Start a construction company in New York

New York City decides which credential a construction company needs by looking at the work, not at the price of the job. There is no threshold to cross the way North Carolina sets one at $40,000 and Pennsylvania at $5,000 of the previous year. The Department of Buildings publishes a map instead. A new 1- to 3-family home needs a General Contractor Registration. Any other new building needs a Safety Registration Number with a Construction Endorsement, or the General Contractor Registration. An alteration adding more than 25% to the floor area, or three or more stories, needs the same pair of options, and one removing more than 50% of the floor area or a story needs a Demolition Endorsement. Placing 2,000 yards of concrete or more needs a Concrete Endorsement. All other alteration work needs an Insurance Tracking Number at minimum. And work inside a 1-, 2-, 3- or 4-family home or a condo or co-op needs a Home Improvement Contractor license, which the Department of Buildings does not issue at all.

That last one is the split worth planning around. The Home Improvement Contractor license comes from the Department of Consumer and Worker Protection, a different agency with its own application, its own fee schedule and its own phone number. A company that builds spec houses and remodels kitchens is registered with Buildings for one line of work and licensed by Consumer and Worker Protection for the other. The General Contractor Registration itself is the simpler of the two: $300 to register, $240 to renew, $50 late, on a three-year term, and new applications have gone through the department’s online system since September 2021. Its form asks whether the business holds at least $25,000 in operating capital and lists every stakeholder with 10 percent or more. The insurance floor is $1,000,000 of general liability per occurrence, certified by the broker, plus workers’ compensation and disability cover. That last requirement is stricter than it looks: a general contractor registrant may not file the affidavit of exemption that other licensees use when a company has no employees, where a home improvement license at the other agency does accept a state exemption certificate. The same crew is exempt on one credential and not on the other.

The home improvement license is where the real conditions sit. A person or business must hold one to do construction, repair, remodeling or other home improvement work on any residential land or building in the city, and the department reads that broadly enough to include driveways, fences, garages, landscaping, patios, porches, sidewalks, swimming pools and terraces next to a home. The application asks for a $20,000 surety bond, or enrollment in the department’s trust fund at $200, where participants stop paying that fee at renewal for as long as the fund holds more than $2,000,000. It asks for proof of workers’ compensation insurance naming the department as certificate holder at its own Broadway address, or a Certificate of Attestation of Exemption from the state board, and it will not accept an ACORD form as proof. It asks for EPA Renovation, Repair and Painting certification and lead abatement certification, or a signed affirmation that the work does not require them. And it asks for a signed Contractual Compliance Agreement, because the department also sets what the contract itself has to say.

The entity question gets its sixth answer here, and New York splits it down the middle. Exactly one person needs to pass the exam. A sole proprietor, general partner, corporate officer, principal, director, member or shareholder owning 10% or more of the company may be the one, and the department asks you to confirm which. The exam runs 30 questions, needs 21 correct, costs $50 on top of the license fee, has to be taken within 60 days of your application clearing and is paid for again after a second failure. Fingerprinting works the other way: all of those people are printed, not just the one who sat the exam. On top of that, a limited liability company has to register and stay active with the New York State Division of Corporations to keep the license, which ties the formation filing to the trade credential the way California does. One member carries the exam, every member over 10% carries a background check, and the company carries the license.

The license fee is a calendar rather than a term, which is the detail that catches people. Every home improvement license in the city expires on 28 February of an odd year, so the term you buy depends on when you apply into that cycle. Applying between March and August of an odd year costs $100 and runs up to 24 months. September of an odd year through February of an even year costs $75 for up to 18 months. March to August of an even year costs $50 for up to 12 months. From September of an even year you choose: $25 for a stub of up to 6 months, or $125 for up to 30 months. The cheapest license is not the cheapest per month, and a company formed in the wrong half of the cycle pays twice inside three years.

The counts on the plate above give New York the fewest solo operators per construction firm with payroll of any state in this pilot, closer to two and a half where Texas runs near eight, and its payroll firms are small, averaging under four employees each. The credential map above is also the most demanding in the pilot: an exam, a bond, fingerprints and a separate registration for new construction, against states where a residential remodeler meets no regulator until a permit is pulled. These counts cannot show that one produced the other. They do show that the market with the highest barrier to a one-person start has the fewest one-person starts in it.