Some Essential New York Construction Projects Pausing Amid Safety Concerns and Rising Debts

The number of construction jobs that continue in the New York City metro area, despite the stop order on non-essential work, with government records shows over 1,000 projects still in progress when CISLeads reported on this topic at the start of the month. The map shown in that April 6th publication has ballooned to over 4,000open projects. Key among these are affordable housing ventures, a stipulation that has kept many residential projects going despite the shutdown. However, a growing trend that’s beginning to crop up is that, for safety’s sake, several affordable housing contracts are either slowing or pausing in the wake of the ongoing COVID-19 crisis. There is also a growing concern that delays are going to cause rising debt problems for construction firms as lenders eye upcoming deadlines.

Why Are These Essential Construction Projects Still Shutting Down? 

Affordable housing is considered an essential part of construction, where other forms of residential construction are not, because it serves an already existing, but growing, demand for housing at a time of financial crisis. Before the COVID-19 outbreak, below-market-priced housing remained a primary concern for New Yorkers and found its way into the blueprints of many a project, as you can see in these four posts from the past year: (1) Making Every Floor Count (2)  Manhasset Square Redevelopment, (3) Bronx Point Complex and (4) Transforming Flushing. This need can only increase in a time of economic anxiety and massive shutdowns to contain the spread of coronavirus. 

The fact that some of even these essential projects are pausing indefinitely is an understandable reason for concern. Around the 12th of April, it was reported that at least 28 affordable housing ventures have volunteered to shut down. Ron Moelis, CEO of L+M Development Partners, stated that protecting his workers from undue exposure was at the height of his concerns, and it was for their safety that he chose to pause his firm’s tasks. Leaders at the New York Building Congress noted that the struggle is similar for many companies in the field. One must decide between finished sites that provide much-needed resources to the people of New York and the health and protection of their laborers, and a balance must be maintained. 

As deadlines continue to loom for some of these projects, with lenders keeping a close eye, some experts have speculated a potential danger for the construction industry in general. While Bloomberg reports that most banks acknowledge that now is not the time to turn antagonistic about debts, questions of timely return of investment remain. 

How Are the Remaining Open Projects Handling The Workload in Pandemic Conditions?

It is important to note that the earlier-mentioned reporting suggested around 30 stopped projects, but this is 30 out of more than 300 still open. Related Corporate Properties, for instance, is one such firm with projects still running, most notably Hudson Yards, and their example seems to be common. A representative from the firm reported that the site has fewer than 12 workers on site, all of whom submit to regular screenings for fever, wear protective gear, and sanitize the work area regularly. A staff of this size may seem untenable to the casual onlooker, but it is the price of progress while maintaining safe social distancing and cleanliness at this time. 

Whether more firms will press toward their deadlines or choose to pause for safety’s sake remain to be seen. The landscape for essential construction work will likely be ever-changing in the coming weeks. 

 

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