Navigating the Climate Policy Maze: An Analysis of New York City’s Local Law 97, Projected Fines, and the Path to Policy Improvement

Abstract

The ongoing climate crisis and the significant role of the real estate industry in contributing to greenhouse gas emissions call for urgent and effective policies to regulate building emissions. Local Law 97 in New York City serves as an ambitious effort to address this pressing issue. This study analyzes the potential fines imposed by the law, evaluates its fairness, and proposes comprehensive policy recommendations to improve its implementation for a fair and sustainable New York City.

Our research begins with an examination of the climate crisis and the real estate industry's impact on GHG emissions. An in-depth exploration of Local Law 97 is then conducted, covering its legislative history, intended purpose, key provisions, and requirements for compliance. The law is also compared to similar policies in other cities and countries, and the arguments of its proponents and opponents are discussed.

A detailed analysis of building emissions in New York City is then carried out, revealing two crucial insights. Firstly, our research uncovers the magnitude of fines imposed by Local Law 97 in both 2024 and 2030, which had not been previously known. This information is essential in understanding the law's enforcement and its potential effects on the city's housing market. Secondly, the research highlights the substantial impact of Local Law 97 on multifamily housing, as these buildings face a disproportionate share of the fines in terms of both the percentage of non-compliant buildings and the absolute dollar amount of fines. These findings underscore the need for policy interventions that address this disparity and promote fairness in the implementation of Local Law 97.

Based on these findings, the study proposes five policy recommendations to improve Local Law 97 for a fair and sustainable New York City: increasing the emissions factor for multifamily housing for the calculation of allowable emissions, expanding on-premise clean energy generation benefits, explicitly allowing for carbon capture technology in Local Law 97, offering tax incentives for excess emissions reductions, and discouraging a cap-and-trade program. Additionally, further analysis and monitoring of Local Law 97 when fines are implemented in 2024 is recommended to ensure the continued effectiveness and fairness of the law. These policy recommendations aim to strike a balance between environmental goals and the diverse needs of the city's building owners and residents.

In conclusion, this research provides a comprehensive analysis of Local Law 97, its potential impact on New York City's building owners and residents, and the fairness of its enforcement. By proposing policy recommendations grounded in our key findings, this research contributes to the ongoing debate around Local Law 97 and offers valuable insights for decision-makers seeking to create a fair and sustainable future for New York City.