How Does Your Building Rank?

Knowing Your Grade and What Local Law 33 Means for You

Report cards aren’t just for school kids anymore! Thanks to New York City’s new Local Law 33, the entrance to every large building in the city will soon be sporting a prominent letter from A-F attesting to the building’s energy efficiency score.

Local Law 33 applies to all commercial and residential buildings of at least 25,000 square feet. The scores run from A to F and are determined by a New York City Agency. They must be updated annually.

The law is effective immediately, but scores only need to be posted by 2020, giving building owners some time to improve their energy use before the scores must be publicly displayed. Local Law 33 is modeled after a similar rating system in Europe and NYC’s own restaurant grades.

As always, Jack Jaffa & Associates is here to guide you through the latest change to the NYC Compliance Code.

Here’s a quick rundown about what you need to know about Local Law 33. For more complete information about your benchmarking requirements and how Local Law 33 will affect your properties, download our Comprehensive NYC Code Overview Compliance defined.

The Intended Goal of Local Law 33

Local Law 33 was passed with the expectation that it will prompt building owners across the city to improve their buildings’ energy efficiency. Essentially, it is taking benchmarking to the next level. Benchmarking was established with the hopes that increased transparency will reward better-performing buildings through higher rents and decreased vacancies. However, this is only possible when potential renters are fully aware of the building’s energy use. Under the new law, they will now have immediate access to that information.

When every building will be plastered with a grade, potential renters will stop and look. They may not know what that grade means, but they will know whether they are walking into a “C” building, an “F” building, or an “A” building. And if they have a choice, they’ll likely prefer to rent a unit in an “A” building. Hopefully, this line of thinking will achieve its intended goal of increased energy efficiency in NYC’s buildings.

The Scoring System

The awarded grades will be based on the building’s Energy Star scores as follows:

A: 90 or above

B: 50 – 89

C: 20 – 49

D: 0 – 19

F: buildings that have failed to submit the required benchmarking information

N: buildings that are exempt from benchmarking or are not covered by the Energy Star program

Every energy label will include the letter grade as well as the numerical Energy Star Score in order to narrow the scope between grades. For example, two buildings may have scored 50 and 89, respectively. There is a huge gap in those two numbers, but both of these buildings will be marked with a “B.” By posting the numerical grade as well, potential renters can determine if the building falls towards the higher or lower end of the letter’s range of scores.

Is It Working In Europe?

Europe is years ahead of New York in this area; buildings in Europe have been required to affix energy labels at their entrances since 2002.

It is difficult to ascertain whether the implementation of a publicly posted energy label has successfully increased energy efficiency in Europe, as there is very little public data available to analyze. There are a number of studies that show the energy labels affected rents and sales in some areas, but these studies are not broad enough to offer any definite conclusions.

We can only hope this new law will bode well for our own city in the years to come.

What Does This Mean For Me As A Property Owner?

It’s time for you to renew your efforts in making your property as energy-efficient as possible. Review your current benchmarking results and look for problem areas throughout your building that may be leaking or wasting energy. Do what you can to improve your energy use now so that your building is awarded with an “A.”

Still not sure how this new law will impact you as a landlord? We can help! Call, click, or stop by Jack Jaffa & Associates to learn all you need to know about Local Law 33 and the NYC Compliance Code.

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