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Torchlight
We The People
By: Nancy E. Anderson, Ph.D., Executive Director, The Sallan FoundationIssue: Torchlight #25Date: July, 2009
 
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© 2009 The Sallan Foundation, Inc. All rights reserved.http://www.sallan.org
 
 
Torchlight #25
We The People
After long months of bill drafting, meetings and more drafting, the City Council held hearings onMayor Bloomberg’s green building legislative quartet in late June. Supporters, ranging from theexpected — environmental and environmental justice advocacy groups — to the less expected — labor unionists and affordable housing activists, made their case and offered their proposals for legislative improvements. Opponents, particularly of Intro 967, the energy audits and efficiencyretrofits bill, ranged from the Real Estate Board of New York to the New York Council of Cooperatives and Condos.The Administration made its broad case for its four-part “Greener, Greater Buildings Plan” in termsof the City’s commitment to combating climate change already codified in local law. That lawrequires New York to cut its carbon footprint 30% by the year 2030. It also framed the quartet as a powerful stimulus suited to these difficult economic times. Focusing in on the specifics of the bills,the Administration set out to make the case “we know that because of the way energy prices are set,citywide efficiency measures save every New Yorker money — so there is a compelling public purpose, even aside from climate change and air pollution, for achieving energy efficiency” in theCity’s existing stock of buildings, 85% of which will still be standing in 2030. Making an effort toacknowledge that out-of-pocket costs would be a burden for some, the Administration proposed touse $16 million in federal stimulus funds for a pilot revolving loan fund to assist “financiallydistressed” buildings meet new legal requirements. Testimony stressed that the legislation preserved property owners’ discretion about what energy efficiency measures to undertake. The legislationwould neither dictate particular actions nor set specific energy reduction requirements. The onlygermane legislative stipulation is that an owner’s selected course of action would be limited to thoseoptions calculated to repay the owner’s initial investment within five years. As a practical matter,this stipulation excludes capital-intensive building work like boiler replacement or upgrading the building façade from Intro 967 obligations.The testimony of advocates and opponents sometimes appeared to be a discussion and other times ashouting-match over how to address the costs imposed by the Greener, Greater Building Plan, particularly, although not exclusively related to Intro 967. The Real Estate Board maintained that
 
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© 2009 The Sallan Foundation, Inc. All rights reserved.http://www.sallan.org
 
 
Torchlight #25
We The People
the long-term nature and renewal options typical of commercial leases would leave owners unableto recoup the costs of energy audits and efficiency retrofits. The typical short-term nature andextremely challenging current market for commercial mortgages would only add to this burden.The testimony of the Environmental Defense Fund sought to tackle and allay concerns of propertyowners. “By tying the obligation to make energy-related improvements to returns projected toaccrue as a result of such improvements, the bill encourages energy efficiency improvements thatmake sense for owners as well as for the planet. In addition, by allowing owners to performalternative retrofits that yield the same energy conservation outcomes, the bill accords to buildingowners discretion to act based on different cost judgments than the auditors’ own, providedequivalent energy efficiency improvements can be achieved by such alternativemeans”. In a follow up reply to a Council member’s question about the impact of long-termcommercial leases and automatic renewal clauses, EDF questioned what proportion of current leaseswould run for fifteen years starting from 2009 and emphasized that the provisions of commercialleases can be drafted differently in response to legislation like the audits and retrofit bill, which givelandlords an incentive to ensure that the benefits and costs associated with energy efficiencyretrofits would accrue to the same party.The Council of New York Cooperatives and Condos voiced strong objections to both the audit andretrofit bill and the energy benchmarking bill, Intro 476A. “Our experience is that using the online benchmarking tool is neither simple nor cost-free, and we are not convinced that the major utilitieswill take the necessary steps to provide this information directly to the City.”
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Turning to Intro 967,“Perhaps most troublesome is the absolute requirement that a building implement all measuresdeemed to have a payback of seven years or less.
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This removes from the Board its discretion to runits cooperative or condominium.”This conclusion ran counter to the Administration’s emphasis on the choice retained by propertyowners as to what specific energy efficiency investments they must make. From a housing activist perspective, the testimony of Enterprise Community Partners, a hands-on organization involved in
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