Published: November 13, 2025
Source: JD Supra (All‑Electric Building Act to Challenge NY Developers and Contractors)
URL: https://www.jdsupra.com/legalnews/all-electric-building-act-to-challenge-4359839/
Summary
New York’s All‑Electric Building Act is a major shift for the construction industry. Beginning January 1, 2026, most new small and mid-size buildings must be all‑electric for space heating, hot water, and cooking. Larger buildings follow on January 1, 2029. For NYC contractors, developers, and trades, this is an operational challenge with real cost, schedule, and supply implications—and a chance to gain an edge by preparing now.
Key deadlines and scope
– Effective 1/1/26: New residential up to 7 stories; new commercial/industrial under 100,000 SF
– Effective 1/1/29: All larger buildings
– No grandfathering unless your permit is approved before the cutoff date
What changes technically
– Heating and hot water: Electric systems only (air‑source or water‑source heat pumps, or resistance)
– Cooking: No new gas service; use induction or other electric cooking appliances
– Gas infrastructure: No new gas service, reshaping MEP design, riser layouts, and central plants
Cost and schedule headwinds
– Upfront costs: Typical mid‑size multifamily projects may see 5–12% higher MEP and related costs due to heat pumps, larger electrical panels, and insulated distribution
– Labor and skills: Tight specialty trades and required upskilling for heat pumps and commissioning can pressure wages and schedules
– Utility coordination: Interconnection and capacity upgrades may bottleneck projects in high‑growth areas
– Permitting: Expect new DOB checklists, compliance documentation, and potential approval delays
– Supply chain: Heat pumps, switchgear, and breakers face longer lead times; late design changes can trigger redraws and value engineering rounds
Affordable housing impacts
– Thin margins in tax‑credit and supportive housing mean higher electrification costs can reduce unit counts or create financing gaps
– Monitor incentives and potential grants to keep projects viable
What leaders should do now
Owners and project executives
– Engage MEP engineers early to optimize electric system sizing and loads
– Start utility conversations immediately and submit early service requests
– Demand firm lead times and pricing validity windows from suppliers
– Upskill field and subs on heat pump installs, controls, and commissioning
– Use SAGE 300 CRE to track electrification cost codes, RFIs, and schedule risk
CFOs and controllers
– Run scenarios at 7%, 10%, and 15% higher MEP costs to stress‑test margin and cash flow
– Tighten change order processes; document utility delays and compliance costs thoroughly
– Track incentives, grants, and rebates that can offset electrification expenses
Project managers and estimators
– Update bid templates to include utility coordination, DOB reviews, commissioning, and long‑lead procurement
– Build realistic procurement schedules for heat pumps and switchgear
– Prequalify subs for electrification experience and commissioning capability
SAGE 300 CRE tips
– Add cost codes for electrification equipment, utility upgrades, and commissioning
– Capture utility correspondence, RFIs, and change orders tied to compliance
– Use dashboards and alerts for long‑lead items and budget variances
90‑day action plan
– Review your 2026–2029 pipeline for scope affected by the all‑electric mandate
– Map permit timelines to the cutoff dates; accelerate critical approvals
– Initiate pre‑application meetings with utilities for priority projects
– Launch crew and subcontractor training on heat pump systems and electric cooking rough‑ins
Bottom line
Treat the All‑Electric Building Act as a strategic pivot, not just another code hurdle. Firms that align design, procurement, utility coordination, and cost control now will protect margins and win work as the market transitions to all‑electric delivery.
Reference: JD Supra article on the All‑Electric Building Act: https://www.jdsupra.com/legalnews/all-electric-building-act-to-challenge-4359839/
