Building Owners Got A Long Leash For Local Law 97 Reporting. Some Are Still Scrambling

Joy Chiu has no idea how much she’s going to have to fork over to cover fines at the 12-building Forest Hills co-op that she calls home. But as New York City rolls out the enforcement phase for one of its landmark pieces of climate legislation, she’s sure she’s going to have to cough up.

Chiu is one of roughly 530 owners at the Quality and Ruskin co-op at 105-25 67th Road and one of thousands across the city who will likely have to pay fines under Local Law 97. But there are still big questions about when and how those fines will be handled, and there is skepticism from landlords that the city will issue them at all.

“I get the emissions issue, and I don't mind doing it. But the question is, can we have our own timeline so that we can prove in good faith that we have a plan?” Chiu said. “Don't fine me, allow me to do it.”

She's also one of the owners whose costs are stacking up, even before any fines are issued, between paying for emissions analyses and filing for reporting extensions with the city. And adding to the confusion, the city has yet to publish its guidelines for what owners can do if they think they’re being incorrectly fined. 

Under Local Law 97, building owners must report greenhouse gas emissions for buildings 25K SF and up to the New York City Department of Buildings. By now, for the first reporting period — from 2024 through 2029 — landlords are expected to demonstrate a 40% reduction in emissions from their 2006 levels.

“One of the biggest challenges is just the overall accuracy and quality of the data, and that they have not yet confirmed what that appeals process is,” said Adam Fisher, managing director of JLL’s sustainable brokerage business.

The DOB opened its portal for building owners to report their carbon emissions in March, giving them until May 1 to file the disclosure. The deadline came with a 60-day grace period, giving owners until June 30 this year to send in their data for 2024.

Then, on June 16, the DOB issued a service notice, telling owners that if they still need more time to pull 2024's data together, they can apply for an extension by Aug. 29. If they do that, they then can have until Dec. 31 to submit their emissions reports.

The extensions granted by the city have led some smaller owners to doubt they’ll ever have to submit the data, according to Jimmy Carchietta, founder and CEO of sustainability consultancy firm The Cotocon Group.

“What I'm hearing is a lot of misbelief that the law is going to take place,” he said, adding that he works with a mix of multifamily, industrial and faith-based owners. “I've already told two different clients to write the check.”

The DOB plans to start pursuing enforcement actions in the fall, an agency spokesperson told Bisnow in an email. Buildings that don’t manage to cut their emissions by enough or fail to demonstrate a “good faith effort” to make improvements will face a fine of $268 per metric ton of excess carbon.

If owners miss the deadline and don't file, they will face late fees of $0.50 for every square foot of their building.

“The purpose of Local Law 97 is to compel building owners to reduce harmful greenhouse gas emissions from our built environment,” the DOB spokesperson said. “DOB will continue to support those who are taking decisive action to file their reports as we build out the first compliance year.”

Based on data received for 2024, the DOB estimates that it will be able to collect fines from nearly 10% of the 50,000 NYC buildings that have to submit emissions data for the first reporting period. Basic energy efficiency measures should be enough to generate the required emissions cut, the DOB said.

There had been some doubts over whether or not the law would be allowed to take effect because of a challenge that had been playing out for the last three years in the New York State Court of Appeals. But the court dismissed the appeal last month.  

“That slight uncertainty about whether the law was going to be tossed out in litigation — that's gone now,” said Vincent Nolette, a fellow at the Columbia University Sabin Center for Climate Law. 

Two buildings in the 2,000-property multifamily portfolio belonging to Manhattan-based owner, developer and manager Argo Real Estate will be subject to small fines, Vice President Jessica Tusing told Bisnow.  

Tusing isn’t sure how Argo would appeal fines once they’re issued. It’s unlikely that the city will collect any fines for a couple of years because owners will probably file appeals, experts previously told Bisnow. Now, delays in releasing appeals guidelines could be part of the slow rollout, Fisher said.

“This is very much still ‘flying the plane while building it at the same time,’ so I would not expect fines to come directly in September right after that deadline,” he said.

For Chiu's co-op, the cost of complying with compiling its Local Law 97 report just adds to the burdens the city has piled on.

After a parking garage collapsed in the Financial District in 2023, NYC DOB officials fanned out across the city to inspect hundreds of other garages, including the Quality & Ruskin co-op. The board was told that it had an unsafe parking structure that had to be shuttered and repaired immediately.

“As we're trying to figure out financially how to deal with this bigger policy, we're getting all these other policies and things that are coming on,” she said. “It’s like death by a thousand cuts, all of these costs just piling up.”