New York Local Law 97 (LL97): Everything you need to know

August 28, 2024

In this article, we dive into New York Local Law 97, a legislation aimed at reducing greenhouse gas emissions in buildings across New York City. We discuss the key drivers behind the law and explain the requirements that building owners must comply with to avoid penalties. Additionally, we will explore potential retrofits and programs that can help building owners reduce their emissions and achieve compliance. We also examine how building analytics software can help building owners track their emissions, identify inefficiencies, and comply with Local Law 97.

What is New York Local Law 97?

New York Local Law 97 (LL97) is a landmark piece of climate legislation enacted as part of the city’s broader Climate Mobilization Act. Passed in 2019, LL97 aims to drastically reduce greenhouse gas emissions from large buildings, which are among the biggest contributors to New York City's carbon footprint. The law sets strict emissions limits for buildings over 25,000 square feet, starting in 2024, with progressively tougher standards leading up to 2050.

Key aspects of LL97:

Emissions limits: The law requires covered buildings to stay below specific carbon emissions thresholds. These limits vary based on the building's use and occupancy type and will tighten over time.
Compliance periods: The first compliance period begins in 2024, and buildings must meet set emissions limits or face significant financial penalties. Further restrictions come into effect in 2030 and 2035, pushing towards a goal of reducing emissions by 40% by 2030 and 80% by 2050.
Penalties for non-compliance: Buildings that exceed their emissions limits will incur fines based on the excess emissions, calculated at a rate of $268 per ton of CO2e (carbon dioxide equivalent) over the limit. There are also penalties for failing to submit required emissions reports.
Retrofits and energy efficiency: To meet these requirements, many buildings will need to undergo significant retrofits, including upgrades to heating, cooling, lighting systems, and building envelopes to improve energy efficiency and reduce emissions.
Support programs: Various city and state programs offer financial assistance and technical support to help building owners comply with LL97. These include low-interest loans, incentives for energy efficiency upgrades, and guidance on compliance strategies.

Recent updates (2024):

The most recent updates to LL97 include the introduction of new rules that offer flexibility for compliance, such as the "good faith" effort provision, which allows buildings to avoid fines by showing committed efforts toward decarbonization. Additionally, a new electrification credit was introduced, incentivizing buildings to electrify their systems earlier than required.

LL97 is considered one of the most ambitious climate laws in the United States, aiming to significantly reduce New York City's greenhouse gas emissions and contribute to global efforts to combat climate change.

What are the key drivers behind LL97?

The key drivers behind LL97 are to reduce greenhouse gas emissions and combat climate change. The law recognizes that buildings are a significant source of greenhouse gas emissions in the city, accounting for nearly 70% of total emissions. Therefore, the law aims to reduce emissions from buildings to help achieve the city's goal of reducing greenhouse gas emissions by 80% by 2050.

The law is also driven by the recognition that climate change poses significant risks to the city, including increased frequency and intensity of extreme weather events, sea-level rise, and public health risks. By reducing greenhouse gas emissions, the law seeks to mitigate these risks and protect the health, safety, and welfare of city residents.

Another driver behind the law is the potential economic benefits of reducing emissions. By improving energy efficiency and using renewable energy sources, building owners can reduce their energy costs and increase the value of their buildings. The law also encourages the growth of a green economy in the city, creating new jobs and economic opportunities in the energy efficiency and renewable energy sectors.

What is the difference between Local Law 97, Local Law 87 and Local Law 84?

LL97, LL87 and LL84 are all legislations aimed at improving energy efficiency and reducing greenhouse gas emissions in buildings in New York City, but there are some key differences between the three laws.

LL87: Requires large buildings over 50,000 square feet to undergo an energy audit and retro-commissioning every ten years. The goal of LL87 is to identify and implement cost-effective energy efficiency measures in buildings to reduce energy waste and greenhouse gas emissions. For more information on LL87, check out our blog article on it here.

LL97: Sets emissions limits for buildings over 25,000 square feet based on their occupancy group. The goal of LL97 is to reduce greenhouse gas emissions from buildings by 40% by 2030 and 80% by 2050. Building owners must comply with the emissions limits by implementing energy efficiency retrofits, on-site renewable energy, and/or purchasing renewable energy credits.

LL84: Requires owners of buildings larger than 50,000 square feet (or with multiple buildings on the same tax lot that collectively exceed 100,000 square feet) to annually benchmark and report their energy usage to the city. Find more information on LL84 here.

What buildings are covered under LL97?

New York Local Law 97 (LL97) primarily covers larger buildings, targeting those that contribute significantly to the city’s greenhouse gas emissions. The specific categories of buildings covered under LL97 include:

Buildings over 25,000 square feet: The law applies to individual buildings that have more than 25,000 gross square feet of floor area.
Buildings on the same tax lot: If there are two or more buildings on the same tax lot that together exceed 50,000 gross square feet, they are also covered under LL97.
Condominium buildings: Two or more buildings governed by the same condominium board that collectively exceed 50,000 gross square feet are subject to the law.

Meera Joshi, New York City Deputy Mayor of Operations, addressed the diversity of building ownership in the city. Joshi's commentary underscores the inclusive nature of LL97 and its impact across different building types and ownerships, not just high-end properties.

"We have a very diverse group of building owners within New York City. This law covers co-ops on the Grand Concourse and condos in Flushing. It’s not all fancy buildings." - Meera Joshi, New York City Deputy Mayor of Operations (NY1)

What are the requirements for building owners to comply with LL97?

To comply with New York Local Law 97 (LL97), building owners must adhere to several key requirements:

Emissions limits:

2024-2029 Compliance Period: Starting in 2024, buildings over 25,000 square feet must meet specific greenhouse gas (GHG) emissions limits. These limits vary based on the building's occupancy group (e.g., residential, commercial).
2030 and Beyond: The emissions limits become more stringent in 2030 and will continue to tighten through 2050. Building owners must prepare for these future benchmarks by implementing long-term strategies for reducing emissions.

Annual emissions reporting:

Building owners are required to report their GHG emissions annually to the New York City Department of Buildings (DOB). This report must be submitted through the DOB's online portal.
The emissions data must be verified by a qualified professional, such as a licensed engineer or architect, to ensure accuracy and compliance with LL97.

Energy efficiency upgrades and retrofits:

If a building exceeds the emissions limits, the owner must implement energy efficiency retrofits or other measures to bring the building into compliance. Recommended retrofits may include improvements to building insulation, lighting systems, HVAC systems, and installation of renewable energy sources such as solar panels.
Building owners are encouraged to create a decarbonization plan, which may be required to qualify for "good faith" compliance efforts, helping to avoid penalties through 2029.

Building owners should develop a comprehensive plan that includes regular emissions tracking, identifying and implementing necessary retrofits, and staying informed of any updates to LL97 to ensure ongoing compliance and avoid significant penalties. It's worth noting that it will become increasingly difficult to comply in the future periods (2030-2034 and beyond) due to stricter emissions limits. Early preparation and comprehensive retrofits, such as the adoption of renewable energy sources or installing commercial-scale heat pumps, will be essential to meet these stricter requirements (Carter Ledyard & Milburn LLP).

Chart: Properties below and above the 2030 limits

The chart below, courtesy of Urban Green Council illustrates how many office properties are already meeting 2030 emissions limits, with positive percentages indicating the number of buildings that are not yet meeting the requirements. This visually indicates the scale of work still to be done.

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What buildings are exempt from LL97?

The law exempts the following buildings from Article 320, even if they otherwise meet the definition of a covered building as indicated above:

An industrial facility primarily used for the generation of electric power or steam.

Real property, not more than three stories, consisting of a series of attached, detached or semi-detached dwellings, for which ownership and the responsibility for maintenance of the HVAC systems and hot water heating systems is held by each individual dwelling unit owner, and with no HVAC system or hot water heating system in the series serving more than 25,000 gross square feet, as certified by a registered design professional to the department.

A city building.

A housing development or building on land owned by the New York city housing authority.

A rent regulated accommodation.

A building whose main use or dominant occupancy is classified as occupancy group A-3 religious house of worship.

Real property owned by a housing development fund company organized pursuant to the business corporation law and article eleven of the private housing finance law.

A building that participates in a project-based federal housing program.

Important note: The aforementioned building types may be covered by different parts of the law, rather than being fully exempt. For example, city buildings are required to reduce pollution by even more than private buildings, but aggregated across a wider property portfolio. Rent-regulated buildings are also covered, but their requirements are a prescriptive list of specific lower-cost energy efficiency upgrades. Further details can be found at the Department of Buildings (DOB) Greenhouse Gas Emission Reporting website.

Buildings that include affordable and rent-regulated housing are NOT exempt from the requirements of Local Law 97 but may be treated differently under the two articles that make up the law as outlined in Title 28 of the NYC Administrative Code:

Article 320 establishes Building Energy and Emissions Limits for buildings starting in 2024 and outlines the implementation of such limits.

Article 321 establishes Energy Conservation Requirements for Certain Buildings that are not covered under Article 320.

What is the "Good Faith" Compliance Pathway?

The "Good Faith" Compliance Pathway under New York Local Law 97 (LL97) is a provision introduced by the New York City Department of Buildings (DOB) to help building owners avoid or reduce fines for non-compliance during the initial compliance period (2024-2029). This pathway was included in the finalized rules released in late 2023 to accommodate buildings that are making genuine efforts to reduce their emissions but may not yet fully meet the law's stringent requirements.

Key aspects of the "Good Faith" compliance pathway:

Eligibility: To qualify for the "Good Faith" pathway, building owners must demonstrate that they are actively working towards compliance with LL97. This includes keeping up with existing emissions-related laws, such as submitting required emissions reports and upgrading lighting under Local Law 88.
Compliance Plan: Building owners must submit a decarbonization plan by May 1, 2025, or provide evidence that they have begun work to meet the 2024-2029 emissions limits. This plan should outline the steps the building will take to reduce its emissions and the timeline for implementing these measures.
Avoidance of Fines: Buildings that meet the "Good Faith" criteria can avoid fines up to 2029. This gives building owners additional time to implement necessary retrofits and upgrades without facing immediate penalties.
Monitoring and Enforcement: The DOB retains the authority to assess whether a building is truly making "Good Faith" efforts. If a building is found to be non-compliant or not following through with its decarbonization plan, the DOB can impose fines retroactively for the years the building claimed "Good Faith" efforts.
Flexibility: The pathway was created in recognition of the challenges posed by the COVID-19 pandemic and the significant investments required to meet LL97's emissions limits. It offers some flexibility for buildings that may have faced delays or financial difficulties in starting their decarbonization efforts (Brick Underground) (Cooperator News).

The "Good Faith" Compliance Pathway provides a temporary reprieve for building owners who are committed to reducing their emissions but need more time to achieve full compliance with LL97. However, it is not a permanent exemption, and building owners must still work towards meeting the law's long-term emissions reduction goals.

What if my building doesn't meet the emissions limits?

The New York Department of Buildings provides a list of recommended retrofits that building owners can choose from to comply with the emissions limits. The list includes:

Building Envelope: Building envelope retrofits involve improving insulation, upgrading windows and doors, and sealing air leaks to reduce heating and cooling losses.

Lighting Systems: Lighting retrofits involve upgrading to energy-efficient lighting systems, such as LEDs, and installing occupancy sensors and daylight dimming controls.

Heating, Ventilation, and Air Conditioning (HVAC) Systems: HVAC retrofits involve upgrading to energy-efficient HVAC equipment, improving ventilation systems, and optimizing controls to improve system efficiency.

Hot Water Systems: Hot water retrofits involve installing energy-efficient hot water heaters, improving distribution systems, and optimizing controls to reduce hot water waste.

Renewable Energy Systems: Renewable energy retrofits involve installing on-site renewable energy systems, such as solar panels or wind turbines, to generate clean energy and offset building emissions.

As of April 2024, new rules under LL97 include a "Beneficial Electrification Credit." This credit is awarded to buildings that install high-efficiency heating, cooling, and domestic hot water systems before 2030. Buildings can receive higher credits if these systems are installed before 2026. This incentive encourages early adoption of efficient technologies to meet future emission requirements more easily (Urban Green Council, Blueprint Power).

Building owners are not required to implement all of the recommended retrofits, but they must implement enough measures to comply with the emissions limits. Building owners can work with qualified professionals, such as engineers and architects, to determine the most effective retrofits for their building and develop a compliance plan.

What are the fines for non compliance with LL97?

There are three kinds of fines for building owners who fail to comply with LL97:

For building owners who exceed the emissions limit, the maximum annual penalty is the difference between a building’s annual emissions limit and its actual emissions, multiplied by $268.

For building owners who fail to file a report, the fine is $0.50 per building square foot, per month

For building owners who provide false statements on their report, there is a fine of $500,000

Recent rules limit the use of Renewable Energy Certificates (RECs) for buildings under the fine mitigation process. Buildings in this category are restricted from using RECs to meet their emissions caps, emphasizing the need for direct emissions reductions instead of relying on credits

In addition to fines and penalties, buildings that are out of compliance may face reputational damage and decreased property values. Therefore, it is important for building owners to take the necessary steps to comply with LL97 and reduce their greenhouse gas emissions.

Rohit Aggarwala, Commissioner of the New York City Department of Environmental Protection, highlighted the focus is on encouraging compliance rather than penalizing building owners, indicating the law's primary aim is to reduce emissions effectively rather than simply enforcing penalties.

"Local Law 97 was called the Climate Mobilization Act, it wasn’t called the Climate Penalties Act. And what we have got to do, what will save the planet, is not issuing a bunch of fines." - Rohit Aggarwala, Commissioner of the New York City Department of Environmental Protection (NY1)

Are there any programs that can reduce costs of compliance?

Yes, there are programs that can help reduce the costs of compliance with LL97. These programs are designed to provide financial assistance, technical support, and other resources to help building owners implement energy efficiency measures and reduce their greenhouse gas emission:

New York City Energy Efficiency Corporation (NYCEEC): A non-profit organization that provides financing and technical assistance to building owners for energy efficiency retrofits. NYCEEC offers low-interest loans and other financing options to help building owners pay for energy efficiency upgrades, such as lighting retrofits, HVAC system upgrades, and building envelope improvements. The organization also provides technical support and guidance to building owners throughout the retrofit process.

New York State Energy Research and Development Authority (NYSERDA) Commercial Tenant Program: Provides financial incentives to tenants in commercial buildings that reduce their energy use. The program offers financial incentives to tenants who install energy-efficient equipment and implement energy-saving practices.

Additionally, the New York City Department of Buildings provides technical assistance and resources to building owners to help them comply with LL97. You can visit their Getting Started guide and compliance guide for more information.

Building owners can also consult with qualified professionals, such as engineers and architects, to determine the most effective and cost-efficient measures for reducing their greenhouse gas emissions and complying with LL97.

How can the use of building analytics software help building owners comply with LL97?

The use of building analytics software, such as CIM's PEAK platform, can help building owners comply with New York LL97 in several ways, including:

Emissions Tracking: Building analytics software can help building owners track their greenhouse gas emissions in real-time, which can help them stay within the emissions limits set by LL97. The PEAK platform provides a comprehensive view of energy and water consumption and GHG emissions data, allowing building owners to identify inefficiencies and areas for improvement.

Performance Benchmarking: Building analytics software can also provide performance benchmarking against similar buildings, allowing building owners to compare their energy management performance with that of their peers. This can help building owners identify areas where they can improve their energy efficiency and reduce their greenhouse gas emissions.

Retrofits Identification: Building analytics software can help building owners identify potential retrofits that can reduce their energy consumption and greenhouse gas emissions. By analyzing data from various systems in the building, such as HVAC, lighting, and water systems, building analytics software can identify areas where improvements can be made.

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We're here to help!

Request a callback, and let's discuss how we can help you reduce your greenhouse gas emissions to comply with LL97.

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For more information on LL97, head to the NYC Sustainable Buildings page.

To see how other state energy efficiency regulations affect your building portfolio, check out our articles on New York Local Law 87 (LL87), the Los Angeles Existing Buildings and Water Energy Efficiency Program (EBEWE), and New York Local Law 84 (LL84).

With an increasing focus on sustainability and reducing emissions, state energy efficiency regulations are becoming more and more ambitious. Having a LEED certified building is one way of ensuring compliance with local or state regulations. Check out our blog on LEED Certification for more information.

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Paul Walsh

August 28, 2024