New York City and New York State laws have set ambitious clean energy goals. Meeting these goals will require electrifying buildings large and small, since buildings account for 30 percent of greenhouse gas emissions in the state and 70 percent in the city.
As part of its work on climate, the New York Fed’s Community Development team researched the challenges of electrifying small-to midsize-properties. The paper, “Window of Opportunity: New York’s Small Multifamily Buildings, Expiring Equipment, and Clean Energy Goals” analyzes the number, location, and tenant demographics of these properties in both New York City and New York State.
The coming years represent a critical juncture for these properties. There are over 1.3 million units in small multifamily buildings heated by non-electric equipment that is more than 15 years old. Owners will likely replace thousands of non-electric heating systems in the near- to medium-term. This provides an opportunity to take advantage of incentives and replace aging equipment with high-efficiency electrical systems.
The authors identify the key roadblocks and potential solutions for electrifying these properties, drawing on insights shared in interviews and roundtables with more than two dozen experts, including property developers as well as advocates for affordable housing and clean energy.
Among the paper’s findings:
- Units in small- to midsize-multifamily buildings are 20 percent of the housing stock in New York State.
- Almost 70 percent of the tenants in these buildings are low- and moderate-income.
- Owners of small- to midsize-multifamily buildings are often small-scale investors with limited portfolios who frequently charge below-market rent.
- Electrifying these properties is challenging due to affordability and financing issues; hard-to-access government incentives; the complexity of retrofitting; lack of awareness about what’s available; and an inefficient market for construction providers.
- Addressing electrification challenges at scale will require increased funding; streamlined and improved incentive programs; widespread proofs of concept; easily accessible technical assistance and education; and a better structured construction provider market.
