NEW Carbon Tax in NYC - How Does That Affect Me as a Tenant?
We understand that this topic is not as riveting as what we overheard on the NYC subway, but this may affect you more than you think. Beginning in 2024, NYC landlords will be subject to a carbon tax known as Local Law 97. Under this law, buildings over 25,000 sf that exceed the criteria for carbon emissions will have to pay a fairly hefty fine, with even stricter limits coming in 2030.
Who pays for this carbon tax? Landlords are responsible for Local Law 97 fines, but some landlords may push these fines on to their tenants because they use the electricity. Since every building in NYC is different, the fines may vary.
In speaking with Howard Schlesinger of VRF Solutions, who is helping business owners maximize energy efficiency through improved HVAC, he says, "there are practical, efficient solutions that can help building owners and occupants mitigate the impact of LL 97. These include sustainable, efficient technologies for HVAC and the building envelope, as well as financing programs that the City, State, and Federal Government are supporting".
So, what that does that mean for you as a tenant? Clarify with your existing landlord if you will be hit with this tax starting in 2024 and build this into your budget if yes.
If you’re looking for new office space, your broker should check with potential landlords if you’ll have to pay this carbon tax and model “all-in costs” so you can compare spaces and avoid unexpected costs. It might be the reason you choose one space over the other, or even break your existing lease (and as you know, we can help you terminate your lease). If you don’t want to pay this tax, we can find you an office space in a building that will have minimal or non-existent carbon taxes based on energy efficiency, or the landlord does not plan to pass this tax onto tenants.
Please reach out to me at brosenblatt@vicuspartners.com or call my cell (917) 862-8820 if you’d like to discuss this or talk about your office space options.
