New York City licenses an array of businesses, including newsstands, Laundromats and street fair vendors. Not so the people who put up houses and apartment buildings.
Though home improvement contractors and their sales agents are licensed by the city’s Department of Consumer Affairs, home builders have never been regulated.
“Right now, anyone can construct a home — or build the Empire State Building — without having to show any qualifications,” said Bill Friedlich, principal of Bronx-based Hudson View Construction.
That could change, at least for smaller builders. A bill is winding through the City Council that would require builders of new one-, two- and three-family homes to obtain a license issued by the Department of Buildings. It’s expected to pass before the end of the year, said officials and others with knowledge of the negotiations.
“This is not something that is being imposed from above, it is an initiative that builders have asked for,” said Allen Cappelli, a consultant to the Building Industry Association, based on Staten Island.
Prompted in part by shoddy home building on Staten Island, the home builder licensing bill, introduced five years ago, has undergone many changes over the years as the Department of Buildings, the mayor’s office and other agencies hash out the language and scope of the licensing requirements.
The more striking provisions being considered in the bill’s latest incarnation include granting authority to the New York City Police Department to seize the equipment and vehicles of builders operating illegally and requiring that principals of companies register themselves to prevent the creation of dummy corporations designed to shield owners from liability. Other discussions center on the merits of background checks for builders.
“This is meant to level the playing field, but it will also insure due process before the city takes away someone’s livelihood,” said Kevin Fullington, government relations attorney at law firm Herrick, Feinstein, who helped write the original draft of the ordinance when he served as chief of operations for Republican Councilman James Oddo of Staten Island, sponsor of the current bill.
The city’s Office of Management and Budget is reviewing the proposal to determine the cost of issuing licenses and enforcing its provisions, he said.
The licensing of home improvement contractors in New York City, established a decade ago, has had limited success, said Friedlich, whose projects range from single-family homes to 15-story buildings. He supports government regulation of home builders and even major developers, though he knew nothing about the bill that’s before the Council.
“Right now, the home contracting license is hollow,” he said. “All it takes to get one, really, is the submission of fingerprints, which I suppose excludes registered felons. Any license should mandate a rigorous test that demonstrates competence in building. When you let unscrupulous builders fleece the public, we all suffer.”
The idea to license builders isn’t new, and resistance to such regulations in New York stem in part from the real estate industry’s pull, said insiders.
In Maryland, for example, the principal of any new home building company, or those who sell new homes, must register with the state, which stipulates that builders contractually certify that their homes conform to all building codes and meet performance standards.
Builders of owner-occupied new single-family, townhouse, duplex, co-op, condo and other residences in New Jersey are obliged to register with the state’s Department of Community Affairs and warrant the quality of materials and workmanship, the structural integrity of new homes, and the performance of heating, air conditioning, plumbing and electrical systems.
Liability is limited to the purchase price of the home or the fair-market value on its completion date. In the event that a builder shirks its responsibility, the state’s Home Warranty Security Fund, or the private alternate warranty security fund, pays the cost of repairs to homeowners.
Honest contractors have nothing to fear from any licensing process, said Cappelli of the Building Industry Association. “We welcome the weeding out of bad apples to protect the public and we would recommend establishing a system similar to that in New Jersey,” he said. “That way, if a pattern of dishonesty occurs, the lack of ability to secure insurance shuts people down.”
Despite concerns that onerous costs might encourage noncompliance and drive good builders into other markets, “we favor any measure, legislative or regulatory, that allows only reputable, capable builders to ply their trade,” said Anne Teshima, president of the Manhattan-based Association of Real Estate Women, which represents a range of constituencies. “Our support is contingent on fair, reasonable and cost-conscious licensing guidelines and procedures.”
Although many people in the industry favor measures that “help foster safer, better quality buildings, this bill is passing way under the radar, at least in my circles,” said Wayne Turett, principal at Turett Collaborative Architects in Manhattan.