- REAL ESTATE EDUCATION
- GIVING BACK
The Real Estate Board of New York to The Committee on Environmental Protection on Int. 980
January 26, 2021
The Real Estate Board of New York (REBNY) is the City’s leading real estate trade association representing commercial, residential, and institutional property owners, builders, managers, investors, brokers, salespeople, and other organizations and individuals active in New York City real estate. REBNY thanks the Committee for the opportunity to testify on the retiring of no. 4 oil.
With the launch of PlaNYC in 2007, New York set the ambitious goal of having the cleanest air quality of any major city in the country by 2030. NYC has for the past several years recorded an average EPA Air Quality Index of less than 50, which is “good,” but our air quality can still be improved. The most prevalent pollutant in NYC air is PM2.5, or fine particulate matter, and between 2018 and 2019 the city’s level held steady at 7 μg/m3 and increased since 2017. While the EPA deems anything less than 10 μg/m3 acceptable, the World Health Organization is clear that any level of PM2.5 pollution poses public health risks, increasing rates of cardiopulmonary illnesses. To protect New Yorkers and meet our air quality goals, the City needs to address the largest contributors of pollutants, and no. 4 oil, while only used in less than 1% buildings, accounts for the majority of the NYC heating related PM2.5, according to the Environmental Defense Fund.
REBNY supports our collective environmental goals and continues to work with the City to find practicable steps the real estate industry can take to help make New York City more sustainable and safer for all New Yorkers. We believe this bill works to that end.
SUBJECT: A Local Law to amend the administrative code of the city of New York, in relation to phasing out the use of fuel oil grade no. 4.
SPONSORS: Council Member Constantinides and the Public Advocate (Mr. Williams).
Int. 980 would proposes expediting the gradual phase-out of No. 4 oil to no later than January 1, 2025. To that end, the bill creates three sequential tiers of retiring No. 4 oil, first affecting buildings that use the fuel as a backup to natural gas, followed by those with above ground oil tanks, followed by those with covered boilers.
REBNY generally supports this legislation. No. 4 oil is currently used in a small number of buildings but is nevertheless responsible for relatively high rates of pollution. As such, the measure is reasonable, particularly given that converting from no. 4 to no 2 oil can be done without being overly disruptive to building operations or tenants.
At the same time, we encourage the Council to consider the importance of a predictable regulatory framework that allows buildings to make and implement capital plans. The Department of Environmental Protection has already mandated that no. 4 oil be retired by 2030. Although this bill would accelerate that timeline by five years, some buildings have already accounted for and planned for the retirement of their systems operating on no. 4 oil. If this bill is enacted, those plans will have to be amended, which comes with costs.
Buildings often operate on capital plans of ten years or more. Design and infrastructure costs are forecasted based on the conditions and regulations at the time of the budgeting. As the Council moves forward with any legislation that would require capital improvements and retrofits to buildings, we also encourage you to consider the immediate fiscal realities of buildings, especially now that budgets are strained because of the economic conditions induced by COVID-19 - median rents have dropped more than 15%; vacancies are at their highest point in decades; and landlords have forgone revenue to offer large rent concessions to assist New Yorkers hurting from their own fiscal constraints.
REBNY looks forward to continuing to work with the Council to find practicable ways to achieve our environmental goals.
Thank you for the consideration of these points.
To read the full testimony, please click here.