Can New York Create Affordable Housing That’s Also Environmentally Sustainable?

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At the moment of silence during Sunday’s People’s Climate March, a deep hush washed over Sixth Avenue, symbolizing a growing, worldwide commitment to fighting climate change. Yet the moment also recalled the aftermath of the city’s most recent climate catastrophe, Superstorm Sandy, when Manhattan’s mighty skyline was for several days stunned into an eerie stillness by nature’s ire.

But on Sunday, the city put a more positive spin on the connection between the global environmental struggle and the local disaster of Sandy. Mayor Bill de Blasio tried to make good on his campaign vow to address the underlying climate-change problems Sandy exposed, starting with a retooling of the city’s buildings.

The “One City, Built to Last” plan aims to slash building-based greenhouse gas emissions and boost the economy simultaneously. Overall, the plan promises to bring “$8.5 billion in energy cost-savings over ten years.” The long-term goal is to cut total emissions by 80 percent by 2050. Buildings contribute a large majority of local carbon pollution, and the plan would “cut energy use across all building sectors on average by at least 60 percent from 2005 levels and switch to renewable fuel sources.”

Many of the changes outlined in the 110-page blueprint are basic. In contrast to the sexy tech-driven solutions like electric cars and flashy rooftop photovoltaics, the de Blasio administration and City Council members are focusing on nuts-and-bolts efficiency projects to expand “green collar” job sectors.

The plan would in the immediate term “generate approximately 3,500 new jobs in construction and energy services,” according to Amy Spitalnick, a spokesperson for the mayor’s office. Modest numbers, but the main goal is putting the city’s infrastructure on a greener and more equitable development path.

Matt Ryan, executive director of the advocacy group ALIGN-NY, tells The Nation that the plan reflects a “need to think about dealing with climate change in a way that not only addresses the root causes, such as carbon emissions, but also addresses jobs and economic issues that are related.”

Some of the proposed initiatives include a “retrofit accelerator” program for an estimated 20,000 private buildings, about 40 percent of them public housing or rent stabilized. Public school buildings, firehouses, hospitals, police stations and homeless shelters would get energy-saving retrofits and lighting upgrades, and fixed up with clean technologies. The city would install solar panels “on more than 300 city buildings, generating 100MW of energy over the next decade.” The plan would link green building projects to the broader agenda of controlling housing costs: less energy consumption means lower utility bills, which “will make it easier for people to afford to live in New York City” and “invest in other capital upgrades to improve the quality of our housing stock.”

But the plan doesn’t spell out exactly how the city will push the private sector to invest in efficiency and renewables. The report focuses on voluntary programs, and the administration has for now avoided proposing strict mandates for carbon reductions, relying instead on seeding environmental business incentives (though mandates may be “triggered” later if needed). The administration advocates, for example, providing “green grants” that tie affordable-housing goals with eco-friendly construction, “which would fund efficiency upgrades in exchange for regulatory agreements to preserve affordability.”

Nonetheless, progressive groups are wary of leaving too much of the plan to market forces. Though some landlords may respond to green incentives because it makes business sense, Ryan says, given the ambitious emissions targets, “There is no way we’re going to move fast enough through a voluntary system, to meet the urgency of the climate crisis.”

Some progressive labor advocates fear that the workforce initiatives may not be ambitious enough, either. The Center for an Urban Future (CUF), which has pushed the administration to expand jobs programs for disadvantaged youth, warns that although green jobs could benefit struggling young workers, they need more comprehensive job training and placement services.

“There are really very few youth centered programs that have strong links to employers…. It’s especially true for construction, weatherization and maintenance jobs that really require a lot of skills,” says CUF Research Associate Christian González-Rivera. Without a major effort by the city “to engage employers and youth workforce agencies in building the kinds of relationships that will really get young people on track to getting these new jobs…young people will continue to be left behind, no matter how many jobs are created.”

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But the plan does appear to aim beyond the usual “shovel ready” construction projects that are the easiest to fund in big infrastructure initiatives. According to Spitalnick, the city plans to work with the Department of Education to train some high school students in energy auditing, and to “train more than 7,000 building staff to upgrade their skills.”

The report cites as a model the pioneering “Green Supers” program led by the building service workers’ union, SEIU 32BJ, which has trained and certified about 2,000 members on maintenance skills specializing in maximizing efficiency for lighting, ventilation and other operations. In contrast to one-off retrofitting jobs, Ryan says, Green Supers graduates “are going to be in a building for a long time. They’re going to have to learn technology as that changes year by year and continue to develop those skills as things change.”

The city also faces the challenge of balancing environmental goals and housing needs, and making the two objectives complement each other. Poor New Yorkers face skyrocketing private-housing rents, along with shoddy public housing (a huge repair backlog has accumulated in recent years, ranging from mold to leaky roofs). These are more immediate housing issues, perhaps, than green retrofitting. However, climate justice can address ecological and economic sustainability simultaneously. After all, the areas most damaged by Sandy were those already besieged by poverty and, by extension, a lack of environmental resiliency when disaster strikes.

Sunday’s moment of silence spoke directly to that challenge—harmonizing the movements for economic equity and for greener, healthier neighborhoods. The city that boasts of leading the world on carbon cutting is also a leader in social inequality; it is now tasked with rebuilding itself both to a higher environmental standard and to a more level economic landscape.

That may seem like a tall order, and New Yorkers are famously cynical, but this city has a history of harboring impossible dreams. Anything short of total idealism at this point would condemn future generations to a disaster of our own making.


Dan Garodnick Prepares to Push Midtown East Into 21st Century

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Midtown East, once the gold standard of business districts, has aged. Its towering skyscrapers, having once tested the boundaries of engineering, are struggling to retain top tenants. And its transportation infrastructure is buckling from a population that nearly doubles during the workweek.

In an effort to ensure the area maintains its competitive edge, Mayor Bill de Blasio, like his predecessor, has put forth a planning strategy. A central player in the process to develop a thorough proposal is City Council Member Dan Garodnick, who, along with Manhattan Borough President Gale Brewer, was tapped in May to head the Midtown East Steering Committee.

Since 2006, Mr. Garodnick has represented Midtown East, as well as Murray Hill, the Upper East Side and Stuyvesant Town, a 11,200-unit development that comprises one-sixth of Manhattan’s District 4. Mr. Garodnick is no stranger to controversial real estate dealings; he’s waging a battle to secure Stuyvesant Town and Peter Cooper Village’s future affordability as stakeholders spar over the fate of the mega-complex. Commercial Observer visited the council member at his legislative office at 250 Broadway to speak with him about Midtown East’s fate, the city’s economic development strategy and his own priorities for his final years representing Manhattan’s East Side.

Commercial Observer: What are the key differences between former Mayor Bloomberg’s plan to rezone Midtown East and Mayor de Blasio’s?

Mr. Garodnick: This is what we’re going to be studying. There were a lot of concerns about the plan that was proposed last year, that it was not complete. That it didn’t put the proper emphasis on infrastructure and public realm improvements. That the pricing for air rights was fixed and did not evolve based on time or geography. As a result, we are taking a fresh look at all of those questions and trying to make some recommendations going forward. I think fundamentally, there is a recognition that the zoning regulations in Midtown East are out-of-date and that they have made much of our commercial office space stuck in an era where it does not belong.

Are there major differences between working with Messrs. Bloomberg and de Blasio as a member of the City Council? 

Yes. And on these big real estate questions, I have found [Mr. de Blasio] to be very collaborative and engaged.

Did you not feel that way about Mr. Bloomberg? 

The Midtown East rezoning proposal was presented to us without the significant deliberation among stakeholders that I think it deserved. And on Stuyvesant Town, [Mr. Bloomberg] had indicated that he believed it was a purely private transaction. Here, Mayor de Blasio has asked me and the Borough President of Manhattan to chair a task force to study the Midtown East rezoning and propose something in the relative near term. He is actively engaged in supporting our efforts to deliver a good outcome in Stuyvesant Town. It’s positive engagement, which helps.

What would you say about the fact that neighborhoods like the Flatiron District, Dumbo and Williamsburg are becoming hot places for new businesses? Google, for example, moved to Chelsea instead of Midtown. 

I think it’s great for New York City to have growing pockets of economic activity. At the same time, we want to support Midtown East as a vibrant commercial district that is unmatched anywhere in the city.

What do you think are the most compelling reasons for businesses to locate in Midtown East?

Great transit connections and a concentration of commercial activity that makes it a vibrant place. Those are the biggest reasons. I think that the best attraction Midtown East has is access. When we plan our commercial districts, we should be planning them around our best transit hubs.

What do you think are the key characteristics of a 21st century city? 

I think top-quality mass transit is at the top of the list. If you can move your residents around the city quickly, safely and effectively, it opens the door to commercial activity everywhere.

Going off of that, what is the status of East Side Access at Grand Central? 

The [completion] date will be between 2021 and 2023.

You, along with Manhattan Borough President Gale Brewer, are leading the Midtown East Steering Committee. In July, Ms. Brewer said that the “critical conversation” on the area will start soon. Has that conversation begun? 

We have put together the players who will be part of the task force. It’s about 10 people. They represent the various stakeholders in the area from real estate to landmarking to community representatives. We’re having our first formal meeting in the next couple of weeks.

Who is on the steering committee? 

There are representatives from Community Board 5, Community Board 6, the Multi-board Task Force, the Municipal Arts Society, the Regional Plan Association, REBNY, Grand Central Partnership, East Midtown Partnership and representatives on behalf of the Landmarks Conservancy and Historic Districts Council and Build Up NY.

Are there any updates on city planning or open space in your district? 

We just opened a park on 50th Street between Park and Madison [Avenues], which was done in connection with the East Side Access work. I think it’s a good model for us in finding pockets of opportunity for the public to have some open space in a very dense urban area. My district has the least open space of any district in the city, so finding ways to improve access to parks and other public spaces is critical.

You are the chair of the Committee on Economic Development. What sort of legislation related to economic development do you hope will be passed in the coming year? 

Issues like [Midtown East rezoning are] central to the questions of economic development for New York City. We can’t let our commercial office stock fall behind and we need to continue to be competitive. We’re also looking at questions of workforce development, protecting our manufacturing sector, considering housing affordability questions for potential workers and office affordability questions for businesses that are small but want to grow.

How do you think Kyle Kimball is doing as the president of the New York City Economic Development Corporation? 

He is a very capable guy who is working to create opportunities in a number of different areas. We have a good working relationship.

“I think fundamentally, there is a recognition that the zoning regulations in Midtown East are out-of-date and that they have made much of our commercial office space stuck in an era where it does not belong.”

This is your final City Council term. What do you want to accomplish now that your tenure is starting to wind down? 

In my own area, there are two very significant projects that are pending and unresolved. One of them is the Midtown East rezoning and the other is the anticipated sale of Stuyvesant Town and Peter Cooper Village. We have been fighting the good fight over there for years, but expect to have another bite at the apple in setting that property on a more stable and affordable course into the future.

You’re a resident of Peter Cooper Village. Is there an emotional stake in seeing this through? 

I have known many of the people who live in that community for a very long time. And I understand the challenges they are facing because of rent pressures or being on the receiving end of aggressive landlord behavior in the past. I’m determined to get it right for them.

What type of aggressive landlord behavior was there? 

The owner rained legal notices on many long-time residents, claiming that they were not using their rent-stabilized apartment as a primary residence, as required by law. It was an aggressive and transparent effort to get people out of their affordable units, to be able to jack up rents to pay for significant debts. Many of these claims proved to be frivolous or false.

Do you know what’s next for you? Do you think you’ll run for office again? 

I don’t know. It’s too early for me to be able to answer. Let’s revisit that question in two and a half or three years. Maybe I’ll have a better idea then.



New York gets $1.9bn for storm protection

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State governor Andrew Cuomo said that the funding from the Federal Transit Administration (FTA) will support the his goal of improving storm resiliency and building back better in the aftermath of major storms.

“Superstorm Sandy taught us the importance of preparing for the worst and the need to reimagine our state to meet the challenges of a changing climate,” he said. “Over the past few years we’ve focused on everything from storm-proofing homes and electrical stations to protecting subway entrances and other vital infrastructure from the effects of major flooding. This funding will ensure that our State has the resources it needs to continue building back stronger and better than ever before.”

Of the US$1.915bn in funding from the Federal Transit Administration, approximately US$1.6bn supports projects managed by the Metropolitan Transportation Authority and approximately US$212m supports projects managed by the Port Authority of New York & New Jersey. The New York City Department of Transportation is also expected to approximately US$200m.

Largest of the funding awards is US$617m for the mitigation of flooding in rail yards.  Superstorm Sandy’s tidal surge inundated yards throughout the system, damaging power and communications systems, switches, signals and track, sometimes flooding into tunnels to further damage assets. The project will protect 10 rail yards in flood-prone areas with measures to meet or exceed the 100-year design standard, improving perimeter protection, drainage improvements and pumping. The yards are in Manhattan, Brooklyn and Queens and support the entire New York City subway system with facilities for repair, cleaning, maintenance, restoration and storage of thousands of subway cars.

The funding also provides US$301m for the protection of street-level openings. The MTA has identified more than 500 openings serving stations in Lower Manhattan alone that allow water into the subway system. These necessary openings, such as stairwells, elevators, escalators, sidewalk vents and manholes – through which millions of gallons of salt water entered the system during Sandy – will receive fixed or deployable emergency flood covers.

Other projects include protective measures for substations, provision of pumping capacity, flood resiliency for critical bus depots, elevating and waterproofing power and communications equipment and flood protection improvements to secure the World Trade Center site.

MTA chairman and CEO Thomas Prendergast said: “With each passing day, the MTA puts Superstorm Sandy further behind us as we restore service and repair our infrastructure. But we also know that similar events are ahead, so we are building back better, making our transportation network stronger, more resistant to major storms and thus more resilient. This is a new way of thinking at the MTA and one which must become a permanent feature of how we plan the future of the transportation system that is the backbone of our regional and state economy.”

Port Authority Executive Director Pat Foye said: “Today’s FTA Tier 3 awards allow us to move forward on critical resiliency projects at the WTC Transportation Hub and Moynihan Station, both vitally important to the regional transportation network and the New York State economy.”


De Blasio Unveils Ambitious Plan To Cut NYC Greenhouse Gas Emissions By 80%

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Today, on the day of the People’s Climate March, Mayor Bill de Blasio announced a plan for NYC to reduce greenhouse gas emissions by 80% (over 2005 levels) by 2050, starting with huge efforts to improve the energy efficiency of public and private buildings. De Blasio said, “Climate change is an existential threat to New Yorkers and our planet. Acting now is nothing short of a moral imperative.”

De Blasio added, “New York City must continue to set the pace and provide the bold leadership that’s needed—and becoming the world’s largest city to commit to an 80 percent reduction in emissions by 2050 is central to that commitment. By retrofitting all of our public buildings with significant energy use in the next ten years, we’re leading by example; and by partnering with the private sector, we’ll reduce emissions and improve efficiency while generating billions in savings and creating thousands of jobs for New Yorkers who need it most.”

The plan is called One City, Built to Last: Transforming New York City’s Buildings for a Low-Carbon Future, and the mayor’s press release includes these notes:

Nearly three quarters of New York City’s greenhouse gas emissions come from energy used to heat, cool, and power buildings, making building retrofits a central component of any plan to dramatically reduce emissions. The City is poised to make direct investments to increase the efficiency of its public buildings, including schools and public housing, reducing the government’s contribution to climate change and generating operational savings for New York City taxpayers. Every single city-owned building with any significant energy use – approximately 3,000 buildings – will be retrofitted within the next ten years, by 2025, with interim goals along the way. The City will also spur private building owners to invest in efficiency upgrades, setting ambitious interim targets and incentives to catalyze voluntary reductions, and implementing mandates that trigger if interim reduction targets are not met – leading to retrofits in tens of thousands of private-owned buildings. High energy costs take a disproportionate toll on lower-income residents who typically live in less-efficient buildings and must pay a higher share of their income for energy. The City’s plan aims to protect New Yorkers from rising utility bills while reducing emissions and poor air quality and stimulating demand for retrofitting and renewable energy jobs This plan is projected to reduce greenhouse gas emissions by an additional 3.4 million metric tons a year by 2025 – an additional 10 percent reduction in building-based greenhouse gas emissions, equivalent to taking 715,000 vehicles off of the road. This will also generate cost-savings across the public and private sectors of more than $1.4 billion a year by 2025, leading to $8.5 billion in cumulative energy cost-savings over ten years. It’s anticipated that approximately 3,500 new jobs in construction and energy services will be created, in addition to the training of more than 7,000 building staff to upgrade their skills.

According to the NY Times (which points out that the plan is being “announced before the start of the United Nations Climate Summit on Tuesday), “Such ambitions, though, will come at a significant near-term price: At least $1 billion of its capital funding alone will be devoted to enhancing the city-owned buildings over the next decade, the administration said, excluding the cost of the private building alterations and other changes. Though the city’s many competing financial interests mean there are typically few spending guarantees, particularly on projects intended to span decades, officials insist the money will be incorporated in its 10-year capital plan, to be released early next year.” On the other hand, the projected cost savings!

And some environmental groups told the Times that the plan was pretty good, with the Natural Resources Defense Council’s saying it “could be the most far-reaching one of its kind.”


New York City scaling up food waste-to-energy program

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The Big Apple is planning an expansion of its anaerobic digester (AD) pilot program launched last summer at the Newton Creek Wastewater Treatment Plant in Greenpoint.

 The purpose of the one-year pilot was to test the logistics of source separating food waste, collection of the waste, preprocessing by Waste Management and injection into the wastewater treatment plant (WTTP) digesters, according to Anthony Fiore, director of New York City’s Department of Environmental Protection Office of Energy. “The volume of source separated organics was too small during this initial pilot in order to determine benefits or costs of treating food waste through this pathway,” he said.

 The densely populated city’s DEP hopes to prioritize increasing recycling rates and investing in clean, affordable renewable energy using the knowledge gained from the pilot program expansion. “There is a strong nexus between these two initiatives when it comes to food waste and wastewater treatment,” Fiore said.

 This nexus is brought to life with the colocation of AD at the Newton WWTP. The DEP works with the NYC Department of Sanitation, the Department of Education and Waste Management to source separate organic waste (SSO) and remove residual contamination of the feedstock. This pretreatment creates a bioslurry for injection into the digesters. Fiore describes Waste Management’s part in preprocessing the food scraps as unique and crucial to seamless integration in the AD process. “The Waste Management system will provide specifications that are important to the digestion process such as pH, alkalinity, total suspended solids, and carbanaceous biological oxygen demand,” Fiore said.

 From April 2013 to May 2014, the facility processed between 1.5 and 2 tons of SSO a day. This winter, the project will be scaled up over a three-year period beginning at 50 tons per day to 250 tons per day. “This volume of SSO will allow us to better understand the ability to source separate waste from both residential and commercial sectors, the efficiency of processing the material into a consistent bioslurry and the costs and benefits of treating food waste in anaerobic digesters,” Fiore said.

 In the expansion plans, a bump in waste volume is accompanied by a new use for the created biogas. “The biogas that is produced at the plant today is used as fuel in boilers for both process and building heating needs, which accounts for about 40 percent of the gas that is produced,” Fiore said.

 Fiore added that the remaining 60 percent is flared. In order to put the remaining biogas to use, the DEP is working on a biogas-to-grid energy project. “The DEP is working with National Grid to put that flared gas to beneficial use by cleaning it to pipeline-quality gas and injecting it into the local natural gas distribution system for community use,” Fiore said.

 The residual gas produced from just the domestic sludge is estimated to heat 2,300 homes a day. Even more is possible at capacity if the demonstration project if successful. “We believe we have enough capacity at the Newtown Creek WWTP to handle 500 tons per day of SSO, or about eight percent of the city’s total organic waste load,” Fiore said. “All told, this would result in enough heat for approximately 5,100 homes per day and the avoidance of 90,000 metric tons of greenhouse gas emission—landfill, diversion, vehicle miles traveled, offsetting carbon intensive sources of natural gas and reduction in flaring—equivalent to removing approximately 19,000 vehicles from the road.”

 Overall the project’s emphasis is on increasing the knowledge of the systems capabilities and resulting effects. The project is teaming up with the New York State Research and Development Authority as well as other academic institutions to develop a monitoring and testing program. The program will address operational parameters, codigestion benefits both operationally and financially, as well as additional parameters like digester chemistry, rheology and centrate quality among others.

 Fiore believes that biogas serves as a good source of renewable energy, because in cities like New York, millions of tons of discarded food have potential as fuel. “Renewable natural gas produced from digestion serves as a model of how to affordably integrate clean, renewable energy into dense urban environments by leveraging existing assets.”


Work stops at Atlantic Yards as partners fight over cost

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Work stopped Tuesday on the first residential building at Atlantic Yards in Brooklyn as a dispute over the tower’s rising costs spilled into public view.

The decision by the general contractor, a subsidiary of Swedish group Skanska AB, to halt work on the project came even as its partners threatened to take legal action if the company went through with furloughing employees at a factory where pieces of the building are assembled, according to a letter obtained by Capital.

In the letter sent Tuesday to Richard Kennedy, chief operating officer of Skanska USA, a lawyer representing a subsidiary of developer Forest City Enterprises said any such action would violate their corporate agreement. The companies are partners in a joint venture that runs the factory.

“By disregarding the terms of the LLC Agreement and proceeding without Board approval after you obviously came to the conclusion that such approval was required, you will be taking actions that are not in good faith and constitute a willful breach of the LLC Agreement,” the attorney, Harold Weinberger, wrote in the letter. “In the event that you do so, our client intends to hold both Skanska Modular LLC and you personally responsible for the significant damage these actions will cause.”



The shutdown, first reported by the Wall Street Journal and Crain’s New York, is the result of a disagreement over cost overruns for work on the tower, which is called B2 and located next to the Barclays Center arena. The building, which is to rise 32 stories, was actually championed as being inexpensive to construct due to its Lego-like design. Much of the work is done in a Brooklyn Navy Yard warehouse where modular units are assembled—toilets, sinks and all—before each section is hauled to the construction site and hoisted into place.

Both Skanska and Forest City agreed the unexpected costs are the result of manufacturing delays. But each firm points fingers at the other, saying they are not to blame and should not have to pay. Skanska  claims the modules have technological problems, something that would contractually obligate the developer to pay, and that there are unresolved “commercial” issue as well.

“It finally got to the point where we said, ‘OK, this project is requiring from us an investment that is much more significant than anything we ever anticipated or agreed to,” Kennedy said Wednesday afternoon.

He said the letter sent by Weinberger, which arrived around 7 p.m. Tuesday after a stop-work order was issued, was “factually wrong” and was responded to on Wednesday. “It’s completely irresponsible to suggest that Skanska Modular or I personally should be held responsible” for work stopping at the Navy Yard factory, Kennedy said.

But Forest City says the contractor is at fault. Spokesman Jonathan Rosen said the costs are the result of “Skanska’s own failures and missteps” and that the company signed a management agreement that guaranteed a fixed price for their work. “Now faced with over-runs, they are employing a typical strategy to try to weasel out of that obligation,” Rosen said in a statement.

“We are extremely disappointed that Skanska has unilaterally and wrongfully stopped work at our factory—unnecessarily putting the livelihoods of hundreds of employees at risk and causing unneeded delays in a critical project for New York City’s future,” he said. “Forest City remains deeply committed to completing B2 and meeting our commitments to the people of Brooklyn … We intend to pursue all of our rights and remedies under the law to enforce our agreement and resume work at the factory.”



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When Mayor Bill de Blasio formally unveiled his comprehensive affordable housing plan back in early May, the rattling and drilling of construction equipment in downtown Brooklyn nearly drowned out his voice.

While the clamor on this picturesque spring day was not actually coming from the site highlighted by the mayor in his remarks—250 Ashland Place, the future location of a residential tower, 50 percent of which will comprise affordable units— it nonetheless provided a fitting soundtrack for the announcement, a centerpiece of de Blasio’s agenda.

The broad strokes of the mayor’s plan had been public knowledge for some time—the administration’s aim would be to create or preserve 200,000 affordable units across the five boroughs within 10 years—but beyond some previously undisclosed details, part of what made the event noteworthy was which union leaders had come out to demonstrate their support for the new initiative.

Gary LaBarbera, the president of the Building and Construction Trades Council of Greater New York (BCTC), looked on stoically from a corner of one of the seated areas at the press conference, along with several other representatives from the various construction trades he represents. While LaBarbera’s involvement with 250 Ashland, a project being built largely by his members, was a mere footnote on this particular morning, the fact that his unions would be erecting the tower signifies a major milestone for the continuing viability of the trades he represents.

Ten years ago, it was almost inconceivable that the building trades would even be interested in working on a New York City affordable housing project. Affordable housing developers have found it difficult to justify paying union wages for construction of housing units at below market rate prices. As a result, the building trades have historically declined such projects in favor of higher-paying luxury residential buildings and commercial high-rises.

Mayor de Blasio alluded to this past dynamic in his prepared remarks. “We always look for every opportunity to work with union labor,” he said. “We also are trying to create affordable housing with real tight financial dynamics, and our job is to create it on an unprecedented level. So it really will take a lot of cooperation and creativity in that relationship, but I think we’ve signaled to the building trades that we want to maximize their involvement—Gary LaBarbera is here, and we appreciate his support— but we also know that we have to build these units, and we have to make the financial realities work.”

The shifting landscape of the construction industry has propelled labor leaders like LaBarbera to re-examine their old orthodoxies. In an era where some of the building trades have seen their membership erode and their influence wane, the sudden interest in the affordable housing market—spearheaded by the de Blasio administration—could help unions recapture some of the market share of new construction they have been losing to nonunion firms, who traditionally offer a cheaper alternative to commercial and residential developers eager to cut costs.

“The Building Trades in New York and other parts of the country have grown much more flexible in their attempts to regain market share,” said Ed Ott, former president of the New York City Central Labor Council. “One of the strengths of the building trades has traditionally been that they understood market share. But over the last quarter-century, every time there has been a boom in the construction industry, they have come out of it with less of the share. Things have to change. They have a grasp on that— and, yes, they are working to do things in new ways.”

The exact size of New York City’s various construction unions is notoriously difficult to determine. The federal government mandates that every labor organization file a financial report that includes information on the size of its membership, but experts say that the accuracy of these forms as it pertains to membership data is debatable, as many times the union official responsible for filling out the form claims a bigger boost in membership than the union has in fact attained. In order to ascertain an accurate portrait of the state of unionized construction in the city, it is thus preferable to take the estimates compiled by outside experts and weigh them against the figures provided by insiders like LaBarbera.

Whichever assessments one relies upon, one thing is indisputable: In plunging the nation’s economy to lows not seen in decades, the Great Recession contributed to a sharp downturn in construction spending and employment.

The New York Building Congress, a membership organization dedicated to promoting the real estate industry, found in its annual report for 2011 that construction spending in New York City had declined 20 percent from 2008 (when the financial sector began to collapse) to 2009. Over that time period the industry lost roughly 11,000 jobs, from a high of 136,000 in the third quarter of 2008 to 101,200 in the first quarter of 2011, when it bottomed out.

“Those formerly ubiquitous small- to medium-size projects, which fed the building boom, have virtually dried up, and a lot of hardworking men and women are now out of work as a result,” wrote Building Congress President Richard Anderson in the report.

That same year the flagging real estate industry finally began to show a pulse, although nonunion construction companies helped provide the reviving charge.

These nonunion firms, “open shops,” as they are commonly known within the industry, had largely cornered the market on constructing affordable housing, as well as smaller buildings and hotels previously of little interest to the trades. Now, however, they were beginning to make headway into segments of the business the building trades had formerly monopolized, especially low- to midrise residential developments.

The niche carved out by the open shops already marked a significant change in the industry. Twenty years earlier it was virtually unthinkable that a construction project—residential, commercial or otherwise—could break ground without the involvement of the building trades. Not only were there deep personal allegiances to unions among those in the real estate community, but unionized construction was—and remains—the fastest, most efficient way to build in New York City. Moreover, nonunion shops typically lack the sophistication to construct the type of major commercial high-rises the trades specialize in, and as a rule are less diligent in ensuring workplace safety.

Still, in recent years these facts have failed to dissuade developers from utilizing nonunion construction. Prominent examples include the Toll Brothers’ second Northside Piers tower in Williamsburg; Lightstone’s housing complex adjacent to the Gowanus Canal; and the City Point project in downtown Brooklyn, which is using partially nonunion labor.

The decision of developers to hire open shops boils down to simple economics, experts say.

A 2011 study conducted by Julia Vitullo-Martin, a senior fellow at the Center for Urban Innovation at the Regional Planning Association (RPA), estimated that union development carries a 20 to 30 percent higher premium than nonunion work. When Vitullo-Martin compared union and nonunion costs for constructing 20,000-square-foot residential buildings in both Brooklyn and Manhattan, she found the price tag was notably less for the work if it were done nonunion. Using $750 per square foot as the average sale price for an apartment in Brooklyn, Vitullo-Martin determined that if a development company were to build a condominium nonunion in the borough, it would reap a profit of just under 30 percent, whereas if it employed unionized labor, the project would lose money. Comparable arithmetic holds for Manhattan, where Vitullo-Martin, assuming an average sale price of $1,000 per square foot for apartments in the borough, calculated that developers building nonunion would realize a profit of just under 22 percent; with union construction, they would just break even.

Louis Coletti, the president of the Building Trades Employers’ Association (BTEA), New York City’s biggest trade organization representing contractors, said that the price disparity tilted in nonunion labor’s favor notwithstanding, the big difference in today’s construction climate is that its present economic realities are forcing some of the trades to become less choosy about the projects they take on. In the past, he suggested, one might see contractors walk off jobs that employed nonunion labor, but with the rise of open shops, contractors have no choice but to accept a new normal.

“What we have happening in New York City is that those trades that have made changes to be competitive, if their contractors are awarded that work and it’s a nonunion job, they’re going to work, and that’s a huge change in the New York City construction market,” Coletti said. “Unless we find a way to continue making changes in those markets, the BTEA contractors will find ways to compete in those markets, because we have a responsibility to those employees, to those stockholders, to keep our businesses viable. We want to do that by building union for all trades. But make no mistake about it, that’s a direction that you’re going to see BTEA contractors taking in the future. There are continued discussions that go on about how to address this. I’m hopeful that all the trades make the appropriate adjustments that will lead us to increasing our market share.”

LaBarbera insists the encroachment of open shops is no greater threat to the trades than it has been in recent decades. While construction of smaller residential buildings and boutique hotels is an areas where nonunion builders have done well at the expense of union labor, this hardly represents a new trend, he notes, as over the last 20 to 25 years the trades have consistently struggled in securing contracts for such projects.

“We would venture to say that probably 75 percent of all construction activity in New York City is unionized, so to me that is a very, very strong market share, especially coming into this boom,” LaBarbera said. “Currently we have almost 100 percent employment across the board in the building trades, 130,000 unionized construction workers working in the city of New York.”

“I’m not denying there is a sector of the construction industry in New York City that is nonunion, that has existed for 40 or 50 years,” LaBarbera continued. “Fact of the matter is, when the tide rises, all boats rise with the tide. The construction market right now is so busy that there are more residential projects within this kind of bailiwick, smaller projects that are being built nonunion. Not that percentages have changed; it’s because there is more and more work.”

Ruth Milkman, a sociologist of labor and labor movements at the CUNY Graduate Center and academic director of the Joseph S. Murphy Institute for Worker Education and Labor Studies, publishes an annual “State of the Unions” for New York City, New York State and the United States. Her most recent reports show that compared with the nation as a whole, organized labor in New York City has begun to rebound from its recession lows, despite its continued erosion in some sectors. Based on data from the Current Population Survey, which is conducted by the U.S. Census Bureau, Milkman ascertained that 22.4 percent of all wage and salary workers in New York City were union members in 2012–13, nearly the same as in the prior year but considerably fewer than the prerecession figure of 24.6 percent. Losses over the past decade have mostly come from the private sector, where the building trades have historically been dominant.

Nonetheless, a number of the building trades unions reported increased membership between 2012 and 2013, Milkman told City & State, citing new data from her forthcoming 2014 “State of the Unions” report—specifically among iron workers, journeymen and allied trades, plumbers and pipe fitters, and carpenters.

“It’s a very bifurcated industry,” Milkman said. “Heavy commercial [construction] is still pretty highly unionized in many cases, smaller buildings less so. One thing we’ve seen is there has been a slight increase in union density in New York City and state in the last year. Commercial construction is one driver of that, but it’s hard to pin it down exactly. Density is affected by the economy in general.”

PLA Panacea?

The grim circumstances of the recession forced the building trades to compromise in the form of “project labor agreements” (PLAs), agreements that determine wages, benefits and other provisions—such as encouraging minority representation—which the construction unions, contractors and subcontractors negotiate in lieu of a collective bargaining agreement to ensure that an entire project remains union.

As the economy went south in 2009, BCTC struck deals on several PLAs for both private and public projects intended as temporary salves to the city’s suddenly unstable construction environment. For developers and builders, PLAs represented a positive step toward streamlining the convoluted organizational structure of some of the trades. As Vitullo-Martin wrote in RPA’s 2011 report, “Applied projectwide, these agreements take a first step toward consistency in the intricate assortment of pay arrangements, holidays, work rules, and other customs.”

Developers privately concede that the fragmented bargaining structure of the Building Trades (which encompasses 49 affiliated local unions) can not only make negotiations difficult at times, especially when some of the locals make demands not in sync with the rest of the trades; it also contributes to the high price tag and potential inefficiency of working with unionized labor.

“The PLAs have proved very successful for some developers,” Vitullo-Martin said. “PLAs aren’t cure-alls, but there is no cure-all in labor and construction issues—none. What a PLA can do is handle some of the more onerous work rules, which is what developers and builders really complain about more than the high cost of salaries and benefits.”

In her report, Vitullo-Martin notes that the various unions within the Building Trades have unpredictable availability, with no standardized workday and “various subgroups adhering to their own seemingly random assortment of holidays.” She pointed to the Economic Recovery PLA negotiated by the Building Trades and BTEA, which included a “Schedule B” of union concessions negotiated by each local affiliate.

“From the standpoint of the industry, the built-in inefficiencies come from the fact that each negotiation is separate; they’re done by separate trade associations, different subcontractor associations—there’s no coordinating or negotiating,” said one real estate developer who asked not to be named so as not to anger the Building Trades union. “If everyone has different policies, how can you build a building?”

Disputing the notion that the trades are fractured or factionalized, LaBarbera prefers instead to characterize them as “specialized.” Construction by its nature is a specialized industry, he says, and nuance often gets lost with the hiring of nonunion firms, which gravitate toward more industrialstrength, straightforward projects rather than buildings that require a lot of variation or intricate design. PLAs allow the trades to maintain their hold on such projects, he noted.

“We have been able, even in those types of buildings, to mitigate [cost] and get those buildings built using PLAs; that’s one of the things we have used as a tool for now to be more competitive,” LaBarbera said. “Once you start going up to larger construction or more complicated floors, more architectural buildings, that’s where the nonunions don’t have the skills or the capacity to do that.”

One PLA that has allowed LaBarbera and the Building Trades to stay competitive, while also achieving some cost savings, is the “Outer Borough” agreement covering residential development outside of Manhattan that LaBarbera helped negotiate in 2010, which required that each local affiliate provide the equivalent of a 20 percent reduction in payroll costs, taken from wages and benefits.

Still, LaBarbera and Coletti agree that PLAs are not a panacea in bridging the cost gap between union and nonunion construction but rather a temporary solution to keep construction projects in the pipeline.

“A PLA, in the interim, serves the purpose, for the most part, holistically, so we’ve been able to do that,” LaBarbera said. “Fundamentally, I don’t believe that PLAs should replace the collective bargaining process. I firmly believe as a trade unionist that collective bargaining should address the economics of the marketplace, and it should be done through the collective bargaining process between a local union and the multi-employer association.”

Recapturing the Market

When The Wall Street Journal reported in August that the Building Trades had forged a coalition with housing activists in an attempt to get a piece of the expected influx of affordable housing construction, many New York City labor experts were pleasantly surprised, for two reasons: because the Building Trades had never previously shown much interest in affordable housing construction; and because the coalition with housing activists continued a recent trend of the Building Trades working collaboratively with other organizations to help create leverage to get more work for their members.

The Journal reported that the unions would join housing activists in calling for 50 percent of all new housing units to be set aside for lower- and middle-income residents, while also offering to accept wages 40 percent lower than typical union pay on affordable housing projects, and fostering a new class of workers, drawn from local communities, to help construct the houses. The latter part of that agreement is what has many individuals in the labor and government spheres excited for the opportunity it could provide for people of color to gain some upward mobility within the Building Trades. Though they have been historically slow to integrate their membership, the trades have made great strides in this area in recent years, thanks in part to new apprenticeship programs. Black representation in union construction is higher than it has been in years (21.3 percent), and is comparable to black representation in the overall workforce (23.3 percent), according to an analysis conducted by the Economic Policy Institute, a nonpartisan think tank.

“What I think is interesting here is this actually does not seem to be an effort started by City Hall but an effort between community organizations who want more affordable housing, and those who build housing but want prevailing wages, to get together and say, ‘Do we have some good ideas between ourselves?’ ” said state Sen. Liz Krueger, herself a former housing advocate. “It’s a pretty big step for labor to say, ‘We’re willing to explore a lower wage rate for specific kinds of housing.’ I think the potential also for using internships and onthe-job training to help bring more people from the city and of color into construction labor in a unionized way would also be a fabulous win for the city.”

Not everyone is convinced the mayor’s approach will ultimately align with the priorities set by the coalition of housing activists and Building Trades. Immediately after de Blasio expressed his desire to work with labor at the announcement of his affordable housing plan, Alicia Glen, the deputy mayor for housing and economic development, equivocated on that very topic, saying, “Different kinds of folks are going to participate in that labor pool.”

“Too early to tell, but I’m not convinced [de Blasio] needs [the Building Trades],” said one prominent city real estate source, who declined to be named so as not to upset the mayor. “I think he wants them because Bill, he’s a tried and true believer in unions, but at the end of the day this is about economics. Bottom line is, if you try to force Building Trades costs into the construction of affordable housing, what you’re gonna get is no housing.”

The Building Trades’ newfound interest in affordable housing construction, LaBarbera explains, stems from a political sea change that came about with the end of the Bloomberg era and the dawn of the de Blasio administration, and capitalizes on the current opportunities available for growth.

“It’s really been a bit of a fight with prior administrations because the whole affordable housing world has become a handful of housing developers that got rich off the backs of low-wage workers, and that scenario can’t continue,” LaBarbera said. “We honestly believed that with this mayor that behavior wouldn’t continue. He’s a progressive mayor that we think we can actually have an opportunity to create a win-win outcome with. In the past we were really pushed out because the affordable housing industry became very, very closed. Only certain developers got certain [incentives]. … A lot of the financing deals were done [with developers] directly. There weren’t RFPs. We’ve been trying to expose all that in the past.”

Before the trades learn if de Blasio will live up to their high expectations for his mayoralty, LaBarbera will first have to convince his members—80 percent of whom he claims are already on board—to approve the new wage rate proposal. (LaBarbera does not need unanimous approval from his members to move forward.) Jack Kittle, the political director for the District Council 9 International Union of Painters and Allied Trades, has already expressed skepticism that top construction talent can be attracted at such a low rate. Ed Ott, the former Central Labor Council president, added that operating engineers, whom experts affirm are notoriously intransigent in making union concessions in project labor deals, would present another hurdle to the proposal’s adoption.

“Operating engineers have always been the most resistant to change, because in New York they had no reason to change; what they were doing was working for them. It’s a skill that’s not easy to replace,” Ott said. “They’re the institutional memory in the industry, so they’ve always felt like they don’t have to change. Hard to think that [the Building Trades] would try to do [the new wage rate] without everybody being in.”

One additional incentive for his members to support the affordable housing agreement is the opportunity for LaBarbera and the trades to beat the nonunion builders at their own game. LaBarbera dismissed the view that nonunion construction pulls from a different, more diverse talent pool than union shops, repeatedly insisting that nonunion shops “exploit” minority construction workers because of their unsafe conditions, inferior construction product and, most important, substandard wages. As evidence, he pointed to a recent Daily News report about a group of nonunion workers hired to build the Sugar Hill affordable housing development in Harlem who were paid far below the prevailing wage required on the project.

“We can essentially create a pipeline of work for this workforce at a rate lower than our current prevailing wage rate but higher than what they’re currently making now, so it creates more money for them, medical coverage for them. … There’s pension security, and they can ultimately become a journeyman worker all over the five boroughs,” LaBarbera said.

Coletti believes the Building Trades dipping their feet in the affordable housing pool, combined with union and nonunion shops working pretty much at capacity, could bring about a tipping point for the construction industry as a whole, for better or worse.

“The only thing that has really saved us has been the strength of the market,” Coletti said. “I’ve never seen the set of conditions that we have now, which is the market is so hot. The nonunion world is at their capacity; they can’t handle more work. So is the union market. We need people on both sides of the table. The next couple of years are going to be very, very interesting.”

Correction: An earlier version of this post incorrectly stated that Related hired a nonunion contractor to oversee construction of the Hudson Yards development in Manhattan. In fact, the entire project is being built union under a PLA.