NYC Hates Its Middle-Class Homeowners

From the MANHATTAN CONTRARIAN

Jane Menton

Four years ago, just before our son was born, my husband and I bought our first home: a two bedroom, one bathroom apartment in Queens. 

Queens has a lot to recommend it; it is often known as the City’s “middle class” borough, with almost no slums, and an equivalent lack of notable wealth. It is not a small area: more than 100 square miles, with a population over 2.25 million. The homeownership rate is about 45%, which is high for New York City. In addition, it is the most ethnically diverse county in the U.S., and a place where immigrants from all over the world have sought the American dream. Unfortunately, our politicians are working hard to put an end to that. 

About a year ago I joined the board of my building, a nondescript co-op which has about 160 apartments. Within my first month of joining a senior board member, one who has been on the board for many years and is about 20 years my senior, sent us all the following email: 

“I just wanted to bring this topic to your attention… The Climate Mobilization Act of 2019 will have a big impact on our building. Our emissions must be cut by 60% in the next 10 years or so. If we fail, the fines are in the range of $150k a year. We will be required to make hundreds of thousands of dollars in investments to upgrade our systems.” 

For reference, this act, the Climate Mobilization Act, is a New York City statute also known by the name Local Law 97 (LL97).

Since I am the daughter of the MC, I was already familiar in a general way with this New York City law, and with the similar law at the state level known as the Climate Leadership and Community Protection Act, also passed in 2019. But our senior board member’s email brought home the particular financial consequences that our building – and hundreds of others like it – would shortly be facing.

My colleague’s email was accompanied by the following chart, created by this website, called the NYC LL97 Carbon Emissions Calculator. This site has been endorsed by the City for buildings to use to calculate how much they are supposed to reduce their carbon emissions and how much they will owe in fines if they fail to install “zero-emissions” heating systems by the set deadlines. Here is the chart that my colleague came up with for our building:

According to the chart, about 75% of our carbon emissions result from our natural gas heat, represented in green in the circles in the lower right portion of the chart.  The City’s statute mandates a series of lowering thresholds for building emission per square foot of space. By 2035, supposedly we must reduce our emissions by 60%, or face fines well in excess of $100,000 per year. In order to reduce our emissions by 60% we would have no option but to convert our building away from its current gas heat system – which is quite reliable, only a few years old, and in fine working condition – to an electric heating system.  

In addition to the lowering emissions mandates, the City statute also prohibits new natural gas hookups in new buildings under 7 stories starting in 2024, and buildings over 7 stories starting in 2027.   

Policy makers busily writing these edicts have yet to figure out how NYC’s electric grid could support such a transition. Spoiler alert: it cannot.  They push ahead even as California begins to realize the folly of requiring everyone to buy an electric car. Supposedly New York is going to triple the load on the electrical grid by forcing the electrification of all buildings and automobiles, while also closing reliable fossil fuel power plants and trying to replace them with wind and solar facilities that only work part time. Meanwhile, they have made no effort to demonstrate how this could possibly work. See prior Manhattan Contrarian discussion, for example here. Beyond being a financial burden on New York’s middle class, there are serious quality of life concerns to consider.

Assuming that they decide to or are forced to go along with this, how much will it cost the unfortunate co-op owners? We haven’t yet had an estimate done for our building, but here are a few words from Warren Schreiber, board president of another Queens co-op, the Bay Terrace Gardens Co-op Section 1, and co-president of the Presidents Co-op & Condo Council (PCCC):

“Converting to (electric) heat pumps will cost [the co-op] $2.5 to $3 million, which does not include finance charges. This expense will result in a 25-30% monthly maintenance increase. Shareholders who have lived here for 20, 30, 40 and 50 years will have to leave Bay Terrace Gardens to find more affordable housing.”

A 25-30% maintenance increase is significant. In my building, we just had a relatively minor maintenance assessment due to rising gas prices. The total was $45,000, spread over 160 apartments, to be paid over the course of three months. We announced this at the annual shareholder meeting in September. During the meeting, our accountant also briefed everyone on the other things that were likely to affect our building finances, including: rising cost of labor, rising property taxes, and inflation.

“This meeting is a call to action to vote Republican” I texted my friend on the board. 

She replied: “Yep.”

After the meeting, a shareholder came up to me to complain about the assessment. 

“If you are going to have a maintenance assessment, you really need to give tenants more warning. It’s too expensive. It’s an increase of $88 a month for me.” 

In our building, $100 a month is not money most residents won’t miss. Knowing that, I seized the opportunity to warn this resident about the Climate Mobilization Act and the much higher costs NYC plans to impose on us. 

“But that’s crazy! They can’t do that — it would ruin the city! You know, this is the Republicans’ fault and the Democrats are too cowardly to stand up to them.” 

How anyone could believe that when our city is under exclusive control by the Democratic Party, and the “Green New Deal” has been entirely championed and sponsored by Democrats, is beyond me. But that’s the NYC mindset for you. Even as the costs of policies championed by Democrats begin to hit home, there is acute denial over who’s to blame.

I am trying to take productive action. I wrote the following to my fellow board members: 

“My primary concern in all this is that it seems clear the city wants to push us to convert to electric heat. The cost to retrofit such a system to our building would be astronomical, not to mention that the cost per resident for electric heat would be a significant personal expense. Further, if hundreds of NYC buildings were to suddenly depend on electric heat, I have no faith in the city grid to rise to that level of demand. The cascading negative consequences of imposing this on NYC co-op owners are immense. I’m seeing a housing market crash and financial ruin for middle class citizens (as evidence, see: Europe). What can we realistically do to push back?”

I haven’t heard back from them yet. I’ll let you know if I do.

In the meantime, there are several co-ops in the city who understand what’s at stake. They have mounted a legal challenge against the law. I hope to join them.

FRANCIS MENTON adds: The costs of installing and running an electric heat system are actually the smaller part of the problem. The much bigger issue is that the City has embarked on forcing all buildings (and separately, all automobiles) to convert to electricity without any sort of realistic plan of how to provide the necessary electricity. My recommendation to Jane and her Board is that they get together with several other co-ops in Queens and call a meeting with their State and City representatives where they say: “We can’t responsibly convert our buildings to electric heat until you can demonstrate a workable system to provide the electricity without blackouts. Otherwise we risk having our owners freeze to death in the winter.

Read the full story here.

via Watts Up With That?

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October 30, 2022 at 08:18AM

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