In the South Bronx, this co-op sets a high standard

When Derek K. Jones moved into the Sherman Terrace Cooperative at 1010 Sherman Ave. in the Bronx in 2018, he was pleased to see the building, orig­i­nally built in 1958, already under­going energy upgrades: New windows to prevent unnec­es­sary A/​C leaks, and an all-elec­tric elevator to replace the older one that often broke. But after a year of riding the new elevator with his neigh­bors, Jones noticed there was still room for improve­ment — and decided to run for board president. 

That same year, in 2019, New York City passed Local Law 97. Sherman Terrace, with its 67 units across 6 floors, was well over the 25,000 square-foot threshold for build­ings that need to decar­bonize by 40 percent by 2030. Jones and his fellow board members knew the new law would apply to their building, but they were still new to the clean energy scene, so they weren’t sure exactly how. 

With the help of an energy consulting company, Jones spear­headed a collec­tion of efforts to switch to cleaner energy sources and reduce overall energy use in the building. In just six years, the co-op’s Building Energy Efficiency Rating jumped from C to A, making Sherman Terrace a standout example of how working-class commu­ni­ties can meet regu­la­tions, avoid fines, and reduce oper­ating costs, all through investing in long-term energy solutions.

The Challenge

At the real estate firm where Jones works, he observed plenty of energy upgrades made to its build­ings. He thought there might be some trans­fer­able lessons for the co-op where he lived. 

The first step was to under­stand their starting line. An energy audit to comply with Local Law 87 — which is required every decade for build­ings over 50,0000 square feet — revealed that Sherman Terrace’s energy perfor­mance was poor. Its ENERGY STAR® score sat at just 58, which trans­lated to a low C in Building Energy Efficiency Rating.

Future fines from Local Law 97 also loomed over board members’ heads. Starting in 2025, build­ings that fail to file their emis­sions reports are charged $0.50 per square foot per month after the May 1 filing dead­line, and build­ings that haven’t met their emis­sions targets are fined $268 for each metric ton over the build­ing’s emis­sions limit. Neglecting to take action could have resulted in thou­sands of dollars in fines for the shareholders. 

So, back in 2019, Sherman Terrace’s board decided to start decar­bonizing to hit its 2030 green­house gas emis­sion reduc­tion targets. The timing was serendip­i­tous: The board was also due to rene­go­tiate its mort­gage. Refinancing yielded a lower interest rate and a pool of capital to use toward upgrades, Jones said.

The Roadmap

Jones worked with an energy consulting company called En-Power Group that special­izes in green energy effi­ciency projects. Thomas Morrisson, the organization’s director of energy manage­ment, presented Sherman Terrace with a multi-pronged approach to improving the building’s energy effi­ciency. Together, they imple­mented a few options simul­ta­ne­ously: Changing out the lights, installing solar panels, and upgrading the boiler.

After calcu­lating an initial budget, the board deter­mined all of this would run them just under $1 million — not bad for multiple upgrades. 

They were able to source the money needed for this project from a few different streams. The approx­i­mately $320,000 in capital from refi­nancing the mort­gage helped, but board members also tapped into a combi­na­tion of grants and rebates from federal clean energy incen­tive programs, New York State Research and Development Authority (NYSERDA), and ConEdison. In all, they were able to tap more than $350,000 in supportive dollars. 

Along with the capital raised, the board also decided a main­te­nance fee increase was neces­sary to keep up with rising costs, which met with some resis­tance from share­holders. Among Sherman Terrace’s many resi­dents, some fami­lies have lived there for 50 years or longer. Over the decades, resi­dents’ main­te­nance fees remained rela­tively stable. But fees didn’t reflect actual cost increases, so the building had accrued finan­cial debt. The board decided to increase main­te­nance fees by 7% begin­ning in 2023 to bring them more in line with the cost of living. The goal was to better be able to pay for regular repairs, and also help build up reserves to fund future capital projects.

At first, the Sherman Terrace board wasn’t convinced the upgrades were worth the hassle — or the cost. But Jones and Morrisson showed them that there was a rela­tively quick return on invest­ment for tech­nology like solar panels, and that these upgrades would also result in long-term savings for share­holders. Plus, they would avoid thou­sands of dollars in LL97 fines. 

“The build­ings that are most successful at reducing their energy consump­tion typi­cally have one or more advo­cates like Derek amongst the share­holders that are driving those deci­sions,” Morrisson said. 

The Project

Once Jones and his fellow board members confirmed their funding sources, it was time to get to work. 

Among the suite of options, a simple light­bulb switch was one of the first clear path­ways. They took advan­tage of a ConEdison program for multi­family build­ings to swap out 600 light bulbs in common areas and indi­vidual units with more effi­cient LEDs at a discount. (Residents will be respon­sible for replacing them, but LEDs last for a long time, Jones said.) 

They were also eager to harness the bene­fits of solar power. Sherman Terrace worked with Best Energy Power to install more than 300 solar panels on its roof during the summer of 2020. While the pandemic had resi­dents quar­an­tined in their units below, Best Energy Power workers installed the building’s sprawling rooftop solar panels over the span of a couple months. Sherman Terrace paid nearly $400,000 out of pocket for the instal­la­tion up front, but were able to take advan­tage of more than $246,000 in state and federal tax credits. Plus, the invest­ment promised mone­tary returns in three to five years. The panels aren’t set up to power the building directly, but rather serve as a renew­able energy source for the larger power grid, and consis­tently reduce the building’s energy bills by more than $30,000 annu­ally through a process called net metering. 

At the same time as the solar instal­la­tion, the building iden­ti­fied another target for emis­sions reduc­tion: The boiler. The building’s heating system had up to that point relied on No. 2 oil to power the boiler, but En-Power Group recom­mended they switch the boiler’s primary energy source to natural gas, which would bring down the building’s overall carbon emis­sions, Morrisson explained. 

“Even if the fuel usage doesn’t change, you have some carbon savings, because natural gas is less carbon-inten­sive than oil,” Morrisson said. While natural (methane) gas is an improve­ment over oil, the co-op hopes to even­tu­ally elec­trify heating, too. 

They also equipped the boiler with a Real Time Energy Management (RTEM) system to help it operate more effi­ciently, and installed smaller domestic hot water heaters for use during the summer, so that the big boiler could be turned off entirely when it’s not heating season. 

Last and most tedious were the elec­trical subme­ters: Small devices installed in each unit near the elec­tric panel to measure energy usage. Submeters make sure share­holders can see how much energy they’re using, and there­fore how much they will need to pay. The board had to post notice of the subme­tering plan to all resi­dents, a process that took weeks before it was approved by the Public Service Commission in 2021. 

After the subme­tering plan was approved in 2021, resi­dents became respon­sible for their own indi­vidual elec­tric bills in addi­tion to the main­te­nance fee. Because resi­dents weren’t used to paying for their own elec­tricity usage — a cost that was previ­ously divided evenly among share­holders and included in the main­te­nance fee — that change met with some push­back as well. 

Ernestina Otoba, a share­holder since 2016, imme­di­ately worried about what all of the upgrades — but espe­cially subme­tering — would mean for her budget. As a single mom on a teacher’s salary who had already been pushed out by rising rents in the gentri­fying Harlem neigh­bor­hood where she grew up, she couldn’t afford to pay more.

But after a few months, Otoba and other resi­dents appre­ci­ated the wake-up call to change their habits. 

“Prior to this upgrade, I’d run to the grocery store and I’d leave my lights on, just being very wasteful and not conscious of how I was using energy,” said Ernestina Otoba. She and her adult son now consciously reduce their energy usage, halving their orig­inal elec­tric bills to about $55 a month.

“When you’re more respon­sible for your energy use, you’re smarter with how you use elec­tricity,” Jones said.

In the end, Sherman Terrace has success­fully avoided LL97 fines through 2030, exceeding its energy effi­ciency goals. According to Morrison, the building’s most recent carbon emis­sions report is at 261 metric tons, and if it continues decar­bonizing at the current pace, it will meet its emis­sions goals through 2039. Over the past seven years, its ENERGY STAR® score also increased from 58 to 97 — earning the building a new energy effi­ciency grade of ​“A,” and placing it in the top three percentile of resi­den­tial build­ings in New York City. 

Rooftop solar has saved the building some big bucks, too. In 2022, its solar panels gener­ated $37,600 worth of elec­tricity, reducing the building’s elec­tric bills. In 2023, it lowered the building’s bill by $33,000; in 2024, by $30,000. And the energy effi­ciency gains from the boiler upgrade contributed to the building’s annual energy savings of 26,095 therms, or more than $53,000 in energy savings each year.

But the project hasn’t stopped there: The building’s goal is to even­tu­ally reach total carbon neutrality. Moving forward, Jones hopes to apply for grants and loans to help pay for bigger projects, such as installing heat pumps to replace the need for the boiler. The Sherman Terrace board is working with En-Power Group to consider Property Assessed Clean Energy (PACE) loans, a long-term,low-interest way to fund energy projects in multi­family buildings. 

The Future 

Notably, Sherman Terrace isn’t the only post-war building in New York City facing LL97 and other energy requirements. 

Other South Bronx build­ings are looking to Sherman Terrace as a guiding example of how working-class neigh­bor­hoods can improve their energy effi­ciency — even without finan­cial privilege.

“Other build­ings don’t have to spend millions of dollars to show energy savings,” Morrisson said. ​“They can spend less and still get really good results.” 

At 823 E. 147th St., south­east of Sherman Terrace near St. Mary’s Park, share­holder and co-op board trea­surer Maryam Ansoralli saw an oppor­tu­nity in Sherman Terrace’s story. Her Housing Development Fund Corporation (HDFC) coop­er­a­tive building was coming out of years of debt and finan­cial misman­age­ment — and much like at Sherman Terrace, share­holders were resis­tant to change. Seeing another working-class coop­er­a­tive success­fully work with its share­holders to comply with local laws was inspiring, she said. 

“Sometimes the right thing is not the most popular thing,” said Ansoralli, adding that some share­holders have harassed her for suggesting clean-energy upgrades. 

So far, her board has worked with ConEdison and the Urban Homesteading Assistance Board (UHAB) to install LEDs throughout the building and, in the future, they plan to reno­vate the boiler. Because her neigh­bor­hood is located in a food desert, resi­dents are now inter­ested in some­thing like a commu­nity garden or green roof, which could help with insu­la­tion, stormwater manage­ment, and a neigh­bor­hood cooling effect.

“It’s slow, but it’s progress,” Ansoralli said.

For Otoba, the teacher living at Sherman Terrace, climate change isn’t always on her mind. But she says it’s a priv­i­lege to live some­where with resources for making margin­al­ized commu­ni­ties more resilient. 

“For resi­dents to be taking note of things like climate change and to be actively doing some­thing about it, I feel like that speaks to the fact that good things are happening in the South Bronx,” Otoba said. ​“We haven’t been forgotten about.”