LL97 Is Here to Stay: Fines Loom for Market-Rate Properties Without a Good Faith Effort Filing

As 2025 begins, nearly 10% of New York City buildings face Local Law 97 (LL97) fines amounting to hundreds of thousands of dollars. For market-rate properties, the clock is ticking to file a Good Faith Effort (GFE) extension and avoid these penalties. Unlike a simple report or plan submission, the GFE requires a legally binding decarbonization plan with clear commitments to reduce emissions and achieve carbon neutrality by 2050.

Understanding LL97 and Its Implications

Enacted in 2019 as part of the Climate Mobilization Act, LL97 sets ambitious greenhouse gas (GHG) emissions caps for NYC buildings over 25,000 square feet. The law targets buildings, which are responsible for over two-thirds of the city’s emissions, with the goal of reducing emissions 40% by 2030 and achieving net zero by 2050.

LL97 imposes steep penalties on properties exceeding their emissions limits, calculated at $268 per metric ton of CO2. For many market-rate properties, these fines can easily exceed $100,000 annually. The law includes flexibility measures, such as GFE extensions, but these come with strict requirements: a GFE filing must demonstrate progress toward compliance, including a concrete and actionable decarbonization plan.

The Political Landscape: Why LL97 Is Here to Stay

When LL97 was first passed, it was seen as NYC’s response to then-President Trump’s withdrawal from the Paris Climate Agreement. Today, as Trump prepares to return to office with a renewed “drill, baby, drill” agenda, the enforcement of LL97 remains a political counterweight to federal policy. The NYC Department of Buildings (DOB) has invested $4 million and hired 35 staff members specifically to enforce LL97, signaling the city’s commitment to implementing the law as written.

Redocs: Two Decades of Compliance Expertise

Redocs Inc. has been a trusted name in NYC compliance for nearly 20 years, assisting property owners with energy efficiency upgrades, regulatory filings, and navigating complex local laws. However, we deliberately delayed engaging with market-rate clients facing 2025 LL97 fines because, like many, we doubted the city would enforce such sweeping penalties purely for CO2 emissions.

Over the past year, we’ve successfully prepared prescriptive path compliance for rent-regulated properties and buildings that only face fines in 2030. But the landscape has shifted dramatically, and the properties now most at risk are market-rate buildings with imminent 2025 fines. For these properties, the stakes are highest, and the options are few: pay the fines or file a GFE.

Why the GFE Filing Is Critical

The GFE filing provides a deferment on LL97 fines in exchange for showing adequate progress toward a decarbonization plan. This plan must align with the law’s long-term targets, including interim emissions caps in 2030 and carbon neutrality by 2050. Importantly, a GFE filing cannot rely on unattainable or impractical solutions. A building owner must commit to actionable strategies they are prepared to implement.

This requirement presented a significant challenge for Redocs. Until recently, the most commonly proposed solution—installing heat pumps—was both logistically and financially untenable for many market-rate properties.

The Challenges of Heat Pumps for Pre-War Properties

Retrofitting a pre-war property with heat pumps entails gutting and rehabilitating nearly every apartment. The process requires installing refrigerant piping, upgrading electrical service, and addressing air sealing, insulation, and ventilation. These projects disrupt tenants and involve costs that are often prohibitive for market-rate buildings.

Even after installation, heat pumps come with significant drawbacks:

• High Operating Costs: Heat pumps incur substantial peak demand charges, leading to higher energy bills compared to existing systems.
• Tenant Disruption: The invasive nature of the work often forces tenant displacement, adding to the challenges for property owners.

Given these limitations, Redocs could not, in good conscience, recommend a heat pump retrofit as the centerpiece of a legally binding GFE filing.

Introducing the Alternative: Boiler Electrification + Energy Storage

Redocs is now ready to offer an alternative solution in partnership with Standard Carbon . This approach, called Boiler Electrification + Energy Storage for Heat & Hot Water with Off-Peak Electricity, represents a tenant-friendly, cost-effective pathway to LL97 compliance.

How the System Works

1. Carbon Capture: The system captures CO2 emissions directly from a building’s boilers.
2. Renewable Natural Gas (RNG) Production: Using off-peak electricity from the grid, the system converts captured CO2 into RNG.
3. Energy Storage: RNG is stored on-site in compact, compliant containers for use during peak demand periods or to reduce reliance on utility-supplied natural gas.

This technology eliminates fines, lowers overall energy costs, and meets LL97’s emissions reduction targets—all without disrupting tenants or building operations.

The Benefits of Boiler Electrification + Energy Storage

1. Immediate LL97 Compliance: By reducing emissions to meet LL97 limits, the system avoids fines entirely.
2. Financial Incentives:
3. No Tenant Disruption: All work is confined to the boiler room and roof, with no in-unit modifications required.
4. Seamless Integration: The system leverages existing infrastructure, avoiding costly electric boiler upgrades.
5. Scalable and Future-Proof: The technology aligns with LL97’s 2050 carbon neutrality goal, ensuring long-term compliance.

The Expertise Behind the Solution

Redocs’ Vice President of Engineering, Natan Shahar , PE, has spent the past six years developing this solution in direct response to LL97’s challenges. Founding Standard Carbon, Shahar has ensured that the system meets all regulatory requirements and provides a practical alternative to traditional decarbonization strategies.

Mark Balsam , Redocs’ CEO and founder, acknowledges that his initial skepticism about LL97’s enforcement has been proven wrong. “We didn’t think the city would enforce such massive fines purely for emissions,” Balsam says. “But now that enforcement is here, I’m glad we have a solution that works for property owners and meets the law’s demands.”

Why Act Now?

With the May 2025 deadline for GFE filings fast approaching, the time to act is now. NYC DOB has made it clear that fines will be enforced, and only properties showing tangible progress toward decarbonization will receive extensions.

Redocs is uniquely positioned to guide market-rate property owners through this process. We handle all aspects of compliance, from preparing GFE filings to coordinating engineering, permitting, and implementation. Partnering with Standard Carbon, we deliver a turn-key solution that addresses LL97’s challenges head-on.

Conclusion

LL97 is here to stay, and for market-rate properties, the stakes are high. With hundreds of thousands of dollars in fines looming, property owners must act decisively. Redocs’ Boiler Electrification + Energy Storage solution offers a viable, tenant-friendly pathway to compliance that avoids fines, reduces costs, and ensures long-term sustainability.

Don’t wait. Contact Redocs today to begin your Good Faith Effort filing and secure a future-ready solution for your property. Together, we’ll navigate LL97 and achieve compliance with confidence.