Because of a very quiet deal between the city and a large union, developers will have to pay higher wages to service workers at large affordable housing projects in newly-rezoned neighborhoods, according to a new report.
The 2017 deal struck between the de Blasio administration and 32BJ SEIU, the building-service workers union, was never publicly announced, according to Crain’s. After securing “prevailing wage” requirements for large state-subsidized projects in future rezoned neighborhoods, 32BJ voiced support for the city’s rezoning initiatives at several public hearings, all while neglecting to mention the existence of such a pact. The city rezoned Jerome Avenue, Far Rockaway, East Harlem and Inwood.
In some cases, 32BJ representatives called for a wage requirement, even though they had already secured one.
The lack of publicity for this arrangement even led some developers to purchase sites without knowing about the wage requirement, Crain’s reported. Prevailing wages (in essence, union pay) can be as much as 25 percent higher than nonunion wages, according to some developers. Some developers worry the subsidies wouldn’t cover the labor costs imposed by the deal.
The prevailing wage requirement, which applies to most projects with over 30 units that receive public subsidies in the newly-rezoned areas, could impact up to 11 more rezonings in the future, and was also applied retroactively to the East New York rezoning in Brooklyn.
Both the city and the union claim that the deal was never meant to be a secret, but did not provide specific examples of public discussion of the deal.
32BJ recently raised the average wage for its residential workers to $55,000, after threatening a citywide strike last spring which would have forced tenants to take out their own trash or volunteer as doormen.
Last month, Gov. Andrew Cuomo announced that he will push for an expansion of what projects are required to pay workers prevailing wages, which would benefit construction unions as well. The city has opposed extending these benefits to construction unions, arguing that the added cost would result in fewer units being built. [Crain’s] — Kevin Sun