The Real Estate Board of New York’s Comments on The New York City Economic Development Corporation’s Decarbonizing Capital Investment Strategy RFEI

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REBNY strongly supports this effort to develop a broader range of financial tools to help buildings cut their greenhouse gas emissions, which can avert the more serious consequences of climate change while reducing air pollution at the local level.

The City of New York, through its Economic Development Corporation (EDC), along with the Department of Buildings (DOB) and the Mayor’s Office of Climate and Environmental Justice (MOCEJ), is soliciting information from all relevant entities regarding investment strategies to build a robust “green economy” in New York City. In general, the term green economy, as used in the Request for Expressions of Interest, refers to industries that are involved in reducing the emissions of greenhouse gasses. REBNY is of course primarily focused on reduction of emissions from buildings, including tools to assist buildings in meeting the mandates of Local Law 97.

With a proud tradition of robust public transit, the building sector accounts for roughly 70 percent of greenhouse gas emissions in New York City. As such, it is critical that we do reduce emissions from buildings by both reducing overall energy consumption and moving buildings away from on-site fossil fuel combustion to clean sources of energy including through electrification. Driven both by the requirements of Local Law 97 as well as company’s own environmental commitments, building owners are motivated to work to reduce carbon emissions from their buildings.

This transformation will be substantial and will take a tremendous effort and cost. Indeed, according to estimates from NYSERDA, the upfront cost to electrify a residential building can exceed $20,000 per dwelling unit in addition to increasing the annual operating costs of the building. For commercial properties, NYSERDA estimates that costs can exceed $10 per sq/ft while REBNY members who own larger commercial buildings have reported that upfront electrification costs can be significantly higher.

With that in mind, more forms of support need to be developed to help the different segments of the building stock realize these goals. This is particularly true because existing financing programs, while well intentioned and helpful in some circumstances, do not do enough to meet the scale of the challenge. As various program designs are considered, it may be helpful to look to programs such as NYSERDA’s Empire Building Challenge that have seen significant interest from building owners.

REBNY looks forward to working with EDC, DOB, and MOCEJ to help advance our shared goals and develop additional financial tools to help decarbonize New York City.