Perspectives New York City Climate and Environment Housing

Eric Adams Is ‘Getting Stuff Done’ on Climate Law — For the Real Estate Lobby

The mayor is putting New York City’s landmark climate and jobs law in jeopardy, our columnist argues.

Pete Sikora · September 25, 2023

NYC Mayor Eric Adams stands at a podium at REBNY gala superimposed over shot of One Bryant Park

REBNY chairman, One Bryant Park owner, and Eric Adams donor Douglas Durst has been pushing for loopholes to the city climate law. | Photos: Benny Polatseck / Mayoral Photography Office (Adams); Zheng Zhou / Wikimedia Commons (One Bryant Park) | Illustration: Maia Hibbett

This article is published in our opinion section. Pete Sikora directs climate advocacy at New York Communities for Change and is a member of the Local Law 97 Advisory Board.

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This article is published in our opinion section. Pete Sikora directs climate advocacy at New York Communities for Change and is a member of the Local Law 97 Advisory Board.

New York City is among the bluest of blue places. Even our moderates profess loyalty to climate science. But when political talk collides with the money and power of powerful industries, our boastful lion politicians become quiet kittens. In Texas, it’s the oil companies that wield vast power. In New York City, it’s the real estate industry. They’re the top campaign donors to Mayor Eric Adams, who once declared, “I am real estate.” Now, he’s proposed rules to weaken the world’s most important city-level climate and jobs law, Local Law 97, which requires the owners of big buildings to cut pollution.

It was a summer of climate-fueled disasters and heat waves, from fire in Maui to orange, dangerous air in New York. Thousands are missing and presumed dead in Libya after a dam gave way to an unprecedented rainstorm. Surface sea temperatures are off the charts. And we’re just at 1.1 degrees Celsius of heating.

Yet we can still head off far greater catastrophe — and create a fairer society as we do it. Energy use in buildings creates 70 percent of the city’s climate-heating pollution. Upgrading buildings to slash that pollution lowers utility bills and creates enormous numbers of jobs in design, renovation, and construction. Already, in large part due to Local Law 97, New York City leads the nation in new clean energy jobs.

Mayor Adams is threatening these achievements. He released draft regulations this month that would create two big loopholes for building owners to skate by the law’s initial requirements, allowing them either a two-year extension or an option to buy their way out of upgrading their buildings.

The vast majority of building owners are in compliance with the law’s initial requirements. To get those who aren’t to take the law seriously, the city needs to show it takes the law seriously. Fines get the message across. Letting owners off the hook does the opposite — and it signals that the city could toss owners more get-out-of-jail-free cards down the line, too.

The first pollution limits under Local Law 97 take hold in 2024 and last through 2029. They’re essentially a warm up: Four out of five buildings already met them when the law passed in 2019, and the remaining 20 percent only needed to duck a bit to get under the bar. Many hadn’t even done the very basics of energy efficiency, like installing LEDs, properly weather-sealing facades, tuning boilers, fitting steam radiators with simple valves, and insulating exposed heating pipes.

Since the law passed, progress has been fast: By 2022, just 11 percent of buildings were over the 2024–2029 pollution limit. The law is on pace to be a huge success — unless Adams knocks it off track.

The mayor’s team can’t come right out and say they want to weaken the law to compromise with the real estate lobby. But poke at their arguments, and they don’t make any sense.

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The Adams administration argues that fines could strip money away from improvements or jack up rents and maintenance. But the penalties for violating the initial limits are quite low: At $268 per ton of pollution over the limit, they work out, per unit, to the equivalent of a parking ticket. A residential building owner that has to fork over something on the order of five to 15 bucks a month per apartment isn’t going to go into financial crisis.

The administration emphasizes that in exchange for the delay, developers will have to submit a plan to implement pollution cuts to satisfy the law from 2026 onwards. As Chief Climate Officer Rit Aggarwala, the administration’s point person on the law, put it to The New York Times: “What we have done very intentionally is say if you are late on 2024 targets, you can go ahead and pay the fees, or you can enter into a legally binding agreement with the city.” But landlords are already obligated to follow the law. Suggesting that some sort of new agreement is extra special legally binding is absurd.

The delay program would simply reward building owners who stuck their heads in the sand.

Eric Adams is eager to break up homeless encampments, arrest turnstile jumpers, and punish immigrant street vendors. Poor people of color don’t get an option to ignore laws by promising to follow them in two years; neither should the owners of the city’s dirtiest big buildings, who were given half a decade to fulfill a basic social responsibility.

“A simple patch to the delay program would be to require landlords who make use of it to reduce their pollution to compensate for the two lost years.”

There are also serious administrative challenges with the mayor’s approach. After multiple rounds of budget cuts under Adams, the severely understaffed Department of Buildings is not in a good position to evaluate large numbers of plans to upgrade big buildings. This month, Adams announced a hiring freeze and is insisting agencies cut budgets again, by 15 percent. Building owners will hire well connected consultants and lawyers who know the right dance steps to get pro forma approval from overwhelmed agency staff, and the process will likely devolve into an exercise in paperwork.

It’s not even clear that the city will penalize owners who haven’t gotten into compliance by the end of the delay period. The proposed rules are clear as mud; the department “may” choose to fine landlords retroactively, not “shall” or “must.” Now that Adams is letting them off the hook for 2024, why would owners expect he’ll do differently in 2026 — or 2030, when stricter requirements come into effect?

The 2030 limits are where the rubber hits the road. They match the pace and speed of the Paris climate agreement: an over 40 percent reduction in pollution across large buildings. Watering down the initial limits signals to the real estate lobby that landlords can get a re-elected Mayor Adams to water down the later requirements, when they really start to force down pollution.

That works out well for the mayor on one level: It tells the titans of real estate that he can deliver value for money spent on his re-election. The law effectively requires billions of dollars of new investment across New York’s building stock, so what’s a few million through an Adams super PAC in comparison?

There’s another big loophole in the mayor’s draft rules: Owners could buy Renewable Energy Credits (RECs) in place of cutting the pollution generated by their buildings’ electricity use.

Since electricity is the top source of energy use by offices (as opposed to boilers, for homes and apartments), this would be an especially big gift to deep-pocketed commercial building owners.

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Allowing owners to purchase unlimited RECs to offset their pollution from electricity would severely reduce how much pollution they cut. Analysts have crunched the numbers: The Urban Green Council found that about 50 percent of required pollution cuts could be offloaded to REC purchases, if the sole restriction is that they only offset pollution from electricity. The City Comptroller’s office estimates about 70 percent.

The city’s official Advisory Council for Local Law 97, which included a wide range of experts, industry practitioners, unions, and advocates (like yours truly), made a fair and specific proposal: RECs should be limited to offsetting only up to 30 percent of the pollution by which a given building is over its limit. Councilmembers Carmen De La Rosa, Lincoln Restler, and Pierina Sanchez also rounded up 26 colleagues — a majority of the City Council — to urge the mayor to adopt that limit.

The mayor’s proposal ignores the expert consensus and allows unlimited RECs to offset electric use. The only restriction is that buildings opting for the two-year delay program couldn’t use RECs.

Adams is giving landlords a choice of giant loopholes: Either they can get a two-year reprieve or they can purchase RECs starting in 2026 to cover a huge proportion of their pollution.

“The law effectively requires billions of dollars of new investment across New York’s building stock, so what’s a few million through an Adams super PAC in comparison?”

Big building owners like billionaire Douglas Durst — the chair of the Real Estate Board of New York, who has donated heavily to Adams and employs his former chief of staff — pushed hard for this approach. The Durst Organization’s showpiece property, One Bryant Park — the Bank of America Tower — is a skyscraper polluting well over the 2024–2029 limit. If Durst can simply purchase RECs to cover electricity use, no pollution will be cut and no jobs will be created.

RECs are meant to help induce renewable energy development by creating a guaranteed revenue stream for developers, but there is open debate over whether they work.

The city and the state can’t meet their respective climate plans without reducing on-site pollution. The electric grid must be cleaned up, cars and truck pollution must be slashed, and buildings must become more energy efficient — all at the same time. It can’t be one or the other.

So what is to be done?

New Yorkers should make our voices heard in the rule-making process. After a 30-day public comment period and a public hearing in late October — both of which are open to all New Yorkers — the mayor can modify his proposed rules. It’s vital that Adams reconsider his position.

A simple patch to the delay program would be to require landlords who make use of it to reduce their pollution to compensate for the two lost years. Landlords who have blown off the limits and need more time could get it, but they’d have to cut more pollution from 2026 to 2029 to make up for the delay. That fix would make a world of difference. Pollution cuts would stay on track and landlords would get the message that the 2030 limits are for real.

As for the REC loophole, Adams should accept the Advisory Council’s proposed additional limit on the practice: No more than 30 percent of pollution over a building’s cap should be offset by RECs.

The real estate lobby is trying to portray Local Law 97’s requirements are impractical or unaffordable. In reality, the first limits aren’t difficult and the 2030 limits are also achievable. Indeed some buildings across the city have already upgraded to the law’s 2035 limits — and are saving money in the process.

If Mayor Adams won’t modify his rule, the City Council should step in and close the loopholes itself. It can amend Local Law 97 at any time to remove discretion if the mayor abuses it for the benefit of special interests. New York City must stay at the forefront of global leadership, not squander it under Mayor Eric Adams’s tenure.