Local Law 97 capital planning for mid-size NYC co-ops and condos

Whether your building is covered

Local Law 97 covers a building that exceeds 25,000 gross square feet, two or more buildings on the same tax lot that together exceed 50,000 gross square feet, and two or more condominium buildings governed by the same board of managers that together exceed 50,000 gross square feet. DOB publishes a Covered Buildings List each year; the 2026 list was published in March 2026. If the list shows the wrong floor area, occupancy or compliance pathway, the owner can dispute it through a ticket in the LL97 reporting portal.

Each covered building is assigned one of four compliance pathways. Which one applies determines when limits start and what the board must file.

• Pathway 0: Article 320 emissions limits beginning in 2024. This is the pathway for most covered buildings, including most market-rate co-ops and condos.
• Pathway 1: Article 320 limits beginning in 2026. According to HPD, this includes buildings with at least one and no more than 35 percent rent-regulated units; their first annual report is due May 1, 2027.
• Pathway 2: Article 320 limits beginning in 2035, for certain categories of buildings defined in the law.
• Pathway 3: Article 321 one-time compliance, for buildings with more than 35 percent rent-regulated units and certain other affordable housing, such as HDFC co-ops.

Reporting and penalties

Under Article 320, the owner files an emissions report by May 1 of every year, certified by a registered design professional. The law sets one set of limits for 2024 to 2029 and a considerably stricter set for 2030 to 2034, with the goal of reducing emissions from covered buildings by 40 percent by 2030 and reaching net zero by 2050. A 2021 DOB presentation estimated that 75 to 80 percent of properties would meet the 2024 to 2029 limits but only 25 to 30 percent would meet the 2030 to 2034 limits without changes.

The civil penalty for exceeding the limit is up to $268 for each metric ton of CO2e above it, for each year. As an illustration, a building 100 tons over its limit would face a penalty of up to $26,800 for that year. Failure to file the report carries a separate penalty of $0.50 per gross square foot per month, which for a 40,000 sq ft building is up to $20,000 a month.

Article 321 buildings instead complete 13 prescriptive energy conservation measures, documented with attestations or detailed inspection reports. HPD lists the Article 321 penalties as $10,000 for failure to report plus an additional $10,000 for failure to comply.

Estimating your 2030 exposure from your own data

No useful plan can be made without the building's actual numbers. The data already exists in the annual Local Law 84 benchmarking submission, and the calculation is straightforward once it is organized.

• Collect the most recent benchmarking data showing annual use of electricity, natural gas, fuel oil and district steam.
• Have the registered design professional calculate the building's current emissions using the coefficients in the law, and its limits for 2024 to 2029 and 2030 to 2034 based on floor area and occupancy group.
• Express the gap in metric tons of CO2e and multiply by $268 to estimate the annual penalty exposure at each limit.
• Identify which fuel produces most of the emissions. In most older co-ops and condos it is the fuel used for heating and hot water, which points to where reductions will come from.

Capital projects that intersect with Local Law 97

Mid-size buildings rarely have the budget for a stand-alone decarbonization project. They do have a capital calendar, and several items on it affect emissions for decades.

On-site solar reduces the electricity the building buys from the grid, which lowers reported emissions, but on a mid-size roof the effect on LL97 is usually modest. Its main value is lower electricity costs and compliance with Local Laws 92 and 94 when the roof is replaced.

Deductions, offsets and adjustments

The law allows certain deductions from calculated emissions. Offsets purchased through the Affordable Housing Reinvestment Fund (AHRF) are the only offsets eligible for LL97 compliance, and they may reduce emissions by at most 10 percent of the building's limit. A beneficial electrification deduction, metered or deemed, is also available for qualifying electrification work; the eligible years and calculation method should be confirmed with the registered design professional before the deduction is counted in a plan.

Buildings facing serious financial constraints may apply for an adjustment under Section 28-320.7, which HPD describes as providing an additional year to comply. Offsets and adjustments can close a small gap or buy time, but they do not replace a capital plan for the 2030 limits.

An example five-year sequence

The order below is an example for a prewar co-op of about 40,000 sq ft with a steam boiler, a roof nearing replacement and a gap to its 2030 limit. The actual sequence depends on the building's data, equipment age and reserves.

• Year 1: benchmarking review and emissions calculation by the registered design professional, an electric service study with the utility, and a condition survey of the roof, boiler and facade.
• Year 1 to 2: steam balancing, heating controls and air sealing, which reduce emissions at lower cost and shrink the size of later equipment.
• Year 2 to 3: roof replacement with added insulation and the required solar or green roof, designed as one project.
• Year 3 to 4: heat pump domestic hot water, if the electric service allows.
• Year 4 to 5: the heating plant decision, made before the boiler fails and before the 2030 compliance year, with financing arranged in advance.

Board decisions and how we support them

In a co-op, the board must weigh assessments, reserve use and financing against the penalty exposure, and the proprietary lease determines which equipment belongs to the corporation and which to shareholders. In a condominium, the board of managers and the declaration play the same role, and work inside units may require unit-owner consent. Clear scopes, comparable bids and a realistic schedule make these decisions easier to present to residents.

As project manager, we build the capital sequence with the board and its managing agent, prepare scopes and coordinate bids, and manage the roof, mechanical, plumbing and electrical work through our licensed partner trades with minimal disruption to residents. LL97 emissions reports are calculated and certified by a registered design professional; we coordinate that work with partner engineers and do not certify the reports ourselves.