Proposed legislation by the New York City Council to require energy audits,  while a nice idea, is extremely cost-prohibitive especially in today’s economy. The bottom line is that the spending proposed in this bill (Intro  967) will be taken straight out of the operating budgets of co-ops and condos  and not the city coffers.  

 Among the legislation’s provisions are that owners of buildings 50,000 square feet or more must retain  an approved energy professional to conduct the once-per-decade audit, which the  city will require of a specified 10 percent of affected buildings each year for  10 years. The audit would identify both “capital alterations of building systems involving the installation of new  equipment, insulation or other proven energy efficiency technologies” and “reasonable retro-commissioning and retrofit measures that would ... reduce  energy use and/or the cost of operating the building.”  

 Which co-ops or condos will be most affected by this bill? Not the Manhattan  high-rises recently built with fancy names and green roofs, but the garden  style and high-rise variety built a half century ago dotting the neighborhoods  of Queens and Brooklyn where many of the working class families of our city  live. And worse yet, you will have nothing to say about it.  

 Government-mandated spending, which was once the bane of local municipalities is now spreading to the  residential housing stock of our city. City legislators, many of whom I venture  to guess probably have never stepped inside a co-op, have sponsored Intro 967,  titled “Energy Audits & Retrofits.” This bill is being sold as an environment-friendly green bill but in my opinion  it will wreak havoc on co-ops and condos by mandating huge expenditures for  green projects. The bill is on the move and is scheduled for a hearing before  the City Council’s Environmental Protection Committee in mid-July.  

 Intro 967, which is part of the Mayor Michael R. Bloomberg’s larger PlaNYC 2030, would require that all buildings including co-ops larger  than 50,000 square feet undergo periodic energy audits. These energy audits,  however, do not come cheap, and if one finds that your building is lacking in  energy efficiency and can be retrofitted to save energy with a project payback  period of seven years or less, then you have no choice but to do the project.  What about cost? It doesn’t matter. Does it save energy and will the project’s cost be paid back in seven years through savings? Those are the only determining factors that matter.    

 Usurping the Decision-Making Process

 The city’s Office of Long Term Planning and Sustainability (OLTPS) will soon make such  decisions that were once sacrosanct and the domain of the boardroom. And what  if you don’t have the money lying around to replace the windows or boilers in your building  as outlined in your energy audit? No problem, the OLTPS would require you to finance the project. Never mind that  the board may have other priorities for its shareholders’ money such as sidewalks, driveways, elevators, roofs, lobby renovations or  pointing. The board is elected by its shareholders and unit owners to make difficult  decisions and choices about prioritizing spending needs are suddenly being  superceded by legislators who will now determine the best way for your co-op or  condo to spend its limited resources.  

 This legislation is serious business and is being fast tracked for approval. If  the payback period for an energy efficient project is seven years or less,  needless to say, you have no choice but to do it. Don’t have the money, and don’t want to incur debt or assess your shareholders? You can apply for a waiver one-year at a time. However, the caveat is that your  building must meet the city’s yet to be defined threshold for a “financially-distressed” building eligible for a waiver. And if you are successful in getting a waiver,  then the “financially distressed” building label surely won’t help with sales and property values and perhaps may do even more damage than  the actual spending of funds you don’t have.  

 At a recent Federation of New York Housing Cooperatives and Condominiums (FNYHC)  meeting, Rit Aggarwala, director of Long Term Planning and Sustainability  discussed this bill. He said his agency along with the New York City Department  of Finance will draw up the regulations that will determine if your building  can afford the project or be deemed a financially-distressed building eligible  for a one-year waiver. However, if the OLTPS believes your building can afford the project by taking  out a loan or assessing your shareholders, then they are unlikely to grant you  a waiver. Affordability is in the eyes of the beholder and if those eyes aren’t paying the bills, hold on to your wallets.  

 It’s Just Wrong

 From my perspective, this bill is everything that is wrong with politics and the  City Council in New York today. Fifty-one members, many of whom have little or no understanding of cooperative  housing, believe that they are in a better position than you to manage your  building’s spending. As an accountant and City Council candidate for the 23rd Council  District in Queens, this is about the most frightening piece of co-op housing  legislation I have seen. The budgeting process, which has been the sole domain  and responsibility of an elected board of directors that knows its building,  knows its shareholders and knows its priorities, is now being turned onto its  head.  

 Intro 967 will destroy a co-op or condo’s ability to keep maintenance affordable and commensurate with its shareholders’ or unit owners’ ability to pay. It will challenge any building’s ability to maintain sound and prudent debt levels.                 

 Bob Friedrich is president of Glen Oaks Village, New York’s largest garden apartment co-op with 10,000 residents in eastern Queens. He is also a candidate for the New York City Council from the 23rd Council  District in Queens.