In an unexpected effort to accelerate the reduction of greenhouse emissions from residential buildings, Mayor Bill de Blasio announced new potential mandates that would require property owners to make costly energy conversions by 2030.
Mayor de Blasio’s current goal through the Mayor’s Office of Sustainability is to reduce greenhouse gas emissions by 35 percent by 2025 and to further reduce emissions by 80 percent by 2050. However, on September 13th, Mayor de Blasio announced a proposal that would force rental property owners of approximately 23,000 buildings larger than 25,000 square feet throughout the City to retrofit their buildings and make them more energy efficient over the next 12 years or face steep fines for failing to do so.
Rental property owners are already well aware of the high costs it takes to retrofit older buildings. Mayor de Blasio acknowledged that costs for these conversions would be high and that low-interest loans would be available to owners of smaller buildings. However, he also implied that larger owners would not be offered the same financial opportunities because “Big landlords can handle it. They can afford it.”
Additionally, Mayor de Blasio claimed that property owners would not be able to pass along the costs of prospective energy conversions to tenants through major capital improvements (MCIs). Following the Mayor’s press conference, tenant advocates were immediately concerned about the possibility of certain conversions qualifying for MCIs. However, Mayor de Blasio noted that these proposed requirements would not go into effect until 2020, which is after the State rent laws come up for renewal in 2019. Mayor de Blasio vowed to push for changes to the laws that would allow these mandatory energy conversions to be ineligible for MCI rent increases.
It is important to remember that Mayor de Blasio strongly advocated for pro-tenant changes to the rent laws when they last came up for renewal in 2015, including the elimination of MCIs. Prior to that, he strongly endorsed Democratic candidates for the State Senate during the 2014 Statewide elections.
If the Democrats had won the majority of the Senate seats, Mayor de Blasio and his pro-tenant allies almost certainly would have been able to advance his progressive agenda and drastically change the rent laws. With the Statewide elections just a year away in 2018, it is almost certain that Bill de Blasio will once again be at the forefront endorsing pro-tenant Democrats for vital Senate seats (RSA members must keep this in mind and understand how important it is to maintain Republican control of the Senate and how catastrophic the result could be if it is controlled by pro-tenant Democrats).
Although Mayor de Blasio’s proposal is certainly an ambitious one, the Mayor and his Administration announced a very vague plan and failed to provide vital details during his press conference. A lack of details and much uncertainty about the proposal has to lead to a lack of support, not only from the entire rental housing industry, but from many of his allies in the City Council.
In order for this proposed law to be implemented, not only would Mayor de Blasio need to successfully advance his agenda in Albany over the next two years, but he would also need the City Council to pass legislation in order to carry out this proposal. Council Member Costa Constantinides, who is the Chairman of the Council Environmental Protection Committee, said that there are still many aspects of this potential mandate that need to be discussed before anything can be considered and that he was surprised when he learned the Mayor would be holding a press conference to announce the proposal.
In addition, Mayor de Blasio was strongly criticized in a New York Times article a week after his announcement for not considering energy efficient conversions in two properties that he owns. Although his properties are significantly smaller than 25,000 square feet, Mayor de Blasio has not even taken basic measures to ensure energy efficiency and, when he installed a natural gas-fueled boiler in 2010, it was not certified to use less energy.
As you can see, these proposed changes are in extremely premature stages and a lot must happen in order for Mayor de Blasio to accomplish this ambitious goal. We will keep you apprised of any developments in future editions of the RSA Reporter.