Near Miss in New York: How the Industry Dodged a Bullet & What's Coming Next [podcast transcript]

Jon Hannah-Spacagna

Sure. Thanks, John. So, the last two years in New York, Claudia has helped us fight off a bill, multiple bills that would have impacted the modular industry directly and really a direct attack on our manufacturers that would have forced them to use union labor in their factories, regardless of where they are located. What also would have required continuous supervision by someone that is licensed by the state of New York or New York City. It was just impossible that if those bills were passed, it would have meant there would be no more modular building that would happen likely in New York City. So last year, we were able to get the bill to not even come up for vote.

This year, it passed both houses and had very little opposition. Despite the work we were doing, and through the work in the relationships that Claudia and I did, it was not brought up for a vote for this session. So, we put it off for another year. We also understand this has come up two years in a row. So, it's likely going to come up again. So, we're already preparing and making plans of how we can defeat this and also, as Claudia mentioned, work with the bill sponsors and the trades to find a happy medium that works for both of us to address the needs of the city like affordable housing, that needs the modular industry.

Claudia, if you could share kind of a summary of all the phone calls, virtual Zoom meetings, and conversations that we've had over the last 18 months. It really has been a heavy lift that you and I have had to deal with the last couple of sessions to keep our industry safe. Can you just kind of provide a summary for us of all those conversations and folks we've been working with?

Claudia Granados

Absolutely Jon. So, Jon is right. Often the work is not seen by people because a lot of this is having the relationship and really working everything that you have. Phones, meetings, Zooms, texts, and whatnot. Once the bill got out of the Senate specifically, they didn't even hear it. They just passed it. Then it got kicked over to the House. Once it got kicked over to the House, they rushed again through the Labor Committee. I think we had a few meetings before that, so then Jon and I went very quickly to work multiple times a day going back and forth on calls, and we were able to meet with numerous amounts of elected officials both in committees of housing and labor for the Senate and the Assembly. We were quick to also meet with the Program Counsel of the Assembly, which is where all the sausage gets made. So, we were able to go line by line item. The bill, as it was written, to say this is why it will not work, and these are all the deficiencies of this rushed legislation. We also thought that there were some legal challenges that could have come out of that.

So, Jon and I very quickly worked to come up with suggested language with suggested changes to it. So, towards the end, we ended up rewriting basically the bill, which was just like 90% of our language, which is really unheard of. This was all done, as Jon just previously mentioned, within a matter of days to make sure that this bill did not go through. As Jon stated, people really don't have an understanding of what modular construction is. So, what Jon and I tried to do, in addition to impacting the language of the bill and having it rewritten, and really prevented him from passing was to also educate folks as to what modular construction is. So, we were doing two to three jobs at the same time when we were doing this meeting.

The other part of what Jon and I did was work with coalition building. That included not only the different organizations that have credibility around the state, the one to build affordable housing. So those were some of our external partners, as well as working with other city organizations in the city itself and saying how this would dramatically impact the affordability of building new homes for people who need it most. So, we fired up all cylinders and we managed to get a lot of support from external partners through coalition building, and really holding a lot of meetings with people who are extraordinarily busy during the closing of the session, but we managed to get a lot of time with key players that really understood the issue and wanted to be helpful, particularly the chairs of the different housing committees in the state.

Jon Hannah-Spacagna

That's a great summary, Claudia and you're right. A lot of our time was spent educating the decision makers and the bill writers of what this impact would actually be on New York City in a negative fashion. To your point of being able to rewrite the language of the bill, if it had passed, we were able to take most of the negativity that would have hampered our ability to even do business in New York, in New York City, out of the bill. So even if it had passed, even though it would have been not great for our industry, it wouldn't have been as restrictive as originally written. So that was certainly a great opportunity for us to build those relationships with the central staff, that are the ones that are doing the final bill writing, and deciding what bills are being heard and what are not. We know Claudia as we head into and prepare for the next session, you can never wait until the session starts to be working on what's coming next. So, we have a planning meeting coming up not only with Claudia as our representative in New York, but also with our Washington, DC lobbyists as well as our California team, and specifically for New York to talk about how we can try to build a partnership with labor and unions, and with the bill sponsors to help create a better situation to address their housing needs. Part of that would also include us working with the Department of Housing to adopt the new anti-standard of how to create a modular program that would be more friendly for the industry, and also remove some of the barriers for our membership to be able to do business in New York and in New York City. So, we're certainly looking forward to working on those things and with the foundation we built over the last year in the relationships that Claudia and I have been able to develop, we're in a much better position in New York than we were a year and a half ago. Would you agree Claudia?

Claudia Granados

Absolutely, Jon. Very well said. I think the work that we have ahead of us, it’s a lot because what happens in New York specifically is January through June is when the legislature is in session. That means that they are actively passing bills, dealing with a budget the first quarter of the year, and then the rest of it is legislative work. In between July and December, they are working in their home districts, and they are introducing new legislation as well as going over what they're going to bring up the following year. One of the critical things that we learn, Jon and I, were we have to get in front of this again. We have to really educate more people what modular construction is, specifically in the city. John, you also asked about what's the political environment now in New York specifically. We just got through the primary. So, we're going to have a new mayor come January 1, 80%, of the city council members will be brand new. Most of them have never worked in city government, state government, so they have no understanding of the local apparatus of government. So, it's going to require a lot of education, reeducation, introduction, and we want to be helpful to the to the incoming mayor in trying to solve the housing crisis.

Jon and I have talked about this at length, how we see an opportunity to be partners with the mayor and offer solutions to the housing crisis in New York City specifically. Some of the other things, as Jon mentioned, is Fancy passing the NC Standards is going to require a lot of legwork with the trade so that they can understand why we're passing this so that they don't get in it. If they're not, we need to neutralize them at minimum, at best they should be supporters. If we don't achieve that, then it will be very difficult in a state like New York, where labor plays a humongous role in legislative policymaking for them to get out of the way for us to pass them. Well not get out of the way, more like to understand why this is also in the interest of the industry to pass.

Jon Hannah-Spacagna

Claudia, you hit the nail on the head there as far as the relationships and being prepared for what's coming next. We're already planning here in the off session to try to conduct a factory tour with some of the members and leadership in both houses to tour one of our factories so they can actually see the process and understand it more. Then, as Claudia mentioned, having a new mayor that will come in in January. One of the candidates Claudia has already established a good relationship with so we're proactively taking steps there to have relationships in place that will make a difference and help us have influence on things that could impact our industry. So, Claudia, appreciate all the work you've done. We're glad to have you on our side, our team and I look forward to continued success in the months and years to come.

Claudia Granados

I appreciate it Jon. It is really such a treat and pleasure to work with leaders like yourselves to really create the space for modular construction to us, the new kid on the block in an emerging industry to really find a sweet spot where we can make New York state the model for what should be across the country. I'm really looking forward to follow up the work ahead.

John McMullen

Well Claudia and Jon, thank you so much for your time today. I hope you both can come back soon and keep us updated hopefully during the legislative session starting in January.

Claudia Granados

Sounds great.

Jon Hannah-Spacagna

All right. Thanks, John.

John McMullen

All right. My name is John McMullen and this has been another episode of Inside Modular: The Podcast of Commercial Modular Construction. Until next time.