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LI construction jobs rise as multifamily housing grows

Construction workers on the job at an apartment

Construction workers on the job at an apartment at Modera, a multifamily apartment complex in Mineola on Sept. 23, 2015. Credit: David L. Pokress

Rising demand for multifamily housing on Long Island has pushed the number of local construction jobs to the highest level in at least a quarter-century.

Long Island had 80,500 construction jobs in August, the most for any month since 1990, the earliest year in the state Labor Department's online database. That count is nearly double the total in 1992, when there were 40,400 construction jobs here.

Construction is one of the Island's highest-paying job sectors. Several other top-paying sectors, such as financial services, have yet to make up jobs lost during the recession. But the number of construction jobs has risen 10.7 percent since 2006, the year before the recession began, the August data show.

Developers say the reason for the uptick is clear: a boom in multifamily housing.

2 generations, 1 need

Aging residents downsizing from single-family homes and young people clamoring for more affordable housing are fueling the demand, experts said.

"There is no question that the residential building industry is on the upswing," said Mitchell Pally, chief executive of the Long Island Builders Institute in Islandia. "It does not mean that we are building larger numbers of single-family homes. We're building multifamily developments, assisted-living facilities, we're building mixed-use developments."

At Wincoram Commons, a Coram retail and multifamily development with 176 residential units, some still under construction, 2,000 people have applied for an apartment, said Marianne Garvin, chief executive of the Community Development Corp. of Long Island, a Centereach economic development nonprofit. It is developing the property along with Conifer Realty, a Rochester-based company that builds and mana.ges affordable housing. "The demand is huge out there," Gavin said.

Rents range from $929 a month to $1,788 for one- to three-bedroom apartments, Garvin said. Work on the development has created about 145 construction jobs, she said.

An Island of options

On Long Island, America's oldest suburb, where the single-family home is iconic and multifamily housing was long eschewed by many communities, apartment seekers now have a growing number of options. Residents are more accepting of apartments in their towns, experts said, and more municipalities see multifamily housing as a way to revive their aging downtowns.

Factor in low interest rates to finance projects, and developers with big plans, and the result is the biggest flurry of building activity on Long Island in about seven years, Pally said.

The resulting surge in construction jobs delights local economists, who had long bemoaned the predominance of lower-wage jobs, such as sales clerks and home-health aides, during the local employment market's recovery from the recession. The construction sector is viewed as a key barometer of the Island's economic strength.

"It's a nice indicator of the improvement in general economic conditions here, because the real estate sector is such an important component," said John A. Rizzo, chief economist of the Long Island Association, the region's largest business group.

The need for apartments is now being cast in economic terms, giving it more urgency -- and acceptance among Long Islanders -- than ever before, some business experts said.

"Our elected officials at the county and the local level have realized that they need to be approving projects to spur some economic activity in our region," LIA president Kevin Law said. "We need to be growing, and that mindset certainly has gotten better over the last few years."

The co-head of the company that built multifamily housing credited with reviving Patchogue's downtown agreed.

"We believe that a number of communities have recognized the realization that we do not have enough multifamily housing on Long Island, and that the lack of housing is having a significant detrimental effect on economic development," said Bob Coughlan, co-principal of East Setauket-based Tritec Real Estate Co., whose company is also building the 1,450-unit Ronkonkoma Hub, which combines retail and residential elements.

Jobs in development

A multitude of projects is generating the jobs.

The number of jobs that have been created to build the Modera Mineola, a luxury 275-apartment complex, with some units still under construction, and a sister property nearby, the over-55 Hudson House, with 36 units, is estimated at 340, said Jamie Stover, vice president of development for the builder, Mill Creek Residential, of Dallas.

At the Modera, monthly rents range from $2,150 for studios to more than $3,500 for its largest two- bedroom apartments, Stover said. At Hudson House, rents start at $1,635 for one bedroom.

The Ronkonkoma Hub, a $475 million project expected to break ground later this year or in the spring, estimates the work will involve 11,700 construction jobs over 10 years, said Christopher Kelly, Tritec's director of marketing. Many of the apartments are expected to be affordable units.

Developments like the Hub are often located near Long Island Rail Road stations, said Shital Patel, labor market analyst in the state labor department's Hicksville office.

"So it kind of goes hand in hand with revitalization projects that hope will attract younger workers" who may travel to New York for work or play.

Some commercial projects are also spurring hiring. The $261 million Nassau Coliseum project, encompassing a new coliseum and a retail and entertainment complex, is expected to create 1,000 construction jobs. Work on the project has begun.

Reconstruction after superstorm Sandy, which struck on Oct. 29, 2012, initially revived the construction sector, which had been losing jobs because of the recession and slow recovery, Labor Department data show. In August 2011, 14 months before the storm, the number of construction jobs had fallen to 64,400, a 15-year low for the month. But by August 2013, 10 months after Sandy, employment had jumped to 71,400 jobs. The specialty-contractor subsector, which powered a lot of that construction growth, expanded by 5,400 jobs in that same time period, the biggest jump in 10 years.

These days the biggest projects are multifamily buildings, tapping into built-up demand, experts said.

In 2013, 21 percent of Long Island's housing units were rentals, according to the Long Island Index, a report compiled by the Garden City-based Rauch Foundation. By contrast, 39 percent of the housing in Westchester County and 38 percent in northern New Jersey consisted of rentals.

"Long Island has lopsided housing stock because of the way we were developed," Garvin of the CDC said. "Most other places have diversity in the housing stock. A lot of people recognize that."

One municipality considered in the vanguard of providing affordable housing, particularly for young Long Islanders, is Patchogue. Since 2004, when he took office, Mayor Paul Pontieri estimates, $400 million has been invested in 700 multifamily units and town houses in the village, especially downtown, generating about 1,000 construction jobs.

The buildings include the downtown 291-unit New Village, where 25 percent of the rental units are considered affordable and leases range from $1,300 to $3,000 a month for studios to three-bedroom apartments. It opened last year. Also downtown is Artspace, a 45-apartment complex for artists, that is billed as entirely made up of affordable housing. Its rents range from $861 to $1,509 a month for studios to three-bedroom units. It was completed in 2011.

Multifamily housing has been credited with reviving Patchogue's downtown, where the mayor said many blighted buildings once stood. Earlier this month Newsday reported that four restaurant owners in downtown Patchogue plan to open other Long Island locations because their local businesses have done so well.

"It's really about creating this lively atmosphere that makes people want to be here," Pontieri said.

A boost for the nation

Long Island isn't the only area enjoying a robust construction sector. Construction spending for residential and nonresidential projects nationwide jumped 13.7 percent in August from a year earlier, the fastest year-over-year growth since 2006, according to an analysis by the Virginia-based Associated General Contractors of America. Meanwhile, the group has begun raising the alarm about labor shortages and noted that September federal data showed unemployment among construction workers nationally was 5.5 percent in September, the lowest for the month since 2001.

That tight labor market doesn't seem to be an issue yet on Long Island. Richard O'Kane, president of the Building and Construction Trades Council of Nassau and Suffolk Counties, AFL-CIO, said that while more of his 59,000 members are working than in prior years, many members find it difficult to find jobs because of the competition with nonunion labor. Some building projects use both union and nonunion labor.

Getting local support for multifamily housing can be difficult on the Island. Winning residents over isn't a "slam dunk," said Garvin of the CDC. And she noted that the process from approval to shovel can take as long as two years. But that's better than a flat out "no," which she believes developers hear less these days. She attributes her group's success at changing minds to a more comprehensive strategy.

"It has a business focus," she said. "It has a governmental focus, and it has a community engagement focus."

As a result, she said, "town boards are more receptive to listening to people."

And developers keep making their pitches for more multifamily units.

"There certainly is still a lot of pent-up demand," said Patel of the Labor Department. "And there's a lot of projects still in the works."

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