NYC buildings will now earn grades for good behavior—at least in terms of the environment. In October 2020, the city implemented a letter grade campaign that scores all buildings over 25,000 square feet on their environmental sustainability.
The goals of this campaign are twofold: increase public transparency about the environmental impacts of NYC architecture and incentivize building owners to find ways to earn better scores through sustainable-minded updates.
The Big Picture
Buildings account for an estimated 71% of NYC’s emissions. By grading each one on its performance, the city hopes to decrease this percentage.
This policy is part of New York’s Climate Mobilization Act, a series of goals dedicated to helping NYC combat climate change through measures like scaling back building-generated emissions by 40% by 2030.
This is an update on the 2010 regulation for restaurants, which assigned them a letter grade representing their environmental efficiency. Now, medium and large commercial and residential buildings must follow the same requirements.
- This policy is part of Local Law 33, which was amended by Local Law 95 in 2019.
- Buildings must follow this regulation if they qualify for the NYC Benchmarking Laws, which require owners to submit energy and water usage data to the EPA.
- As with restaurants, qualifying buildings will need to display their letter grade prominently at the entrance.
- The regulations will affect over 40,000 buildings across the five boroughs. An estimated 50% will earn D grades.
Nuts and Bolts of the Ranking System
All qualifying NYC buildings will be ranked according to the U.S. Energy Star Score. This is a 1-to-100 score taken from the accumulation of records for twelve months of energy consumption, as well as data about the building’s location, size, and number of occupants.
Buildings will receive letter grades according to the following rubric:
- A – ranking equal to or above 85
- B – ranking equal to or above 70 but less than 85
- C – ranking equal to or above 55 but less than 70
- D – ranking less than 55
- F – building failed to submit the required information
- N – buildings exempt from the program
These scores make it possible to compare a building’s energy performance against others of similar sizes and in similar climates. You can think of each score as a percentage. For example, a building at 75 is performing better than 75% of similar facilities across the United States.
Note that buildings will only receive a failing grade if they don’t submit the required documentation. Besides earning an F, landlords will have to pay a fine up to $1,250 (with plans to increase this amount in the future).
Advantages of High Scores
If you’re a property owner, it’s in your best interest to earn a high score—preferably a B or above. Consider the following:
- NYC has some of the highest electricity prices within the United States, so shifts towards efficiency can add up to significant savings on utilities. In other words, well scoring buildings may be more attractive to tenants because they can expect to pay less on their monthly electricity bill.
- A high score may boost a business’s reputation and encourage passersby to patronize it. The city’s goal is to make the environmental impacts of buildings across the city public knowledge so that those performing below average are held to a higher standard.
- Starting in 2024, buildings that don’t meet the city’s mandatory carbon emission reductions will receive penalties. Today’s score will help building owners know what progress they need to make before then.
The goal is admirable, and likely profitable. Urban Green shared data in 2019 that showed that NYC could host close to a $25 billion energy retrofit market by 2030 if buildings were optimized for energy efficiency and obeyed the established carbon caps.
Some have challenged the value of this letter grade system, calling it too stringent. After all, half or more of all eligible buildings will earn a “D” rating.
Many argue it isn’t a helpful way to differentiate them from each other and will lead to confusion. That’s because the ranking system doesn’t consider certain factors, such as the number of people working within each building.
Likewise, some are concerned that the policies landlords need to implement for better energy efficiency will contradict improvements for healthier buildings implemented in response to the Covid-19 pandemic.
What Does This Mean for Older Neighborhoods?
How does the West Village or Lower East Side fit into this equation? While it’s tempting to think that these new policies will hit older neighborhoods the hardest, the reality might be different.
True, older buildings are more like to have mechanical inefficiencies than newer ones built with the best technology. However, newer construction often includes intricate systems to keep them at comfortable indoor temperatures, such as pumping in outdoor air to keep things fresh or heating hallways. Hudson Yards is reported to have some space age tech in many of its new buildings and these features, while convenient, come with a cost energy wise.
The “bells and whistles” of modern condo convenience can be surprising energy sucks and may lead to lower scores overall.
Building Ratings Pave the Way for a More Sustainable NYC
While it remains to be seen what the long-term impact of scoring NYC’s buildings on sustainability will be, the city is optimistic that these measures will lend more transparency in the fight against climate change.
Shifting towards more energy-efficient buildings should prove an essential step for the city to meet its goals laid out in the Climate Mobilization Act.