NYC Real Estate Alert: Climate Mobilization Act

Important deadlines for the New York City Climate Mobilization Act

The Climate Mobilization Act (the “Act”) signed into law on April 22, 2019, is a package of legislation designed to reduce direct and indirect greenhouse gas emissions through the implementation of efficiency improvements related to medium-to-large-size buildings operating in New York City (“NYC”). Covered buildings under the Act would be required to cut emissions 40% by 2030 and 80% by 2050. Except for some noted exceptions, buildings covered under this Act are:

1. Buildings that exceed 25,000 gross square feet;
2. Two or more buildings on the same tax lot that together exceed 50,000 square feet; or
3. Two or more owned condominium buildings governed by the same board of managers that together exceed 50,000 square feet.

The Act features the following targets with noncompliance subject to fines as described below:

October 31, 2020 – Buildings that appear on the 2020 NYC Benchmarking Law Covered Buildings List must have a Building Energy Efficiency Rating Label displayed in a conspicuous location near the applicable building entrance by no later than October 31, 2020, and each October 31 thereafter. Starting October 1, 2020, building owners and operators can access the NYC.Gov website to print the Building Energy Efficiency Rating Label. Noncompliance will result in a civil penalty of $1,250. Refer to the following links for additional information:

https://www1.nyc.gov/assets/buildings/pdf/ll33_eer_sn.pdf 
https://www1.nyc.gov/assets/buildings/pdf/benchmarking_cbl_compliance_2020.pdf 

July 1, 2021 – The Act allows covered building owners to submit an adjustment application of the annual building emissions limits for calendar years 2024 through 2029 to the Department of Buildings certified by a registered design professional. The adjustment considers building hardship and access restraint, and various special circumstances, such as the following, that contribute to building emissions exceeding the emissions limits:

1. 24/7 operations
2. Operations that are critical to human health (e.g. hospital)
3. High-density occupancy
4. Energy-intensive communications technologies or operations
5. Energy-intensive industrial processes

May 1, 2025 – By May 1, 2025 and by May 1 of every year thereafter, covered buildings are required to submit an annual report, certified by a registered design professional, indicating the covered building’s compliance under the Act. Noncompliant covered buildings will be imposed a fine equal to the difference between the building greenhouse gas emission and the emission limits for the reported year, multiplied by $268. In addition, covered buildings that fail to file such report with New York City, will be imposed a fine equal to the gross floor area of the covered building, multiplied by $0.50 for each month of noncompliance. 

Starting in 2029, the established emissions limits used to calculate the imposed fine will be lowered.

Despite the numerous challenges building owners and operators are facing in the midst of the COVID–19 pandemic, New York City is not providing relief for compliance under the Act. Owners and operators should act now if they have not yet started to meet the requirements under the law.

If you have any questions regarding the Act, the calculation of the penalty, and/or other compliance matters, please reach out as we are here to help.