Union labor for construction is far more expensive than originally estimated IBO rechecks its data and says the added burden is a whopping 23%

Using union labor to build affordable housing under the mayor's ambitious program will be almost twice as costly as previously estimated.

The bottom line: 23% more, or $4.2 billion, which works out to $80,000 per unit.

In January, the almost-always reliable Independent Budget Office issued a report putting the impact of requiring prevailing wage, one tool to mandate union workers, at 13%. It turns out that 12 of the projects that IBO analyzed were labeled as nonunion when they had paid prevailing wage. The erroneous data had been provided by the city's Department of Housing Preservation and Development.

When experts complained to the IBO, the organization rechecked the data and found the error. I got a few similar comments when I used the IBO report in my Monday column for the print edition.

In fact, the IBO now believes the "hard'' cost of using union workers is 28% higher, but that builders respond by shaving other development costs to lower the overall number to 23%.

In the end, the new data merely make the conclusion of my Monday column more compelling.

Builders and the mayor want a 421-a tax break lucrative enough that it would allow the city to mandate affordable rents for up to a third of all units—an arrangement that would still require billions of dollars in city subsidies.

And the unions and the governor think they can ask for more?

Source: Crains New York