Building Trades Unions Join Forces To Fight REBNY’s 421-a Wage Floor Proposal

The push to revive a crucial and controversial tax incentive for developers of New York City apartments appears to be breaking down over construction wages.

New York Gov. Kathy Hochul directed unions and the real estate industry this year to negotiate wage standards for any replacement of the 421-a tax abatement, but those talks are at an impasse after a group of unions balked at the Real Estate Board of New York's “final offer.”

Eight unions publicly backed the Building and Construction Trades Council of Greater New York’s rejection of REBNY's proposal and have called on the state legislature to step in, City & State reported. 

“As members of the Building Trades representing tens of thousands of workers, we rejected their offer because it was a rehash of every flawed policy that existed under the previous 421-a program,” the eight trades unions told City & State in a statement.

“We urge [lawmakers] to work with us and housing advocates to spearhead a program that prioritizes the needs of workers, tenants and all New Yorkers,” the unions said.

REBNY's proposal would result in an average wage and benefits pay of $72.45 an hour for workers on projects south of 96th Street in Manhattan that receive a replacement 421-a subsidy. That figure drops to $56 an hour for similarly size projects in specific Brooklyn and Queens neighborhoods. Average citywide wages for projects with more than 100 units would be $35 an hour, increasing in increments to $45 an hour by 2033.

The trade unions said REBNY isn't negotiating in good faith and that the taxpayer-funded program previously contained a “wage standard that has been proven to be ripe with abuse.” The groups also called REBNY’s proposed replacement “scraps and more of the same policies that created this mess in the first place.”

The statement came from eight unions: the New York City District Council of Carpenters, Steamfitters Local 638, IBEW Local 3, UA Plumbers Local 1, Cement Masons Local 780, Plasterers Local 262, Ironworkers and Teamsters Local 28.

REBNY had hashed out a wage deal with the Mason Tenders District Council, The Real Deal previously reported. That collective of unions hasn't wavered from its position, it told City & State.

REBNY refuted allegations that it isn't negotiating in good faith in a statement provided to Bisnow.  

“A 421-a replacement program must accomplish two public policy goals: provide a generous wages and benefits package for working families and incentivize the development of as much permanently below market rate housing,” REBNY Senior Vice President of Policy Zach Steinberg said. “We're hopeful all stakeholders will continue working constructively toward addressing the housing crisis in a meaningful way this legislative session.”

Lawmakers failed to create a 421-a replacement or meet tenant demands last year, leading to a drop-off in filings for new apartment projects and the prolonging of New York’s housing supply and affordability crises. But Albany is staring down next Monday's state budget deadline to make a deal as the stalled negotiations spill into public view.

The BCTC and Hochul’s office didn't respond to Bisnow’s requests for comment. Assembly Speaker Carl Heastie said this week that no tax abatement program would happen without a wage deal.

Legislators and the state’s executive branch are pushing through their second round of housing policy negotiations in two years. As with last year, they are seeking to satisfy tenants asking for increased affordability and renter protections while creating a deal that makes it easier for developers to build rental housing.