As New York state continues on its mission to meet clean energy goals, the real estate industry in the Lower Hudson Valley is embracing a new mindset — with hopes of reducing carbon emissions.

Years ago, eco-friendly features were considered optional when designing buildings, and were often passed over in favor of budget constraints, said Elsa Mullin, sustainability director at Skanska, a global property management company with offices in Queens, Manhattan, New Jersey and Connecticut.

“Even designs on sustainability and energy-efficiency weren’t the driving factor of an increasing budget.” Mullin recalled. “Oftentimes it would be cut.”

As state and local regulations drive more building owners and landlords to be mindful of the carbon footprint of their buildings, reducing emissions has become an essential element. And demands of decarbonization and sustainability features have not only prompted developers and architects to pivot, they’re expanding their teams from a few sustainability experts to a full department. These teams are incorporating ecology into designs by conducting energy consumption studies, using more sustainable materials and equipment, and more.

Julia Gisewite, chief sustainability officer at New York City-based Turner Construction, has seen how the industry’s evolved since the 1990s.

“We’re in a whole new world now,” she said.

With these goals and new trends in mind, real estate professionals and sustainability experts shared their insights May 15 at a real estate conference on climate and resiliency organized by the Westchester County Association. Read on for takeaways from this year’s event.

NY’s lofty energy goals require compliance from developers

New York state has set twin goals to attain 70% reliance on renewable energy by 2030 and zero carbon emissions by 2040. New York City is to enforce “one of the most ambitious plans for reducing emissions in the nation,” Local Law 97, which requires buildings that are more than 25,000 square feet to cut emissions.

Gisewite said the new clean energy goals and regulations have changed the business. To achieve Turner Construction’s net-zero emission commitment by 2040, they need to account for details from the type of equipment to use for transportation to the selection of building materials. They’ve also received more requests from clients on energy consumption studies and engineering assessments, and they’re required to disclose climate risks.

“Set aside client demand, from compliance perspective, things we have to do is no longer a nice-to-have but a must-do,” Gisewite said.

Ashley Ley, vice president of planning and land development at AKRF, said many federal projects currently require details on gas emissions while local projects must comply with new regulations geared toward climate factors such as flooding.

Mullin said she has seen more clients request using sustainable materials and prioritize balancing budget. Her team would set a clear vision on sustainability early on the project and discuss cost and design to integrate sustainability.

Energy efficiency a high priority for NY developers

While the efforts of reducing carbon emission are underway, some developers realized the limits to what they can achieve in building designs and switched to building giant electricity transmission projects that they believe would compensate the energy those buildings use.

That was the cause that led Luke Falk, chief operating officer at energyRe, to develop a $11 billion infrastructure project to deliver 7.5 million megawatt-hours of emissions-free energy downstate and into New York City.

“No matter how hard you try within the real estate assets, there are limits to what you can achieve in terms of demand reduction and energy efficiency,” Falk said at the event. “We looked at the grid and we say how can we solve the real estate problem by changing the compensation of the energy that these building use in the first instance.”

He said the project would not only benefit local communities with clean energy but a boost in economic development, workforce and environmental justices. It promised to create 8,300 jobs, reduce about 20% harmful air pollutants annually, avoid 49 million tons of carbon emissions and more.

Westchester real estate market poised to adapt to new challenges

According to Westchester County Association president and CEO Michael N. Romita, new chapters have been added to the county’s real estate policy playbook — with a heightened focus on climate action, sustainability and coastal resiliency.

“The Policy Playbook is a go-to guide, a real estate resource,” for agents, developers and stakeholders, Romita said.

According to a 2023 survey by CBRE on investors about how climate change shapes the real estate landscape, 90% of responders said they were actively pushing their real estate portfolios to reduce greenhouse gas emissions and reduce resource waste.

Westchester County Executive George Latimer is optimistic the real estate industry will stay resilient and adapt to the new challenges.

“The flexibility of the real estate industry has been a dynamic source of success and wealth of the county,” he said at the event. “We stay alert, we stay flexible, we adjust to the time. If we do that, the Westchester that we turn over to the next generation will be stronger.

“That’s because of what you’re doing, and we hope to be a good partner in that process.”