421-a Deal Reached, Putting Rental Construction Back on Track, Experts Say
(DNAINFO) Amy Zimmer | November 10, 2016 — Without the tax break it’s difficult to build any new rental housing in the city, developers said.
The state’s controversial 421-a program — a tax break for certain newly built residential developments that expired in January — is getting a new life and could soon unlock $2 billion in state affordable housing funds.
The Building and Construction Trades Council of Greater New York (BCTC) and the Real Estate Board of New York (REBNY) reached an agreement to extend the lapsed program, the organizations jointly announced Thursday.
Gov. Andrew Cuomo had charged real estate developers and construction labor unions to negotiate a new deal that included some form of a prevailing wage requirement for construction workers.
Now, nearly a year later, they hashed out an agreement. It calls for eligible buildings in Manhattan — those with 300 rental units or more south of 96th Street — to pay, on average, an hourly wage of $60, including benefits. Eligible buildings in Brooklyn and Queens — those in Community Boards 1 and 2 within a mile of the nearest waterfront bulkhead — will pay construction workers on average, an hourly wage of $45.
Buildings with 50 percent or more affordable units are excluded from the wage and benefits obligation, under the agreement. Projects started prior to the agreement that meet the eligibility criteria may opt in to the program.
“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,” REBNY Chair Rob Speyer said in a statement.
Developers warned that without the tax break it would be difficult to build any new rental housing in the city, hurting the de Blasio administration’s affordable housing goals.