Cuomo. | AP Photo/Richard Drew Housing issues emerge in frenzied end of session in Albany As Senate offers 421-a bill, labor balks at its wage requirements

In the ongoing dispute between developers and labor unions over the future of the 421-a development tax incentive, the State Senate has introduced a bill to reinstate the program with specific wage requirements — a move that drew the ire of the head of the city's labor unions, who called it a giveaway to real estate.

The legislation, which was introduced without a sponsor late Monday night, would set minimum wages for construction crews working on residential projects that receive the property tax break — an attempt by the Republican-controlled Senate to settle the issue through law, rather than private negotiations that did not yield a compromise.


The bill would require a minimum average of $55 an hour for construction workers — $114,400 a year — on Manhattan projects south of 96th Street that have more than 300 units, less than half of which would be set aside for below-market-rate housing. All other workers would get paid a minimum of $15 an hour, with an additional $1.50 for health benefits. That rate would rise to $21 an hour by Jan. 1, 2020.

"Creating more below-market rental housing is one of the greatest challenges facing New York City. Any meaningful effort to address the city's affordable housing needs will require reviving the 421-a program. It accounted for half of the affordable housing projects in New York City over the last two years. The new program will produce even more affordable housing," John Banks, president of the Real Estate Board of New York, said in a prepared statement.

Gary LaBarbera, president of the Building and Construction Trades Council of Greater New York, called the move a "sellout from the Senate Republicans to REBNY."

"Are you kidding me? We just passed $15 minimum wage. Thank you for the minimum wage," LaBarbera said in an interview. "Are they that out of touch with reality?"

Assemblyman Keith Wright, a Democrat who chairs the housing committee, said it is "tremendously unlikely" his chamber would move the bill. A spokesman for the Assembly Democrats called it "a nonstarter." A spokesman for the Senate Republicans did not respond to repeated requests for comment.

Gov. Andrew Cuomo last year required REBNY and the labor unions to reach an agreement on wages for 421-a projects before he would sign a renewal of the bill, which sunsets every four years. The measure that passed the State Legislature last year would have extended the life of the exemption in exchange for more below-market-rate housing from builders.

After pay rate talks hit a stalemate, the law governing 421-a expired in January.

In recent weeks, the governor's office convened executives from the two parties to try to reach a deal. According to several sources with knowledge of the talks, the carpenters union balked at the wages that were being proposed.

"I wouldn't blame it all on the carpenters. It's a building trades issue, and we couldn't come to an agreement at that meeting," LaBarbera said. "There was good faith in the room, and we all accepted the fact that we weren't going to come to a deal and we would take that up next year. … Then in the 11th hour, they do this."

The drama over 421-a unfolded in the background of another housing fight in Albany — the fate of $2 billion the governor previously allocated for low- to moderate-income and formerly homeless New Yorkers throughout the state.

The State Assembly will not sign off on a memorandum of understanding (MOU) unless the governor commits to spending $500 million over five years for the New York City Housing Authority, Wright said. The Senate Republicans want 421-a reinstated.

"I have been steadfast that New York City public housing needs to be a part of the budget. We agave $100 million last year and we're proposing $500 million for this year," Wright said in an interview. "I think it would be political malpractice and governmental malpractice if we didn't do something for them. NYCHA has been neglected by the federal government, by the state government and by the city level of government for well over 20, maybe even 30 years."

Several sources close to the talks said Cuomo is not inclined to give that much money to a city agency controlled by Mayor Bill de Blasio, his political rival.

A Cuomo administration official said it is unlikely that either the 421-a bill or the MOU will be settled before the legislative session is set to end on Thursday. "That being said, obviously conversations are ongoing," the official added.

Advocates have been clamoring for a resolution on the MOU in recent weeks.

Three dozen people gathered before a sandstone staircase outside the Senate chamber in Albany to call out top lawmakers for refusing to sign it.

“When is a promise a promise? Is a promise a promise if it’s not kept?” asked Marc Greenberg, executive director of the Interfaith Assembly on Homelessness and Housing.

Elderly women wearing purple shirts joined with activists, several Protestant ministers and a Catholic nun, Sister Doreen Glynn. Glynn called on Cuomo, “as a fellow Catholic,” to recall Jesus’ teaching that “whatsoever you do to the least of my sisters and brothers, you did for me."

Assemblyman Andrew Hevesi, a Queens Democrat who chairs the chamber’s social services committee, said if no MOU is reached before lawmakers leave the Capitol this week, it would fizzle into a graveyard of broken political promises.

“Funding for homelessness never seems to materialize,” he said. “There are other issues that are threshold issues that are at play. 421-a is an issue, although they are negotiating. NYCHA housing is an issue. Everything related to housing has been lumped into this milieu of supportive housing and affordable housing, but everything is doable.”

Another proposal to create a residential tax exemption seems to be going nowhere.

The New York State Association for Affordable Housing was floating a plan to give a 100-percent exemption to properties with four or more units for 60 years, in exchange for an undefined amount of affordable housing, according to the Association for Neighborhood and Housing Development.

The proposal would not have distinguished between for-profit and nonprofit developers, ANHD said.

"This proposed abatement would be really historically bad public policy. It creates an open-ended, as-of-right abatement for developers who would have 100 percent real-estate tax exemption available to them, with no particular requirement for what the public benefit would be," Benjamin Dulchin, executive director of the organization, said in an interview. "It'd be very good for for-profit affordable housing developers and very bad for the public benefit. It would be very bad for the taxpayers."

A spokesman for NYSAFAH said in response, “We have not heard from Mr. Dulchin on this issue, but he apparently misunderstands a concept that has been discussed informally since 2014.”

--additional reporting by Jimmy Vielkind