OPINION: Prevailing wage will stifle affordable housing
Albany lawmakers should resist efforts to tie the renewal of the 421-a program with demands for higher wages on affordable housing projects, as it will curb the production of new housing just when New Yorkers need it most.
The 421-a property tax exemption has been one of the most successful tools to promote affordable housing programs in New York City since its inception nearly forty years ago. The program now faces expiration on June 15 unless renewed by the State Legislature. While we are confident the program will be extended, we are concerned about calls to link the program’s future to a new mandate to pay prevailing wages.
Such a mandate would drive up costs at affordable housing projects. Prevailing wage rates are out of line with the average wage paid on New York construction sites. For example, the state’s prevailing wage for carpenters, $45 an hour, is nearly one and a half times what an average carpenter makes in New York City, which itself far outpaces the city’s living wage, the standard that allows workers to support their families and afford their basic needs.
These higher costs will require greater government subsidies — or smaller projects. The result will inevitably be fewer units built, fewer construction workers hired and fewer affordable housing options for the residents of Brooklyn.