NYC Local Law 97 Data, Housing Fast-Track Progress

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Hi there, let’s get into today’s news at the intersection of policy and real estate:

• A first look at Local Law 97 compliance data.
• City planning officials adopt rules to create housing fast-track program.
• A new state bill would sharply limit rent-regulated landlords’ ability to win state-approved rent increases for certain building upgrades. 

In this edition we mention: State Sen. Cordell Cleare, real estate attorney Deborah Riegel and others.

We Heard

• Local Law 97 data dive: Of the roughly 28,000 buildings that have filed Local Law 97 paperwork, an overwhelming 93 percent of them have reduced their carbon emissions to the initially required levels, according to new compliance data published by the city Wednesday. The landmark climate law requires most buildings in New York City larger than 25,000 square feet to meet increasingly strict greenhouse gas emission limits or face penalties ($268 per ton of carbon over the limit), with an aggressive target of a 40 percent reduction in emissions by 2030 and carbon neutrality for such buildings by 2050. Emission limits are different for each property and primarily depend on size and occupancy. The first round of compliance reports for calendar year 2024 was due to the city by the end of 2025, and the results are promising. By property type, office buildings and hotels have the highest compliance rate of 95 percent, while multifamily residential and educational facilities followed close behind at 94 percent. Conversely, garages and religious facilities are having a trickier time, with an 81 and 80 percent compliance rate, respectively. Properties in Manhattan had the highest level of compliance (95 percent) while Staten Island saw the lowest (83 percent). Sustainability experts have predicted relatively rosy compliance rates in the law’s early years and point to 2030, when significantly stricter emission caps kick in, as the looming challenge for building owners. Still, several buildings failed to file the necessary paperwork or are out of compliance altogether. Roughly 1,400 properties required to submit a report to the city have failed to do so and are now facing DOB enforcement actions if they don’t submit paperwork in 60 days, according to the city. In the meantime, attorneys in DOB’s sustainability bureau are preparing case filings with the Office of Administrative Trials and Hearings for properties that remain out of compliance. 

• Fast-track framework: Last fall New York City voters approved the creation of a streamlined version of the city’s land use review process. That “housing fast-track” will be available to certain projects — such as those subject to city, state or federal affordability requirements — proposed in 12 community districts with the lowest rates of affordable housing development. The projects would sidestep City Council review during the Uniform Land Use Review Procedure, or ULURP, and the local community board and borough president will review the project concurrently, further trimming the review timeline. Before new projects can take advantage of the sped-up process, the city must identify the districts. This week the Department of City Planning adopted the methodology to do so and is on track to release its list of the 12 districts by Oct. 1. Sideya Sherman, director of the Department of City Planning, described the methodology as “a fair, transparent, consistent approach that will set this program up for long-term success.” Two metrics are core to the calculations. The first is the number of new affordable housing units added to a community district over a five-year period. This will draw on permitting data from the Department of Buildings and the date upon which an affordable housing unit becomes subject to a regulatory agreement or restrictive declaration. The second is the total number of housing units in a district at the start of each five-year cycle. For the first period, city planners will look at apartments established between July 1, 2021, and June 30, 2026. In each district, the number of new units will be divided by the total number of housing units to establish the rate of development. Projects can begin to apply for the fast-track in the districts beginning in January.
• New MCI hurdle? State Sen. Cordell Cleare has introduced a bill that would sharply limit rent-regulated landlords’ ability to win state-approved rent increases for building upgrades. Currently, the Major Capital Improvement (MCI) and Individual Apartment Improvement (IAI) programs allow rent hikes on regulated units to cover eligible upgrade costs, with officials considering a building’s violations in approvals. Cleare’s bill would bar increases for landlords with a “pattern of violations” — defined as three or more over two to three years — unless they can prove the work directly fixes those issues. Critics say the threshold is too low and could discourage improvements unrelated to violations. “This is painting with a pretty broad brush,” said Rosenberg & Estis’ Deborah Riegel. For example, as written a landlord could replace a building’s elevator and file for an MCI, but if they have three violations for a lack of hot water in the last few years, those unrelated violations would block an MCI for the elevator work. Cleare’s bill is currently without a backer in the Assembly, so it’s unlikely to gain traction until then. Cleare’s office did not return requests for comment.

Have a tip or feedback? Reach me at caroline.spivack@therealdeal.com. 

Bill Tracker

The Catch-Up

Mayor Zohran Mamdani faces some hurdles to get his housing plan and pied-à-terre tax through Albany, writes TRD columnist Erik Engquist.

City Council member Chi Ossé and three others were arrested Wednesday at a chaotic protest against deed theft in Brooklyn, after gathering outside a brownstone in support of a woman who is fighting attempts to evict her from the home, reports The New York Times.

President Donald Trump is no fan of Gov. Kathy Hochul’s proposed tax on high-value second homes in New York City. But there’s a chance he won’t have to pay it due to the city’s byzantine property valuation system, reports Gothamist.

Upstate Democratic lawmakers now say they want a piece of the extra revenue pie Hochul is serving New York City with her proposed pied-à-terre tax, writes City & State.

The New York state Legislature passed its sixth state budget extender today — now three weeks past the budget’s deadline — which was promptly signed into law by Gov. Kathy Hochul, reports NY1.

The Kicker

“The advocates would rather bury their heads in the sand rather than recognize the very real challenges New York and other states with ambitious climate targets are facing,” said Ken Lovett, Hochul’s senior adviser on energy and environment, on push back to proposed changes to the state’s climate law.

Read more

Will the housing measures bring projects back from the dead?

Court of Appeals tosses Local Law 97 challenge