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Jan
2016
19

Duh Blasio: Mayor’s Anti-Wage Stance Leads to Suspension of Affordable Housing Construction

The controversial 421-a tax break was cause for many a labor rally

The controversial 421-a tax break was cause for many a labor rally



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With no deal able to be reached between construction unions and the Real Estate Board of New York (REBNY), the controversial 421-a tax abatement program expired at midnight on Friday.  While a bill was passed to extend the program for a four-year period in June, it was dependent on the two groups reaching a compromise on the wages that would be paid on 421-a properties by January 16th.  The worker-supportive stipulation was pushed for by Governor Andrew Cuomo after original talks broke down between the governor and New York City Mayor Bill de Blasio, who opposes paying prevailing wages on these projects.

Gary LaBarbera, President of the Building and Construction Trades Council, asserted his organization’s interest in finding a solution:

“Unfortunately, despite a good faith effort by all parties, REBNY and the Building Trades were unable to come to a final agreement on the renewal of a 421-a program that would provide good wages to construction workers across the city.  We remain ready to engage with all stakeholders in the weeks and months ahead to achieve our goals of creating needed affordable housing and middle class jobs for New Yorkers.”

The 421-a program was first implemented in 1971 as a way to spur housing development during an economic downturn.  Since then the program has been routinely abused and was often mired in scandal.  An excellent breakdown of “Everything you need to know about about NYC’s 421-a tax abatement program” was published last week by Curbed NY.    

As we wrote in July of 2015, lobbying disclosures from the group Putting New Yorkers to Work shows that part of the $1.9 million used in the campaign to push for an extension of the 421-a tax abatement program came from developers who were involved in the federal corruption charges surrounding former Assembly Speaker Sheldon Silver and former Senate majority leader Dean Skelos.  A recent ProPublica investigation found that prevailing wage requirements were being ignored and abused all along.  

Though the deadline has come and gone, the 421-a tax abatement program is not wholly kaput.  The agreement reached in June said that the program would be “suspended” if REBNY and construction unions could not reach a deal, leaving the door open for further talks. However, many worry that the rocky nature of this attempt to reach a deal will make lawmakers wary of push too hard for the legislature to take it up again.  Speaking to Crain’s New York, land-use lawyer and former councilman Ken Fisher said:

“I can’t imagine that in an election year legislators are going to be rushing to take on a really complicated issue where they have to sort out the mayor, the governor, the construction unions, the real estate community, tenant advocates, the property tax base, and the need for more housing.  They could barely pass a flawed bill last year and they weren’t running.”

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