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New York City's Dirty 10,000 Get Paid To Clean Up

One percent of the city's buildings spew more soot than all its cars. Now New York has motivated banks to lend to landlords so they can clean up.

In America's largest city, buildings pollute more than cars. It's not a matter of numbers though, it's a matter of clean fuel, or the lack of it.

Just one percent of buildings in New York still burn heavy forms of heating oil, but those 10,000 polluters spew more soot than all the vehicle traffic in the whole city. "Upgrading these buildings to cleaner heating fuel is the single largest step New Yorkers can take to solve local air pollution,” Fred Krupp, president of Environmental Defense Fund, said in a statement.

The city is taking action with a program called NYC Clean Heat, announced today. Last year, NYC began a phase out of the worst fuels, but this new plan launches creative financing to speed up the process, so building owners will be able to, and may even want to make the switch sooner.

The city partnered with banks, real estate developers and nonprofit groups to structure plans to fund $100 million in boiler conversions and offer other resources like technical consulting to help the process along. “By phasing out heavy heating oils, we are closer to achieving our PlaNYC goal for the cleanest air of any major U.S. city," said Mayor Bloomberg as he touted a new target to reduce soot pollution by 50 percent by 2013, something he estimates will save 120 lives and preventing 300 asthma-related hospital visits.

The NYC-based EDF launched a campaign three years ago to cut soot pollution from buildings with a detailed report and set of police recommendations: “The Bottom of the Barrel” squarely pointing a finger at one culprit in particular: Number 6 heating oil.

It's heavier, cheaper and dirtier than other options for building boilers. Number 6 sends out black exhaust with loads of remaining particles that coat the city in grime and infect the lungs of all who breath it. The EDF estimates 3,000 people die each year from lung disease related to this pollution. (For sticklers out there: It's not just Number 6. Number 4 oil is a little better, but sill bad).

To give you a sense of how dirty this slop is, consider this: Four apartments using Number 6 oil are about as dirty as a delivery truck. To be exact, switching from Number 6 heating oil to natural gas for a 200-unit apartment building would be the environmental equivalent of taking 45 delivery trucks off the road. Switching to Number 2 oil or natural gas could cut residual pollution by over 90 percent.

Switching is no easy task though, and due to where these boilers are in low-income buildings it would mean rent increases to be passed on to tenants if a landlord had to pony up the coin to swap out the old clunker. Conversions can cost up to $50,000 and the cleaner fuel, though more efficient, can cost about 10-30 percent more. Many of the 10,000 building owners say they can't afford it.

To overcome those financial barriers for landlords and make this a more carrot than stick solution, the City government put up $5 million to motivate banks like Chase, Deutsche Bank and Citi to offer up big financing. City money goes to a loss-reserve fund so banks take on less risk lending over $90 million to property owners. The result is an "affordable market rate" loan fund for landlord to do the right thing, and a city initiative with support of nonprofit groups like the EDF to help on the implementation. Carrot, carrot and then the stick of a looming ban on Number 6 oil coming in 2015, and Number 4 in 2030.

EDF hailed the NYC Clean Heat plan as an "innovative collaboration between New York City, the environmental community, leading banks, the real estate community and energy providers."

Think of it as the building-sized equivalent of phasing out incandescent lightbulbs. Except here, it will only affect a few hyper-polluters in the pocket book while helping everyone's lungs citywide. And the hyper-polluters get help in the pocketbook to make doing the right thing a little easier.

Photos via Environmental Defense Fund.

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