The Impact of NYC Local Law 97 on Building Owners in New York City

The Impact of NYC Local Law 97 on Building Owners

Buildings are the single largest contributor to New York City’s carbon footprint, producing nearly 70% of the city’s greenhouse gas emissions. To combat this, New York City passed the Climate Mobilization Act in 2019, which included Local Law 97—one of the most ambitious climate policies in the U.S. The goal is clear: reduce building emissions 40% by 2030 and achieve net-zero carbon by 2050.

For building owners, LL97 is not just an environmental initiative—it’s a regulatory requirement with significant financial implications.

What is Local Law 97?

Local Law 97 (LL97 NYC), part of the Climate Mobilization Act, sets strict carbon emissions limits for buildings over 25,000 square feet. The first compliance period began in January 2024, with annual reporting starting on May 1, 2025.

The law applies to about 50,000 buildings across NYC, covering residential, commercial, and mixed-use properties. Collectively, these account for nearly 60% of the city’s building area.
The penalties for non-compliance are steep—$268 per metric ton of emissions over the limit—which could add up to hundreds of thousands or even millions of dollars annually for large properties.

Key Requirements of Local Law 97

Building owners must meet annual emissions limits, which become progressively stricter over time. Here’s what’s required:

• Annual Emissions Reporting: First reports are due May 1, 2025 to the NYC Department of Buildings’ Office of Building Energy and Emissions Performance.
  
• Emissions Caps: Based on building type and size. Stricter caps apply in 2030, with additional tightening through 2050.
  
• Alternative Compliance Options: In certain cases, owners may use:
  • Adjusted emissions limits for unique buildings
    
  • Renewable energy credits (RECs) for electricity
    
  • Carbon offsets (with limits)
    
  • Special rules for affordable housing and houses of worship

How Building Owners Can Comply with LL97

To avoid penalties and improve performance, building owners should take proactive measures now. Some strategies include:

1. Energy Efficiency Upgrades
   
   • Upgrade HVAC, lighting, and insulation
     
   • Seal air leaks and improve building envelopes
     
   • Transition to high-efficiency boilers or heat pumps
2. Adopt Renewable Energy
   
   • Install solar panels or participate in community solar
     
   • Purchase qualified Renewable Energy Credits (RECs)
3. Retrofits & Modernization
   
   • Participate in NYC’s Accelerator Program, which provides free guidance and technical support
     
   • Leverage Con Edison Demand Response Programs for financial incentives
4. Carbon Offset Use (limited)
   
   • Purchase approved carbon offsets to cover emissions overages (though the city has capped their use to encourage real on-site reductions)
     

Exemptions from Local Law 97

Not all buildings are subject to the law. Exemptions include:

• Houses of worship
  
• Rent-regulated buildings (with more than 35% regulated units)
  
• NYC-owned buildings
  
• Certain affordable housing developments
  

However, exempted buildings may still be subject to alternative energy efficiency requirements.

Penalties for Non-Compliance

Starting in 2025, buildings exceeding their emissions cap will face civil penalties.

• Fine Calculation: $268 × (excess emissions in metric tons)
  
• Example: If a building exceeds its cap by 1,000 metric tons, the fine would be $268,000 for that year
  

The city has projected that 20–25% of covered buildings may exceed their 2024 caps, and by 2030, without intervention, up to 75–80% could be non-compliant.

Steps Building Owners Should Take Now

1. Conduct an Energy Audit: Assess your building’s current emissions and identify areas for improvement.
2. Plan Retrofits Early: Major upgrades take time to plan, finance, and implement.
3. Work with LL97 Consultants: Professional guidance can help align strategies with compliance pathways.
4. Budget for Future Caps: The 2030 limits will be far stricter than the 2024 caps.

Final Thoughts

NYC Local Law 97 is reshaping the future of buildings in New York City. While the penalties for non-compliance are serious, the benefits—reduced energy costs, higher property value, and contributing to a cleaner city—make early action worthwhile.

At The Cotocon Group, we provide Local Law 97 Consultant Services to help building owners navigate compliance, avoid fines, and achieve long-term sustainability goals. From audits to retrofit planning, our experts guide you every step of the way.

FAQs

When does Local Law 97 take effect?
The law took effect in 2024, with first reports due May 1, 2025.

Who must comply with LL97?
Buildings over 25,000 sq. ft. or part of a portfolio exceeding 50,000 sq. ft.

What are the emission reduction targets?
40% by 2030 and net-zero by 2050.

What are the penalties for non-compliance?
$268 per metric ton of emissions above the annual cap.

Can renewable energy help?
Yes. Renewable Energy Credits (RECs) can offset electricity use emissions.