Testimony
Zach Steinberg
Senior Vice President of Policy
•October 27, 2024
We appreciate the opportunity to provide testimony on Intro 910, which would establish community hiring and compensation standards for City assisted housing development projects.
Intro 910, also known as the Construction Justice Act, imposes new wage and hiring standards on affordable housing projects. Specifically, under the proposal, housing development projects that create or preserve at least 100 units and that cost over $3 million, and that receive discretionary loans, grants, or land conveyances at less than market value from the City would need to:
Make a best faith effort to ensure that 30 percent of the hours worked are from a target population (community hiring); and
Ensure that workers receive no less than $40 per hour in combined wages and essential benefits, with exemptions for certified apprentices.
The legislation includes reporting, noticing, recordkeeping and enforcement provisions to ensure compliance with these standards.
REBNY has expressed support for local legislation that would establish an elevated minimum wage standard and local hiring requirements for City-supported construction projects. In a city where too many residents struggle to make ends meet, these policies can be an effective way of strengthening the city’s economy and helping hardworking residents.
Based on this belief, REBNY was proud to reach an agreement with the Mason Tenders District Council (MTDC) to establish an elevated minimum compensation standard for projects benefiting from what eventually became the 485-x program. Under the REBNY – MTDC agreement, all workers on these projects would be guaranteed a wage and benefit package beginning at $35/hr, eventually rising to $45/hr by 2033. Notably, this agreement applied to private-contract mixed-income residential development, not City-supported affordable housing, and called for a lower wage level than proposed in Intro 910.
The REBNY – MTDC agreement recognized that any wage standard must be calibrated so as to not inhibit the ability of a project to move forward. If a project becomes financially infeasible due to higher regulatory burdens those same workers will not have a job in the first place and the City will lose out on the affordable housing it urgently needs.
The $40 per hour minimum wage and benefit standard proposed in Intro 910 will raise project costs and inhibit development of projects that operate with very tight margins. This standard will reduce the overall amount of affordable housing the City can support and limit the ability of the City to create more deeply affordable housing. For these reasons, the $40 per hour threshold must be reduced.
In addition, the proposed compliance regime will pose significant challenges for many developers and contractors, particularly smaller firms and women and minority businesses. Many contractors who employ workers on City-supported affordable housing project are not familiar or equipped to comply with the prevailing wage style recordkeeping, noticing, and enforcement requirements included in the proposal. Given that the legislation imposes a minimum wage rather than a prevailing wage, it would be reasonable to find ways to reduce the significant compliance obligations in the legislation.
In addition, the bill could be improved through changes that make clear the role of the various agencies involved in enforcement to streamline implementation and ensure compliance measures are easy to understand and follow. These include:
Clarifying the role of the Comptroller and the Department of Housing Preservation and Development (HPD) regarding community hiring plans and any enforcement related to those plans;
Reducing the amount of project-specific wage data that is required to be reported to HPD; and
Providing employers with greater ability to cure any deficiencies and prevent benefit revocation that can jeopardize project financing.
Lastly, overseeing and enforcing this legislation will require greater resources for HPD. We encourage the Council to better fund HPD so that it can meet any new obligations.
With the City already facing a severe housing shortage – particularly affordable housing – and the Mayor’s moonshot goal of 500,000 new units, balancing the goals of the legislation with the need for more housing is critical. REBNY looks forward to continuing to work with the City Council, the Mayoral Administration, and all stakeholders on this important topic. Thank you for considering these views.