Expanding Green Roofs in New York City: Towards a Location-Specific Tax Incentive

Vegetated or “green” roofs provide numerous social and environmental benefits to urban areas. Compared with conventional roofs, green roofs promote biodiversity, reduce building energy use, decrease noise, and improve the productivity of solar photovoltaic installations. They can also mitigate the urban heat island effect and reduce stormwater runoff, thereby diminishing flooding and pollution of local waterways. As the effects of climate change worsen, and extreme heat and rainfall events become more common, these attributes will become all the more valuable. And with roofs typically occupying between 20 and 25 percent of urban surface area, transforming this space could substantially impact the local environment. Recognizing the societal benefits green roofs confer, in 2008, New York City Mayor Michael Bloomberg secured legislation from New York State offering property tax abatement to individuals in New York City who install green roofs on their buildings. The legislation, which is still in force today, was expected to spur a slew of new green roof development. Unfortunately, however, only seven property owners have applied for the abatement in the eight years since the legislation was passed. In a city with well over one million buildings, this is a paltry sum. Moreover, while the State has authorized up to $1 million in green roof tax abatements to be granted each year, total expenditure on the program has never reached anywhere near that sum. And although a small number of property owners have chosen to install green roofs without applying for the tax abatement, the vast majority of New York City’s roughly 40 square miles of rooftops remain covered in blacktop. This article therefore asks, how can this incentive program be reformed to encourage more property owners to turn their roofs green? With the legislation authorizing the abatement set to expire in 2019, the time is ripe to consider how a successor program may be more effective. As we will describe, the failure of the green roof tax abatement appears due, at least in part, to the fact that it is simply not large enough to offset the typical cost of installing a green roof. This has led some advocates to call for substantial increases in the size of the subsidy, and these calls may be justified given the diverse social benefits green roofs provide. Politically, however, securing a substantial increase may be impractical. Indeed, the last time the abatement was up for review, advocates were only able to secure an increase of 73 cents per square foot, which is hardly likely to motivate property owners to take action. The political climate for securing local tax abatements may have become even more challenging since then. In this article we suggest a strategy to help get around the budgetary dispute. Specifically, we propose that New York City increase the size of the tax abatement offered to property owners in targeted areas where green roofs are deemed most advantageous – perhaps those neighborhoods that are most vulnerable to the effects of stormwater runoff – while decreasing, or even eliminating the size of the abatement offered to properties located elsewhere. Moving towards a location-specific subsidy of this sort would allow the City to increase the impact of the tax incentive without increasing the total funding allocated to the program; not only would the higher rate likely encourage more full utilization of the funding that has already been allocated to the program, but the roofs that are subsidized would be located in areas where they confer greater societal value. The paper proceeds as follows. Part I reviews the benefits and costs associated with green roofs and explains why it is appropriate to incentivize green roof installations on private property. Part II details the origins of the green roof tax abatement and its disappointing performance to date. Part III argues that a location-specific tax incentive could more effectively stimulate green roof development. Part IV describes the City’s limited authority over tax policy and presents legal pathways to implement our proposed reform. Part V concludes. Importantly, the proposal outlined here is but one piece of the puzzle; we do not believe that a location-specific tax incentive would, on its own, be enough to bring about an optimal number of green roofs. Instead, we hope that this proposal might be part of a bundle of policies – including expansion of an existing green roof grant program as well as new education and outreach initiatives – that aim to convert the City’s roofs to more sustainable uses.