When a trend starts in real estate, it’s usually either transient or here to stay and shape the future. Sustainable buildings are proving to be in the latter group, and New York City is set to begin doing its bit in the fight for a more sustainable future.
On October 3, 2017, NYC Mayor Bill DiBlasio took the imitative and released his plan to meet the goals of the Paris Climate Agreement, a policy adopted by 196 countries to reduce greenhouse gas emissions. By doing so, DiBlasio is joining other U.S. mayors who have committed to the program despite President Trump’s plan to withdraw back in June. It is hoped that the example set by New York will encourage other cities to follow suit.
Back in 2009, NYC became the first city to mandate energy benchmarking for buildings. Since then, 26 localities have followed NYC’s example by implementing some form of benchmarking for privately owned buildings. The new plan will expand on this with new energy saving deadlines and loans to help property owners meet the requirements of the plan.
Also, Mayor DiBlasio has pledged to work with C40 cities to help them develop sustainability plans. C40 is made up of cities around the world who have committed to finding solutions to address climate change. A sustainability plan by C40 cities is expected to be released in 2020 which will add further requirements for owners to reduce their energy, water, and waste usage.
Plan for the Future
The following items in the plan will impact the apartment industry:
- The legislation is requiring large buildings to limit fossil fuels by 2030. If passed it will require half of the cities buildings to be retrofitted for energy efficiency.
- A stricter energy code will be implemented in the next few years, by 2025, all new buildings will have to meet “very-low-energy design targets.”
- A marketing campaign will be launched to encourage residents to change their habits and reduce their energy and water usage.
- An expansion of NYC’s composting program. The city government will work with residential property owners to allow all residents to separate their food waste.
- Property owners will be given access to a free planning tool for energy saving retrofits.
- The city will launch a Commercial Property Assessed Clean Energy program (PACE). Loans from PACE will allow property owners to finance energy retrofits under the state’s interest rate. The loan won’t require money down and is paid back through annual property taxes over a long period (usually 20 years).
At present, the plan does not outline any fines for noncompliance, but the Mayor has recently mentioned his interest in imposing fines for property owners who fail to comply.
What this all means is a brighter and greener future for NYC, something that both current residents and new arrivals will much appreciate. Some of the plans will be launched in 2020, many of which will require building owners to cut back on their energy usage and work with the city to construct greener buildings. Expect significant changes to come.