The foreclosure crisis of 2008 left a wave of abandoned and neglected properties in its wake. As these properties are slowly being reclaimed, a unique opportunity arises for the labor currently employed in foreclosure clean up: a potential segue into the booming rehabilitation sector. The New York City construction industry is experiencing a boom, with spending expected to reach $86 billion in 2022, a 19% increase from pre-pandemic levels which the final increases for 2023 are anticipated to be even more robust. This surge is being driven by a number of factors, including:
- Rising demand for housing: Residential construction is leading the charge, with spending expected to reach $32.5 billion in 2024, up nearly 70% from pre-pandemic levels. This is due in part to a growing population and a strong job market.
- Government investment: Government spending on infrastructure is also playing a major role. The City of New York, the Metropolitan Transportation Authority (MTA), and the Port Authority of New York and New Jersey are all planning to invest billions of dollars in the coming years.
- Changes in office space: While office construction may not be what it once was, there is still a demand for modern office space. The city has seen a number of large office buildings completed in recent years, and more are on the horizon. However, there has also been a shift towards smaller office buildings and more mixed-use developments.
Here are some of the key findings from the report:
- Spending: Construction spending is expected to total $270 billion over the next three years, an increase of $37.8 billion from pre-pandemic levels.
- Employment: The construction industry is expected to create tens of thousands of new jobs in the coming years. However, due to rising costs, the number of jobs per $1 million in spending has fallen.
- Floorspace: The total amount of floorspace constructed is expected to reach 118.2 million square feet in 2024, up from 103.3 million square feet in 2019.
- Residential: Residential construction is expected to be the strongest sector, with spending accounting for 68% of all construction spending in 2022.
- Non-residential: Non-residential construction is also expected to be strong, with spending increasing by 57% from pre-pandemic levels. This sector includes office space, retail, hotels, and more.
- Government: Government spending on construction is expected to reach $26.9 billion in 2024, up from $19.7 billion in 2019.
Overall, the outlook for the New York City construction industry is very positive. The city is experiencing a strong economic recovery, and there is a lot of demand for new development. This is good news for workers in the industry, as well as for businesses that rely on construction activity.
From Demolition to Revitalization:
Foreclosure clean up crews are accustomed to dealing with the aftermath of neglect: removing debris, mitigating biohazards, and securing vacant structures. These transferable skills are highly valuable in the rehab sector, where crews tackle similar tasks like:
- Gutting and demolition: Removing old walls, flooring, and fixtures.
- Mold remediation: Addressing potential health hazards caused by moisture and neglect.
- Securing and stabilizing structures: Fixing leaks, boarding windows, and preventing further deterioration.
This existing experience positions foreclosure clean up crews as a ready-made workforce for rehab projects. They possess the necessary know-how and are accustomed to handling challenging situations, making them valuable assets to rehab teams.
Demand Breeds Opportunity:
The demand for rehab labor is skyrocketing. As property values rise and the housing market remains competitive, investors are increasingly turning to neglected properties for potential profit. This trend creates a multitude of job opportunities for rehab crews, with wages steadily climbing to meet the demand.
The Cost-of-Living Connection:
The rise in living costs, particularly since 2021, puts additional pressure on wages. As rehab crews grapple with rising rents, groceries, and transportation costs, their employers are incentivized to offer competitive compensation packages. This translates to higher wages for workers, making the transition from foreclosure clean up to rehab even more attractive.
A Win-Win Scenario:
This potential shift presents a win-win scenario for both workers and the rehab industry. Workers gain access to a stable, well-paying career path, while rehab companies acquire a skilled and experienced workforce, crucial for meeting the growing demand.
Challenges and Considerations:
While the potential is undeniable, some challenges need to be addressed. Foreclosure clean up crews may require additional training to adapt to specific rehab tasks like electrical work or plumbing repairs. Additionally, navigating the licensing and insurance requirements of the rehab industry might pose hurdles.
Despite the challenges, the potential for foreclosure clean up crews to transition into the rehab sector is significant. With the right support and training, these workers can leverage their existing skills and experience to thrive in this booming field. This not only benefits them financially but also contributes to revitalizing communities and meeting the ever-growing demand for quality housing in New York City.
Foreclosurepedia currently works with Servicers and both public and private funds whom are interested in teaming with Labor. The reality is that the 18 cents on the dollar that they are currently realizing from their relationships within the Industry are far too low and Direct-to-Labor relationships improve not only the profit line items, but the timelines themselves. If you are interested in some direct relationships, reach out today for a discussion about Retaining our services.