The Real Estate Board of New York to The New York City Council Committee on Consumer and Worker Protection on Intro 518

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The Real Estate Board of New York (REBNY) is the City's leading real estate trade association representing commercial, residential, and institutional property owners, builders, managers, investors, brokers, salespeople, and other organizations and individuals active in New York City real estate. REBNY appreciates the opportunity to express our opposition to Intro 518 (Cabán).

Last-mile delivery is integral to the daily lives of New Yorkers and a foundation of New York City's economy. On any given day, one-third of New Yorkers receive a package, and 2.5 million packages are delivered across all five boroughs. New Yorkers rely on fast, affordable delivery to access groceries, medicine, household essentials, and goods from local and national businesses.

As e-commerce demand continues to rise, last-mile facilities have become critical infrastructure for New Yorkers. A modern, well-functioning last-mile delivery network is essential to keeping costs down, ensuring timely access to goods, creating and sustaining local jobs, and reducing congestion and emissions across all five boroughs.

Intro 518 would impose new licensing and employment requirements on last-mile facilities. The bill would require operators to obtain discretionary 2-year licenses contingent on past violations and mandate that all facility workers be directly employed by the operating company. In practice, this would prohibit the use of subcontractors, staffing agencies, and third-party delivery companies to support these core facility roles. In addition, Intro 518 defines last-mile facilities based on their function, thereby extending its applicability beyond large parcel delivery stations to include smaller courier depots, micro-fulfillment centers, and shared logistics hubs, depending on how operations are interpreted.

REBNY strongly opposes Intro 518, which overlooks the fundamental structure of the last-mile industry and would have adverse effects on the City's economy, environment, and affordability. Last-mile delivery relies heavily on subcontracted labor to sustain the efficient movement of goods. Among other reasons, this is the case to account for fluctuations in demand, including seasonal peaks and daily volume changes.

Subcontracted delivery companies, commonly known as Delivery Service Partners (DSPs) or Independent Service Partners (ISPs), are often locally based, minority- and family-owned small businesses that create stable jobs, invest in their neighborhoods, and provide critical pathways to employment and entrepreneurship. Most last-mile delivery jobs are entry- to mid-skill positions typically requiring no more than a high school degree. According to an AKRF analysis, roughly 46 percent of the workforce has completed high school as their highest level of educational attainment. A further 32 percent report completing some college, with only 13 percent of the workforce having completed a bachelor's degree. Further, if a shift to direct employment is mandated under Intro 518, AKRF estimates that over 10,000 jobs could be lost to the City.

Faced with rising costs and operational constraints, facilities will choose to relocate outside New York City to places like New Jersey or Long Island. Fewer last-mile facilities in the city would not reduce delivery demand. Instead, it would lead to longer delivery routes, the use of larger trucks, and increased congestion on key corridors, including the BQE, crossings, and local streets. According to AKRF, relocating a single existing last-mile facility from western Brooklyn to New Jersey would nearly double the facility's daily CO2 emissions, and more than double the PM2.5 and NOx emissions generated by the delivery vans serving it. Moreover, siting last-mile facilities close to the end consumer supports the use of electric vehicles, cargo bikes, and micro-distribution hubs by enabling shorter routes and more efficient, dense deliveries. Pushing these facilities outside the city would likely force operators to revert to gas-powered fleets and stagnate the use of local micro-hubs and cargo bikes, undermining progress toward climate goals.

Furthermore, disrupting the subcontracted delivery model would significantly increase the cost of operating facilities and delivering goods, with direct consequences for consumers. By requiring higher-cost employment models and prompting less efficient operations through facility consolidations and relocations, Intro 518 would raise the per-package cost of last-mile delivery. AKRF estimates that if the additional costs required to maintain current delivery service levels were fully passed on to households, the average household would incur approximately $664 in added annual costs. Alternatively, if costs were constrained and service quality declined, the City could experience roughly 109 million delayed package deliveries per year.

Finally, facility relocation would result in a loss of critical tax revenue. According to a study executed by HR&A and AKRF, the properties developed as last-mile facilities over the past decade generate $8.4 million more in annual property tax revenue for the City than they would if they had not been redeveloped, roughly tripling their tax contributions. Losing these facilities would undermine a growing source of revenue that supports essential City services.

New York City's last-mile delivery network is a critical engine of its economy and daily life. Intro 518 would destabilize this system, eliminating small businesses, reducing worker flexibility, and driving operations out of the City. The result would be higher costs, more congestion, and fewer opportunities for New Yorkers. We urge the City Council to work with stakeholders on alternative solutions that support a resilient, growing, and efficient logistics ecosystem.