Building Trades, New York

Is It Time To Kill 421-a?

June 10, 2015
By Joe Maniscalco

Time is ticking down on 421-a reform efforts.

Time is ticking down on 421-a reform efforts.

New York, NY — This past weekend, a frustrated Mayor Bill de Blasio suggested junking the city’s $1.1 billion 421-a tax abatement program if Albany and Hizzoner’s administration can’t come to terms over reforms. As it turns out, the mayor might just be onto something.

Last Sunday, Mayor de Blasio said, "If Albany will not give us the changes we need, if Albany will not strengthen rent regulations, if Albany will not pass a mansion tax, if Albany will not protect us, then here's what I think about any tax breaks for condominiums, luxury condominiums, any tax breaks for developers who are not going to create affordable housing—I say end those tax breaks once and for all.”

Social activists and worker advocates testifying at a Housing and Buildings Committee hearing held earlier this month essentially suggested the same thing. 

And in an interview conducted this week, UA Local 1 Business Manager John Murphy also told LaborPress that scrapping the entire 421-a tax abatement program might, in fact, be a good idea. 

“We don’t want to see a one-year or a two-year extension,” Murphy said. “We want to see wage protections inserted into 421-a legislation. If that can’t happen, then kill it. Kill it all together.” 

The administration’s insistence on excluding construction workers from prevailing wage language — while extending it to maintenance workers — has frustrated New York’s Building Trades long before the current kerfuffle over 421-a exploded after Governor Andrew Cuomo decided to enter the fray. 

“I really don’t think [Mayor de Blasio] understands the situation,” New York State Building & Construction Trades Council President James Cahill recently told LaborPress. “Prevailing wage is the barometer. Are you going to race to the bottom? How can you have [prevailing wage] for one sector of labor and not others? It’s uninformed. He can’t be that disengaged.”

The current incarnation of 421-a is set to expire on June 15, and despite what the mayor said over the weekend, his supporters aren’t ready to give up on reforms that they maintain will net more affordable housing units for New York City — even if they come at the cost of union wage jobs. 

In soon to be broadcast TV and radio ads, New Yorkers will be told that changes to the 421-a tax abatement program must be made because they will usher in a projected 25 to 30 percent increase in affordable housing over next decade. 

This, despite opposition from critics who question the affordability of the so-called “affordable housing” that will result, as well as the value of the low-wage and often poorly trained jobs that will be produced. 

“There are certain things that are not so easily quantified and when we look at creating careers, opportunities for the middle class and housing, it is clear that we have to improve policies such as 421-a,” Councilmember I. Daneek Miller, chair of the Civil Service and Labor Committee, told LaborPress. “This includes local hiring and investing in our workers. When we invest in our workforce and utilize programs such as union apprenticeships, we are also prioritizing safety. This is essential as the city moves to act on the mayor’s affordable housing plan.”

June 9, 2015

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