Building leverage: The labor groups that shape NYC’s skyline

One might expect a union representing New York construction workers to broadly support a plan to add 800,000 homes in the state. But when it comes to Gov. Kathy Hochul’s proposal to do just that, one of the city’s largest construction unions is more concerned about its leverage — or lack thereof.

In February, the New York City District Council of Carpenters warned that Hochul’s housing plan could jeopardize one of the most effective ways for unions “to force powerful developers to provide good jobs and benefits.” The group was referring to a provision that would allow developers to sidestep zoning rules if localities failed to meet certain housing growth targets. 

The union was not alone in its concern.

“A lot of the local groups and organizations are objecting to the fact that the state will be able to overcome whatever their local concerns are,” said Lou Coletti, head of the Building Trades Employers Association, a group that represents construction managers.

A key way that construction unions and other groups influence development in the city is through the land use process, pressuring local City Council members to make their approval contingent on a developer promising to hire their workers. When it comes to statewide policy, a lack of full-throated support from organized labor can amount to a death knell. 

While some major construction groups have voiced support for her housing plan, Hochul has not managed to mobilize them, said Democratic political consultant George Arzt.

“If you are doing a great crusade such as the governor is doing on her major housing program, you need surround-sound support for the program,” he said. 

To better understand the role construction organizations can play in real estate development, The Real Deal took a look at five of the city’s most powerful trade groups and the various ways they advance their interests.

Building and Construction Trades Council
The team player 

In November 2019, the Building and Construction Trades Council and the Real Estate Board of New York reached a truce. After years of tension — culminating in a highly publicized fight over the use of nonunion labor at Hudson Yards — the pair agreed to support each other when their interests aligned. 

That agreement guides how the BCTC, an umbrella organization that represents more than 100,000 tradespeople in the city across 15 local affiliates including the District Council of Carpenters, positions itself publicly on real estate-related issues.   

“We’ve come to a point where we recognize that the relationship is really a symbiotic relationship,” said Gary LaBarbera, who heads both the city and state chapters of the BCTC.

In some cases, that may translate to sitting out a fight. 

When the 421a property tax break expired in 2016, LaBarbera sparred openly with REBNY as his members demanded that developers who received the incentive pay construction workers prevailing wages. But when it expired again last summer, LaBarbera largely stayed out of debate over the program’s future.  

“We certainly stepped back on it,” he said. “My sense is, the old concept of 421a is just a no-go with the legislature.”

Affiliates of his organization, however, have been more than willing to enter the fray. The New York City District Council of Carpenters has opposed attempts to revive the tax break on the grounds that it must include prevailing wage requirements.  

LaBarbera said that the emergence of voices from the local unions does not diminish his role with the BCTC, which advocates on their behalf. He said he supports autonomy among the local affiliates and has encouraged them to be vocal on projects and policy issues that matter to their members. 

“It is more impactful that elected officials — decision-makers — are not just hearing from me alone,” he said. “I’m not an egotistical guy. I want all their voices to be heard.”

When unified, those voices can be loud. According to City & State, the BCTC donated nearly $1.9 million to Gov. Kathy Hochul’s campaign last year, more than any other labor group in the state. 

“I think when Gary is on board, you see a more coherent, comprehensive approach,” Arzt said. “When you have individual groups, it is sort of splintered.”

District Council of Carpenters
The wild card  

The New York District Council of Carpenters often finds itself at odds with the development community — and, at times, its fellow tradespeople. 

In addition to opposing the revival of 421a, the union has pushed back against attempts to extend a key deadline for projects that qualified under the now-expired program.

The union is still under court supervision as part of a 30-year-old settlement with federal prosecutors over corruption and ties to organized crime. But the group has been working toward independence, and in recent years has become more publicly vocal on real estate development and policy issues.  

The group protested a rezoning in the Throggs Neck section of the Bronx that would pave the way for four buildings with 348 apartments. The developers of the project had reached agreements to use 32BJ SEIU building service workers and Local 79 laborers, but they did not commit to hiring union carpenters. 

Local City Council member Marjorie Velazquez cited this lack of commitment to the carpenters’ union in her initial opposition to the project. After Mayor Eric Adams and City Council Speaker Adrienne Adams intervened and the developers pledged to hire union carpenters for a portion of the project, Velazquez reversed her position, as did the District Council of Carpenters.

“I think we’ve proven to be a pretty consequential force,” said one source in the union, adding that the carpenters are hopeful that Velazquez’s insistence about hiring union labor “will be the paradigm going forward.”

The union similarly opposed One45, a 917-unit project in Harlem, until it cut a deal with developer Bruce Teitelbaum. That project was ultimately killed by local Council member Kristin Jordan Richardson, but Teitelbaum has since revived an amended version of it.

The carpenters plan to spend $500,000 ahead of the June 2023 primaries, according to City & State, and plan to target Jordan Richardson’s seat by backing a challenger.

The union wants to be “a significant, if not the most significant force in land use policy in the city,” the source said.  

Local 79
The middleman 

Local 79, a laborers’ union that is part of the Mason Tenders District Council, has become an increasingly vocal proponent of housing development in the city. It supported the Innovation QNS project in Astoria, the Throggs Neck rezoning and One45. It also backed a smaller project in Brooklyn that was canceled in light of opposition from the local City Council member.  

There is a major, obvious reason the union has been more publicly vocal about supporting such projects: It’s starting to get more work in the affordable housing market. 

“It’s no secret, when it comes to residential, that’s where we struggle in market share,” LaBarbera said of union labor.

Local 79 has been cutting deals with developers to secure work on these projects. The first of these deals was with L+M Partners in 2020; it included wage cuts and allowing a higher percentage of workers in lower-paid positions on the projects.  

Chaz Rynkiewicz, a senior official at Local 79 and the Mason Tenders District Council, said the union tries to “bridge the gap” between developers and progressive politicians. It will push for affordability levels that go beyond the city’s Mandatory Inclusionary Housing program, but also believes that it’s better to move forward with a less-affordable housing project than allow it to die because the developers would not budge. 

“MIH is nice, but we definitely want to see more than MIH,” Rynkiewicz said. “Even though we are working with developers, we’re strongly pushing developers to do the maximum affordable as possible.”

32BJ SEIU
The preordained 

32BJ SEIU is the country’s largest union representing building workers. The group periodically gets into public spats with landlords over contract terms, as it did most recently with property owners in the Bronx. 

32BJ champions large-scale residential development because its members are almost always assured work: Projects that receive $1 million or more in city funding and contain 120 or more apartments must pay building service workers prevailing wages. 

The group regularly aligns with REBNY on policy issues, including Gov. Hochul’s proposed replacement to 421a. While it is broadly supportive of the governor’s housing plan, the union’s leadership has voiced concerns similar to those of the carpenters: It wants lawmakers to include wage requirements in cases where developers are able to override local zoning rules. 

“Trying to create more housing without fair wage and labor standards will just erode the foundation that working class affordability is built on,” 32BJ President Manny Pastreich told the Daily News. “We can and must do both: improve and expedite the path to building more affordable housing, while making sure that family-sustaining wages are a part of that process.”

But this sort of angling by multiple groups stands in the way of large-scale proposals to address the state’s housing crisis, argues Kathy Wylde, president and CEO of the Partnership for New York City, a nonprofit co-chaired by Tishman Speyer CEO Rob Speyer that represents some of the city’s most powerful business executives.

“The problem we have in meeting the housing crisis is that if every interest group is trying to get their interests satisfied in a housing plan, we end up with a Rubik’s cube,” Wylde said. “There’s got to be a point at which we say we can’t go with the interests of each individual group.”

Hotel Trades Council
The strategist

Last year, the New York Hotel Trades Council added “gaming” to its name in a nod to the ongoing competition for three downstate casino licenses. The union has not publicly supported a particular casino proposal, but any winning bid would almost certainly involve its members. 

The union’s former leadership, however, does have a few horses in the race. A consulting firm led by Peter Ward, the union’s former leader, represents the Genting Group, which operates a casino at the Aqueduct Race Track in Queens and, according to Politico, is considered a favorite for one of the licenses. He also represents Bally’s, which has proposed a casino on former President Donald Trump’s golf course in the Bronx. Neal Kwatra, a former political director for the union is working on both proposals, according to the site. 

The union has played a key role in the city’s land use policy and pushed officials to ramp up enforcement against illegal short-term rentals. In December 2021, the City Council approved legislation supported by the Hotel Trades Council that requires developers to obtain a special permit before moving forward with new hotel projects. Special permits must go through the city’s Uniform Land Use Review Procedure, a months-long process that culminates in a vote by the City Council. 

The HTC’s support for the restrictions was viewed as a way for the group to curb the proliferation of nonunion hotels. Because City Council members now have the final say over a project, the politically influential union could push them to make their approval conditional on the developer agreeing not to oppose a union organizing drive. 

In 2021, the ​​Housing Our Neighbors with Dignity Act was passed, authorizing New York state to finance the purchase and conversion of hotels and offices on behalf of state-approved nonprofits. The measure flopped, failing to lead to any building conversions, in part because it comes with steep affordability requirements, including that at least 50 percent of the converted units be set aside for residents who experienced homelessness immediately before moving in. 

The newly renamed Hotel and Gaming Trades Council, which supported the legislation, was given veto power over conversions financed by it. Any owner hoping to convert a hotel needs to get written approval from the employees’ collective bargaining representative in order to move forward. That provision reportedly sank a proposed conversion of the Paramount Hotel to affordable housing.

“HTC is playing chess while everyone else is playing checkers,” Chris Coffey, a Democratic political strategist, told the New York Times. “They’re just operating on a higher playing field.”