Dive Brief:

• The New York City Council voted Thursday to strengthen provisions of the Climate Mobilization Act on buildings’ emissions and the city’s efforts to educate building owners on how they can reach their goals.
• The new law would require buildings with less than 35% of units under rent regulation to comply with the Climate Mobilization Act’s greenhouse gas (GHG) emissions limits, in a move city officials said would avoid major capital improvement cost increases for rent-stabilized tenants and maximize emission reductions.
• This latest move by lawmakers to amend the Climate Mobilization Act is estimated to reduce climate pollution by about 40% by 2030 and over 80% by 2050, with the city’s buildings sector responsible for 30% of GHG emissions annually. Councilmember Costa Constantinides, who sponsored this latest draft of the legislation, said during the council meeting it would help create 141,000 “good jobs” in a bid to bring about “steep but accessible emissions cuts from New York’s largest polluters.”

Dive Insight:

When the act originally passed last year, owners of buildings where rent regulated units make up less than 35% of the total were given an alternate path to compliance due to what officials called “outdated” rent laws in New York State. That path allowed landlords to pass the cost of building upgrades to tenants by charging for major capital improvements through higher rents.

Then in July, the state-level Housing Stability and Tenant Protections Act of 2019 altered how such improvements can be imposed, by only allowing rent increases for rent-stabilized units if they make up 35% or more of the units in a building. While this adjustment saves tenants from having the costs of capital improvements and retrofits passed on to them, some councilmembers worried about landlords’ ability to absorb those costs themselves.

Elected officials said while more established landlords can likely take on the costs for improvements like HVAC and lighting upgrades, but those who manage smaller buildings may not be able to, especially as the coronavirus pandemic (COVID-19) has affected their rental incomes.

“Added mandates and costs don’t hurt the big landlords, but it cripples the smaller ones and forces them in some cases to sell to bigger ones,” Councilmember Robert Cornegy said during the meeting. “[While] we are fighting for climate change, we don’t want to disenfranchise small homeowners in the process.”

Councilmember Vanessa Gibson echoed those remarks and warned of the potential for “unintended consequences” for small property owners. But Councilmember Brad Lander said the energy efficient capital investments made by building owners will help in the long-term.

“The vast majority of the requirements here actually are going to save owners money,” Lander said. “In fact, what they’re going to do is invest in buildings in a way that reduces their energy bill over time.”

Cities are looking ahead to how they will recover from the effects of COVID-19, and some local leaders said they have one eye on using that recovery and any stimulus package to address the climate crisis. Investment in green infrastructure will be a good way to simultaneously reduce emissions and create jobs, Lander said.

“In some ways I think it’s a metaphor for the kind of recovery we’re going to need from the COVID crisis,” Lander said. “If we could come out of the COVID crisis with our eye on getting the city ready for the climate crisis, mitigating fossil fuels and building a more resilient city, then we can involve everyone in building that city together.”