Opinion: For the economy and jobs of the future, look to Local Law 97
By Emma Bonanno, Graduate Analyst
Local Law 97 is a groundbreaking environmental law passed in 2019 that seeks to curtail carbon emissions from New York City buildings. The law requires that most large buildings meet new energy efficiency standards and greenhouse gas emissions limits by 2024, with stricter limits coming into effect in 2030. Buildings currently account for over 70% of New York City’s annual emissions, and Local Law 97 is a critical way to ensure the city can meet its emissions reduction goals, including achieving carbon neutrality by 2050. Carbon reduction is just the tip of the iceberg. Local Law 97 is also a key pathway for the city to support economic growth, spur the development of a green workforce, and build towards a just energy transition that connects the benefits of the green economy to frontline communities most impacted by the adverse effects of pollution, heavy industry, and environmental racism. The potential for economic growth is considerable. A 2019 report from the Urban Green Council estimates a $16.6 to $24.3 billion overall energy retrofit market opportunity in New York City by 2030, stemming from construction-related activities and investments created by Local Law 97. More broadly, the real estate market is proactively leaning into sustainability in response to consumer demand (and market premiums) for green buildings, investor demand for the incorporation of environmental, social, and governance (ESG) criteria in portfolios, and, for some, a desire to assume responsibility for the industry’s outsized role in generating carbon emissions. The City can help ensure the benefits of this economic growth are delivered directly to local residents and frontline communities. The heightened economic activity can generate increased tax revenue for the city and support priority climate and resiliency initiatives through the general fund. Additionally, fees levied against buildings out of compliance with Local Law 97 can be earmarked for programs and funds that directly benefit environmental justice communities (the allocation of fee revenue is one of the components of a current lawsuit against Local Law 97). Ensuring there is a trained workforce in place is another key component to harnessing the benefits of the green economy. On the national stage, creating jobs is a core component of the Biden Administration’s goals in addressing the impact of climate change, and the Inflation Reduction Act of 2022 includes more that $60 billion of investment in new domestic clean manufacturing jobs. In New York State, a February 2022 report from the Office of the Comptroller found that green jobs made up over 17% of total employment pre-pandemic. This share of the pie is expected to grow, due in part to regulations like Local Law 97. Employment and environmental justice is also central to New York City Mayor Eric Adams’ climate platform. With buildings required by Local Law 97 to complete energy retrofits, the city can support a substantial ecosystem of new green jobs in construction, architecture, engineering, sustainability, HVAC, and electrical trades. The same Urban Green Council report estimates that the market for building energy improvements in the NYC metro area spurred by Local Law 97 has the potential to create 15,000 jobs by 2024 and an additional 126,000 jobs by 2030. Job growth includes existing occupations seeing increased overall market demand (i.e. green construction) as well as occupations with an increased demand for existing workers to up-skill (i.e. building operations managers learning to understand and operate new HVAC systems). Targeted workforce development — identifying these new jobs and skills and then connecting workers to the jobs and the training required to perform them — is a direct way to further environmental justice goals. A program sponsored through the New York City Community Energy Co-op in partnership with WE ACT, BMC, and Solar One hires NYCHA residents as apprentices on solar installations. Additionally, Solar One runs a Green Workforce Training program for green construction and solar electrical work that includes a direct hiring pipeline with Accord Power. CUNY’s Building Performance Lab hosts a number of professional development programs on energy efficiency in building operations, property management, and design, as well as an internship program for CUNY students to learn energy management skills through real-world training. And at the city level, the Mayor's Office of Sustainability rolled out the NYC Accelerator in April 2022, a one-stop shop for training, resources and guidance to help New Yorkers understand, manage, and benefit from the transition to energy efficiency in the built environment. Continuing to amplify, build-out, and fund workforce development programs in direct collaboration with community-based organizations and local environmental justice groups is critical to create connections between the skills and opportunities in clean energy industries and the residents who need them most. At the same time, the city can put a strategy in place to actively reinvest economic benefits from the growing energy retrofit market in communities on the frontline of harmful environmental impacts.
Despite the many benefits that Local Law 97 promises, the law has sparked controversy across the City. Many of its biggest opponents are building and property owners who see the law as financially burdening. In order for New York City to reap the environmental, community, and workforce benefits Local Law 97 can provide, the City must work to understand the very real challenges that the law poses for building and property owners, particularly small landlords whose only assets may be the buildings they own. Programs such as NYC Accelerator are one step towards addressing these roadblocks. However, for Local Law 97 to be successful, New York City must continue to find creative ways to provide ongoing support for building owners as they plan and implement building upgrades.
This work needs to happen now. Local Law 97 is slated to go into effect in 2024, and the green economy is growing — with or without New York City’s buy-in. Without a skilled workforce in place and a strategic plan for reinvesting the economic benefits, New York City may miss a major chance to harness both the economic benefits of Local Law 97 and the opportunity to be a true leader in the fight for environmental justice.