By Daniel Avery, director of legislative affairs, BOMA NY
Last year, BOMA NY turned 51. The influential group has aged well, considering its vital role serving commercial real estate and its many professionals.
2018 was a monumental year for our industry, including record-breaking trades, historic developments and the continued rise of proptech.
These successes and our celebrated skyline could not happen without the proactive and strategic planning by our partners within the public sector.
BOMA NY works diligently with our business allies in the asset management, energy and environmental communities — as well as with elected officials and representatives from the City and State — to safeguard the efficiency, safety, quality and allure of commercial real estate throughout New York City.
These relationships will be more important than ever in 2019, as we tackle the continuation and acceleration of many legislative issues facing our industry. Here are just a few of them.
WASTE REMOVAL ZONES
Last year, BOMA NY played a critical role in introducing competition into the city’s waste removal zone system proposal, which will now allow for up to five vendors per zone, rather than just one per zone.
The increase in vendors will create significant efficiencies compared to the original plan.
Notwithstanding the increased number of vendors per zone, the current proposal from the Department of Sanitation poses a potential threat to many waste haulers that already operate in New York City. Failure to obtain contracts under the new plan can put some operators out of business.
That poses the question: If fewer operators remain, will they be able to provide the specialized suite of services businesses require, safely and without cutting corners? Or will lack of competition and associated pricing pressures cause this crucial service to lapse?
Waste removal is a highly complex business and the quality of operation is critical to ensuring that all businesses can continue to operate efficiently – and within the bounds of the law. Inadequate waste removal operations can leave building owners footing unnecessary regulatory fines.
When waste removal goes wrong, it goes wrong for everybody. To ensure the city’s goals are met and while preserving the integrity of NYC’s waste removal processes, we will continue to work with our public and private partners to shape the Department of Sanitation’s Environmental Review Process, which began in November 2018.
As part of the collaboration to find the ideal solution in 2019, BOMA NY will identify and advocate alternative approaches that protect workers, pedestrians and the environment – without a complicated zone scheme.
ENERGY STAR RATING
In January 2018, we worked with BOMA International to ensure that the proposed Energy Star budget cuts did not go through. That early success was coincidentally followed by an unwelcomed surprise from the EPA.
In September 2018, under the revised EPA protocol, Energy Star unveiled its new building scores. The scores of commercial real estate buildings in New York City fell disproportionately. In fact, one of our members saw the average score for their portfolio drop by 21 points. The new Energy Star scores didn’t add up.
With 434 certified buildings, the New York metropolitan area consistently performs above-average for energy efficiency, ranked fifth in the nation by the EPA in 2017. What were the factors that led to this enigmatic gap and how can it be remedied?
In part, the decline was due to the fact that scores are based on a Department of Energy survey that’s only published roughly once every four years. However, the 2007 survey was never published and therefore the previous scores were benchmarked to data from 2003 — nine years before the 2012 survey data that underlies the new scores.
BOMA has since met with the EPA, with whom we have a long-standing relationship, alongside other industry groups.
In 2019, will meet with them again to address the issue and improve scores citywide. We will also continue to be on the lookout for further threats to the Energy Star budget.
BILL INTRO. No. 1253
It may not have a fearsome name, but this bill presents one of the biggest financial threats to commercial real estate in BOMA’s half-century tenure in New York City.
The bill, which would establish an Office of Building Energy Performance (OBEP) within the Department of Buildings, has the noble goal of reducing 80 percent of greenhouse gas (GHG) emissions from buildings by 2050.
The bill sets emission reduction targets for 2022 and 2023, as well as a backstop minimum emissions limit for 2024 – in the event the advisory board hasn’t established a new metric for measuring GHG emissions – as the bill requires to be done by the end of 2020 – and even more strict emission limits than the ones already set for 2023.
While BOMA NY fully supports citywide reduction of GHG emissions, there are some profoundly challenging aspects to the proposed bill.
First off, the backstop measure simply isn’t feasible for existing buildings on such a short timeframe. Compliance with the suggested backstop would mean tens of thousands of large buildings would require major upgrades before 2024.
Further, the successful and on-time development of a new metric — albeit a contentious issue — is far from certain.
Setting the backstop aside, the targets are highly aggressive and non-compliance could result in fines in the hundreds of thousands of dollars per building.
Regardless, achieving the proposed targets on a building-by-building basis would force a shift from fossil fuels to electrification. The result would be a significant increase in electricity consumption. The city’s utilities would have to increase electric capacity, requiring new sources and transmission infrastructure.
This cost alone would result in higher electricity rates for all New Yorkers and needs to be taken into consideration.
To meet the new emissions standards, the electricity grid would also have to be a lot more green — a factor that the CRE industry has no control over.
If the greater demand is met with a usage increase of the city’s power plants, a large scale, quick shift to electrification could increase emissions of GHGs and other air pollutants — which is not advisable.
As of mid-December 2018, the bill had 33 co-sponsors — easily enough to pass the 53-member Council — and looks likely to pass by the end of April.
BOMA NY will continue to educate the Council and the City to establish a realistic backstop and achievable GHG reduction targets that will inevitably benefit the built environment and all New Yorkers.
These are just three of the many legislative issues we will encounter in 2019. Between helping members navigate everything from building operation to regulatory issues, or acting as an industry advocate by co-ordinating other industry groups and developing relationships with representatives and staff at the City Council and at the NY Department of Buildings and other city agencies, BOMA NY needs to constantly be on its toes — more so than ever this year. It’s a good thing the association is keeping spry in its fifties.