Extension of 421-a Affordable Housing Program
Agreement Reached on Extension of 421-a Affordable Housing Program
The Building and Construction Trades Council of Greater New York (BCTC) and the Real Estate Board of New York (REBNY) today announced an agreement to extend the lapsed 421-a tax exemption program.
The agreement calls for eligible buildings in Manhattan to pay on average an hourly wage of $60 (includes wages and benefits) for construction workers based on all hours worked. Eligible buildings in Brooklyn and Queens would pay on average an hourly wage of $45 (including wages and benefits) based on all hours worked.
The wage and benefits obligation applies to buildings with 300 rental units or more in Manhattan south of 96th Street and in Brooklyn and Queens Community Boards 1 and 2 within one mile (5,280 feet) of the nearest waterfront bulkhead. Buildings with 50 percent or more affordable units are excluded from the wage and benefits obligation. Projects that have started prior to the effective date of this agreement and meet the eligibility criteria may opt-in to the program.
Other aspects of the agreement include:
- The now suspended 421-a program would be amended citywide. Newly created rental units with income limitations would be kept in place for 40 years. Such buildings would receive a 100% property tax exemption benefit for 35 years.
- Regarding enforcement and compliance of the wage and benefits obligation, developers will hire independent monitors to audit certified payrolls. The independent monitor would certify to the NYC Department of Housing Preservation and Development (HPD) within 120 days of the receipt of the final Certificate of Occupancy that the required average wages and benefits based on all hours worked have been paid.
- Developers may enter into a Project Labor Agreement (PLA) at the developer’s discretion. If a developer choses to enter into a PLA, then it may opt out of the 421-a wage agreement requirement in its entirety and still be eligible to fully participate in all other provisions of the 421a program.
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