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SEIU Survey: NYC Developers Taking Luxury Tax Exemptions, Not Paying Prevailing Wages

Apartment building service workers protested at three New York City sites last week because they are not being paid the prevailing wages guaranteed to them under a city law that grants luxury buildings tax exemptions.  

A new survey conducted by 32BJ SEIU shows that close to half of the buildings receiving tax exemptions through the city’s 421a program are out of wage compliance.  Many working at the multi-million dollar buildings are earning less than $10 an hour with no health benefits:

There are 57 buildings in Brooklyn, Queens and Manhattan that currently participate in the program and are required to pay prevailing wage. Based on the number of units in these 57 sites, a conservative estimate is that about 380 workers are affected, with an additional 250 workers in 30 buildings that are planned or under construction.

The survey showed widespread and systemic violations, with at least 26 buildings in clear violation. Workers said they would no longer stand by while employers get away with paying some of them close to minimum wage without benefits. They are calling on the city to make the developers pay them the required $22 hourly wage and benefits like paid sick days and health insurance or give back the tax breaks. The 421a program costs the city $1 billion each year.

The 421a program was created to spur development on unused or underused land.  The program drastically cut property taxes for a set amount of time.  As part of the program, prevailing wage standards were set to ensure workers from the community received solid jobs in exchange for their tax dollars going to build luxury buildings.  Sadly, for some workers this two-way trade became a one-way street.

Arias Park Slope at 150 4th Ave., Brooklyn was completed in 2011 for a total cost of nearly $46 million. The monthly rent for a one- bedroom apartment at Arias is currently listed for $3,120. The building will receive a tax exemption that will ultimately total $2.78 million.

Griffin Court Condominium at 454 W. 54th Street, New York, NY was completed in 2010 for a total cost of $109 million. The building will receive a tax exemption that will ultimately total $14.5 million.  A two-bedroom apartment there is currently under contract for $1.89 million.

L Haus, located at 11-02 49th Avenue, Long Island City, NY, was completed in 2009, and will receive a tax exemption that will ultimately total $784,000.  A two-bedroom apartment at L Haus is currently under contract for $1.15 million.

Jonathan Velez, 27, has been a porter-maintenance worker for 11-50 50th Ave. LLC at L-Haus in Long Island City for four years. Minor injuries, cuts and scrapes are daily features of his job. He earns $19.65 but without health benefits.

“Last year I was out of work for three days. There was no way for me to go to hospital. I had to stay home until I got better on my own,” he said.

For Velez, the lack of compliance became a major problem while working through Superstorm Sandy. After a door was ripped out of the ground by high winds he missed six weeks of work with an injury.

“We need the benefits that we are entitled to,” the married father of two toddlers said. “We need peace of mind, not to be left to the whims of supervisors. More than anything, we need not to be cheated out of what the law says we are entitled to.”


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