Unions express concerns about HPD wage requirement rule changes for 421a tax exemption projects.

hpd website
Image from NYC's HPD website

Construction groups are concerned that New York City’s implementation of the new 421a doesn’t adequately protect wage requirements on certain projects, The Real Deal reports.

Developers can’t apply for 421a until after their project is completed in the the newly revived program through a rule change proposed by the department of Housing Preservation and Development (HPD). They also don’t need to prove that construction workers were paid required wages until then.

NYC’s HPD 421a exemption information page

The Building and Construction Trades Council of Greater New York (BCTCNY) says this arrangement presents an “insurmountable obstacle” for workers to enforce compliance. Santos Rodriguez, speaking on behalf of BCTCNY president Gary LaBarbera, said the new rule defeats the purpose of requiring minimum wages on certain projects, which is to assure workers get “paid appropriately while they are working.”

“The proposed rule delays compliance efforts until long after the workers, the contractors, are gone from the site, which will only serve to increase confusion, non-compliance, fines, penalties and findings of deficiency in the wages,” Rodriguez was quoted as saying.

Daniel Walcott, representing the New York City District Council of Carpenters, echoed Rodriguez’s concerns, adding that the city should create a mechanism for enforcing minimum wages throughout construction.

The new 421a version requires wages for large Manhattan projects (300 rental units or more) south of 96th St, at an average of at least $60 an hour. The average wage for projects on the Brooklyn or Queens waterfronts is $45 an hour.

However, wage enforcement is only one area where there are challenges.

It’s also unclear how the city will assess condo projects and how the lack of a preliminary certificate of eligibility will impact lending practices, The Real Deal reported.

Last month, HPD proposed a rule change that will prevent developers who are receiving 421a from generating off-site inclusionary air rights.


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