New York construction unions, anxious to keep their members employed as building in the city slows, are exploring starting a fund to help finance real estate projects.
Ed Malloy, President of the Building and Construction Trades Council, says the unions may put $100 million of pension fund money into a fund that would fund various construction projects. However, he said the unions would seek matching funds from the city and the state to create a fund of $300 million. A proposal will be sent to government officials next year.
“As the days go on you hear about more projects with financial problems and we really want to do something to help,” said Mr. Malloy.
The unions are already negotiating with contractors in an effort to lower labor costs by up to 25%. Louis Coletti, chief executive of the Building Trades Employers’ Association, which represents contractors, estimated that labor accounts for 50% to 60% of a construction job’s cost. Union workers earn an average of $60 to $70 hour.
The hope is that lower labor costs will bring down the cost of total construction enough to make financing easier to obtain when banks begin lending again.
Construction unions may finance building projects