Press Release

New York Fed Releases Paper on Electrifying New York State’s Small Multifamily Buildings to Meet Clean Energy Goals

October 25, 2023

NEW YORK—The Federal Reserve Bank of New York today 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.

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: healthhousehold financial well-being, and climate risk.

Contact
Ellen Simon
(347) 978-3036
Ellen.Simon@ny.frb.org
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