Category Archives: NY

Making Every Floor Count: City of New York Closes Mechanical Void Loophole

After approval by the city council on May 29, 2019, an amendment that stands to noticeably affect the New York City skyline, has been ratified. It comes in the form of an attempt to close a unique loophole in zoning laws that creates taller residential buildings with far less available living space. The Residential Tower Mechanical Voids Text Amendment imposes new regulations on the use of excessive mechanical voids in building construction.

What, Exactly, Are Mechanical Voids, and What Is the Problem? 

Before this amendment, mechanical voids of any kind did not count in the square footage of usable space in a zoning permit. The reason for this is that these voids usually make up floors for storing mechanical equipment for the building and mechanical bulkheads in the tops of some high-rise structures. In a residential space, these entire floors are not habitable and therefore do not count toward the square footage, hence the name “void.” The projected height of a building generally should not be largely different from the finished product. 

This is where the issue of excessive mechanical voids comes into play and what the amendment hopes to do away with in future projects, involving not only the size of singular voids but also how multiple close voids can be in relation to each other. The amendment seeks to address issues such as:

  • Too-tall buildings. With uninhabitable spaces in a high-rise building reaching and exceeding the equivalent of multiple habitable floors, the final structure is far higher than zoning would have otherwise allowed. This poses environmental changes to other parts of the city, such as longer shadows cast on parts of Central Park, as suggested by activists supporting stronger regulations. 
  • Inflated cost of living. These taller buildings in highly demanded corners of the city use these voids to reduce the amount of livable space on lower floors, meaning the available residences are higher up and ultimately cost more. As the discussion around affordable housing in the city of New York continues to rage, the closing of this loophole has become a necessary part of the discussion

Is The New Legislation Enough? What Are Critics Saying? 

While some hail this decision as an essential first step, others say the amendment is not enough. In some cases, this has already led to some slight alterations. For instance, the City of New York website notes that criticism did lead to some changes before the amendment’s final passage. Initially, the minimum allowable height of a mechanical void that would not be counted among usable space in zoning was 25 feet in height, raised to 30 feet to allow a more reasonable amount of space for mechanical equipment. By and large, criticisms come from both sides of the debate: 

  • Not strict enough, say some critics. Gale Brewer, President of the Manhattan Borough, believes the required distance between voids (before they are counted as zoned space) should be increased from 75 feet to 90 feet. City Councilman Ben Kallos suggested that the allowable size of unzoned space for individual voids should cap at 14 feet rather than 30 feet. 
  • Space is needed for growing energy trends. At a time when New York has committed itself to increasing energy efficiency and reducing its carbon footprint, lobbying groups like the Real Estate Board of New York insist that these limitations further limit developers’ ability to incorporate evolving technologies for lowering energy costs. Mechanical equipment, including ventilation systems and batteries, require space. The latter, especially, are growing larger all the time. 

As the debate continues and further restrictions are proposed at the state and local level, the discussion will only continue to evolve just as the city skyline does. For now, whether it reaches unforeseen heights or becomes more down-to-earth discourse remains to be seen. 

Schumer Hopes Legislation Can Jump-start Gateway Construction

This week New York Senator Chuck Schumer said he will propose legislation to push construction to start on the multi-billion dollar Gateway Tunnel and Portal Bridge Project. Speaking at an event of the Association for a Better New York, Schumer said his bill would allow New York and New Jersey to advance money to get shovel-ready construction projects started and be guaranteed reimbursement from the federal government when the U.S. Department of Transportation gives its final approval.

Schumer said “if DOT continues to withhold the new starts grants from Portal and the ROD [record of decision] for the Hudson tunnels” he and fellow members of Congress from New York and New Jersey would push this legislation and attach it to an appropriations bill or some other “must-pass legislation,” according to The Bond Buyer.

Right now, Schumer said, even if the states had the money to fund the projects ready to begin the $12.7 billion plan to upgrade the rail tunnel under the Hudson River, the local government won’t spend that money for fear of not getting back what they would be owed from the federal government.

Acknowledging that this legislation is not the “magic solution” to solving the problems plaguing the Gateway Project overnight, Schumer said “the time for waiting is over.”

NYC Construction Costs Are Highest in the Country But NY Building Congress CEO Says It’s Worth It

The numbers are out, and it’s no surprise—it is expensive to build in New York City. As a matter of fact, New York City has the highest construction costs in the country. And they just keep going up.

The New York Building Congress released its New York City Construction Costs 2019 Construction Outlook Update this week. Last year, the cost of construction in New York City rose 5 percent, compared to a 3 to 4 percent increase nationally. That is about the same increase as the year before and, overall, NYC remains the country’s most expensive major city to build in. The primary driving factors in construction expenses were the cost of land, materials and regulations, according to the report.

The top ranking is created by Class A office and retail building costs, which were significantly higher than any other sector. New York is actually behind Chicago in hotel construction costs, less expensive than Los Angeles for K-12 education, and ranked lower than Chicago and San Francisco for multi-family residential construction.

Despite the overall numbers, it’s worth it to work in New York City, according to Carlo A. Scissura, president and CEO of New York Building Congress.

“While the cost of construction is high, the rewards for doing business in New York have never been greater.”

Amazon’s HQ2 Could Mean Construction Boom in Long Island City

When Amazon announced it chose Long Island City as one of its two, new HQ2 locations, New York officials emphasized the new construction projects and infrastructure improvements that will come with Jeff Bezos’ multi-billion dollar company. According to the press release from NYC mayor Bill de Blasio’s office, the pending projects include:

  • Four million square feet of commercial space on Long Island City’s waterfront over the next 10 years, with expansion opportunities for up to eight million square feet over the next 15 years.
  • A 10,000 square-foot on site employment center
  • A new approximately 600-seat intermediate public school
  • A 3.5-acre waterfront esplanade and park

The construction is expected to create an average of 1300 direct construction jobs annually through 2033, according to city officials. Read the complete press release here.

According to Curbed New York, to fund local infrastructure—streets, sidewalks, open space, etc.—Amazon will utilize the city’s PILOT (payment in lieu of taxes) program, estimated to be $600 to $650 million over four decades. The details of how those funds will be allocated will be decided upon via community engagement, the ny.curbed.com article said.

NY’s MWBE Program Is Problematic, But What Is the Solution?

The current Minority and Women-Owned Business Enterprise (MWBE) program in New York State isn’t working as it was intended. It has created obstacles and difficulties for both general contractors and MWBEs. Proponents and critics can often agree on that. There is debate, however, about which part of the program is most problematic and to whom.

Are the 30 percent MWBE goals a burden on general contractors who say they can’t find qualified MWBEs to meet the quota and end up forced to hire a company that ends up too small or inexperienced to properly do the work or must file a waiver and delay the process?

Or is it more onerous on women and minority owned businesses who can’t get certification to qualify, saying the process is too difficult and the state needs to provide assistance to businesses trying to apply?

In 2014, Governor Andrew Cuomo increased the goal for using MWBE businesses on state contracts from 20 to 30 percent. That is the highest percentage in the nation. Under that current state law, MWBE goals only apply to state-funded contracts issued by state agencies and authorities. Cuomo pushed for expansion for 2019 that would have expanded the program to local contracts or any funded by the state. It also would have provided annual goals for specific minority groups. But those changes were not in the approved budget. As a matter of fact, the MWBE Article 15 program, scheduled to expire at the end of this year, was only extended for one year, instead of the previously expected five. That has some proponents of the program fearing it might be gone altogether soon.

The N.Y. State Senate is holding hearings “to examine the Minority and Women-Owned Business Enterprises program, and consider potential legislative solutions to create a more effective and efficient program to enhance New York’s business climate.”

People from both side of the issues have attended the hearings and testified to the difficulties with the program and proposed their ideas for a solution. Some suggest adjusting the goals by region, pointing out that demographic disparities from one area to another make a statewide mandate impractical.  Or as one person said at the hearing in Watertown, “Brooklyn and Watertown are not the same.”

Another issue creating problems, according to Crain’s New York Business, is that “unlike the largely white-owned incumbent construction firms, MWBEs are rarely unionized though they must pay prevailing wages on state-subsidized work.”

One area contractor says he doesn’t think MWBEs can find or know where to look for the jobs in many cases. He proposes general contractors find a way to help them know about projects out to bid, even if it costs them a little money to do it. Regular events designed to have GCs meet MWBEs rarely result in working relationships, he says.

The New York State Contract System (https://ny.newnycontracts.com/) website has a directory of certified businesses. It also has information to help businesses apply for certification, and on trainings and grant opportunities.

As the debate continues and 30 percent statewide goal remains—at least through the 2019 budget—the state senate will continue to listen to the industry’s issues with the program. The remaining hearings are:

September 26 at 2 p.m. Stage 14, Finger Lakes Community College, 3325 Marvin Sands Drive, Canandaigua. For more information, contact Kristin Frank at (518) 455-2366

October 16 at 11 a.m. Senate Hearing Room, 250 Broadway, 19th Floor, New York. For more information, contact Graham Wise at (518) 455-1765 or Anthony Capozzi (607) 773-8771.

Oral testimony is given by invitation only.

By Chris Colabella and Kara Yorio