For decades, energy codes only mattered when you built or renovated. Building performance standards (BPS) change that: they set a cap on how much energy an existing building can use, or how much carbon it can emit, and the cap gets tighter over time. Miss it, and the owner pays. Because heating, cooling, ventilation and hot water are usually the biggest energy loads in a building, these laws land squarely on the boiler room and the rooftop. This piece is for building owners, property managers, co-op boards and the technicians who service their equipment.
What Local Law 97 actually requires
Under New York City's Local Law 97, most buildings larger than 25,000 gross square feet must stay under greenhouse-gas limits or face penalties, with a target of a 40% emissions reduction by 2030 and carbon neutrality by 2050 (NYC Department of Buildings). Each building's limit is based on its floor area and occupancy type, and its reported emissions come from fuel burned on site (like a gas or oil boiler) plus emissions tied to the electricity it buys (NYC Comptroller). The penalty is $268 per metric ton of CO2e over the limit, and offset certificates sold through the city's housing fund cost the same $268 per ton (NYC Department of Buildings).
The scale is large: about 63,000 buildings are covered, roughly 45,000 of them residential, including many of the city's 6,800 co-ops (City & State New York).
Year one went well. 2030 is the hard part
In its year-one results, the Department of Buildings reported that about 95% of required properties filed 2024 reports, and 95% of those filings met emissions limits or one-time upgrade requirements (Facilities Dive). Owners who passed mostly did it through lighting upgrades, envelope work, heat pumps and building or energy management systems (Facilities Dive). About 470 market-rate properties exceeded their 2024 limits, and the city has begun sending notices of deficiency to non-filers (Facilities Dive; NYC Department of Buildings).
The next step is much steeper. A February 2026 report found that while more than 90% of buildings met the first-phase limits, only 43% currently meet the 2030 limits, and getting there generally means moving heating off on-site fossil fuel (City & State New York). One Queens co-op of 134 buildings estimated its electrification cost at around $60 million (City & State New York). That is why 2027 through 2029 will be planning and engineering years for many buildings.
Field note: the cheapest ton is usually the one you never burn. Before pricing a full electrification, look at what the building is wasting now: boilers short-cycling on outdoor reset settings nobody tuned, steam traps failing open, ventilation running at full speed overnight, and leaky ductwork or pipe insulation gaps. Fixing controls and distribution reduces emissions in every compliance period and makes any future heat pump smaller and cheaper.
It is not just New York
Building performance standards now exist in several states and cities, each with its own size threshold and metric (ENERGY STAR):
| Jurisdiction | Who is covered | What is measured / key target |
|---|---|---|
| New York City (LL97) | Most buildings > 25,000 sq ft (NYC Department of Buildings) | Carbon emissions; 40% reduction by 2030, net zero by 2050; $268/ton penalty |
| Washington State (Clean Buildings) | Tier 1: nonresidential > 50,000 sq ft; deadlines June 1, 2026 / 2027 / 2028 by size (Washington Department of Commerce) | Energy use intensity target (EUIt) by building type, benchmarked in ENERGY STAR Portfolio Manager (Washington Department of Commerce) |
| Colorado | Buildings > 50,000 sq ft (State Climate Policy Dashboard) | Emissions 7% lower by 2026 and 20% by 2030 vs. 2021 (State Climate Policy Dashboard) |
| Maryland (BEPS) | Buildings > 35,000 sq ft (State Climate Policy Dashboard) | Direct emissions 20% lower by 2030; net zero by 2040 (State Climate Policy Dashboard) |
| Oregon | Commercial > 35,000 sq ft (State Climate Policy Dashboard) | Based on ASHRAE Standard 100 (2024) with state amendments (State Climate Policy Dashboard) |
| New Jersey | Commercial > 25,000 sq ft (NJ Clean Energy Program) | Benchmarking only: report energy and water use yearly in Portfolio Manager (NJ Clean Energy Program). No performance cap today. |
New Jersey sits at the benchmarking stage: owners measure and report, but there is no emissions cap with penalties. In our view, NJ owners who already keep clean Portfolio Manager data will be better prepared if the state ever adds a performance cap, since Washington's standard is built on that same benchmarking tool.
What this means for HVAC decisions
- Know your number first. Pull 12 to 24 months of utility data into ENERGY STAR Portfolio Manager. Compare the building to its limit or target before buying anything.
- Fix controls and distribution. Boiler reset curves, ventilation scheduling, steam and hydronic balancing, and sealing ducts and pipes are low-cost and help in every compliance period.
- Time replacements to the cap. A boiler or rooftop unit that will be replaced around 2030 should be evaluated against the 2030 limit, not today's. In our field experience, a like-for-like fossil replacement can lock in years of penalties, because that equipment will likely still be running in the next compliance period.
- Size electrification after load reduction. Envelope and ventilation improvements reduce the heat pump capacity, the electrical service upgrade and the cost.
- Check the electrical service early. In our experience, older buildings often need utility service upgrades for heat pumps, and the utility work can take months.
- Keep records. Every jurisdiction above relies on documented, certified reporting.
Limitations
Each law has its own exemptions, alternative pathways, deadline schedule and calculation rules, and several have been amended since adoption. Colorado, for example, has changed the legal status of its 2026 target (State Climate Policy Dashboard). The emissions limit for any specific building depends on its property type and floor area, so treat the table above as an orientation, not a compliance determination. Your registered design professional or energy consultant determines the official numbers.
This article names no products and endorses no manufacturer. Any equipment type mentioned (heat pumps, boilers, energy management systems) is discussed generically. HVAC Zone Inc is a multi-brand dealer and remains brand-neutral.
Informational and educational content, not legal or compliance advice and not a substitute for a site-specific assessment by a licensed professional.
Own or manage a multifamily or commercial building and want to know where its heating, cooling and ventilation stand against a current or future performance cap? Request a consultation and we will review your equipment, controls and upgrade timing, across all major brands.