Understanding the Affordable Housing Exemption in NYC’s Climate Mobilization Act / by Paul Castrucci

To ensure NYC reaches its 2030 target of 40% reduction (80% by 2050) in greenhouse gas (GHG) emissions, all buildings – including affordable housing – must reduce their energy consumption. The Climate Mobilization Act exempts the rent-stabilized sector, which represents about 40% of large multifamily space, from its building emissions limits. Complicated state laws allow costs of ‘Major Capital I­­mprovements’ (MCIs) to be passed to tenants in rent-stabilized apartments. The replacement of heating systems and retrofitting the building envelope can qualify as MCIs and give owners the right to increase rents. Additionally, owners may petition to deregulate such units once rent exceeds a certain threshold.

Unless state laws are updated, affordable housing subjected to mandatory carbon emission limits from the Climate Mobilization Act will burden low-income tenants, pushing families out and lowering the amount of affordable regulated housing on the market. 

Until state regulations are updated, a prescriptive list of low- to no-cost Energy Conservation Measures (EMCs) are recommended, supported by a robust verification process administered by the city. None of these measures will qualify for an MCI; yet, collectively, these measures should reduce energy consumption up to 10 to 13%.

While there is intent to prevent retrofit costs passed down to tenants under the current frameworks of existing state regulations, the exemption will further worsen the quality of housing for low-income New Yorkers. Low-income New Yorkers will live in leakier, inefficient building resulting in unhealthy indoor conditions, and they will have higher energy bills. Rent-stabilized buildings are more likely to be built before 1980s – thus leaving most buildings in dire need of energy upgrades. To address the need, one strategy outlined by Blueprint for Efficiency includes targeted funding or grants from the City that support energy efficiency upgrades that will not be eligible for MCIs. Another possibility would be for the city to finance additional affordable housing to counter the loss of rent-regulated units.

We applaud the city and its leadership on its ambitious climate change policy; however, we must ensure policies should not leave the most vulnerable New Yorkers behind. NYC and NY State should explore policy options and funding to help bring affordable housing stock to 40% energy reduction by 2030 and usher in a sustainable and equitable future for all New Yorkers.

 Sources:

1. NYC Mayor’s Office of Sustainability (2017). Inventory of New York City Greenhouse Gas Emissions in 2015. Retrieved from www.dec.ny.gov/docs/administration_pdf/nycghg.pdf

2. Urban Green (August 2018), 80x50 Buildings Partnership Blueprint for Efficiency.

3. BuildingEnergy NYC, (2018) The challenge of Energy Efficiency in Rent-Regulated Housing