Easing NYC’s Affordable Housing Crisis: A Construction Manager’s Take
Insights from Andy D’Amico of Urban Atelier Group on building successfully in a tough environment.
In New York City, the country’s largest market, boosting the multifamily supply in the lower end of the quality spectrum has always been a pressing issue. The metro doesn’t only need more affordable living options, but it also lacks enough transitional and supportive housing, according to Andy D’Amico, founding president & CEO of Urban Atelier Group, a construction management firm with multiple projects underway in NYC.
“Transitional housing provides a stepping stone for residents to find permanent, affordable housing,” D’Amico told Multi-Housing News. “Supportive housing is a combination of housing and services intended as a cost-effective way to help people live more stable, productive lives.”
Having lived and worked in NYC for more than two decades, D’Amico has experienced first-hand the challenges that make supportive and affordable housing development difficult to pencil out. In the interview below, he talked about all the headwinds the industry has been dealing with, and also touched on construction companies’ role in the communities they serve.
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What are the top challenges for you as a construction manager today, considering the deteriorating economic conditions?
D’Amico: For the past three years, the construction industry has experienced a surge of challenges it hasn’t encountered in years or ever before. While it was difficult at the time, the previous economic recession in 2007-2008 didn’t have the complex global supply chain issues the current one has. As an industry, our proactive preplanning and problem-solving skills have been tested by increased interest rates, material and labor shortages, the global pandemic and the Russo-Ukrainian War. And there is no doubt that we’ll be tested again in the future.
On the heels of various stressors such as the pandemic, labor shortages, material increases and schedule uncertainty, the 2022-2023 cost of money and rising interest rates struck the same companies again, making it even harder to withstand the market financially. Several companies have closed their doors, while others have increased overall costs to mitigate these stressors, leading to high construction costs. And for developers, that challenge is compounded by the same rising interest rates and their ability to borrow money and finance new developments.
Finding and retaining skilled workers has also been difficult for many constructors lately. Do you expect this issue to persist going forward?
D’Amico: The construction industry has continued to face the challenge of finding and retaining skilled workers. Locally, the New York Building Congress anticipates employment in the construction of buildings, heavy and civil engineering, and specialty trades to total 143,000 in 2023 and 142,500 in 2024. Nationally, according to the Associated Builders and Contractors, the construction industry will need to attract nearly 650,000 additional workers on top of the normal pace of hiring in 2022 to meet the increased demand for labor. These metrics highlight the shortage and urgent need for qualified craft professionals.
Building materials costs began to slightly decline in the second half of last year. How do you keep your projects on time and on budget?
D’Amico: Since the onset of the pandemic, our team has cultivated a more holistic understanding of our partners’ financial stability, including product and materials sourcing, allowing us to manage client expectations and those risks. Construction companies can better manage their projects’ time and budget constraints by planning for the supply chain, adding unforeseen delays, including shipping delays, and considering estimated lead times for materials and equipment.
At UAG, our team is actively involved at the front end of the pre-development process across our projects, which drives our ability to derive cost and schedule certainty for our clients. With building materials up 7.9 percent in December 2022, compared to January 2020, according to the Bureau of Labor Statistics, developers rely on our expertise for accurate budgeting, evaluating proper contingencies and escalations and providing cost certainty with a clear path towards completion.
What has been most challenging for you in the past few years?
D’Amico: Completing four residential developments during the COVID-19 pandemic was our biggest obstacle. Our project managers and operational proficiency allowed us to remain flexible as we reset expectations and determine creative solutions to keep the project on schedule and budget.
In these circumstances, it’s vital to prioritize effective communication and collaboration with subcontractors and our clients to keep the teams engaged and aligned with the project goals. Managing the supply chain and staying aware of market trends and financial escalations can also help mitigate these obstacles.
Is there a project that you are most proud of in terms of your contribution to the wellbeing of the NYC community as a whole?
D’Amico: While we have several projects that will significantly impact New York City’s wellbeing, Bronx Point will bring 100 percent permanently affordable housing projects to the Harlem River waterfront. Bronx Point began construction during the pandemic, yet will open on time which is a major achievement considering the challenges posed by the pandemic and its broader impact on the construction industry.
In addition to providing 542 affordable units, the mixed-use project also gives back to the community by providing 2.8 acres of public open space and an array of cultural and community-focused programming, including the permanent home of the Universal Hip Hop Museum, an early childhood space run by BronxWorks, and outdoor science programming run by the Billion Oyster Project. Projects such as Bronx Point demonstrate how construction companies can play a critical role in improving the quality of life for communities.
What do you think NYC lacks the most when it comes to addressing the homelessness crisis and making the city more inclusive?
D’Amico: The homelessness crisis in New York City is one of the most complex and challenging issues. According to the Coalition for the Homeless, in December 2022, there were 68,884 homeless individuals, including 21,805 homeless children, sleeping each night in New York City’s primary municipal shelter system.
Currently, the city lacks adequate rooms dedicated to transitional and supportive housing. Unlike homeless shelters, transitional housing offers temporary placement for specific segments of the homeless population, including working homeless individuals earning too little to afford long-term housing…
UAG recently broke ground on 13-12 Beach Channel Drive in Far Rockaway, Queens, consisting of 146 affordable and supportive apartments, social service programming, and a community facility with various tenant amenities. A total of 60 percent of the units—88 units—will be set aside as supportive housing, and a shelter will serve as a 200-bed facility dedicated to single, adult women. Tenants will have access to a range of person-centered therapy services to stabilize individuals and move each woman into her highest level of independent housing. The clinically-based model will provide services specifically targeted toward the needs of this population, with an overarching focus on recovery and community reintegration goals. When completed, 13-12 Beach Channel Drive will provide a model for how good homeless, supportive, and transitional housing should look and serve the community.
Do you feel like you’re better prepared now for the next crisis that will affect the multifamily industry than you were three years ago?
D’Amico: Yes—the experience of navigating through the obstacles posed by the COVID-19 pandemic and the resulting supply chain disruptions have better prepared us for the next crisis that might affect the multifamily industry. No one could have predicted the past three years. Still, we developed greater agility and flexibility to respond to unforeseen events and have learned valuable lessons to help us be more strategic in our approach. Despite the past few years, UAG has remained resilient.