IBO: Correction to Our January 2016 Report on Prevailing Wages

Read the report correction

After the Independent Budget Office released its report on the impact of expanding prevailing wage requirements on January 11, we discovered problems with the data provided to IBO by the Department of Housing Preservation and Development (HPD). Correcting the erroneous data significantly alters our previously published findings. The updated results are described in this correction. After publication of the report, errors in the data identifying prevailing wage projects came to IBO’s attention. Twelve projects totaling 1,154 units that required prevailing wages were incorrectly flagged in the data as not requiring them by HPD, which tracks the city’s affordable housing programs and in many cases is responsible for monitoring compliance with prevailing wage laws on these projects. IBO has since independently examined regulatory agreements between the project sponsors and HPD for projects that could potentially have been required to pay prevailing wages to verify the status of each project. HPD has also completed its own review of the prevailing wage status of affordable housing projects, as well as confirmed the projects IBO identified. In addition to correcting the prevailing wage status for the 12 projects, an additional prevailing wage project was added to the dataset after previously missing data was made available. The resulting revised dataset consists of 211 new construction housing projects with a total of 22,157 affordable units financed from fiscal years 2010 through 2015, including 69 prevailing wage projects with 5,856 units. Using this corrected dataset, IBO again compared the construction budgets of projects that were subject to federal prevailing wage requirements with other publicly subsidized affordable housing projects that were not required to pay prevailing wages while controlling for various project characteristics. The revised results are reported below.