Commentary from Construction Chair David Pfeffer was featured in a Law360 article, "Real Estate Construction Labor Shortage Making Banks Wary." The article discusses the strain that the frenetic pace of real estate construction has put on core U.S. markets – particularly in New York – on the labor workforce, which in turn is causing banks to be wary about providing construction loans.
David noted, "There's been a construction boom across the country, because of the lack of construction during the Great Recession. There's been pent up demand." He discussed the impact of the union labor issue, which has come to the forefront in New York, noting, "Wage and hour requirements across the country have been changed at local and state levels to require things like overtime, prevailing wage. More and more owners and developers [in New York], including large commercial developers and owners, have been more willing to use a nonunion workforce. Part of the reason is pricing, and another part of that reason is availability."
David also noted that many jurisdictions have been cracking down on ensuring that the construction labor force is protected by owners and developers who are seeking to get their projects built quickly, noting that, "When businesses, and in this case contractors and developers, are having a hard time finding labor to complete projects, they're more inclined to cut corners, to get their projects done."
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