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Bill de Base: NYC Mayor Supports Lowering Construction Wages on Affordable Housing Projects

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New York Mayor Bill de Blasio is playing a divisive game with New York City’s labor unions as he works towards reforming the 412-a tax abatement program that is set to expire on June 15th.  The program grants tax abatements to developers who build and preserving affordable housing units in the city. It costs the city roughly $1 billion a year in lost property taxes. 

Construction unions want guarantees that developers who are given these tax breaks are held to a quality and wage standards that the prevailing wage ensures.  Mayor de Blasio originally appeared to understand the importance of these protections, but has now shifted to using the developers’ anti-union talking points.

On Tuesday de Blasio dismissed the wishes of those who benefit from the 421-a program’s prevailing wage requirement.  However, behind the scenes he was pushing for the prevailing wage to be expanded to building services employees represented by unions such as SEIU.  Speaking to the New York Daily News, de Blasio said he thought the prevailing wag could scare off developers, an argument commonly used by politicians in anti-union states. de Blasio promised 200,000 new affordable housing units during his campaign.  

“It’s well known that I am a believer in union labor, but I am also a believer in achieving the affordable housing goals that I put forward,” he said. “The only way to achieve those goals is with an appropriate wage level for the creation of affordable housing, which obviously is not based on the profit motive. It’s based on a very different design.”

de Blasio originally pushed for strong reform of the 421-a system that appeared to include prevailing wage standards.  But documents sent to Albany show that this is only partially true:

de Blasio’s office is circulating in Albany a memo of support obtained by the Daily News that outlines the latest version of the housing bill he wants that would change 421-a.

In the latest version dated May 20, de Blasio is calling for prevailing wage for all building service employees working in 421-a buildings that are 30 units or more.

That would greatly expand the current requirement, which mandates better wages at all 421-a buildings 50 units or more.

Governor Andrew Cuomo believes the programs should be extended but doubts the state legislature can achieve changes this year.  The timing of de Blasio’s comments suggest he may be hoping to hustle reform through the statehouse regardless of how it affects workers’ lives. Paul Fernandes, a major player in the Up4NYC movement and director of the New York City and Vicinity Carpenters Labor Management Corporation, sees de Blasio’s approach as one-sided.

“Public subsidies require public responsibilities,” he said.


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