Landlords, Unions and Engineers Take Aim at Building Retrofitting Bill

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The real estate lobby, engineers, major landlords and labor unions questioned whether landlords of rent-stabilized buildings should be subject to a new City Council bill requiring large buildings to drastically cut back their energy usage during a hearing today.

SEE ALSO: How a Controversial Piece of Legislation Aims to Make NYC’s Big Buildings Greener

Queens Councilman Costa Constantinides unveiled the bill, known as Intro. 1253, last month with the goal of slashing greenhouse gas emissions from the city’s largest buildings 40 percent by 2030 and 80 percent by 2050. Landlords who own buildings of 25,000 square feet or larger will be required to make energy-efficiency upgrades in order to meet certain emissions standards beginning in 2022 and 2023. Any landlord that doesn’t comply with the new retrofitting rules will be hit with yet-to-be-determined financial penalties by the city. The legislation also calls for the creation of a new office of building energy performance within the New York City Department of Buildings that would develop and enforce the new carbon emissions standards.

Landlords of rent-regulated buildings don’t have to meet the new emissions standards because the city doesn’t want to force them to make upgrades that would trigger rent increases for stabilized tenants. Carl Hum, the general counsel for the Real Estate Board of New York, pointed out at the hearing that buildings with stabilized units produce a third of all greenhouse gases for buildings over 25,000 square feet. Exempting them from the new energy-efficiency standards would be a major missed opportunity for reducing carbon emissions citywide, he said. And the exemption applies to all buildings with rent-regulated apartments, including market-rate rental, condo or co-op properties with only a handful of stabilized units.

He also argued the deadlines set by the legislation were unfairly tight and would potentially be impossible for landlords to meet. “Over 450 million square feet of retrofits would need to be completed during this initial period [by 2023], overwhelming the available workforce and building owners’ ability to successfully implement the required retrofits within that time frame,” he said in his testimony.

Representatives from the Natural Resources Defense Council, a national environmental nonprofit, and building service workers union 32BJ SEIU echoed Hum’s points as they spoke on the same panel as him during today’s hearing.

“I acknowledge the care taken in drafting the bill to avoid the unintended consequence of triggering rent increases in rent-regulated units,” 32BJ’s political manager, David Cohen, testified. “However, leaving these buildings out exempts over a third of the city’s building square footage, making the long-term efforts to achieve substantial reductions significantly harder by leaving a smaller portion of buildings subject to performance standards.” He added that leaving stabilized buildings out of the bill “risks denying rent-regulated tenants the benefits of cleaner air, more energy-efficient apartments and lower energy costs.” The union also supported giving additional city funding and financing to help the owners of rent-stabilized buildings make retrofits.

Condo and co-op unit owners are also concerned about the impact of the legislation’s deadlines for retrofitting measures. “The tight time frames in the current bill make it a real challenge to engage in the long range technical and capital planning every building needs to undertake to address [the new] energy requirements,” said Mary Ann Rothman, the executive director of the Council of New York Cooperatives and Condominiums.

A representative for the Archdiocese of New York expressed frustration with the 2022 deadline too. He said it would be impossible for the Catholic Church to upgrade all 370 of its New York City properties, which include schools, churches and housing developments, in time. The unusual, lofty architecture of many churches would make it difficult for them to meet the new energy-efficiency standards, he argued, and so houses of worship should be exempt from the bill. The legislation should also give federally subsidized low income housing developments, like Section 8 and Section 202 projects, a pass on the new energy efficiency requirements, he said.

Josephine Zurica, the vice chair of the New York chapter of the American Council of Engineering Companies, agreed that the 2022 and 2023 enforcement periods were too soon. “The engineering community in New York will be adversely impacted as there will not be time to…design, construct and commission what in many cases will be major alterations to buildings.”

Jeffrey Perlman, the CEO of energy-efficiency consulting firm Bright Power, put it even more bluntly. “Trying to hit targets this aggressively could lead to shoddy work and detrimental boom-bust cycles in the energy-efficiency contracting market,” he said.

Most of these speakers also mentioned that the bill, which sets emissions targets based on occupancy groups defined in the city building code, could create crippling standards for energy-dependent properties like hospitals.

The current version of the bill would require a hospital open 24 hours a day to reduce its energy usage just as much as an office building occupied 40 or 50 hours a week, REBNY’s Hum said.

The Greater New York Hospital Association, which represents all the public and private hospital systems in the five boroughs, was one of the legislation’s harshest critics. It is pushing for hospitals to be exempt from the fines for landlords who fail to meet the new energy usage targets.

“The financial penalties resulting from these unrealistic emissions limits…would impose enormous financial burdens on New York City hospitals and ultimately put their viability at risk,” said Andrew Title, the senior director for governmental affairs at the hospital organization. The fines could lead to “further hospital closures in medically underserved areas where they are most needed, and the loss of many good-paying union jobs.”