By: The Real Deal Staff
Hello, let’s get into our last special edition on Somos with news at the intersection of real estate and policy:
Momentum builds for Gov. Kathy Hochul to tackle scaffold law reform.
Catching up with Department of Buildings Commissioner Ahmed Tigani at Somos.
In this edition we mention: Business Manager of Mason Tenders District Council David Bolger, New York State Association for Affordable Housing President and CEO Carlina Rivera, New York City Department of Buildings Commissioner Ahmed Tigani and others.
We Heard
Scaffold showdown: Is this the year New York finally tackles the scaffold law? Developers and lobbyists circulating at Somos see momentum building for long-sought reforms to the state’s liability statute, which builders blame for driving up insurance premiums and construction costs. They believe the issue could land on Gov. Kathy Hochul’s agenda next year.
The governor’s office is having exploratory conversations with housing interests and labor leaders on the possibility of pursuing reforms in the next legislative session, according to three people with knowledge of those discussions.
The Hochul administration has indicated that they are looking at the law as part of an effort to bring down insurance costs. It would build on reforms to auto insurance that were included in this year’s state budget. The governor is expected to lay out her policy agenda in January.
The scaffold law holds general contractors and property owners fully liable for gravity-related injuries on construction sites. New York is the only state that applies an absolute liability standard. Most states use a comparative liability standard, where a court determines who was at fault, reducing an employer’s liability if the employee’s own negligence contributed to the fall.
The Building Trades Employers’ Association, which represents general contractors, estimates that scaffold law-related insurance costs eat up 8 to 10 percent of New York development budgets. In states such as New Jersey, Massachusetts and Illinois, which use a comparative negligence standard, insurance accounts for just 2 to 4 percent, according to the trade group. The BTEA estimates that without the added costs associated with the scaffold law, New York developers could have built another 1,400 units of affordable housing in 2025.
Reforming the law could slash as much as $42,000 off the cost of building each apartment, according to estimates from the Citizens Budget Commission.
Lobbyists representing affordable housing interests see an opening for reform as Democrats look to deliver on affordability promises after Tuesday’s blue wave, with housing high on the list.
“We’re not getting ahead of ourselves, but we feel like there is high receptivity as part of an affordability agenda,” said one New York City lobbyist, who was not authorized to speak publicly on behalf of their clients.
But adjusting the law will mean navigating a raft of competing interests.
Construction unions have argued that changing the liability standard would erode worker safety. Gary LaBarbera, head of the city and state Building and Construction Trades Council chapters, has been a vocal critic of reform.
David Bolger, business manager of Mason Tenders District Council, told TRD Policy Pro that he recognizes that the law increases building costs, but currently opposes potential amendments. He stands by the law as a key worker protection by giving the construction workers he represents an additional avenue for compensation for certain injuries while on a job.
“We’re kind of between a rock and a hard place,” said Bolger. “I’d like to see costs reduced from my own contract, but I don’t want to see it at the expense of my workers’ rights.”
“You’ve got to prove to me it works out better for all of us,” added Bolger.
Labor’s price for backing off scaffold law reforms remains unclear. But the issue could become caught in negotiations over potential reforms to the 485x tax abatement.
Trial lawyers are also against reform, echoing unions’ warnings that changes to the scaffold law could weaken worker protections. The New York County Trial Lawyers Association and its statewide counterpart both oppose altering the statute.
Should the governor take up the issue, affordable housing groups are bracing for a fierce fight. That includes the New York State Association for Affordable Housing.
“It’s controversial. It’s going to be hard to do,” Carlina Rivera, the organization’s president and CEO, told Policy Pro. “There’s a lot of competing interests, all of them important, and there’s going to be a lot of negotiating and horse trading, to be honest.”
Policy Pro caught up with Department of Buildings Commissioner Ahmed Tigani at Somos. Here’s how he approaches the conference and what he’s been up to:
What brings you to Somos?
I’ll be having a conversation about how lending is influenced by the permitting process and suddenly walking by is someone who does lending construction. ‘Hey, Steve! Can you sit down?’ You could do that in New York, but it involves four assistants to organize the call. Somos stands out as one of the events where DOB has multiple irons in the fire, multiple topics and industries overlapping intersections that we need to be in conversation for and that we can give a lot of information on.
What’s your strategy for the gauntlet of events?
I think the way to do Somos, as I’ve learned, is you have to do it targeted. Some people come for a few days. I come in mid-Thursday. I leave early Saturday. I have a system. I just left a meeting — Puerto Rico’s government has been going through a series of construction permit reforms and we met with the head of their permitting office so I can see and learn what they’re doing from a technology perspective, from a policy perspective, how they’re set up versus us.
What can DOB learn from Puerto Rico’s use of AI in permitting?
They’re using AI tech to write scripts that is bringing together their different permitting workstreams under one dashboard that can communicate better between the applicants and the reviewers. They’re building tools for the reviewers that help them with the most mundane questions, helps them triage more capacity that will otherwise be used for more complex issues. Their permitting office is set up differently. But I think process and operationally, their emphasis on supporting their staff and giving them the tools to be able to support a central platform is something that myself and my other colleagues in government need to think about because we want the user to be able to go and use a platform that feels like they can get all the information that they need.
What are some ways DOB is exploring AI use on the front end for applicants?
First and foremost, we have to make sure that any AI is not putting at risk private information, personal information, information that reveals something that the applicant is trusting us with, and that we go through the safeguards that need to be up. Additionally, we need to figure out the balance of any machine learning tool. We’re going to build trust with them over time. We have two particular pilots that we’re looking at: Archistar for pre-check review and then CivCheck for an initial plan review. But basically, we want a great tool that helps people prepare for their submission on the front end, and then when this comes in, supplement the work of a plan examiner so that we can give them the time they need to deal with the more complex issues. I hope that next year we’ll be able to start deploying this.
The Catch-Up
The real estate industry has turned out in force for this year’s Somos conference in Puerto Rico, where housing development is taking center stage among New York’s political class, writes TRD’s Ben Miller.
A Queens man pleaded guilty Thursday to stealing the home of a dying woman with dementia, becoming the first person convicted under New York’s deed theft law, reports The New York Times.
Amtrak’s proposal to rebuild Penn Station could subsidize a new entertainment venue for the Madison Square Garden Company, reports Gothamist.
The Kicker
“I’ll work hard to manage within our existing resources. But if we need more, we’ll find a path.”
— Gov. Kathy Hochul on the possibility of new taxes to fund universal child care, marking a shift in tone on levies and not closing the door on a potential income tax hike