Your Building May Be Fine Today and Still Be Headed for a 2030 Penalty

Who this is for: an owner, asset manager, or board member of a New York City building over 25,000 square feet that is covered by Local Law 97. The decision: which capital decisions made now change where the building stands in 2030. Scope: New York City only. Local Law 97 does not reach Westchester, Long Island, or New Jersey.

The 2024 report was filed, the building was under its limit, and nothing is wrong

That is where most covered buildings are today. The first Local Law 97 compliance year was 2024, reports were due May 1, 2025, and the majority of buildings came in under their 2024 to 2029 limit without doing anything in particular. The limit tightens sharply in 2030, and the way it tightens means a building that is comfortable today can be well over its limit on January 1, 2030 with the same equipment, the same occupancy, and the same bills.

How the limit is set

Local Law 97 (Article 320 of the Administrative Code, with the rule at 1 RCNY §103-14) gives each covered building an annual emissions limit in metric tons of CO₂-equivalent per square foot, by the property type the building reports in ENERGY STAR Portfolio Manager. A mixed-use building’s limit is the sum of each use’s floor area multiplied by that use’s factor. The building’s actual emissions are its metered energy use, by fuel, multiplied by a fuel coefficient set in the rule. Exceed the limit, and the penalty is $268 per metric ton over, per year.

Both halves of that calculation change in 2030, and they change in the same direction.

The limits fall. A few rows from the rule’s table, in tCO₂e per square foot per year:

The property type matters more than it looks. There is no “skilled nursing” row: a senior-care campus reports as Senior Care Community or Residential Care Facility, not as a hospital, and modelling it as a hospital overstates its headroom by more than two times. The registered design professional who certifies the report classifies the building; “Other” and “Mixed Use” are not available as types.

The electricity coefficient halves; gas and oil do not move. From 2030 the rule credits electricity at 0.000145 tCO₂e per kWh instead of 0.000288962, because the grid is expected to be cleaner. District steam edges down from 0.00004493 to 0.0000432 per kBtu. Natural gas stays at 0.00005311 per kBtu, and #2 and #4 fuel oil stay at 0.00007421 and 0.00007529. The arithmetic follows: a building that heats with gas or oil sees its limit fall by half or more while its counted emissions barely change, and a building that heats with electricity sees its counted emissions fall with the coefficient. That reading of the table is ieComfort’s analysis; the rule does not describe its own effect. One practical consequence for anyone running the numbers now: projecting 2030 with the 2024 electricity coefficient overstates a building’s exposure by roughly 15 to 30 percent.

What the penalties are, and where enforcement stands

Two penalties exist. Emissions over the limit cost up to $268 per metric ton per year; the law says “not more than,” and the amount is at the Department of Buildings’ discretion. Failing to file costs $0.50 per square foot per month for up to twelve months after May 1, a maximum of $6.00 per square foot, and only if the report is not filed within 60 days. A 300,000 square foot building’s failure-to-file ceiling is therefore $1.8 million once, not per year. False statements carry civil penalties of up to $500,000 and possible criminal liability.

As of April 2026, enforcement had begun but no dollar penalties had been assessed: the Department of Buildings reported that 93% of covered private properties had filed for 2024, about 28,000 reports were under audit, and roughly 1,400 non-filers had been sent notices of deficiency with 60 days to cure. Urban Green Council’s estimate is that about 9% of covered buildings are over their current limit and about 57% would be over the 2030 limit with today’s performance.

The levers, and the one with a date on it

Beneficial electrification credit. Qualifying electric heating equipment earns a deduction of 0.0013 tCO₂e per kWh if it is installed and operating before January 1, 2027, and half that, 0.00065, for equipment installed between January 1, 2027 and December 31, 2029. The credit can be used against penalties through 2036. Air-source unitary and VRF heat pumps qualify when they exceed a coefficient of performance of 1.5 at 5°F under the applicable AHRI standard; equipment not on the list, including ground-source systems, qualifies above the same threshold. The credit is claimed inside the annual report. For a building weighing an electrification project, this is the date that moves the economics: the same equipment earns twice the credit if it is running before the end of 2026.

Renewable energy certificates and offsets. RECs offset only grid-electricity emissions and must come from resources located in or delivering into New York City; there is no numeric cap on RECs for 2024 to 2029, though buildings on a decarbonization plan may not use them in that period. Because the electricity coefficient halves in 2030, each REC offsets half as much from then on. Offsets through the Affordable Housing Reinvestment Fund are capped at 10% of the annual limit, at $268 per ton.

Extensions and good-faith pathways. An extension to file can be requested from 30 days before to 60 days after May 1 if a registered design professional is under contract by February 1 or a square-footage challenge is pending. The good-faith-effort pathways require Local Law 88 lighting and submetering compliance, whose deadline passed May 1, 2025.

Affordable housing and houses of worship follow Article 321 instead: thirteen prescriptive measures, ten of them HVAC, controls, or mechanical, with their own one-time report. Those buildings still owe annual benchmarking under Local Law 84 and the ten-year Local Law 87 cycle.

What to decide this year

The 2030 limit is a function of three things the owner controls in the next three years: the fuel the building heats with, how efficiently the existing systems run, and the property type the report uses. In order of how much they move the number:

1. Any heating or hot-water replacement decided before 2030 is a 2030 decision. Equipment chosen now will be running through the first 2030 to 2034 compliance period. If the replacement is electric and running before January 1, 2027, it earns the full credit; the same project a year later earns half.
2. Controls and operating evidence come before capital. A building’s counted emissions are its metered use. Set points, schedules, simultaneous heating and cooling, and overrides change that use without a capital project, and the Local Law 87 retro-commissioning cycle already requires correcting those deficiencies for buildings over 50,000 square feet. Fixing them first makes the 2030 model smaller and the replacement, if one is needed, smaller too.
3. Get the property type right before modelling anything. The difference between the hospital row and the senior-care row is the difference between headroom and exposure.

What an exposure review produces, and what it does not

A Local Law 97 exposure review takes the building’s metered use by fuel, its Portfolio Manager property types and floor areas, and its equipment inventory, and produces the 2024 to 2029 and 2030 to 2034 positions under the rule’s own coefficients, with the beneficial-electrification credit shown at both rates. It identifies which operating corrections and which capital decisions move the 2030 number, and by how much. It is an engineering estimate, not a filing. The annual Article 320 report must be certified by a registered design professional, a licensed engineer or architect, and ieComfort does not certify it; where a filing is needed, the review names what the certifying professional will need from the building.

Sources and dates

• NYC Administrative Code Article 320; 1 RCNY §103-14 (limits table at (c); fuel coefficients at (d)(3); penalties at (g) and (j), penalty amendment effective January 20, 2024); NYC DOB Article 320 Information Guide (beneficial electrification credit).
• NYC Department of Buildings and HPD press release, April 22, 2026 (filing compliance, audits, notices of deficiency, offset sales).
• Urban Green Council, estimates of buildings over the 2024 and 2030 limits.
• 1 RCNY §103-17 (Article 321); DOB Article 321 Filing Guide v1.7, April 28, 2025.
• Last reviewed October 27, 2026. The electrification-credit section changes meaning on January 1, 2027. Pending legislation (Intro 772 on co-op and condo relief; Int 0159 on a REC cap) is not reflected and will not be until enacted.