Economist to Co-op and Condo Boards: Pick the Low-Hanging Fruit First

Habitat spoke with the economist Alex Heil, vice president for research at the Citizens Budget Commission, a nonpartisan watchdog on city and state finances. Heil has testified before legislators on the best ways to implement ambitious carbon-reduction laws, including New York City’s Local Law 97, the Climate Mobilization Act.

You're a big believer that co-op and condo boards should take cost-effective actions to cut their buildings’ carbon emissions. What exactly do you mean by this?

The economist in me tells me that if one invests in a building, it should be paying back. In other words, investments and improvements should be chosen in a way that the greenhouse gas emission cuts per dollar spent are maximized. You basically try to deliver the greatest bang for your buck, especially in older buildings.

Can you give an example?

This can start with installing thermostats, with improving the insulation and the envelope of the building. You can also reduce greenhouse gas emissions by reducing the usage of electricity. It's not only the existing infrastructure, the low-hanging fruit that boards should be thinking about; it’s also additional infrastructure.

Electrification is the word on everyone's lips nowadays. The idea is that if building systems switch from fossil fuels to electricity that comes from renewable energy sources, then that will cut their carbon emissions. But a green electric grid is several years down the road, at best, and the Climate Mobilization Act fines start in 2024. How can boards handle that disconnect?

I think you're absolutely right. If the electric grid is still largely powered by fossil fuels, then you can electrify a building as much as you want but you’re not going to reduce carbon emissions meaningfully. That said, boards need to realize that  electrification ultimately will be the way to go. Since we're still fairly early on in the implementation and design of some of these rules, including Local Law 97, there’s an opportunity for policymakers to incentivize building owners to electrify — even though the electric grid is not yet as green as it’s going to be. Bridging that gap is an important role for policymakers.

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People like yourself are still trying to educate lawmakers on the best ways to implement these new rules. So these laws are not set in stone. Is that right?

That’s correct. A lot of these rules still need to be ironed out. I think it’s important that there is transparency and clarity and certainty in the process, because co-op and condo boards need to know that when they make retrofits that help with the effort to decarbonize the city, the rules are not going to be changed.

To sum up, boards should look at the low-hanging fruit first and then at the major retrofits down the road. Is that the right approach?

I think it's always good to look at what can be done in a cost-effective manner — modest investments that produce significant results. Don't let the perfect be the enemy of the good. And certainly keep in mind what the long term trend is, but stay fixed on what you can do now.

Any general advice you would give to co-op and condo boards as they embark on their journeys to try to comply with these laws? 

I think that ultimately we're going to move toward a system in which carbon pollution will become pricey — either through a regulatory approach or an incentive system. So when boards think about improvements, upgrades and retrofits, it's important to realize that carbon pollution will come at a cost. I think the overall trend will move in that direction. And it's important to take that into consideration in today's decision making.