NEW YORK CITY—After months of hand-wringing—and developers threatening to bring multifamily development to a grinding halt if no tax abatement was put in place—The Building and Construction Trades Council of Greater New York and the Real Estate Board of New York have reached an agreement to extend the lapsed 421-a tax exemption program.
The agreement calls for eligible buildings in Manhattan to pay on average an hourly wage of $60 (includes wages and benefits) for construction workers based on all hours worked. Eligible buildings in Brooklyn and Queens would pay on average an hourly wage of $45 (including wages and benefits) based on all hours worked.
The wage and benefits obligation applies to buildings with 300 rental units or more in Manhattan south of 96th Street and in Brooklyn and Queens Community Boards 1 and 2 within one mile (5,280 feet) of the nearest waterfront bulkhead. Buildings with 50% or more affordable units are excluded from the wage and benefits obligation. Projects that have started prior to the effective date of this agreement and meet the eligibility criteria may opt-in to the program.
In a statement released just after the deal was struck, Governor Andrew Cuomo says, “The deal reached today between these parties provides more affordability for tenants and fairer wages for workers than under the original proposal. While I would prefer even more affordability in the 421-a program, this agreement marks a major step forward for New Yorkers.”
He continues, “The agreement extends affordability for projects created with 421-a for an additional five years–bringing affordability for these units to 40 years. It also allows lower-income individuals to qualify as it lowers the percentage of area median income needed to apply.
“Additionally, this agreement rightly delivers fair wages for working men and women – providing a rate of $60 per hour in Manhattan and $45 for certain projects in Brooklyn and Queens. Most importantly until this agreement is finalized, the State Legislature has refused to release $2 billion in state affordable housing funds. I urge the Legislature to come back to Albany to pass desperately needed affordable housing and to sign the MOU to release these funds. We simply cannot allow the lack of resolution to stall affordable housing production for years to come. There is no excuse not to act.”
“We are pleased to have reached an agreement that will permit the production of new rental housing in New York City, including a substantial share of affordable units, while also ensuring good wages for construction workers,” says REBNY chair Rob Speyer. “We would like to thank Governor Cuomo for his leadership on this critical issue.”
“We applaud Gov. Andrew Cuomo and his administration for bringing all parties together to finalize an agreement on an important public policy that will allow for the development of critical affordable housing, and establishes wage standards for construction workers in New York,” says Gary LaBarbera, president of the 100,000 member BCTC. “The agreement, which was overwhelmingly approved by the executive board of the BCTC, will preserve traditional worker standards and benefits and create opportunities for new categories of workers which will ensure our long-term competitiveness in the industry.”
Under the terms of the new agreement, the now suspended 421-a program would be amended citywide. Newly created rental units with income limitations would be kept in place for 40 years. Such buildings would receive a 100% property tax exemption benefit for 35 years.
Regarding enforcement and compliance of the wage and benefits obligation, developers will hire independent monitors to audit certified payrolls. The independent monitor would certify to the NYC Dept. of Housing Preservation and Development—within 120 days of the receipt of the final Certificate of Occupancy—that the required average wages and benefits based on all hours worked have been paid.
In addition, developers may enter into a Project Labor Agreement at the developer's discretion. If a developer choses to enter into a PLA, then it may opt out of the 421a wage agreement requirement in its entirety and still be eligible to fully participate in all other provisions of the 421a program.
The agreement calls for eligible buildings in Manhattan to pay on average an hourly wage of $60 (includes wages and benefits) for construction workers based on all hours worked. Eligible buildings in Brooklyn and Queens would pay on average an hourly wage of $45 (including wages and benefits) based on all hours worked.
The wage and benefits obligation applies to buildings with 300 rental units or more in Manhattan south of 96th Street and in Brooklyn and Queens Community Boards 1 and 2 within one mile (5,280 feet) of the nearest waterfront bulkhead. Buildings with 50% or more affordable units are excluded from the wage and benefits obligation. Projects that have started prior to the effective date of this agreement and meet the eligibility criteria may opt-in to the program.
In a statement released just after the deal was struck, Governor Andrew Cuomo says, “The deal reached today between these parties provides more affordability for tenants and fairer wages for workers than under the original proposal. While I would prefer even more affordability in the 421-a program, this agreement marks a major step forward for New Yorkers.”
He continues, “The agreement extends affordability for projects created with 421-a for an additional five years–bringing affordability for these units to 40 years. It also allows lower-income individuals to qualify as it lowers the percentage of area median income needed to apply.
“Additionally, this agreement rightly delivers fair wages for working men and women – providing a rate of $60 per hour in Manhattan and $45 for certain projects in Brooklyn and Queens. Most importantly until this agreement is finalized, the State Legislature has refused to release $2 billion in state affordable housing funds. I urge the Legislature to come back to Albany to pass desperately needed affordable housing and to sign the MOU to release these funds. We simply cannot allow the lack of resolution to stall affordable housing production for years to come. There is no excuse not to act.”
“We are pleased to have reached an agreement that will permit the production of new rental housing in
“We applaud Gov. Andrew Cuomo and his administration for bringing all parties together to finalize an agreement on an important public policy that will allow for the development of critical affordable housing, and establishes wage standards for construction workers in
Under the terms of the new agreement, the now suspended 421-a program would be amended citywide. Newly created rental units with income limitations would be kept in place for 40 years. Such buildings would receive a 100% property tax exemption benefit for 35 years.
Regarding enforcement and compliance of the wage and benefits obligation, developers will hire independent monitors to audit certified payrolls. The independent monitor would certify to the NYC Dept. of Housing Preservation and Development—within 120 days of the receipt of the final Certificate of Occupancy—that the required average wages and benefits based on all hours worked have been paid.
In addition, developers may enter into a Project Labor Agreement at the developer's discretion. If a developer choses to enter into a PLA, then it may opt out of the 421a wage agreement requirement in its entirety and still be eligible to fully participate in all other provisions of the 421a program.
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