The Real Estate Board of New York to The New York State Assembly Standing Committees on Energy, Government Operations, and Environmental Conservation and Assembly Climate Change Work Group Concerning All-Electric Buildings

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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 appreciates the opportunity to comment on the feasibility and timing of requiring new construction to be all-electric.

REBNY understands and appreciates the Assembly’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 be reduced, which includes the curtailment of fossil fuel combustion in buildings.

To be effective, however, the implementation of such a policy must be done in such a way as to balance multiple competing needs including electric grid reliability and the deployment of renewable energy in different regions of the state, the ability of all-electric building technology to meet the needs of the market across the diverse climates in the state, the cost to  New Yorkers utility bills, and emissions reduction. Furthermore, such a policy requires 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 reducing emissions with growing our housing stock – including affordable housing – and creating high quality office buildings that are critical to the State and City’s employment and tax base.

With these multiple interests in mind, when the New York City Council was considering legislation on this topic in November 2021, REBNY suggested the adoption of a phased-in approach for a requirement to prevent onsite fossil fuel combustion in new buildings. Specifically, at the time, we recommended 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.

Ultimately, in December 2021, the City Council enacted Local Law 154 of 2021. Local Law 154 generally requires new buildings under 7 stories to eliminate onsite fossil fuel combustion by January 1, 2024, and new buildings 7 stories and over to do the same by July 2027.

REBNY believes a phased-in approach for addressing this issue is appropriate and has numerous advantages:

·       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 and allow for more efficient and reliable electric heat pumps to become more readily available for large scale buildings.

·       It would allow time for a new performance based energy code to come into effect and more closely follow the compliance periods set under New York City’s Local Law 97 to ensure efficient construction.

·       It would provide additional time for on-site energy storage systems to be approved in New York City so that buildings could have the resilience and redundancy needed to protect against electric blackouts or brownouts.

·       It allows for the electrification of buildings to better align with the greening of the electric grid, which would allow for a much more comprehensive approach to eliminating fossil fuel emissions.

For these reasons, REBNY believes that it would be imprudent for State legislation to impose a mandate on a faster timeframe than established by Local Law 154.

In addition, as the Assembly considers this topic, REBNY believes it is vital that regulation in this space focus on removing on site fossil fuel combustion in new buildings rather than require new buildings to be all-electric. With significant investment and innovation underway in low- and no-carbon fuels, it is possible that in the coming years new buildings could utilize energy sources other than electricity and have no onsite emissions. An all-electric requirement would foreclose this innovation and leave buildings vulnerable to the reliability and cost of the electricity system while the potential to use very low or no-carbon fuels would help protect the resiliency and reliability of buildings by creating multiple energy sources that a building could utilize while being emissions free, protecting residents and owners from potential electricity disruptions.

Thank you for the opportunity to provide comments on this important issue.