De Blasio’s 421-a plan boosts prevailing wage for service workers
Mayor Bill de Blasio’s proposed changes to a controversial tax abatement program would strengthen a requirement that service workers such as lobby attendants and maintenance staff be paid a prevailing wage, according to a legislative memorandum obtained by Capital.
The mayor’s proposal, which is supported by the Real Estate Board of New York, would mandate that recipients of 421-a tax breaks pay prevailing wages to workers in buildings with more than 30 units. Only buildings that are entirely affordable would be exempt. Under existing law, the requirement only applies to buildings that are at least 50 percent affordable and have more than 50 units.
De Blasio would also extend the requirement retroactively to buildings receiving the existing 421-a abatement if construction started after December 2007. In addition, he would add an enforcement mechanism, punishing owners who violate the wage mandate.
“The fiscal officer would be authorized to enforce the prevailing wage requirement, and would be required to present evidence of any noncompliance to the department of housing preservation and development,” the memo says.
News of the prevailing wage mandate comes as de Blasio prepared to head to Albany on Wednesday, where he will press his agenda on 421-a, rent regulation and other issues with state officials. With just 19 days left until 421-a expires, lawmakers are expected to introduce some version of his proposal this week.
The wage proposal also lands squarely in the middle of a debate over whether 421-a should have a similar requirement for construction workers. A coalition of unions known as Up4NYC has been running a weeks-long advertising blitz to draw attention to the issue, and it seems to have given real estate interests some pause. On Tuesday, REBNY and several other groups launched their own ad campaign responding to Up4NYC.
In several statements, members of the union coalition suggested it was a bit hypocritical for supporters of 421-a to not call for a prevailing wage for construction workers when one exists for service workers.
“Public subsidies require public responsibilities,” said Paul Fernandes, the executive director of New York City and Vicinity Carpenters Labor Management Corporation, in a statement echoing Up4NYC’s ad spots. “421a has wage standards right now for building service workers, but not construction workers. 421a needs to be fixed. It must require increased affordable housing and good wages for the workers who build these projects.”
For de Blasio, though, these are distinct issues. Service workers are generally paid less than construction workers, and in some cases far less. The current prevailing wage for carpenters doing heavy construction is more than $94 per hour when benefits are included. For doormen, elevator operators and cleaners working in residential building, the current prevailing wage is nearly $32 per hour with benefits.
On top of that, construction workers can account for much of the costs associated with building rental housing. Developers say union labor can add significantly to those costs.
De Blasio reiterated on Tuesday that he would not support a prevailing wage mandate for construction.
“Well, it’s well known that I am a believer in union labor, but I also am a believer in achieving the affordable housing goals that we’ve put forward,” de Blasio said, speaking at an unrelated press conference. “And the only way to achieve those goals is with an appropriate wage level for the creation of affordable housing.
“So I’ve expressed that to leaders in the labor movement, that, you know, this is a pretty sacred mission, from my point of view, to really produce affordable housing on a grand scale,” he said. “I think there is a way to do it that accommodates union labor, but not at prevailing wage. So we’re trying to find a more balanced approach.”
In addition to the practical, there is the political: The primary union that represents such workers, SEIU 32BJ, is much closer to the mayor’s base than construction unions. The proposed changes to the prevailing wage requirement in 421-a came out of discussions between the union and the de Blasio administration, according to a city official. REBNY has supported the mayor’s entire plan, but it was not pleased with everything included in it.
The mayor’s comments on Tuesday appeared to anger construction unions. Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York, issued a forceful statement in response.
“421-a tax subsidies have failed to achieve the primary goal of creating any real affordable housing,” LaBarbera said. “We strongly disagree with the mayor’s position that developers should not be required to provide good wages and benefits and a path to the middle class in order to benefit from millions of dollars in tax breaks. We should be enacting policies that look to reduce income inequality, not encourage it.”
CORRECTION: An earlier version of this article misidentified Paul Fernandes. He is the executive director of the New York City and Vicinity Carpenters Labor Management Corporation, not the Greater New York Laborers-Employers Cooperation & Education Trust with the Laborers.