Local Law 97 explained: limits, fines and the 2030 deadline

Local Law 97 of 2019 puts a yearly cap on the greenhouse gas emissions of most large buildings in New York City. The first limits took effect in 2024, the first reports (covering 2024) were due May 1, 2025, and the limits tighten sharply in 2030, again in 2035 and 2040, toward net zero by 2050. A building over its limit pays a penalty for every ton over, every year.

This guide explains who is covered, how the limit and the penalty are worked out, what owners can do about them and what tenants and buyers should ask. It is general information drawn from the law and the Department of Buildings rule that carries it out (1 RCNY 103-14), not legal or engineering advice. A building's actual report must be certified by a registered design professional.

Which buildings are covered

The law covers:

Any building over 25,000 gross square feet.
Every building on a tax lot where two or more buildings together exceed 50,000 gross square feet. On a lot with buildings of 26,000, 15,000 and 10,000 square feet, all three are covered, not just the largest.

The square footage that counts is the Department of Finance's figure for the lot. The Department of Buildings publishes a Covered Buildings List, and an owner who thinks Finance has the square footage wrong can dispute it. A condo building files one report for all of its units, submitted by the board of managers.

Some buildings follow a different path. Buildings where more than 35% of apartments are rent regulated, and houses of worship, can comply by carrying out a list of prescriptive energy measures or by meeting the 2030 limit. City buildings have their own targets: a 40% cut by 2025 and 50% by 2030. Buildings with at least one but fewer than 35% rent regulated apartments file their first report by May 1, 2027, and Mitchell-Lama buildings and most buildings with income restricted apartments by May 1, 2036. A new building begins reporting for the first full calendar year after it receives its certificate of occupancy.

This guide is about the main path, which covers most office, retail, industrial, hotel and other commercial buildings.

How the limit is set

Each building's limit is its floor area multiplied by an emissions factor for each kind of space in it, using the property types of ENERGY STAR Portfolio Manager, the tool owners already use for the city's yearly energy benchmarking. A building with offices over ground floor shops gets the office factor for the office floors and the retail factor for the shops, added together.

Here is what that comes to for 100,000 square feet of some common property types, in metric tons of CO2e a year, from the rule's tables:

Property type	2024 to 2029	2030 to 2034	2035 to 2039	2040 to 2049
Office	758	269	165	58
Retail store	758	210	122	18
Medical office	1,074	291	168	41
Restaurant	1,181	404	303	202
Warehouse (not refrigerated)	426	88	57	16

The 2030 step is the big one: the office limit drops by about 65%, the retail store limit by about 72%. For calendar years 2024 and 2025 only, an owner may use the limit the law originally set for the building's occupancy group instead, where that is higher.

How emissions are counted

All the energy a covered building uses counts, including the electricity tenants buy on their own meters and the fuel burned testing emergency generators. Electricity used to charge electric vehicles can be left out where it is separately metered.

Each kind of energy is multiplied by a coefficient set in the law and the rule:

Grid electricity: 0.000288962 tons per kWh for 2024 to 2029, falling to 0.000145 from 2030. The same kilowatt hour counts about half as much once the cleaner grid figure applies.
Natural gas: 0.00005311 tons per kBtu in both periods.
District steam: 0.00004493 tons per kBtu, then 0.0000432 from 2030.

That difference matters. A building that heats with electricity gets the benefit of the lower electricity figure in 2030, while a building that burns gas or oil does not, even as its limit falls by two thirds.

The penalty

Over the limit: $268 for every metric ton of CO2e over the building's limit, for each year.
Late report: once a report is more than 60 days late, $0.50 per gross square foot for each month it is missing, counted from May 1 for up to 12 months. For a 100,000 square foot building that is $50,000 a month.

An owner who cannot file on time despite good faith efforts can apply for an extension between 30 days before and 60 days after May 1, for example when the design professional they hired by February 1 could not finish the report, or while they are disputing Finance's square footage. Penalties are pursued at the city's Office of Administrative Trials and Hearings (OATH).

A worked example

Take 10 East 53rd Street, a 374,197 square foot office building. Its owner's 2024 benchmarking filing reports 5,258,664 kWh of grid electricity and 23,579,566 kBtu of district steam. Running those through the coefficients and the office factor:

Metric tons a year	2024 to 2029	2030 to 2034
Grid electricity	1,519.6	762.5
District steam	1,059.4	1,018.6
Emissions	2,579.0	1,781.1
Limit (374,197 SF of office)	2,836.4	1,006.9
Over the limit	none, 257.4 under	774.2
Penalty a year at $268 a ton	$0	about $207,000

At the same energy use, the building's emissions fall about 31% on paper in 2030 because grid electricity counts for less, but its limit falls about 65%, so it goes from comfortably under to well over. In 2035 the limit drops again, to about 618 tons.

This is an estimate from a benchmarking filing, which is how we calculate the Local Law 97 section of every building page. It is not the building's Local Law 97 report, which can count credits and deductions a benchmarking filing does not show. Our free Local Law 97 calculator runs the same math for any floor area and energy use, and every building page with an estimate can open it with that building's filing filled in.

What the 2030 limits mean across the city

We ran the same estimate on the large buildings with Leasemark building pages that have a usable benchmarking filing, leaving out housing, fully tax-exempt properties, filings that look like errors and property types the rule does not name. That left 1,571 buildings. At their latest filed energy use:

89 are over their 2024 to 2029 limit. 914, or 58%, are over the 2030 to 2034 limit.
Of the 408 whose filing lists only office space, 20 are over now and 215 will be over in 2030. 195 of those 215 are under the current limit, so 2030 is when the law would first cost them.
The typical office building (the median) uses about 53% of its current limit and about 103% of its 2030 limit.
Fuel decides a lot of it. Only 1 of the 24 all-electric office buildings is over the 2030 limit. Of the 347 office buildings that burn natural gas, oil or another fuel on site, 203 are.
Together, the estimated penalties come to about $15.3 million a year under the current limits and about $63.8 million a year from 2030, if energy use stayed the same.

Energy use will change as owners retrofit, so treat these numbers as the size of the gap at today's energy use, not a forecast. They show how much work most commercial buildings have left before 2030.

How owners bring the number down

Use less energy. Lighting, controls, tune-ups, better windows and insulation all lower emissions directly.
Electrify heating, cooling and hot water. Efficient electric systems that replace oil, gas or steam can use a lower "beneficial electrification" coefficient, and the savings can be banked and applied in later reporting years, through 2034 to 2036 depending on when the equipment started running.
Renewable energy credits. Credits that meet the rule's requirements can be deducted, but only from the emissions of electricity bought from the utility.
Solar on site. For 2024 to 2029, electricity a solar system on the premises exports to the grid can be deducted from the building's utility electricity.
Offsets, within a cap. Only offsets from the city's Affordable Housing Reinvestment Fund count, and only up to 10% of the building's limit.
Adjustments. Owners facing special circumstances, and not-for-profit hospitals and health centers, can apply for an adjusted limit.

For 2024 to 2029 there is also a good faith route to a reduced penalty. The owner has to file the emissions report and the benchmarking data, attest that the lighting upgrades and tenant electrical submeters required by separate laws are done, and show one of several things: a decarbonization plan filed by May 1, 2025 that the building is carrying out, approved permits or a signed contract for the work needed to meet the 2024 limit, an electrical service upgrade under way to prepare for electric equipment, or an earlier report showing the building under its limit, among others. An owner who files a decarbonization plan cannot also use renewable energy credits for 2024 to 2029, and the rule says outright that a plan's strategies may not include removing a tenant. Disaster damage, such as a fire or flood that made compliance impossible that year, can bring the penalty to zero.

What tenants should ask

Tenants do not file anything, but Local Law 97 can still reach them:

Your electricity counts. The energy your space uses is part of the building's total, even on your own meter. Expect owners to ask for usage data and to care about your lighting, equipment and, in restaurants, your kitchen.
Read the operating expense clause. Check whether it excludes fines and penalties, and how it treats the cost of capital improvements made to comply with new laws. That decides whether a penalty or a retrofit shows up in your escalations. Have your attorney review it before you sign.
Plan for retrofit work. Window replacements, new heating systems and electrical upgrades may need access to your space. Check the access clause and whether rent abates if work disrupts you.
Ask the landlord directly: has the building filed its reports, was it under its 2024 limit, and what is the plan for 2030? A building with a credible plan is a safer ten-year bet than one facing a large gap with no answer. If you are not sure who the owner is, see how to find out who owns a building in NYC.

Leasemark building pages show a building's energy score and grade where it has filed, and this estimate where the data allows, so you can check before a tour.

What buyers should check

When you buy a covered building, you take on its future limits. Ask for the emissions reports filed so far, any decarbonization plan, approved adjustment or good faith filing, the estimated gap for 2030 and 2035, and the capital plan and cost to close it, then price that into your offer. A new owner who is a bona fide purchaser does not have to file the report for the calendar year in which title transfers, but reporting, and any penalty, resumes the next year.

Buying a unit in a commercial condo is no exception: the board files one report for the whole building, and penalties and retrofit costs end up in the common charges. See buying a commercial condo in NYC, NYC commercial property tax and the NYC commercial transfer tax for the rest of the checklist.

Next steps

Looking up a building: type an address or name into the building lookup to see its energy grade and Local Law 97 estimate.
Looking for space: post what you need and get matched with spaces as owners and brokers list them.
Own or represent a building: list your space free so tenants searching your neighborhood can find it.