Local Law 97 (LL97), enacted as part of the 2019 Climate Mobilization Act, stands as one of the most impactful laws for New York City building owners. This legislation targets greenhouse gas (GHG) emissions from large buildings, which contribute over two-thirds of the city's total emissions, aiming for a 40% reduction by 2030 and net-zero by 2050. For NYC building owners and investors, understanding LL97 compliance is crucial to avoid hefty penalties and capitalize on energy efficiency incentives.
Local Law 97 establishes annual limits on greenhouse gas emissions for most buildings over 25,000 square feet and for certain combinations of multiple buildings on the same lot or under the same condo board. These limits are calculated by building type and gross square area. Buildings that exceed their limits may be subject to significant financial penalties.
Covered buildings include:
If a BBL meets the threshold, all buildings on it are subject to LL97, even if an individual qualifies for an exception – their footage still counts toward the total. Affected property types encompass residential (co-ops, condos, apartments), commercial (offices, retail, hotels), and mixed-use buildings.
Gross Square Feet (GSF) is the total square footage from Department of Finance (DOF) records. This metric determines if a building is a “covered building” under LL97.
Gross Floor Area (GFA) means all floors/spaces in a covered building. This metric is necessary for LL97 reporting and must be verified by Registered Design Professionals (RDPs).
Exemptions or modifications apply to certain types, including those with over 35% rent-regulated units, places of worship, city-owned or NYCHA properties, nonprofit hospitals, healthcare facilities, and historic buildings. These aren't always full exemptions; unique accommodations may include delayed reporting or retrofit flexibility.
Adjustments for external or financial constraints are available under NYC Administrative Code §28-320.7, though some applications closed on January 1, 2025. Common LL97 exemptions can save owners thousands, but applications require precise documentation – check the NYC DOB website for the latest forms and deadlines.
LL97 features three phased periods with escalating requirements:
2024-2029: Initial, lenient NYC building emissions limits based on building type (e.g., multifamily, offices, hospitals). This phase allows time for planning retrofits.
2030-2034: Stricter emissions caps, ramping up penalties for non-compliance.
2035-2050: Net-zero emissions for all covered buildings, aligning with NYC's carbon-neutral goals.
1. Article 320: Standard annual emissions limits for most private buildings (sometimes called CP0).
2. Article 321: Lower-cost or alternative compliance for many rent-regulated and houses of worship buildings (CP3).
3. Rent-regulated Pathways:
4. City-owned portfolios (CP4): Separate portfolio-wide targets.
Steps to comply include the following:
1. Benchmark and Report: Track data using EPA's ENERGY STAR Portfolio Manager. Benchmarking is the recording of a building’s total energy and water use for the previous calendar year to an online database such as the US Environmental Protection Agency (“EPA”)’s Energy Star Portfolio Manager.
2. Implement Upgrades: Focus on energy-efficient HVAC, insulation, or renewables. Examples include installing LED lighting or solar panels to reduce GHG emissions.
3. Alternative Methods: Limited options like renewable energy credits (RECs), carbon offsets, or up to 10% deductions via the Affordable Housing Reinvestment Fund or distributed energy resources. Consider exploring NYSERDA incentives for cost-effective upgrades.
Annual reports, certified by a registered design professional, document prior-year emissions and compliance, due May 1 each year via the City’s BEAM portal.
For buildings subject to Article 320 (applicable to most free-market buildings):
Failure to file annual building emissions report: (Floor Area x $0.50) per month.
Exceeding Limits: A covered building must meet the annual emissions limit for that building. Penalty for noncompliance is = ((Actual Emissions – Emissions Limit) x $268) per year. In other words, $268 per metric ton of CO2e over the cap.
For buildings subject to Article 321:
Failure to file annual building emissions report: $10,000.
Noncompliance: A covered building must demonstrate compliance with one of the two compliance pathways. Penalty for noncompliance = $10,000
These LL97 penalties can add up quickly: for a 100,000 sq ft building exceeding limits by 500 tons, fines could exceed $134,000 annually. Proactive compliance is essential.
In an effort to comply with LL97, owners of covered buildings should take the following steps: