New York’s All-Electric Buildings Act Put on Hold

New York’s effort to require all-electric systems in new construction has entered a period of uncertainty following the state’s recent agreement to delay implementation of the “All-Electric Buildings Act.” The law, enacted in 2023, phases out natural gas and other fossil-fuel equipment in newly constructed buildings starting in 2026 for structures seven stories or less, and in 2029 for all new buildings statewide.

These requirements were intended to push the building sector toward electrification in support of the state’s climate-emissions targets. For the retail and commercial development community, the coming ban originally meant that new projects would need to abandon gas infrastructure entirely and rely on all-electric heating and cooling. That trajectory shifted in November, when the state agreed in federal court to pause enforcement of the new rules while a lawsuit challenging the law proceeds in the U.S. Court of Appeals for the Second Circuit.

Trade groups and labor unions have argued that the federal “Energy Policy and Conservation Act” preempts state-level restrictions on gas appliances. Under the court stipulation, New York will not enforce the all-electric construction requirements until the appellate judges issue a decision, effectively creating a moratorium on the 2026 implementation date. State officials emphasized that the pause reflects litigation strategy rather than a retreat from the policy.

For the retail real estate sector, the delay offers temporary breathing room but does not eliminate long-term regulatory risk. Developers with near-term projects may be able to proceed under existing gas-friendly building codes, but they must do so understanding that the law remains on the books and could be reinstated with relatively short notice once litigation concludes. In the months ahead, retail property owners, developers, and tenants should continue monitoring the appellate litigation and any corresponding updates.

 Other Legislative Highlights in New York:

• Organized Retail Crime: The FY2025 State Budget included new measures to combat retail theft, such as tougher penalties for assaulting retail workers, authority for prosecutors to aggregate stolen goods across multiple stores and a ban on selling stolen items online. It also allocated $40.2 million for new “Retail Theft Teams” and created a $5 million small business security tax credit.
• Retail Worker Safety: The Retail Worker Safety Act now requires large employers to provide panic buttons or alarms and adopt workplace violence-prevention plans.
• Commercial Property & Retail Policy: Lawmakers continue to debate a proposed commercial vacancy tax on storefronts empty for more than six months in large cities. Other active proposals include expanding wine sales to grocery stores, ongoing cannabis licensing reforms and legislation that would require commercial landlords to mitigate damages after a tenant defaults.

 For more information contact gpp@icsc.com.