Cuomo’s revised 421-a plan will move ahead as REBNY and construction trades come to agreement
Ever since the city’s 421-a tax exemption program expired in January, the Building and Construction Trades Council of Greater New York and the Real Estate Board of New York (REBNY) have been negotiating under what terms to extend and/or modify the program. Both groups took part in what the city believes were “secret talks” with Governor Cuomo over the summer, after which he released his proposal to revise 421-a with wage subsidies for construction workers. REBNY was concerned about this stipulation, claiming it would increase construction costs by up to 30 percent, but a press release sent yesterday evening reports that they’ve reached an agreement with the Trades Council to move ahead with Cuomo’s version of the plan, which, in addition to setting a $60 hourly wage for qualifying projects in Manhattan and $45 in Brooklyn and Queens, extends the tax breaks up to 35 years (up from de Blasio’s proposed 25 years) and mandates newly created affordable units be kept in place for 40 years.
According to the press release:
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 percent 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.
It should be noted that these projects won’t require union workers, but rather will allow them to compete for work based on the wages. Developers will hire independent monitors to enforce the wages and audit payrolls. They’ll have 120 days after the issuance of the final Certificate of Occupancy to certify these facts to the Department of Housing Preservation and Development.
The news comes just a week after more reports that Cuomo was holding closed-door meetings with union officials and developers, about which de Blasio spokeswoman Melissa Grace said, “Albany needs to make good on the reforms we secured to the broken old 421-a program: No tax breaks for luxury condos, and no tax breaks without significant affordable housing in return. We look forward to seeing a plan that jumpstarts rental construction and contributes more of the affordable housing our city needs.” Days later, the city released its own 421-a reforms, proposing a mandate that those under-construction projects currently under the program must include housing for some of the 60,000 New Yorkers currently living in homeless shelters. There’s no mention of this in the Governor’s plan, however. In response to the announcement, de Blasio gave a vague statement: “We look forward to reviewing all the details of a new proposal. Our priority is ensuring that the ultimate legislation passed demands real affordable housing for our people and protects taxpayers from giveaways.”
The state legislature now needs to approve the program.
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