New York's Cooperative and Condominium Community
Bill Morris in Bricks & Bucks on March 2, 2022
It’s a tough time to negotiate a union contract — with rents back to pre-pandemic levels, with prices rising at an alarming rate and with that dirty word inflation suddenly back in the news. Adding to the anxiety, war has broken out in Europe.
Nonetheless, negotiators from the Realty Advisory Board on Labor Relations (RAB), which represents co-op and condo boards and other New York City residential building owners, will sit down at the negotiating table tomorrow with a team from Local 32BJ of the Service Employees International Union. The current four-year labor agreement between the two sides is set to expire on April 20. The stakes have rarely been higher.
“No one knows if inflation is going to end soon, but my mood about the negotiations is very hopeful,” says Howard Rothschild, the president of RAB and lead negotiator for building owners. “The RAB and 32BJ have worked together for 80 years — and never more closely than during the pandemic over the past two years. We worked out 16 memos of understanding on extending health benefits and other issues. Given that, our relationship has never been better.”
Asked if pay is likely to be the big issue, given the state of the economy, Rothschild replies: “I don’t want to speculate. We haven’t even seen their proposal yet. They’re usually about wages and benefits, though, and I don’t expect that to change.”
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Kyle Bragg, president of 32BJ, sounds his own optimistic note in a statement: "Over the past two years, our members have shown that they are invaluable to this city. That’s why we are confident that the RAB will be able to offer a package that meets the moment and gives workers the wages and benefits they’ve earned — and deserve.”
Many co-op and condo boards and their management companies are busy getting educated about the issues while making preliminary preparations for a possible strike. In one instance, Rothschild held an informational Zoom meeting on Feb. 24 with about three dozen managers and co-op and condo board clients of New Bedford Management.
“Howard is optimistic that they’ll reach a resolution without a strike,” Peter von Simson, the chief executive at New Bedford, said after the Zoom meeting. “I’m not so optimistic because of inflation and the rising cost of living. You should prepare for the worst and hope for better.”
To that end, von Simson says, the company will soon begin preparing security badges for residents in buildings with doormen and will contact security agencies, part-time cleaning companies and others that can fill staffing gaps in the event of a strike.
The current four-year contract covers more than 30,000 residential building service workers — door personnel, porters, handypersons, superintendents and others — in more than 3,000 buildings in Manhattan, Brooklyn, Queens and Staten Island. The current contract includes average annual wage and benefits increases of 3.32% per year, or more than 13% over the life of the contract.
The annual cost to employers for an average doorman or porter is more than $96,000 overall; for a handyperson it’s more than $103,000. Benefits include full family health insurance covering medical, dental, optical and prescription drug coverage, with no premium contribution from the employee. All workers also receive a defined benefit pension fund and 401K annuity with an employer contribution. They receive training and legal benefits and have up to 49 paid days off for holiday, vacation, sick and medical time.
There’s a new upside for co-op and condo boards whose employees belong to 32BJ. Their pay equals or exceeds the prevailing wage in all job categories, which means that residents of such buildings remain eligible for the coveted co-op and condo property tax abatement, which can slice up to 28.1% off an individual’s property tax bill. In the future, under an order signed last year by Gov. Kathy Hochul, the tax abatement will be available only in buildings that pay prevailing wages. Boards have until April 15 to sign a notarized affidavit saying they will pay prevailing wages for as long as they receive the abatement. Early reports indicate that many boards plan to forfeit the abatement rather than taking on increased payroll costs.
“We haven’t had a strike since 1991,” von Simson says of the impending contract negotiations. “We hope they work it out again.”
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