The Department of Buildings (DOB) released the newest draft rules for NYC Local Law 97, and it includes key details for affordable housing and houses of worship on the Prescriptive Pathway. DOB will accept public comments on the draft rules through October 24th, and then will revise and finalize the new rules in January 2024.
We’ll break down the new rules below, but please note that because these rules are still in draft form, they are subject to change following the comments process. In today’s post, we’re talking specifically about the Prescriptive Pathway for certain affordable housing and houses of worship.
Guidance Differs by Pathway
The draft rules include important information about how properties can comply successfully, and what they can do if they are not on track to comply with LL 97 on time. However, these options vary depending on your compliance pathway:
- Standard Pathway
- Prescriptive Pathway ←In this blog, we are talking about Prescriptive Pathway only!
- 2026 Pathway
- 2035 Pathway
Not sure where you fall? Check out our earlier blog post which breaks it down here.
The other three pathways: Standard, 2026, and 2035, have different penalties and extensions described here.
Limited Guidance for Prescriptive Measure Installation
We were hoping to have all the guidance for prescriptive measure installation released in these draft rules, but we’re going to have to wait a little longer. The rules do include some limited guidance for each measure, which we’ll discuss further in an upcoming webinar, but it does not address key questions such as: What if owners can’t access every unit? And what is the required sampling rate for service providers?
There will likely be additional guidance for each measure coming in a filing guide from DOB, however, we don’t know when that will be released.
Penalties, Mediated Resolution, and Extensions for Prescriptive Pathway
DOB understands that some buildings might not be ready to comply with the Prescriptive Pathway on time. The draft Rulemaking #2 takes this into consideration, and explains the applicable penalties, and also what special options are available if you can’t get there. However, despite what you may have heard in the press, none of the options will be easy and we strongly suggest owners and managers get started early!
There are generally two types of penalties (fines) that DOB can leverage if you don’t comply successfully with the Prescriptive Pathway:
- If you don’t submit anything, you could face a penalty of $20,000 per building
- If you attempt to comply, but are not successful, you will face a penalty of $10,000 per building
We anticipate that these will be one-time penalties, rather than being levied every month or every year. However, DOB has not confirmed this yet.
For buildings that need more time, there are two types of extensions allowed under the law. Both can be filed only one month ahead of the deadline, so that means April 2025 for buildings seeking extensions before the first filing deadline. Here are the available options:
- Your service provider needs more time: If your service provider needs more time to prepare your reports for DOB, this extension can give them more time to file. To be eligible, you must have a contract signed with your service provider by February 1, 2025. If your extension request is approved, your service provider will receive an extra four months to submit the required documentation.
- You believe your building is not “Covered”: This extension option is for buildings that are on the Covered Buildings List (CBL), but you believe there was a mistake with your square footage or another eligibility issue that would take your building off of the LL 97 CBL. If so, you must initiate this process with the Department of Finance and/or DOB.
The following options are for penalty mitigation, meaning that these are not exemptions! If you successfully meet the criteria for one of the three, DOB may reduce your penalty, and they will review each one case-by-case. There is currently no guarantee that DOB will eliminate your penalty entirely, even if you meet all the criteria, DOB may still decide to force you to pay a portion of the penalty you owe. And unlike properties on the Standard Pathway, the Good Faith Effort is not an option for Prescriptive Pathway.
- Unforeseeable Events: This option is for properties that have had disasters like fire and flood at the building that prevented your ability to comply with the LL 97 requirements.
- Rehabs: Certain properties undergoing a rehab will be eligible for a zero penalty. If the owner can show a letter confirming their participation in an HCR/HPD and/or other agency program, and the letter is dated after November 2019, the DOB may remove their penalty entirely. However, the owner will have to show DOB how their rehab will help them achieve the requirements of LL 97, and submit all this information by May 1, 2025.
- Mediated Resolution: The Mediated Resolution is a process by which the building owner and DOB can craft a custom compliance plan to avoid a penalty. This option will require the building to eventually get into compliance with the law, but with a customized pathway to do so. Owners and managers should note, however, that if they agree to Mediated Resolution and don’t comply with the requirements set out in their plan, DOB has the ability to penalize them.
Submission and Inspection Requirements
The draft rules include more information about inspection and submission requirements for Prescriptive Pathway properties. It’s important to note that owners will not be allowed to inspect their own properties, even if they have certified personnel on staff. If the draft rules pass as written, owners will be required to use a third party to inspect the installed prescriptive measures, and sign off on the required reports for DOB.
There will be two parts required for the report:
- An Energy Compliance Buildings Report, AND
- A Prescriptive Energy Conservation Measure Report
Part #1 will be the report required for buildings on every pathway, it will show the energy use and carbon emissions for the building as if it was subject to Standard Pathway. And part #2 will include the required verification documents to show successful completion of the prescriptive measures.
Have questions? Contact our team.
Our team is working hard to plan and assess possible services to assist you with your LL 97 compliance efforts, stay tuned for more information in the coming months. In addition, a blog post on Local Law 88 for lighting and submetering is coming soon!
Reach out to your Account Manager with any questions. Don’t have an Account Manager? Email email@example.com to get connected with us.
Disclaimer: All pathway and other guidance provided by Bright Power is based on the best available information from NYC Department of Buildings (DOB) Local Law 97 guidance and the housing classifications provided by the client. Bright Power is not responsible for any incorrect pathway and/or other determinations. Questions about pathway eligibility should be referred to DOB and/or the applicable affordable housing agency.