What is Local Law 97?

Unlike most places in the US, it’s not cars or facto­ries that are primarily to blame for New York City’s green­house gas (GHG) emis­sions — it’s build­ings. All of the office towers, store­fronts, and resi­den­tial build­ings in our densely-popu­lated city require heating and elec­tricity, and the energy produced for those build­ings accounts for more than two-thirds of the city’s emissions. 

The lion’s share of those building emis­sions comes from big build­ings, defined as those larger than 25,000 square feet. To address this, New York City has passed an ambi­tious piece of legis­la­tion known as Local Law 97 (LL97), which requires build­ings to cut their carbon emis­sions. LL97 aims to reduce overall building emis­sions by 40 percent by 2030, which would in turn reduce the city’s overall GHG emis­sions by 10 percent; its ulti­mate goal is net-zero emis­sions city-wide by 2050. If imple­mented success­fully, this law stands to have great impact on New York’s future, and can also serve as an example to other cities for how to tackle climate change. 

The first GHG emis­sion limits set by LL97 apply to approx­i­mately 34,000 build­ings in 2025, and build­ings that don’t meet the require­ments will likely be fined. Stricter limits will be applied in 2030, and then grad­u­ally increase every four years until build­ings meet the zero emis­sions goal of 2050. The law applies to resi­den­tial and commer­cial build­ings alike, but one of the bigger chal­lenges for New Yorkers will be reducing emis­sions in the multi­family resi­den­tial build­ings where they live — which is where Skylight comes in. 

Below is Skylight’s guide to navi­gating this complex and compre­hen­sive law, with answers to common ques­tions about LL97’s goals, require­ments, and dead­lines. As we continue to craft a roadmap for New Yorkers decar­bonizing their build­ings, consider this resource a starting point — the rules of the road for our city’s journey toward carbon neutrality.

Where did Local Law 97 come from?

LL97 was first passed by the City Council in 2019 as the main compo­nent of the Climate Mobilization Act (CMA), a legis­la­tion package aiming to reduce GHG emis­sions in the city and create new green energy jobs. Passing such an ambi­tious law didn’t come without polit­ical chal­lenges: The inter­ven­tions required by LL97 can be very expen­sive, and it has received signif­i­cant push­back from the real estate lobby. While new proposals to limit its scope continue to be intro­duced, LL97 remains the law of the land in New York City.

What buildings does LL97 apply to?

LL97 applies to three groups of buildings: 

1. Individual build­ings bigger than 25,000 square feet;
2. Two or more build­ings in the same tax lot bigger than 50,000 square feet combined; and
3. Two or more condos managed by the same board that exceed 50,000 square feet combined. 

Let’s break that down. A tax lot, which is iden­ti­fied by a unique number in city records, can contain one or more build­ings. If the lot’s combined surface exceeds 50,000 square feet, all of the build­ings on the lot have to comply with LL97 require­ments. Still, every building must comply according to its own char­ac­ter­is­tics; for instance, if a lot comprises private housing as well as afford­able housing and, say, a place of worship, each would need to adhere to the compli­ance pathway laid out for that specific type of building. (More on that later.)

There are excep­tions for some build­ings — for instance, utility producers or garden-style apart­ments. However, the square footage of the exempt build­ings is still included in the calcu­la­tion to deter­mine whether the broader tax lot — and the other build­ings on it — must comply with the law. 

For instance, imagine that a 45,000-square-foot private apart­ment building and a 10,000-square-foot power plant sit on the same lot, and the total square footage is large enough that both build­ings have to abide by LL97 require­ments. This means that the power plant can demon­strate its eligi­bility for an excep­tion (see below), while the apart­ment building must adopt the measures required by the law. 

The Department of Buildings (DOB) compiled a prelim­i­nary list of the thou­sands of build­ings covered by LL97. The list features covered tax lots, not indi­vidual build­ings, so even though it provides infor­ma­tion on compli­ance (for instance, when the require­ments begin to apply), the specific details may vary for different build­ings on the same lot. The list is non-exhaus­tive, non-binding, and subject to change, so the DOB recom­mends working with an engi­neer or an archi­tect to confirm the status and require­ments for a building.

What are the requirements for covered buildings?

The vast majority of resi­den­tial build­ings covered by LL97 fall in one of two buckets regu­lated by two provi­sions in the law: Article 320 and Article 321. The law makes a distinc­tion between build­ings based on resi­dents’ income as a proxy for their assumed capacity to pay for clean energy improvements. 

The first group, regu­lated by Article 320, comprises 34,000 private build­ings, including those with some rent-regu­lated units. For these market-rate build­ings, LL97 regu­la­tion has tech­ni­cally already begun, and those build­ings must file their first GHG emis­sions report with the DOB by May 2025. Buildings with some rent-regu­lated units (but still no more than 35 percent) have to start working to meet the require­ments in 2026, and file the first report in 2027, while Mitchell-Llama build­ings and build­ings with income-restricted units have until 2035 to meet emis­sion limits, and must start filing annual reports in 2036.

Article 321 governs build­ings where more than 35 percent of units are rent-regu­lated, income-regu­lated co-ops, and houses of worship. These build­ings only have to file one compli­ance report, by May 2025, demon­strating either that their emis­sions are below the levels required in 2030, or that they have applied all of the energy conser­va­tion measures prescribed by Article 321. These measures include inter­ven­tions such as temper­a­ture control for radi­a­tors, piping insu­la­tion, and upgraded lighting. The two arti­cles also estab­lish different penal­ties in case of noncompliance. 

On top of these two groups, LL97 also regu­lates 5,500 city-owned build­ings, which will have their own dead­lines. City build­ings will have to cut emis­sions by 40 percent compared to 2006 levels by 2025, and by 80 percent by 2030. New York City Housing Authority (NYCHA) build­ings have less strict dead­lines: They must cut emis­sions by 40 percent in 2030 and 80 percent by 2050, compared to their 2006 levels.

How are a building’s emissions calculated?

A building’s GHG emis­sions are a calcu­la­tion of the amount of carbon and other green­house gases a building releases, depending on the energy it uses to operate — be it elec­tricity, gas, or other fuel. LL97 assigns a ​“carbon coef­fi­cient” to each fuel to account for the different levels of emis­sions they create. The total emis­sions of a building are calcu­lated by multi­plying the amount of fuel a building uses each year by the appro­priate coef­fi­cient, according to the fuel source. 

For 2024 through 2029, the coef­fi­cients for common fuel types are as follows:

• Utility elec­tricity — 0.000288962 tCO2e per kwh
• Natural gas — 0.00005311 tCO2e per kBtu*
• Fuel Oil #2 — 0.00007421 tCO2e per kBtu
• Fuel Oil #4 — 0.00007529 tCO2e per kBtu
• District steam — 0.00004493 tCO2e per kBtu

*kbtu= kilo-British thermal units

A building’s GHG emis­sions are calcu­lated as:

Σ (Annual fuel use x Emissions coef­fi­cient of fuel type)

A building’s GHG emis­sions limit is the maximum amount of emis­sions a building is allowed to produce under LL97 — in other words, it’s an emis­sions cap, used to define and enforce fines. This emis­sions cap varies depending on a building’s size and prop­erty type, and it will grad­u­ally go down year after year as we approach the goal of zero emis­sions in 2050. The GHG emis­sions cap is calcu­lated by multi­plying a building’s total floor area by its Emissions Factor, or the inten­sity limit for carbon emis­sions for a given type of prop­erty, according to the EPA’s Energy Star program. 

For 2024 through 2029, the emis­sions factor for multi­family housing is 0.00675 (tCO₂e/​sf). So a resi­den­tial building’s GHG emis­sions limit is calcu­lated as:

Building’s gross floor area x 0.00675 (tCO₂e/​sf)

A building is in compli­ance with LL97 when:

Annual GHG Emissions < GHG Emissions limit

When does Local Law 97 take effect? 

Past dead­lines:

• LL97 was approved in 2019.
• Specific emis­sions caps were agreed upon in 2022.
• The compli­ance period started in January 2024, when build­ings had to meet the emis­sion caps assigned to them for the five years from 2024 to 2029.
• In December 2024, build­ings regu­lated by Article 321 either had to demon­strate that they imple­mented the prescribed conser­v­a­tive measures, or that they were already meeting the require­ments set for 2030. 

As the law goes into full effect, these are the upcoming deadlines:

• May 2025: Buildings have to report their emis­sions for the previous year, which will show whether their caps were met or they have to pay fines. The 2025 report will be the first, and will be followed by yearly reports every May.
• June 2025: At the end of the fiscal year, city build­ings have to demon­strate a 40 percent reduc­tion in emis­sions, compared to their levels in 2006.
• January 2026: Buildings with 35 percent or fewer rent-regu­lated units have to begin complying with the emis­sion limits.
• January 2030: Stricter emis­sion limits, set for the years 2030 to 2034, come into effect. NYCHA build­ings have to demon­strate cutting their emis­sions by 40 percent compared to 2005.
• January 2035: Mitchell-Llama build­ings and build­ings with income-restricted units have to begin complying with emis­sions limits.
• 2050: Citywide goal of net zero emissions. 

What are the Local Law 97 fines?

Articles 320 and 321 both detail the penal­ties applic­able to the build­ings that fail to submit a report or meet the GHG limits.

For build­ings subject to Article 320, failing to submit a report on time leads to a monthly fine of $0.50 per square foot of the building. Reports are due on May 1 of each year, but there is a ​“grace period” between May 1 and June 30. After June 30, this penalty of $0.50 per square foot per month kicks in. (In some limited circum­stances, there may be oppor­tu­ni­ties to file for an exten­sion beyond the grace period, for a fee.)

If a building’s emis­sions are deter­mined to exceed the limits, the building pays a fine of $268 per ton of excess CO₂ emission.

For build­ings subject to Article 321, both failing to submit a report and to comply with emis­sions regu­la­tions lead to a flat penalty of $10,000 each.

So, for a market-rate, 113,000-square-foot apart­ment building under Article 320, failing to submit a report on time leads to a penalty of $56,500 per month until the report is filed. If that building submits a report showing that it emits 450 tons of carbon annu­ally, but has an emis­sions limit of 350 tons, it’s subject to a penalty of $26,800 — $268 times the 100 tons of CO₂ in excess. 

How can a building get started with decarbonization?

It takes many different types of fuels to power a big building. Heating, air condi­tioning, hot water, and lighting all require elec­tricity, gas, or oil as fuel, and all those energy sources produce carbon emis­sions. Accordingly, each building will require its own strate­gies to reduce emis­sions from all those different energy sources. There is no one-size-fits-all inter­ven­tion for build­ings covered by LL97 and looking to cut their emis­sions, and not every building will need to do a complete over­haul of its energy systems in order to comply.

LL97 does not mandate the adop­tion of any specific retro­fits. The choice is at the owner’s discre­tion, and any combi­na­tion suffi­cient to reduce GHG emis­sions to the required levels is permis­sible. For instance, the International Tailoring Company Building, a pre-war co-op, updated its heating and cooling systems to meet LL97 emis­sions limits, while for another decades-old building in Manhattan, the first inter­ven­tion was recladding the exte­rior to improve energy effi­ciency. 

Some retrofit projects apply to the building enve­lope — for example, upgrading windows and doors, and sealing any leaks to improve insu­la­tion. Others focus on lighting, such as using LEDs or sensors that turn lights off in common areas if no one is there. Still others opti­mize hot water by installing better heaters and improving distri­b­u­tion systems. Further, build­ings can opt to install more compre­hen­sive renew­able energy systems, such as replacing a gas boiler with heat pumps, which vastly reduce GHG emissions. 

NYC Accelerator, a City program that helps build­ings reduce GHG emis­sions, also offers building owners a variety of resources to help guide their retrofit process, including infor­ma­tion on specific tech­nolo­gies like solar and insu­la­tion, contacts for service providers to help execute projects, and a list of state and national incen­tives to save money on projects. It also has an online resource to help build­ings check their compli­ance status, as well as what fines they may expect to receive and when.

Buildings that have demon­strably begun GHG reduc­tion inter­ven­tions but haven’t yet met the require­ments can receive a fine reduc­tion through a so-called ​“good faith” pathway to compliance. 

What are Local Law 97 offsets? How do they work?

Buildings also have an option to offset their emis­sions totals — thereby reducing their fines — by buying certifi­cates in the form of local Renewable Energy Credits (RECs). These credits fund the delivery of clean, renew­able energy to New York’s elec­tricity grid. Each REC corre­sponds to one megawatt-hour of renew­able energy deliv­ered to the grid, and they are offered for purchase through the New York City Affordable Housing Reinvestment Fund. 

Buildings can buy these certifi­cates to offset only up to 10 percent of the GHG emis­sions caused by their elec­tricity use — in other words, RECs can’t be used to offset other sources of carbon emis­sions, like burning oil or natural gas, and they can’t be used to avoid starting building retro­fits in general. LL97 criteria for admis­sible RECs are quite strict, and there aren’t many avail­able projects to apply these credits to just yet, although many more are coming as part of a slate of new clean energy programs across the state of New York. 

The offsets aren’t partic­u­larly bene­fi­cial from a finan­cial stand­point, as they cost exactly the same amount as the fines — $268 per ton of CO₂. Still, there are some incen­tives to buy them rather than being fined, as bene­fits include main­taining good eligi­bility for financing. 

Although the city will direct earn­ings from offset sales toward afford­able housing, envi­ron­mental justice advo­cates have crit­i­cized the program, as they claim it encour­ages building owners to buy their way out of penal­ties rather than make the kind of inter­ven­tions that are required to cut emissions. 

Are there any exemptions to Local Law 97?

The breadth and complexity of LL97 also mean that there are quite a few caveats and excep­tions. For instance, build­ings with special circum­stances such as high-density occu­pancy or housing oper­a­tions crit­ical to human health and safety have higher GHG limits, as do not-for-profit hospi­tals and health­care facilities. 

Individual build­ings can chal­lenge their inclu­sion in LL97, ask for adjust­ments in their GHG limits, and request more infor­ma­tion via email at ghgemissions@​buildings.​nyc.​gov.

What’s next for Local Law 97?

The polit­ical push to weaken LL97 hasn’t ended with its imple­men­ta­tion. Perhaps the most signif­i­cant chal­lenge currently standing, known as Intro 772, is a bill spon­sored by about half the City Council that was intro­duced in April 2024. 

If passed, Intro 772 would dramat­i­cally reduce the impact of LL97 in two ways: First, it would increase building carbon limits, by allowing resi­den­tial build­ings to include any ground floor open and green space in the surface calcu­la­tion, hence increasing allowed emis­sion; second, it would suspend penal­ties for a decade, and reduce penal­ties until 2045. Some build­ings also qualify for tax cuts, such as the ones estab­lished by J‑51. This bill, signed into law in December 2024, allows afford­able build­ings to get tax cuts for invest­ments made to capital improve­ments, such as the ones required by LL97. 

In order to avoid fines, many build­ings have already begun taking actions such as retro­fitting equip­ment to promote energy effi­ciency or improving main­te­nance prac­tices to be less wasteful. Large city build­ings have reported a reduc­tion in GHG emis­sions for the past five years, and as of 2024, 92 percent of all build­ings covered by LL97 met the require­ments set by the law.

Local Law 97 FAQs

1. When does Local Law 97 come into effect?

   The compli­ance period for LL97 started in January 2024. Current emis­sions caps are in place for five years, from 2024 to 2029, before becoming stricter in 2030.

2. How do I know if my building is subject to Local Law 97?

   LL97 applies to build­ings above a certain size based on the square footage of a building or tax lot. New York City govern­ment main­tains a prelim­i­nary Covered Buildings List (CBL) that prop­erty owners can search by address, tax lot number, or unique building number. A PDF version of the Covered Buildings List can be found here. 

3. When is the first compli­ance report due?

   The first build­ings subject to compli­ance must file reports by May 1, 2025, and then by the same date every year after. There is a grace period from May 1 to June 30.

4. What resources are there to begin checking compliance? 

   NYC Accelerator, a program that helps build­ings reduce GHG emis­sions, created an online resource to help build­ings check their compli­ance status, as well as what fines they may expect to receive and when.

   Additionally, Building Energy Exchange, in part­ner­ship with NYC Accelerator, has devel­oped a Carbon Emissions Calculator to esti­mate a property’s carbon emis­sions and expected penalty. Users can search for a prop­erty by address or input building infor­ma­tion manu­ally to get an esti­mate of how its carbon usage measures up against the limits for different enforce­ment periods between 2025 and 2050. However, the creators of the calcu­lator empha­size that it is only meant to be used as an esti­mating tool, not as a defin­i­tive calcu­la­tion for use on a building’s emis­sions report. 

5. How do build­ings avoid Local Law 97 fines?

   For all build­ings taking the tradi­tional pathway, the only way to avoid fines begins with filing compli­ance reports on time, with the help of a regis­tered design profes­sional. Stay tuned for Skylight’s forth­coming article explaining the process for filing compli­ance reports. 

   Some build­ings can plan to reduce their fines by buying offsets in the form of local Renewable Energy Credits (RECs). However, these purchases are capped — build­ings can only use them to offset up to 10 percent of their GHG emis­sions — and they cost the same amount as the fines. Other build­ings with special circum­stances might request exemp­tions in order to avoid fines.