Developers claim that the only way affordable housing can be built is if the workers are paid less

Crains New York

Developers of low-cost housing and homelessness advocates say paying the prevailing wage will put them in the poorhouse. Three of the leading industry groups representing below-market builders joined with nonprofit homeless providers Tuesday to warn that a bill in the City Council obligating them pay union rates would roughly double their labor costs—and have a "crippling" impact on new construction.

"We urge the City Council to delay the vote on this bill until it is amended such that it will achieve its goals without crippling housing production and preservation or hampering the efforts to provide shelter to homeless New Yorkers," according to a joint statement by the the Supportive Housing Network of New York, the Human Services Council of New York, Homeless Services United, the New York State Association for Affordable Housing, LiveOn NY and Enterprise Community Partners.

Developers have battled prevailing wage rules for construction workers for years, but have generally enjoyed an amicable relationship with the bill's main beneficiary 32BJ SEIU, which represents janitors and other building employees.

Large projects in areas of the city rezoned under the de Blasio administration already must pay union-level wages.

The statement on Tuesday marked a change not only in who the industry is feuding with, but also in tactics: the release sent to Crain's linked resistance to the prevailing wage with the longstanding difficulties homelessness service providers have in receiving reimbursements from the city, and with the low standard of living experienced by many workers in the senior and indigent care sector.

"While we agree that all workers should be paid a living wage, we want to point out that the (primarily female) staff that work in affordable/senior housing and shelters have government-funded salaries that are far below those of non-prevailing wage building service workers," the group said. "This bill would exacerbate an already gaping pay—and gender gap."

Contractor is a wage cheat

From the Times Ledger:

An Astoria contractor was found to have cheated three immigrant workers out of $735,000 in prevailing wages and benefits by City Comptroller Scott Stringer.

Astoria General Contracting Corp. has been debarred from doing work with the city and state for five years related to its underpayment of three Latino workers who repaired and installed metal rolling doors or gates, grills and fences at various public schools around the city.

Astoria General, located at 35-34 31st Street, must pay more than $1.1 million in wages and benefits plus interest and civil penalties.

“My office has zero tolerance for unscrupulous contractors who attempt to cheat workers out of their rightfully owed prevailing wages and benefits,” Stringer said. “Paying workers a fair wage is not a choice, it’s the law. Three men are going to get the wages they deserve and another contractor has learned the hard way that we take our enforcement of the prevailing wage very seriously.”

DeBlasio doesn't care much for unions when it comes to affordable housing

From the Observer:

Alicia Glen, Mayor Bill de Blasio’s deputy mayor for housing and economic development, told the City Council today that obligating developers who receive the controversial 421a tax break to pay construction workers prevailing wages could result in 17,000 badly-needed below-market apartments not getting built—and argued that the demand for low-cost housing trumps the call for union jobs.

Ms. Glen told the Council’s Committee on Housing that several independent studies, including those done by Columbia University and the Citizens Budget Commission, showed that mandating real estate interests receiving the tax deduction to pay union rates would result in 30 percent fewer affordable units getting built. This figure, she said, meant “jeopardizing” some 17,000 potential apartments because of higher costs—unacceptable given what she called the city’s “housing emergency.”

Schneiderman fines dirty developer

From the Queens Courier:

The developer of a Rego Park building was forced to pay a combined $100,000 in restitution and back wages after ignoring legal obligations for receiving tax benefits, according to Attorney General Eric Schneiderman.

The state settled with Tuhsur Development, LLC after the firm violated mandates of the 421-a program, which offers tax incentives from the city when constructing buildings.

In exchange for benefits under 421-a, landlords and developers must add properties to the rent regulation system, and building workers must receive prevailing wages.

However, Tuhsur neglected to pay prevailing wages to workers at 63-36 99th St. in Rego Park. The firm was forced to pay nearly $10,000 in back wages to three building service workers and $90,000 in restitution to the city.

City contractors cheat workers out of prevailing wages

From the Daily News:

The mayor's campaign to build more affordable apartments has a dirty little underbelly: Many of the contractors who build cheaper units have been cited repeatedly for cheating workers out of a decent wage, a Daily News investigation has found.

Last week, Mayor de Blasio promised to “lift up working families” with soon-to-be built affordable apartments the city is sponsoring on a vacant lot in Brownsville, Brooklyn.

But at an affordable housing project a few blocks away, builder MDG Design and subcontractor F. Rizos, settled federal wage-cheating charges in April 2013 by agreeing to pay $960,000 in back wages.

Just one month later, MDG was hit with more wage-cheating charges on another city project, this time for $4.5 million in back wages, a city record.

Yet MDG was chosen by the former Bloomberg administration that very month to turn a city-owned warehouse in Williamsburg into 55 affordable apartments and stands to build hundreds more in the coming years.

Many taxpayer-funded developments in New York City require contractors and their subcontractors to pay “prevailing wages.” Some contractors jump through hoops to avoid this.

Cheap contractors arrested

From the Daily News:

A city contractor cheated workers out of nearly $600,000 on a taxpayer-funded affordable-housing project for seniors in Brooklyn, authorities said Wednesday.

Masonry Services Inc. and its owners, James Herrera and Jaime Herrera, have agreed to pay $600,000 in back wages and costs after a probe by state Attorney General Eric Schneiderman.

Between June 2009 and July 2010, the Brooklyn firm paid masonry workers on the city Department of Housing Preservation and Development project in Brownsville as little as $8 an hour even though it was legally required to pay more than $53 an hour, Schneiderman’s office said.

The case is the latest in a series brought by Schneiderman against HPD contractors for failing to pay prevailing wages, he said.

In March, the owner and two employees of Applied Construction Inc. were arrested on underpayment charges in the Bronx.

Developers not paying workers as promised

From the Daily News:

Real estate developers who are getting massive tax breaks to set aside a portion of their housing units for low- and moderate-income tenants are gypping their employees at those sites out of pay and benefits, the workers’ union is charging.

The Bloomberg administration’s little-known tax-abatement program has been used by developers to build housing in the city while taking advantage of an incentive that saves them millions of dollars in taxes.

To reap the benefit, the developers have agreed to set aside 20% of the housing units in a given project for affordable housing.

The program also requires building owners to pay their employees a prevailing wage comparable to workers at similar projects.

But the established pay scales are being ignored by many deep-pocketed developers, charge officials from 32BJ SEIU, the union that represents office cleaners, security officers, apartment building workers and others.

In Park Slope, six building employees at 150 Fourth Ave. were fired in February after they complained about working for $10.50 an hour without benefits, far lower than the estimated prevailing rate of $21 an hour.

The majority of the 92 sites that qualified for so-called 421-a benefits have been luxury developments in Manhattan, but 26 Brooklyn projects also have taken advantage of the tax break.
In 2011, the program cost the city more than $900 million in lost revenue, according to the Independent Budget Office.

Court hands Johnny a big blow

Hey Crapper,

The First Dept of the New York State Court of Appeals crapped on John Liu. Essentially they said that Liu can not just make up a prevailing wage to help out his union supporters and so the prevailing wage for movers in the City may not be set by the Comptroller in this manner.

Here's the link:

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_03756.htm

they don't typically admonish a Government Official but they wrote:

"We find that the Comptroller's use of Local 814's collective bargaining agreement as the sole basis for determining the prevailing wage schedule was arbitrary, capricious, and lacked a rational basis

and

"And, as noted earlier, no matter what statistical method is chosen - average, median or mode - the survey results reveal figures substantially lower than the wages chosen by the Comptroller.

By ignoring the data from his own survey and instead blindly adopting Local 814's rates, the Comptroller failed to comply with the statutory mandate to determine the wage "to be prevailing" (Labor Law § 230[6]), meaning the actual prevailing wage (see Matter of Action Elec. Contr. Co. v Goldin, 64 NY2d 213 [1984] [annulling Comptroller's prevailing wage determination because it was based on arbitrary and irrational interpretation of statute]).

The Comptroller's exclusive reliance on a labor union agreement that does not reflect wages that are actually prevailing was arbitrary and capricious.

and

"Where, as here, the union contract contains wage rates grossly disproportionate to the other data collected, the Comptroller cannot blindly use the 30% rule while ignoring the other data."