NYC Construction Outlook for 2025: More Housing, Stronger Unions
Construction in New York is projected to hit $115 billion in 2025, with much of that going toward housing projects. We need unions working on those buildings.
A new report on the prospects for New York’s 2025 construction industry makes clear that New York City developers should be relying on construction unions more than ever. The report, a compilation of data from the American Institute of Architects, the Financial Times, GlobalData, and LinkedIn, illustrates how union strengths will be paramount for builders next year.
The Report Summary: Housing is King
Overall the report says the future looks good for builders worldwide. “The construction industry stands at a pivotal juncture as we look ahead to 2025. Despite facing a complex landscape marked by both challenges and opportunities, the sector is poised for growth.” Indeed, several industry watchdogs are predicting that construction in the city will reach $115 billion in 2025, up 32% from pre-pandemic years.
Despite this growth, a combination of global and local developments have had an especially large impact on the shape of New York City’s construction future.
The change in America’s work culture following the pandemic has been profoundly impactful here. And the continued influx of inexperienced labor into the construction workforce has weakened the industry’s ability to respond. But thanks to New York City construction unions, the city has a reliable resource to help fix those problems.
“The [non-union] construction industry faces a persistent labor shortage, driven by a lack of skilled workers.”
Office Space Needs are Way Down
One result of the pandemic is that many workers and employers found out that working from home was often just as productive as commuting to an office every day. As a result, many offices in New York, which emptied out due to the pandemic, remain empty today. According to Colliers, the city's office vacancy rate is holding steady at a whopping 17.9%, which is nearly double the pre-pandemic rate. That’s almost 10 million square feet of un-used office space.
Though the report cites some sectors like healthcare and tech that may experience a little construction investment here, it states that overall commercial office construction is expected to remain down while the city figures out how it will go forward with a new urban working/living standard.
Affordable Housing Is On The Up
The bright ray of sunshine in this assessment is housing, particularly affordable housing. New York has had an affordable housing crisis for a long time which has worsened over the past several years. But New York has successfully passed key legislative changes that will help accelerate the construction of middle-class homes here. The recent extension of the deadline for builders to complete their 421-a projects and the big budget agreements reached by the New York City and State legislatures to fund more affordable housing are two examples.
Affordable housing is a critical issue to our construction unions. First, it affects the union members directly as many of them are exactly the type of working-class people being priced out of living in the city. Many now must commute hours a day from surrounding locations to get to jobs that start before 7:00 AM. One union construction worker coming to his worksite in Brooklyn from New Jersey said, “Most days it’s a two-hour commute each way. It’s very frustrating. And this is a tiring job as it is. So when I get home I have very little left for my family. Living closer to work would be wonderful. But the rents here are outrageous.”
Second, unions have been a vigorous combatant in the fight for more affordable housing. Recently Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York, joined the mayor Eric Adams to announce a partnership to raise hundreds of millions of dollars to help incentivize new projects. The mayor said, “We are gonna build it by union workers, we’re gonna make it affordable for working class people in the city, and we’re gonna use our resources, such as land and subsidies to make this marriage happen.”
Experience Needed
Another landmine issue in the new report is the quality of labor in the marketplace. The report says, “The construction industry faces a persistent labor shortage, driven by a lack of skilled workers.” This assessment is an acknowledgement of the growth of non-union contractors in our market, who have no recorded training or experience requirements for their candidates. Unions, on the other hand, require the completion of years-long apprenticeships, hundreds of hours of classroom training, and annual safety training.
Also, union workers enjoy a living wage, health benefits, job security, and more, benefits which many non-unions workers do not receive. All these securities add up to make union members more comfortable, safer and better workers. This is why there is no better trained or better performing crew than a union crew. As the mayor said, these are the men and women we want building our city.
The new report on the construction industry points to some bright spots in New York, which will only be bright if developers rely on union contractors to do the job.
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