Despite a recent display of flexibility in regards to
421-a guidelines, the cityʼs affordable housing logjam seems no closer to a
resolution.
Calling the 421-a tax program “dead” and suggesting that
it should not be renewed “under any circumstances” barring the inclusion of a
prevailing wage mandate, Gary LaBarbera, president of the Building and
Construction Trades Council of Greater New York, has opposed the currently
expired affordable housing initiative.
Deputy Mayor Alicia Glen, meanwhile, has said that the
construction of affordable housing outweighs the need to employ union workers.
Addressing the City Council this summer, Glen pointed to
the prevailing wage price tags that come with union labor as a serious
deterrent to developers who are already accepting revenue cuts in the form of
sub-market rate units.
In a recent interview with Real Estate Weekly, LaBarbera
gave robust support for the unions and insisted that many developers desire to
work with prevailing wage talent due to the higher “quality of work” and a
safety record that is “far superior.”
He echoed that support on Monday saying, “We need a new,
comprehensive approach that builds needed affordable housing citywide, while
also offering construction workers good middle-class wages with benefits.”
But local developers desire to work with union laborers
may make the mayor’s affordable housing goals impossible to achieve.
A report revised earlier this week by the New York City
Independent Budget Office found that prevailing wage raises affordable housing
construction hard costs by 28 percent.
If the entire supply of 80,000 new affordable units — De
Blasio’s target number — was to be built via union labor, the undertaking would
require approximately $4.2 billion in additional public subsidies.
“The IBO’s updated report goes further in validating what
we have been saying for years — more prevailing wage mandates mean less
affordable housing for low- and middle-income New Yorkers,”said Jolie Milstein, president & CEO of the
New York State Association for Affordable Housing.
“As New York City faces an affordable housing crisis, the
IBO’s updated report further shows that construction union leaders are adding
to the problem by pushing for new prevailing wage mandates that compromise
affordable housing development,” Milstein continued.
“The hard-line position held by Gary LaBarbera and other
union leaders is irresponsible and it is directly hurting efforts to increase
the production of affordable housing.”
Earlier this week, Glen revealed that, in lieu of
subsidies for developers, the administration would consider lowering the amount
of units needed to be designated as affordable.
The maneuver would require that a higher number of
remaining affordable units go to tenants who are making less than 60 percent of
the household median income.
The change would make fewer apartments available for the
marginally better off and would also require a smaller unit-by-unit commitment
by developers who would now have more residences to sell off at market rates.
Source: Real Estate
Weekly
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