United States. New York City's real estate market is expected to be impacted as a result of ambitious legislation designed to address climate change, including requiring residential and commercial building owners to reduce energy consumption and carbon emissions or face significant fines.
Under one of six bills passed as part of the Climate Mobilization Act, buildings over 25,000 square feet will be required to make corrections, such as upgrading boilers and installing new windows and insulation, to make them more energy efficient, with the goal of reducing greenhouse gas emissions 40% percent by 2030 and 80% by 2050.
Starting in 2024, noncompliant building owners will be affected by fines that total the difference between the emissions limit for the year and their actual emissions, multiplied by $268.
Real estate industry leaders, including those involved in discussions leading up to legislation that was designed to make it happen on Earth Day on April 22, worry that the aggressive law will further hurt the already struggling residential market, as building owners struggle by making costly modifications and encouraging tenants to change their energy use.
"It's going to have a huge impact on New York City buildings, there's no doubt about that," says Daniel Avery, director of legislative affairs for the Greater New York Building Owners and Managers Association (BOMA), a trade association for real estate companies in the five boroughs that were part of a stakeholder task force run by Mayor Bill de Blasio's office to form the basis of legislation. "Exactly what that will look like, people are struggling to figure it out."
The law will require cooperatives and condominiums of more than 25,000 square feet to make significant improvements. Buildings can also meet the purchase of renewable energy credits, paying for renewable energy that is generated elsewhere.
Source: Forbes.
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