A building files its Local Law 97 report, shows an approved decarbonization plan, and looks compliant on paper. From a distance, that’s the end of the story. For a growing number of buildings, it isn’t — and the gap between “looks compliant” and “actually is” is exactly where a lot of clients are about to get an unpleasant surprise.
For those of us advising on this daily, it’s worth being precise about where that gap actually sits, because it’s easy to explain to a client in a way that sounds more reassuring than the underlying rule actually is.
The Pathway Everyone Treats as a Safe Harbor
The Good Faith Effort pathway has become the default answer for a huge share of the covered building stock, and understandably so — it offers real breathing room during the first compliance period. But the framework was never designed as a permanent exemption. It was built around accepting a framework for retroactive enforcement if a building fails to follow through on its stated plans, according to New York City’s own “Getting 97 Done” mobilization strategy announcement. That single clause is doing a lot of work, and it’s the part that gets dropped from most client-facing summaries.
In practice, this means a building operating under an approved GFE decarbonization plan today isn’t compliant in any final sense — it’s compliant conditionally, pending demonstrated follow-through. The Department of Buildings’ own rule language is direct about this structure: owners who submit a decarbonization plan and receive a mitigated penalty are still required to meet the eligibility criteria and complete the underlying work, with the department retaining a mechanism to pursue mediated resolution or enforcement if that work doesn’t materialize as planned, according to the NYC Department of Buildings’ rule text on Local Law 97 compliance periods.
Why This Distinction Gets Lost So Easily
Part of the problem is structural. A building that’s filed its benchmarking data, submitted an approved decarbonization plan, and is paying a mitigated penalty checks every visible box a client — or a broker, buyer, or lender doing quick due diligence — would look for. Nothing about that picture signals conditional status unless someone specifically knows to ask whether the underlying work is actually on schedule against the plan’s own milestones.
This gap matters more now than it did even a year ago, given where enforcement actually stands. Roughly 93% of covered privately owned properties, representing 91% of covered buildings citywide, filed their Local Law 97 compliance reports in the first year, according to the NYC Department of Buildings’ announcement of first-year compliance data. That’s a very high filing rate — but filing a report and genuinely tracking toward a decarbonization plan’s committed milestones are two different things, and the department’s own framing makes clear it intends to verify the latter, not just the former.
Where This Shows Up in Practice
A few specific situations tend to produce this “looks compliant, isn’t” gap:
Decarbonization plans with milestones nobody’s actively tracking. A plan approved in year one with a five-year implementation timeline can quietly drift off schedule well before anyone notices, especially if the building’s ownership or management changes in the interim.
Buildings assuming GFE status is permanent rather than conditional. The retroactive enforcement mechanism means a building that stops demonstrating progress can lose its mitigated status and face the full penalty exposure it thought it had avoided — applied backward, not just going forward.
Reliance on benchmarking data without a genuine compliance strategy behind it. Filing accurate energy data satisfies one legal requirement (Local Law 84) without addressing the separate, substantive question of whether the building will actually meet its emissions cap.
Ownership transitions that don’t carry forward institutional knowledge of an existing plan’s obligations. A new owner or manager inheriting an approved GFE plan may not fully understand what’s actually owed under it, or by when.
What This Means for Advisory Conversations Going Forward
For those of us working directly with building owners and their teams, this is the moment to shift the conversation from “are you filed and approved” to “are you actually tracking against what that approval requires.” A building’s current paper status tells you almost nothing about its real exposure if the underlying decarbonization work has stalled, and clients relying on outdated assumptions about what GFE actually guarantees are the ones most likely to be caught off guard by a retroactive enforcement action they didn’t see coming.
This is exactly the kind of gap that benefits from an outside, structured review rather than an internal assumption that “we’re fine because we filed.” Encouraging a client to consult with an Energy Strategist for an honest audit of where their plan actually stands — not just whether it was approved — tends to surface exactly this kind of discrepancy before it becomes a retroactive penalty rather than after.
The Real Takeaway for Practitioners
The Good Faith Effort framework was designed with real flexibility built in, and it remains a legitimate, valuable pathway for buildings genuinely working toward compliance. But treating GFE approval as a finish line, rather than the start of an actively monitored obligation, is where a lot of buildings — and the professionals advising them — are going to get an unwelcome surprise over the next few years. The buildings and advisors who stay ahead of this aren’t the ones with the cleanest-looking paperwork. They’re the ones actually tracking the milestones behind it.
