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Boards and Building Owners Must Focus on Upcoming CMA Deadlines

The first significant deadlines under the New York City Climate Mobilization Act (“CMA”) are approaching.  Under Local Law 97, which is part of the CMA, covered buildings have a yearly carbon emissions budget, or limitation, starting in 2024, and buildings that do not comply with this budget can be subject to heavy annual fines.  The law recognizes four categories of buildings that may have particular difficulty complying with the 2024 limits, including (1) high-energy-use buildings facing “special circumstances” (including that the building’s emissions in 2018 exceeded its 2024 budget by more than 40%), (b) non-profit hospitals, (c) buildings with physical and legal constraints (such as NYC landmarked buildings), and (d) buildings with “financial hardships,” which is defined narrowly in the law to apply only to buildings that have been certified as having negative revenue for the prior two years or that have been placed on the city’s tax lien sale list. Buildings qualifying under one of these exceptions may seek an adjustment from the Department of Buildings (DOB) to temporarily raise the building’s emissions limits.

Buildings in the first category, high-energy-use buildings, must apply for an adjustment by June 30, 2021.  The application process for buildings seeking an adjustment is extremely detailed and demanding.  The DOB requires, among other things, that the building submit an “Emission Reduction Plan Report” with a schedule of specific alterations to the building’s physical structure or changes to building operations sufficient to ensure that the building will be in compliance with its emissions budget for the years 2030 through 2034, which must be signed off by a registered design professional.  The level of detail that the DOB is seeking in these reports is exacting, and would likely take several months for an engineer or consultant to prepare.  The catch is that the DOB only released its guidance for these adjustment applications in April 2021, meaning that many potentially eligible buildings may simply run out of time before the deadline passes.

Few co-op and condo buildings are likely to qualify as “high energy use” buildings, so this particular upcoming deadline may not affect them.  However, the stringency of the DOB guidance for this category of buildings may portend similarly rigorous treatment for buildings that seek an adjustment on the other listed grounds. Co-ops and condos in landmarked buildings should not necessarily expect the DOB to rubber stamp a favorable adjustment to their carbon emissions budget.  Boards or owners who believe their buildings may qualify for an adjustment need to start working now with a design professional and legal counsel.