New York construction unions have reached an agreement to cut the wages of members working on a massive residential project on the far West Side by 20%, sources said. The project, which will include more than 500 units of affordable housing, is being developed by the Gotham Organization Inc.
Meanwhile, Forest City Ratner Cos. has applied to the unions for similar wage cuts as it prepares to begin construction of its first residential tower at the long-planned Atlantic Yards project in Brooklyn. There, at least 50% of the approximately 400 residential units will be affordable.
The unions, in conjunction with contractors, began cutting wages and changing work rules for certain projects back in 2009 as part of an effort to lower construction costs and jumpstart projects brought to a standstill by the recession. It was just such an agreement that was a critical element to moving forward with Forest City's Frank Gehry-designed residential tower downtown. At one point, the developer had proposed capping the 76-story tower at roughly half its height, but that never happened. It opened earlier this year.
Typically, the union offers concessions that lower labor costs by 10% to 15%. However, unions make steeper cuts for developers building affordable housing or residential projects in the outer boroughs because they tend to command lower sale prices and rents. Additionally, non-union labor has made greater inroads into those sectors than in major commercial projects in Manhattan.