Construction Costs in New York City: A Moment of Opportunity

There is no question about the underlying importance to New York City's economy of the nearly $24 billion unionized construction industry. There is also no question but that high costs in every sphere--land, labor, materials, logistics, regulatory burdens--combined with the enduring recession and lack of financing have brought the industry to a critical moment in which serious reform may be imminent because it is so necessary.

With the expiration on June 30, 2011 of 23 crucial labor contracts (along with six others throughout the year)--at a time of serious unemployment among building trade union members--"Construction Costs in New York City: A Moment of Opportunity" provides an in-depth analysis of the structure and costs of a notably secretive industry.

This report is not focused on wages and benefits, though they are discussed. It is about work rules and practices that impede productivity--and that are driving union developers and contractors to choose open and merit shops rather than union contracts. Open shops (union and nonunion) have grown from just 15 percent of the market in the 1970s to about 40 percent now and are 20-30 percent less expensive than union shops, Most of this differential could be bridged by enforcing a fully productive 8-hour workday earning an 8-hour paycheck.

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