The City Council held its first day of hearings Tuesday on mandatory inclusionary housing, a major citywide policy that will mandate affordable units in all new developments planned on rezoned land. Several council members grilled Deputy Mayor Alicia Glen, HPD Commissioner Vicki Been, and City Planning Director Carl Weisbrod on the program, railing about the lack of low-income units and union labor and demanding better protections against tenant harassment and displacement.

“We hear economic diversity, but our residents are worried about displacement,” said Council Member Donovan Richards, a Queens Democrat and the chair of the zoning subcommittee running the hearing. At least a dozen council members said the plan didn’t offer enough apartments that residents in their neighborhoods could actually afford. Under the lowest income tier of MIH, developers only have to rent to families who make 60 percent of the Area Median Income (AMI), or $46,620 for a family of three.

Council Member Antonio Reynoso, a Democrat who represents Bushwick, said that nearly half his constituents make less than $31,000 a year (40 percent AMI). Council members Jumaane Williams, Vanessa Gibson, Inez Barron, and Mark Levine all said that apartments for families earning $20,000 or $30,000 a year should be included in the policy, as did Public Advocate Letitia James.

But the top housing officials didn’t budge. If the city makes affordability rules too strict, it could choke off development in marginal areas like East New York, eastern Queens and much of the Bronx. “If we push too hard, we get zero housing,” said Been. “30 percent of zero is zero.”

That’s why they’ve created some escape routes for builders who might not be able to include affordable units in the same building as market-rate ones. Those measures include a hardship waiver from the Board of Standards and Appeals, which would allow developers to reduce their number of affordable apartments, or in some cases, build entirely market-rate. And developers will have the option to build affordable apartments at a different location. Also, buildings with 10 units or less won’t have to include below-market units at all.

Richards and a few other pols wondered how the city will regulate projects where developers choose to build their affordable apartments off-site. Builders who develop in newly rezoned areas like East New York will have to rent at least a quarter of their apartments at below-market rates. They can put those units in a separate building, either on- or off-site, to satisfy the requirements for MIH.

“Off-site is only justifiable if you’re getting considerably more units,” said Councilmember Mark Levine, a Democrat who represents the Upper West Side and West Harlem. “Now that we’re living without 421-a, won’t that open the flood gates to off-site development?”

Glen responded that only 10 percent of affordable units were built off-site under the Bloomberg administration’s voluntary inclusionary housing program. She explained that developers rarely used it, but the administration had to include it for MIH to “pass constitutional muster.”

Several members wondered about what would happen if the 421-a tax abatement was really dead. (Gary LaBarbera, the president of the Building and Construction Trades Council of Greater New York, even said so in an email on Monday.) But Glen tried to reassure the council, explaining that “a 421-a like exemption that will surface as we go through the legislative process.” The city needs a tax break like 421-a to encourage developers to build rentals rather than condos, she added.

Union groups and their allies have pushed for the revamped 421-a program to require that builders use union construction workers in exchange for getting the tax break. Since those 421-a talks in Albany have failed, politicians from union-heavy districts in Queens and the Bronx want a prevailing wage requirement to be written into the text of MIH.

“A living wage can’t be built into housing regulations,” said Glen, because courts won’t consider it constitutional.

The City Council will hold a second day of hearings on Wednesday on its other new zoning initiative, Zoning for Quality and Affordability (ZQA). The Council will vote on both policies next month to wrap up the six-month-long public approval process. Most community boards voted down both proposals, as did the Borough Boards. The City Planning Commission has already greenlighted the two zoning initiatives, and the City Council vote will be the final step before they become law.

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