- REAL ESTATE EDUCATION
- GIVING BACK
The Real Estate Board of New York to The New York City Council Committee on Environmental Protection
November 17, 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 City Council for the opportunity to discuss legislation to advance our shared climate goals.
REBNY appreciates the City Council’s interest in pursuing legislation to reduce the use of onsite fossil fuel combustion in buildings. Reaching the objectives set out in the New York State Climate Leadership and Community Protection Act (CLCPA) requires building emissions to be reduced, which includes the curtailment of fossil fuel combustion in buildings.
Realizing this goal require policy makers to carefully analyze several issues that will ultimately impact the effectiveness of the legislation. These issues include:
- The reliability of our electricity systems,
- The ability of technology to cost-effectively deliver efficient electric solutions to all types of buildings, and
- The financial impact on tenants and residents.
Furthermore, to be successful such policies must be based on clear and consistent regulation at both the State and City levels and provide both financial support and technical assistance for buildings that need these tools. If implemented poorly, well-intentioned policies that seek to reduce emissions would fail to balance the competing needs of the city to grow our housing stock – including affordable housing – and create high quality office buildings that are critical to the City’s employment and tax base.
Comments on the specific bills under consideration follow.
BILL: Int 2317-2021
SUBJECT: Use of substances with certain emissions profiles
SPONSORS: Council Member Ampry-Samuel, Rivera, Public Advocate Williams, Van Bramer, Reynoso, Lander, Rosenthal, Kallos, Levin, Dromm, Diaz, Ayala, Menchaca, Adams, Barron, Chin, Cornegy Jr., Rodriguez, Levine, Riley, Cumbo, Koslowitz, Dinowitz, and Louis
Int 2317 would prohibit the combustion of any substance in a building whose emissions exceed a certain limit established by the legislation. As proposed, the limit would prohibit the combustion of natural gas or fuel oil, which are commonly used heating sources in buildings. Certain exemptions are provided including for emergency standby power, certain operations including manufacturing, laboratories, commercial kitchens, laundromats, and hospitals, or other undue hardships. The prohibition would apply to both new construction and major renovations (an undefined term in the proposal) and would go into effect in two years.
REBNY supports the goals of Int 2317 but believes that changes are necessary for the proposal to succeed. This is the case because policies around building electrification and the elimination of onsite fossil fuel combustion have trade-offs and raise many critical policy issues that need to be balanced. Key issues include:
- Can the electricity system – including generation, transmission, and distribution – provide reliable low-emission power to buildings?
- How can building electrification best deliver emissions reductions?
- Is efficient electric heating technology able to meet the needs of all types of buildings that are required to meet the needs of the city?
- Who will pay the costs that result from using higher cost electricity?
Each of these topics merit detailed analysis on their own. However, one can imagine the potential impacts of implementing Int 2317 in two years for every building in New York City by looking closely at the challenges left unaddressed by the current legislation. These include:
- It would take effect before the deployment of any significant renewable energy into New York City. New York City’s electricity will be largely supplied by fossil fuels until the completion of offshore wind generation and transmission and large scale transmission projects that are yet to be fully permitted or constructed meaning that carbon emissions stemming from electricity usage will remain elevated for many years to come.
- It would add potentially significant load to the electricity system at a time when the city’s electricity provider is already unable to reliably supply electricity on the peak days.
- It would result in the adoption of inefficient electric heating systems, such as electric resistance heat. This is because much more costly and less proven heat pumps are currently not able to meet the needs of very tall buildings or certain uses, including domestic hot water or shared drying facilities. As a result, the implementation of less efficient all-electric technology could lead to increased emissions short-term due to New York’s reliance on fossil fuels for electricity generation.
- It would substantially increase utility bills for New Yorkers. Families across the city would face higher electricity costs because of heating costs becoming borne by the tenant.
These risks can be mitigated by thoughtful improvements to Int 2317. These improvements should include the following:
1. A phased in effective date that better accounts for the cost and effectiveness of efficient electric-based systems, the realities of the electricity system, and the City’s need to grow our housing supply.
REBNY believes an appropriate phase-in would be 2025 for buildings under 3 stories and single family homes, 2027 for all buildings under 10 stores, and 2030 for all buildings over 10 stories.
Such a phase in has numerous advantages. First, in requiring smaller buildings to go first it reflects the reality that heat pump technology is already cost-competitive and proven in small buildings. As electric heat pump systems are less proven and more costly for taller buildings, this phase in would give time to ensure product manufacturers provide high quality cost competitive systems for these buildings. This would help to avoid buildings utilizing inefficient electric systems that would quickly overburden the electric grid if used widely. REBNY believes that this suggested timeline will allow for more efficient and reliable electric heat pumps to become more readily available for large scale buildings.
Second, it would align this mandate with other aspects of State and City policy that are important to drive efficient construction and low-carbon performance. In particular, this phase in would allow time for a new performance based energy code to come into effect and closely follow the compliance periods set under New York City’s Local Law 97. Further, it would also provide additional time for on-site energy storage systems, which are on the verge of finally being approved, to provide buildings with the resilience and redundancy needed to protect against electric blackouts or brownouts.
Finally, a phased-in approach allows for the electrification of buildings to better align with the greening of the electric grid, which as aforementioned would allow for a much more holistic approach to eliminating fossil fuel emissions.
2. An “electric ready” requirement on buildings constructed prior to the full effective date of the law.
A phased approach should also include an “electric ready” requirement for buildings will ensure that new buildings are designed to more easily facilitate conversion to efficient electric systems in the future when more appropriate.
3. A focus on new construction.
This legislation will be more effective if it focuses on new construction, rather than existing buildings. It is substantially easier to eliminate onsite fossil fuel combustion from a building that is not yet completed than an existing building, even if that existing building is undergoing major renovations. Indeed, major renovations can occur without impacting the building’s boiler or HVAC system and some existing buildings simply may not have the space to accommodate electric systems at all.
However, if this requirement is to be extended to major renovations, the term “major renovations” must be much more carefully defined. Unless major renovation is more appropriately defined, there will likely be scenarios where tenants remaining in place during construction could face significant hardship due to the invasive and challenging process of converting an existing building to all-electric systems.
REBNY looks forward to a continued conversation with the City Council on this proposal.
BILL: Int 2196-2021
SUBJECT: Study of the health impacts from gas stoves
SPONSORS: Council Member Louis
Int 2196 requires a study be conducted by a mayoral appointee into the health impacts of gas stoves and further require a recommendation be made as to whether gas stoves should be phased out. REBNY believes such a study is prudent and supports this legislation.
BILL: Int 2091-2020
SUBJECT: Studying the feasibility of electrifying existing buildings
SPONSORS: Council Members Kallos and Cornegy, Jr.
Int 2091 would require a study be conducted into the feasibility of electrifying existing buildings as part of the long term energy plan and analysis that is required to be completed by June 30, 2022.
REBNY believes studying the feasibility of electrifying existing buildings is urgently needed. While Local Law 97 appears to be designed to encourage buildings to electrify, the challenges for existing buildings to do so are immense and merit more careful evaluation.