Related chairman praises rise of nonunion workers, and organized labor strikes back

Stephen Ross of the real estate company called the proliferation of nonunion labor on construction sites ‘good news’

By Rosa Goldensohn

The chairman of the Related Cos. Stephen Ross conveyed some unpleasant news to construction unions Monday, expressing his fondness for the growth of non-union labor in the housing construction market.

“The good news is today, New York is becoming more of an open shop city,” Ross, chairman of Related Companies, told a real estate industry crowd at a Crain’s event at the midtown Sheraton.

In “open shop” jobs, developers do not promise to use exclusively union workers.

The words came as a surprise to Building and Construction Trades Council president Gary LaBarbera, who was also in attendance and spoke on a panel about the future of the 421-a tax abatement in which which he denounced Ross’ statement.

“Now this panel was to discuss New York City and the future and building a strong city,” LaBarbera said, “but to hear a developer, Steve Ross, say it’s a good thing that the city is open shop and costs are coming down, that’s saying it’s a good thing that wages are going down in the city of New York, that workers are being exploited every day, they’re being put on job sites with no training, no benefits—in my view, that is the worst thing for the city of New York,” said LaBarbera, a statement that was met with loud applause from an audience that comprised of real estate executives and construction union leaders.
While some city real estate developers have been unabashed in their attempt to replace union labor with cheaper nonunion construction workers, Related still frequently builds projects under labor agreements with the Building Trades union, LaBarbera said.

“So I was a little disappointed in that, to say that today,” he told reporters after the panels, calling Ross’ stance “a little bit of a change.”

A portion of the Hudson Yards comprised of office buildings is being built with union labor. But Ross said he could not profitably build affordable housing with union workers.

The Department of Buildings does not track which construction job sites are union, so there is no undisputed number for the percentage of construction labor in the city that is done by union workers, or density. But six large firms that previously built union have been refusing to sign project agreements in recent months, The Wall Street Journal reported last month.

Ross also decried the cost of union wages, saying they raise project costs by up to 40%. The city’sIndependent Budget Office estimated that increase at 23%, a figure the union disputes.

The trade groups for real estate developers and affordable-housing developers have opposed attempts to mandate union wages on projects that get tax breaks.