New York City Council Green-Lights the Climate Mobilization Act
Loans program and new department to support ambitious emissions rule for larger buildings
Last month in New York, the city council approved its Climate Mobilization Act (CMA), a package of bills representing an aggressive plan for cutting emissions across the five boroughs.
Establishing a policy and vision that could have significant effects on HVAC contractors and the market for retrofits through the next decade, the CMA calls for a minimum emissions reduction of 40 percent by 2030 for buildings covered under the act, compared to 2005 levels. Pursuit of greener performance continues after that date, with the act specifying an 80 percent reduction by 2050, compared to the same 2005 levels.
Beyond an energy-efficiency agenda and goals for municipal buildings, a major target for the CMA comprises buildings of 25,000 square feet or more.
Council Speaker Corey Johnson issued a statement that put the measure in context from his body’s perspective.
“We are on the precipice of climate disaster, and New York City is acting,” he said. “I hope other cities follow suit.”
That perspective rises from not only future projections and current use patterns but also past developments. New York’s Department of Environment Conservation reports that the state has seen “at least a foot of sea-level rise since 1900, mostly due to expansion of warming ocean water.”
The department cites scientific estimates of additional sea level rise of somewhere between 18 and 50 inches along the state’s coastline by the end of this century, with a rise of roughly 6 feet not out of the question.
More particular to New York City, it released the Lower Manhattan Coastal Resilience Survey in March. That report projects that by 2050, more than one-third of lower Manhattan could be regularly vulnerable to flooding from storms.
Council Member Costa Constantinides of Queens introduced the CMA section that addresses buildings and greenhouse gas emissions.
“Our legislation represents over two years of engagement with the various communities, industries, and everyday New Yorkers impacted by climate change,” he said. “With so many people and cars in NYC, it can be hard to believe that our buildings are the No. 1 contributor of harmful emissions,” he continued.
Bill: Introduction 1253-C is the component that addresses a group of buildings that includes many of the city’s taller structures. Constantinides calls it part of a package of bills that will create an energy-efficiency grading system for buildings throughout the city.
“Hopefully this will encourage building owners to make the necessary upgrades to reduce the amount of negative impacts that these large buildings are having on our environment,” he said.
With regard to that impact and the focus on this category of buildings, Constantinides said that while the 50,000 buildings that the CMA targets may represent a small fraction of buildings in the city, they represent over 30 percent of the city’s carbon emissions.
Small fraction or not, the CMA reaches a large number of buildings and, in many cases, likely their HVAC systems in order to achieve these levels.
Tony Saporito is the executive vice president for New York’s branch of Mechanical Contractors Association of America (MCAA). While Constantinides mentioned a spectrum of people consulted over the development of the CMA, that group may have been light on contracting knowledge.
While the city consults municipal experts and engineering sources, Saporito said, they don’t really come to the contracting community, to the people who have to bid this, and buy the equipment, and plan a project.
He stressed that MCAA has no problem with the best systems being installed for New York citizens, but with any initiative like this involving considerable cost, gathering input from those on the ground doing the installing (and sometimes designing) should be a priority. He also understands the larger traditional dynamics in play.
“We’re not always on the best of terms with owners and developers and GCs [general contractors],” Saporito acknowledged. “They’re looking to get the best built structure for the least cost, sure. And contractors want to build the best structure and make a little profit. So it’s sometimes cross purposes.”
But in this instance, if the topic is mandated and associated costs, then everybody should be involved, because it’s going to affect everybody, he said.
In preparation for speaking with The News for this article, Saporito spoke with a local member who is both a contractor and engineer, and who works with the city’s department of buildings on code matters. That contractor expects that the CMA may represent an opportunity for contractors who know how to perform design-assist work, helping the owner, developer, and others on the project team to understand what the best and most cost-efficient installation might be for a particular building given its existing circumstances.
Meanwhile, contractors with strong marketing and client ties may benefit from promoting another element of the CMA: the Property Assessed Clean Energy (PACE) program. Individual owners may apply for PACE sustainable energy loans — in amounts up to a maximum of 10 percent of a building’s appraised real property value — to facilitate improvements.
Loans for the “energy-efficiency improvements” category of work would be contingent on an energy audit that indicates such work is appropriate. For projects such as renewable energy system retrofits, the loan program requires a similar approval based on the results of a renewable energy system feasibility study.
How much of a difference city financing might make in tipping owners from observers to investors remains to be seen. Vincent Eckerson, vice president of operations for Arista in New York, sees that as one of a few challenges to get the initiative past the tipping point.
Arista does a substantial amount of work in Manhattan. Before, Eckerson said, owners on the whole were not willing to spend on the basis of greener performance.
“They’d rather just keep things running no matter how efficient, and projected return, for whatever reason, didn’t weigh enough for there to be much change,” he said.
Arista has seen VRF units become a very popular tactic for owners who do want to do something. Since the baseline for achieving efficiency gains is the 2005 emissions level, many owners may have already made some progress toward CMA levels. But with one significant efficiency step already taken by many of the most interested, where does the next large step forward come from?
“You’re going into one of the biggest cities in the world and you’re asking owners to reduce their emissions by 40 percent, but then you’re not even sure of the support they would get from the industry,” Eckerson said. “How many of these manufacturers are going to invest deeper than what they’re already doing [to help reach both performance goals and their timeline]?” he asked.
Along the same lines, the engineer/contractor that Saporito spoke with expressed the belief that the city may have proposed something without cultivating enough of an understanding about what is capable of being done based on current conditions in Manhattan and the outer boroughs.
With a little over a decade until the first emissions deadline, there might seem to be no rush for owners. Nevertheless, improvements to reach CMA’s goals could in many cases be quite expensive. Both Eckerson and Saporito wondered about a timeframe with more nuance to reflect existing conditions.
Perhaps that could have come in the form of grandfathering equipment as of a certain date of installation, suggested Eckerson.
“Or maybe the requirements should be phased in over a period of time so that owners can retrofit at the end of the useful life of their existing equipment,” Saporito said.
As the saying goes with regard to car shopping, the most environmentally friendly car is the one you don’t buy. As a 2030 deadline gets nearer, owners may find themselves considering expensive upgrades for equipment that is fairly efficient and not that old in order to reach an overall target.
A sensible staggered timeframe of some sort also addresses the fundamental feasibility concerns, in terms of CMA goals versus equipment limitations, that Saporito and Eckerson each voiced. Owners have other options beyond HVAC, of course — lighting, metering, etc. — but there’s no guarantee that even an owner who develops a renewed interest in efficiency for a somewhat substandard-efficiency building could put together an adequate system even if they can afford it.
A little more flexibility in some cases before an owner has to reach a hard goal, Saporito noted, might also provide the time in which manufacturers develop an option that proves to be that much more efficient.
… AND SPACE
One part of the CMA, sponsored by Council Member Rafael Espinal, intends to require green/cool rooftops for larger buildings. The requirement would apply for new construction and for older buildings that are undergoing certain types of renovation.
This, observed Eckerson, is another instance where the location makes a difference. He expressed hope that owners who have “done the right thing” and invested in something like a VRF system to reduce energy use will not be asked now to relocate the rooftop elements of those systems.
Plus, as residents and visitors to the city can attest, space can get tight. A building that could use a certain equipment upgrade might not have room for it, Eckerson said, and renewable options like solar are somewhat vulnerable to site-specific concerns and constraints.
“Depending on the application,” he said, “you can’t utilize every technology that you would want to in certain markets like Manhattan. The city already has problems with landmarking ... there are already limitations on where units can be placed and seen. So you also have that piece. It’s going to be a huge undertaking.”
With large building new construction requiring cool rooftops, that seems likely to affect new construction design. Added indoor space for mechanical equipment is reduced space for tenants and revenue-generating options, at least not without increasing the investment.
That isn’t the only way that the CMA could affect the local real estate market. Eckerson points to a seller whose building now has a realistic scenario of replacing a large share of its HVAC equipment on the not-so-distant horizon.
Whether as a presale upgrade or an allowance to a seller, that looming retrofit seems likely to decrease a seller’s net at the end of the day, and it adds a potential sticking point requiring navigation by both parties.
PUT THE BEST FOOT FORWARD
So many questions and challenges await the actual rollout and execution behind the CMA. Saporito noted a recent safety measure, and how the sheer logistics of administering training to the number of workers involved (who are usually already working full-time jobs) eventually necessitated delaying the effective date for the requirement.
Sometimes, he said, the city will get it on the books and then they have to backtrack a bit. But at the end of the day, should contractors invest the time, thought, and resources into pursuing a share of the retrofit business that may blossom as a result?
“Well, I think it’s a lost opportunity if you don’t,” said Eckerson. Regardless of one’s beliefs on the larger issue, “you have to start thinking, ‘All right, well this is going to happen regardless.’”
After all, “this” may prove to be a city-mandated (and, occasionally, city-financed) retrofit wave on a scale not seen before.
All the 25,000-sqare-foot buildings in New York may represent a small slice in terms of overall building inventory. Still, the relative size of the slice may not be as important as remembering the truth in the cliché: It’s a Big Apple. A contractor who makes some adjustments and manages even a couple of extra bites at CMA-inspired business might find it worth the effort.
Beyond NYC: The Climate About Climate in Other Cities
Should contractors and owners expect other major cities to warm up to the idea of making their own requirements, similar to New York City’s Climate Mobilization Act?
Chicago and Los Angeles have introduced their own steps on the topic. However, neither has taken measures as concrete as New York’s establishment of the Office of Building Energy and Emissions Performance to monitor and support the CMA, or the city’s PACE program to finance sustainability upgrade-related loans to building owners.
Nevertheless, city governments do have the ability to lead by example and do other things to create a friendlier environment for private upgrades.
Chicago’s city government has set a 100 percent renewable energy goal for its public buildings, with a target date of 2025. That reportedly would translate to 8 percent of the overall building stock using clean or renewable sources. The city points out that this initiative follows the 2013 commitment to eliminate coal from its electricity supply.
Chicago has also touted a desire to see retrofits in half of the city’s commercial and industrial buildings, with an anticipated 30 percent reduction in energy use.
Los Angeles’ Mayor Eric Garcetti recently released that city’s Green New Deal, with a bottom-line goal of achieving carbon neutral status for the city at large by 2050.
Under this plan, as of 2030, all new buildings must be emissions-free. Then by 2050, every building — from single-family residential to the largest commercial buildings — will have become emissions-free.
The act contains an immediate mandate that all city buildings and major renovations shift to all-electric power sources. This approach reflects the city’s intent to take advantage of sources powering local electricity that are more sustainable than, for example, using natural gas for HVAC.
Pursuant to a law passed last year, the California Public Utilities Commission just began the task of providing $200 million to support technologies that further these emissions goals.
According to the Governors’ Wind & Solar Energy Coalition, that criterion could include heat pumps, advanced energy efficiency, and solar paired with storage. The other possible destination for that funding is the Technology and Equipment for Clean Heating (TECH) Initiative. The coalition states that the TECH program emphasizes space and water heating technology and can extend to upgrades for existing stock as well as new construction.
Los Angeles has already made strides in one area where it may have a logistical leg up on New York: an abundance of sunshine and a better city orientation for using it. These efforts follow Los Angeles’ earlier comprehensive solar incentive programs for residents and businesses.
Publication date: 6/3/2019