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The Federal Reserve Bank of New York released a paper on the challenges of electrifying 5- to 50-unit buildings in New York State. Electrifying such buildings, which comprise almost 20% of the state’s housing units, will be necessary to meet clean energy goals set by New York City and New York State laws.
The paper, “Window of Opportunity: New York’s Small Multifamily Buildings, Expiring Equipment, and Clean Energy Goals,” finds that more than 1.45 million housing units in the state are in small- and midsize-properties. Many such properties are owned by landlords with limited portfolios, while 70% of renters in the properties have low to moderate income. Over two-thirds of units in such buildings are heated by non-electric equipment that is over 15 years old. Owners are likely to be replacing 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.
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The paper also finds:
- Owners of small- to midsize-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.
The paper was developed as part of the New York Fed’s Community Development efforts, which have three areas of focus: health, household financial well-being, and climate risk.