News Brief

NYC Carbon Caps Face Lawsuit

Building owners have filed a legal challenge to Local Law 97, New York City’s building performance standard.

Unconstitutional. Draconian. Short sighted and dangerous.

That’s how a lawsuit brought by building owners describes New York City’s carbon caps for buildings—a.k.a. Local Law 97. The building performance standard (BPS) has yet to go into effect, but owners are already anticipating the fines they’ll have to pay come 2024, and some aren’t happy.

“Local Law 97 purports to combat climate change by setting strict caps on emissions and ‘penalizing’ owners, landlords, and shareholders every year for non-compliance,” the suit reads. “But in reality, these ‘penalties’—which either are grossly excessive fines rendered in violation of due process, or else are improperly City-imposed taxes that lack the requisite delegation of taxing authority from New York State …—will do absolutely nothing to reduce greenhouse gas emissions.”

The suit lays out five arguments for why the law should be revoked:

Preemption—The plaintiffs claim that New York State laws supersede the NYC law, making Local Law 97 unconstitutional.
Due process—The fines are just too high, according to the lawsuit.
Retroactivity—In this section, the suit argues that the penalties are retroactive because they punish owners for decisions made prior to enactment of the law, when the buildings were constructed.
Ambiguity—The plaintiffs describe the law as “impermissibly vague and ambiguous” about details such as how emissions will be calculated and how penalties will be determined.
Illegal taxation—Because the State does not give explicit authority to the City to tax carbon emissions, the fines are improper, according to the suit.

The plaintiffs’ attorney did not reply to interview requests.

Although he declined to comment on the lawsuit or on Local Law 97 specifically, Cliff Majersik of the Institute for Market Transformation said his organization advises jurisdictions to ensure their building performances standards are within their purview. “Jurisdictions should consult with attorneys to understand their legal powers and limitations under their constitutions, the U.S. constitution, and state and federal law,” said Majersik in an email to BuildingGreen.

Majersik listed a number of other lessons learned from early adopters of building performance standards, such as New York City and Washington, D.C. “Building owners need long-term certainty to plan long-lived investments,” he said, adding that owners also “need flexibility to meet requirements in the way and at the same time that makes the most sense for their building life cycles and tenants.”