President, Real Estate Board of New York

New York City needs more affordable housing and the Bloomberg Administration and the real estate industry are working towards ways of achieving that.

Recently, Mayor Michael R. Bloomberg announced the winning bid to build a micro-unit apartment development. These new units-the size of a hotel room- will be part of an apartment tower built on city-owned land and would be the first in a wave of tiny apartments aimed at meeting the market need for more studio apartments. This PILOT project is intended to provide lower cost housing units that will enlarge the city’s inventory of housing and become a crucial aspect of new market rate projects in the future.

In addition to micro-units, modular or pre-fabricated construction, which has been around for years, could also become an effective way to address the demand for affordable housing. Building units in a quality-controlled, union run factory for most of the construction process will accelerate development, and increase safety which will make modular building an appealing alternative to conventional construction.

Modular construction is a process by which full sections of a building are built in a fabrication facility and then delivered to a project site where modules are erected and building systems are connected. Thus, construction work is split between the fabrication facility and the actual construction site.

In the past, modular construction did not catch on in New York because it was not designed for multi-family housing which is dominant here and it was antithetical to union labor, which is part of the DNA of New York’s multi-housing construction industry.

These issues were addressed by the Forest City Ratner Company (FCRC) who is using modular methods to build the first residential building at the $4.9 billion Atlantic Yards project in Brooklyn. In January, the Real Estate Board of New York testified in favor of modular building and FCRC’s project at a NYC Council Oversight Hearing on the Future of Prefabricated Construction Practices.

FCRC, a REBNY member, has worked tirelessly to adapt this method of construction for the type of multi-family housing that is commonplace in neighborhoods across our city and worked with our colleagues in unionized labor to keep the production of this housing both local and union. REBNY applauds these accomplishments.

Other benefits of modular construction includes less impacts on the surrounding community; reduced  traffic with fewer truck trips to and from the construction site since much of the construction is done elsewhere; and 70-90 percent less waste, according to estimates.

FCRC’s project holds the potential for more significant long-term benefits.  It could generate demand city-wide and throughout the region for more modular housing. If so, then the 125 union workers at the Brooklyn Navy Yard associated with the FCRC project will only be the beginning.

Modular housing and micro-units can be an important and effective way to address our city’s chronic shortage of affordable housing by bringing the cost of new housing to a level that more New Yorkers can afford.