emissions to certain levels by 2024 and again by 2030. My goal is to put together this array of what the city and state requirements are and what incentives are available. What is Con Edison offering? It’s a dance, and there are so many elements!

Are some of your buildings in trouble?

There are some buildings that will be in real financial peril if they don’t fix things. And anyone in property management knows that you don’t change a heating plant, replace a facade or a roof, or re-skin a building overnight. It takes a lot of years and a lot of planning. 

How realistic is electrification — shifting from fossil fuels to clean electricity? 

This is a classic situation of a problematic law being passed with good intentions. I hate to use the word “pushback” because I am an environmentalist, but it’s not doable or realistic yet – the infrastructure doesn’t exist. There’s money being invested upstate, but the current grid can’t support wholesale electrification. And many of these individual buildings, particularly the pre-wars, don’t have the electrical capacity to convert everything to electric. That’s a multiyear process as well.

How are your boards planning to pay for retrofits?

A lot of our co-op buildings over the last year and a half have been refinancing their underlying mortgages. If a building has a $1 million or $2 million mortgage, it will refinance for $3 million or $4 million to bring in that extra money. Yes, the operating expense of carrying the extra debt is a bit greater, but it’s not like hitting your shareholders over the heads with massive assessments. But interest rates are climbing back up now, so it’s not the win that it was a year ago. Other buildings are structuring long-term assessments.

The city keeps saying, “We don’t want your money; we want your carbon.” Do you agree there’s a possibility that this all might work out?

I do agree with that. We all have to bear this as citizens of the world and as citizens of New York City. I’m very excited to figure out the smartest way for my boards to do it. There are multiple steps here, but I think it is doable.