Crain’s New York Business
September 21, 2023
Aaron Elstein
NYC Co-ops face financial crisis>>

In italics below are excerpts from the article.  It is apparent that these buildings are heated with fossil fuels, primarily oil.  While the building highlighted in the article has unusual circumstances, there are many buildings with different but similar issues. NY City is loaded with aging housing stock that has deferred maintenance because of costs.  Mitchell-Lama, another housing complex is raising maintenance costs by 50%.  Against the backdrop painted by the article, Con Ed’s rates are going up 15% over the next three years and Local Law 97 (explanation of law below) is going to start imposing penalties on buildings that don’t make upgrades to their heating systems.  The problem is that they don’t have money to do that and with interest rates near a 20 year high, the debt service is going to bankrupt these buildings or make them unaffordable for many residents.  A a time when housing in NY City is in short supply, people are going to have no choice but to leave for less expensive areas.

Insurance costs have increased radically, construction costs have doubled or tripled because of supply shortages and a lack of labor, and now regulations are going to add cost increases on top of that in the form of utility rate increases and non-compliance penalties.

At the condo that my daughter lives in, they have looked into trying to comply with Local Law 97 and they don’t have the physical space for the equipment and the costs are extremely high making the changes impossible to implement, so they are just going to pay the penalties.  Rental buildings are just going to pay the penalties and pass them along as rent increases.  It’s not an effective way to reduce carbon emissions.  Any increase imposed by the Condo will not impact my daughter’s lifestyle but the same cannot be said for many of NY City’s other residents.

A less expensive option that would reduce carbon emissions by a third, and one that would be affordable would be for buildings to convert from oil to gas however that is not an option under NY State’s climate law and Local Law 97.   The original part of my factory has steam heat.  It was originally powered by an oil fired steam boiler.  We pulled the oil burner and put in a gas burner.  We didn’t even touch the boiler.  The cost of the conversion was paid for with reduced fuel costs in about one year and the carbon footprint of natural gas is two-thirds that of oil.   Additionally, the gas system needs about twenty times less maintenance, further reducing costs.  The oil to gas conversion would reduce utility costs and carbon footprints simultaneously but Climate Scientist ideologues in Ithaca and Palo Alto have convinced policy makers that upgrade won’t meet the test of ideological purity.  So the buildings will remain more polluting than necessary and more expensive for residents to live in.  That is even more true with oil prices expected to hit $150 per barrel within the next two years.

Forcing people from their homes by making them  too expensive to live in is what is  claimed by the CLCPA as being “climate justice”.  Great public policy that really “works” for the people of NY.

A rebellion against these policies is imminent but that happens frequently when people with little knowledge of a subject set policies and overreach without having any grasp of the unintended consequences.  

This is going to create a real mess in Westchester, NY City, and Long Island (60% of NY State’s population) that is only going to get worse as these costs continue to spiral out of control.

Just another example of how the CLCPA will make NY State more expensive and more polluting.

Rich

When the special assessment kicks in, Warner’s cost to live in Castle Village will have risen nearly 50% in just a year, to about $2,700 a month.

To keep up with rising expenses, some co-ops are raising maintenance fees by 6% to 12% annually. The norm used to be 3% or even less.

That’s small comfort to residents struggling to cope with the soaring cost of staying put. Hector Reyes, an administrator at an urgent-care center, said over his nine years at Castle Village his maintenance bill has risen from $1,800 to $3,000 a month.

It isn’t clear how many co-ops are financially stressed because little public information is available. Pierina Sanchez, who chairs the City Council committee on housing and buildings, said co-ops regulated by the city such as Mitchell-Lama properties, are being told by officials to raise maintenance fees. At the May hearing, Council member Eric Dinowitz of the Bronx said a Mitchell-Lama building raised maintenance by 50%.

LOCAL LAW 97

https://www.nyc.gov/site/sustainablebuildings/ll97/local-law-97.page

Buildings account for approximately two-thirds of greenhouse gas emissions in New York City and Mayor de Blasio has pledged to address these emissions as part of his plan to make the city carbon neutral by 2050. 
 
Local Law 97 is one of the most ambitious plans for reducing emissions in the nation. Local Law 97 was included in the Climate Mobilization Act, passed by the City Council in April 2019 as part of the Mayor’s New York City Green New Deal. 
 
Under this groundbreaking law, most buildings over 25,000 square feet will be required to meet new energy efficiency and greenhouse gas emissions limits by 2024, with stricter limits coming into effect in 2030. The goal is to reduce the emissions produced by the city’s largest buildings 40 percent by 2030 and 80 percent by 2050. The law also established the Local Law 97 Advisory Board and Climate Working Groups to advise the city on how best to meet these aggressive sustainability goals.  
 
Local Law 97 generally covers, with some exceptions:

• Buildings that exceed 25,000 gross square feet; 
• Two or more buildings on the same tax lot that together exceed 50,000 square feet;
• Two or more buildings owned by a condo association that are governed by the same board of managers and that together exceed 50,000 square feet. 

Further details regarding emissions limits, as well as information on buildings that are exempt from Local Law 97 requirements can be found at the Department of Buildings (DOB) Greenhouse Gas Emission Reportingwebsite. Local Law 97 of 2019 was amended by Local Law 147 of 2019, and additional amendments have followed. The amended version of Local Law 97 of 2019 can be reviewed in §28-320 and §28-321 of the Administrative Code. 
 
Please visit this website regularly for updated information. For additional information on the Department of Buildings’ sustainability efforts, visit the Department of Buildings Sustainability page.