Joint Testimony of the Real Estate Board of New York, the Natural Resources Defense Council, and 32BJ SEIU Before the New York City Council Committee On Environmental Protection On Intro No. 1253

Testimony of Carl Hum, Real Estate Board of New York Before the New York City Council Committee On Environmental Protection On Intro No. 1253

Good morning Speaker Johnson, Chair Constantinides and members of the Committee on Environmental Protection. I am Carl Hum, General Counsel and Senior Vice President at the Real Estate Board of NY. Joining me are David Cohen of Local 32BJ SEIU and Donna DeCostanzo of the Natural Resources Defense Council.

We are delivering joint testimony because our organizations collectively recognize the profound societal threat that climate change poses, made abundantly more pressing in light of the recent IPCC report and National Climate Assessment, which show that GHG reductions will need to be closer to 90% by 2050. To that end, our organizations, inspired by the Urban Green 80x50 Buildings Partnership, have been working together to create effective and sensible ways to achieve the GHG reductions to fight climate change, while creating additional significant benefits for New Yorkers.

New York City has among the lowest GHG emissions per capita of large US cities, but buildings – occupants including commercial and residential tenants along with base operations - are responsible for two-thirds of the City’s GHG emissions. Therefore, it is critical and logical to focus on reductions from this sector.

Our organizations appreciate the Council’s leadership on this issue, and specifically, Chair Constantinides’ introduction of such bold legislation to regulate GHG emissions. We support the Council’s efforts and look forward to working with you on this legislation and other related initiatives.

Energy efficiency and reducing energy consumption in buildings is the best, fastest, and cheapest way to achieve our greenhouse gas reduction goals, while also creating local jobs, reducing energy costs, decreasing other harmful pollutants, investing in our city, increasing electric grid reliability, and improving our buildings to be better homes and workplaces. Among REBNY’s membership are early adopters and innovators of energy efficiency. These include builders of the largest passive house structure and LEED-certified office towers, in addition to the creators of real-time building management systems that have realized 40% reductions in energy consumption across portfolios.

REBNY supports the bill’s intention to act quickly and with ambition, but also wants to ensure we proceed wisely - focusing on our long-term goals while being cognizant of our short-term realities. With an aim of reducing GHG emissions 40% below 2005 levels by 2030 and achieving at minimum an 80% reduction by 2050, our organizations jointly offer suggestions to improve the bill.

We appreciate the bill’s call for a “carbon trading study” to encourage investment, preserve a minimum level of benefits for all covered buildings, and not result in any localized increases in pollution. Such a program would permit the ability to trade efficiencies among buildings or portfolios, allowing owners to achieve emissions limits or energy performance targets most cost-effectively, without sacrificing the City’s GHG reduction goals and the local benefits derived from achieving them. Tokyo’s carbon trading program should be referenced as a workable model to explore.

However, we have concerns about the bill’s initial compliance period that require absolute GHG reductions by 2022 – 2023. The capital improvements needed to meet the bill’s initial targets require at minimum two years to be planned, financed, implemented and assessed. We estimate that over 450 million square feet of retrofits would need to be completed during this initial period, overwhelming the available workforce and building owners’ ability to successfully implement the required retrofits within that timeframe.

In addition, since LL84 benchmarking data is still being collected for buildings between 25,000 and 50,000 square feet and will not be available until 2019 at the earliest, we believe that imposing requirements for these buildings prior to an appreciation of the benchmarking data is premature.

Moreover, the bill’s allotment of GHG/sf targets among five categories of occupancy groups does not take into account the very different types and occupancies of buildings, their societal value or the nuances within individual occupancies such as hours of operations or end-user intensity. For example, grouping Occupancy types “B,” “I” and “M” together means that a 24/7 hospital needs to meet the same threshold as a lightly occupied office operating only 40-50 hours per week.

REBNY shares other concerns, in particular, the bill’s exclusion of buildings with at least one rent-regulated unit which effectively means that over a third of GHG emissions from buildings over 25,000 sf will not be addressed. This and other concerns will be described by my fellow panelists to whom I now concede the floor and my remaining time.

 

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Statement of Donna De Costanzo Director, Eastern Region, Climate and Clean Energy Program Natural Resources Defense Council Before the New York City Council

Good morning, I am Donna De Costanzo, Eastern Regional Director for the Climate and Clean Energy Program of the Natural Resources Defense Council. Thank you for the opportunity to deliver testimony on the groundbreaking legislation before you today.

NRDC has been working in New York City on issues related to climate change and energy efficiency for decades, including working extensively with the City on the landmark Greener, Greater Buildings Plan and subsequent bills. In this era in which the Trump Administration has been waging a complete assault on the most fundamental clean energy and climate initiatives, New York City continues to be a critical leader, as action at the local and state levels is now more important than ever.

We fully support the Council moving forward with a framework to significantly reduce energy consumption in our buildings and look forward to working with the Council to advance Int. No. 1253 and improve upon it so that it is as effective as possible. To that end, we offer the following specific comments:

 

Flexibility:

We believe that energy efficiency should remain the focus of the legislation, particularly due to the many benefits associated with it, beyond carbon reduction, including reduced energy bills, the creation of good, local jobs, the reduction of other harmful pollutants, and increased reliability of the grid.  If options beyond efficiency may be used to meet the bill’s requirements, particularly if a “building emissions intensity” metric is used, we recommend that the Council include parameters in the bill regarding how targets may be met.

Assuming that renewable energy may be used to meet the bill’s targets, we urge the Council to only permit the use of renewable projects for purposes of compliance that are deliverable into the NYISO Zone J, thus only including local green power purchases, and to ensure that they are additive, and not duplicative, of other requirements.

In addition, we recommend that the Council adopt New York State’s definition of renewable energy pertaining to its Clean Energy Standard, as the currently included definition of “Green Energy Source” may permit technologies that we don’t consider to be renewable, such as municipal solid waste incineration.

Also, though we believe that there are specific, limited instances in which a variance from requirements may be warranted, the variance provisions currently included in the legislation are too broad and provide a significant amount of discretion to the DOB.

 

Requirements

We join others in voicing concern over the bill’s blanket exemption of buildings with at least one rent-regulated unit. The City will not be able to achieve its greenhouse gas reduction goals with this exclusion. The exemption directly contradicts the conclusion made by the Mayor’s Technical Working Group and reiterated by the Urban Green 80x50 Buildings Partnership report that in order to achieve citywide GHG reductions of 40 percent by 2030, buildings of all types and sizes must participate.  With this exemption, the majority of the burden of meeting our emissions reduction goals from buildings will rest upon less than 40%  of New York City’s total building stock - and over a third of the GHG emissions that come from buildings over 25,000 square feet will not be addressed.

Most importantly, we cannot leave these rent-regulated residents behind.  These are the buildings that often need energy efficiency upgrades the most and these are the tenants that would benefit most from lower energy and operating costs, and better functioning apartments. Of course, any framework including rent-regulated housing must protect against displacement and maintain affordability while advancing emissions reductions and energy efficiency.  [We support the recommendations regarding these buildings as stated by my colleague from SEIU 32BJ].

Given the current concerns and challenges associated with Major Capital Improvements (MCIs), we recommend that rent regulated buildings that meet early compliance criteria be required to implement the low-cost prescriptive measures reflected in the Urban Green 80x50 Buildings Partnership recommendations, which would not trigger an MCI, for the early compliance period.  We also believe that the Advisory Board created by this bill – perhaps with the addition of housing advocates -  will be better equipped to address how rent-regulated buildings can participate, especially with the benefit of knowing how the Rent Stabilization Law will be addressed in Albany next year.

Regarding the early 2022-2023 compliance period, to address feasibility concerns while still achieving the City’s emission reduction goals, we suggest that the Council consider briefly deferring the initial compliance period and staggering compliance, requiring the worst performers to cut their energy use or emissions by an established percentage instead of reaching an absolute target. We recommend that the Council focus on the largest buildings in an initial year, perhaps over 100,000 square feet, followed by buildings over 50,000 square feet in the second year.

In addition, we agree with the Council’s intent to include a backstop that will ensure that we achieve our 40 x ’30 greenhouse gas reduction target, but recommend reassessing the current structure to ensure that we achieve our goals in the most effective and sensible way possible.

Finally, we also strongly support the Council’s efforts to establish a commercial PACE program, as included in Int. No. 1252, which will provide much-needed assistance to building owners for financing energy efficiency retrofits and other clean energy technologies.  It is critical that the City, State and utilities integrate their efforts to the greatest extent possible to provide the financial and technical assistance that will be needed to meet the City’s goals envisioned through this legislation, as well as the State’s ambitious energy efficiency targets.

Once again, we  thank Councilmember Constantinides, Speaker Johnson, and the Council for their leadership and stand ready to help improve and move forward this momentous bill that is not only critical for New York City’s future, but will also serve as an important model for other cities around the country. 

 

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Committee on Environmental Protection Intro. 1253  A Local Law to amend the New York City charter and the administrative code of the city of New York, in relation to the commitment to achieve certain reductions in greenhouse gas emissions by 2050 - Testimony of David Cohen, Political Manager

Good morning Speaker Johnson, Committee Chair Constantinides and Committee Members. My name is David Cohen, Political Manager for SEIU 32BJ here in New York.

On behalf of the union’s 85,000 members who work in our city’s buildings, thank you for the opportunity to testify here today on Intro. 1253.

Our members sit at the nexus of this bill’s impact. They live in communities and hail from countries that are disproportionately impacted by climate change as well as work in buildings that will be covered by the proposed law. In many instances it is our members who will serve as agents for change on the ground – utilizing skills taught in our green training programs to make their buildings more energy efficient. Our members also experience firsthand as tenants the challenge of maintaining affordable housing in our growing city.

On behalf of the union I applaud the efforts of the Committee Chair and the council to engage with stakeholders throughout the drafting process, including with my colleagues from the organizations I share the panel with today, and I strongly encourage the continuation of this dialogue. It is essential that we move forward with a plan to reduce emissions that is broadly supported, technically feasible and does not hurt or leave out those already vulnerable.

I acknowledge the care taken in drafting the bill to avoid the unintended consequence of triggering rent increases in rent regulated units by removing all buildings with one such unit from the definition of covered buildings. However, leaving these buildings out exempts over a third of the city’s building square footage, making the long term efforts to achieve substantial reductions significantly harder by leaving a smaller portion of buildings subject to performance standards.

Important also, carving these buildings out risks denying rent-regulated tenants the benefits of cleaner air, more energy efficient apartments and lower energy costs.

We believe that the Advisory Board created by this bill – with the addition of housing advocates to its composition - should be empowered to consider how rent-regulated buildings can participate. This effort should be informed by the outcomes of the renewal of rent stabilization laws due to occur in Albany in 2019.

As an interim step, we encourage the council to consider the recommendation made by the 80x50 Buildings Partnership, convened by Urban Green, with respect to low-cost energy saving measures that do not trigger MCI increases. In addition, we support separate action by the council to appropriate funds to assist rent regulated properties improve their energy performance, including assistance on voluntary deep energy retrofit measures.     

It has taken a number of years to get to this point where we have diverse groups converging to improve and support this ambitious endeavor. We thank the council for the leadership and cooperation it has demonstrated throughout this process as we work towards what will be a groundbreaking final bill.