The Hochul administration wants to build 800,000 new units of housing across the state, many of those in the population center of New York City. But building housing in the city is more costly than in rest of the state. The reasons for that, depending on who you ask, vary from strict zoning laws to the intense demand for labor and materials.  

One of the major unions involved in construction discussed the administration’s housing proposal Tuesday with Capital Tonight.  

“I think [Hochul’s proposal] is a great foundation for a comprehensive package that’s going to create good jobs and truly affordable housing,” said Kevin Elkins, political action director for the New York City District Council of Carpenters.

Hochul’s latest proposal to create housing includes a variety of ideas including incentives for office conversions, legalizing basement apartments, eliminating density restrictions and creating a new tax incentive for developers, like 421a, which Elkins called “a failed policy."

“It didn’t create good affordable housing. It didn’t create good jobs and because of that, we’re now dealing with a massive affordability and homelessness crisis,” he said. 

But according to developers, 421-a was responsible for 70% of rental housing produced in New York City between 2010-2020; the decline in multifamily housing production came after the tax abatement expired in June 2022.

In her executive budget, Hochul’s replacement for 421a is known as 485-x, but it isn’t fleshed out; it’s just a placeholder until the Legislature, with guidance from other stakeholders, puts meat on the bone.

Elkins is hopeful that developers won’t be allowed to dominate the negotiations over the new tax incentive.  

“We are coming at this (from the) perspective of, what the developer says goes has been proven wrong,” he said.

There is built-in tension between developers who want to turn a profit, and construction unions like Elkins’ which frequently benefit from project-labor agreements and prevailing wage laws in New York state.

According to some in the industry, applying construction prevailing wage requirements to affordable housing projects results in very few projects being built, because it makes construction costs uneconomical.

Any successful negotiation over housing must include compromises from these two groups. 

Elkins' position is that the construction trades have already offered multiple compromises to the Real Estate Board of New York (REBNY), which represents developers, though he wouldn’t be specific. 

“We have been willing to negotiate on the wage standards,” he said. “We understand that there are certain economic realities when it comes to certain affordable housing developments. But we want to make sure that whatever wage standard it is, it applies to all the five boroughs.”

Elkins said that under 421a, union members made a certain amount of money (not prevailing wage), but only in the wealthiest parts of the city. 

“That’s wrong. Whether you’re in the Bronx, whether you’re in Staten Island, whether you’re in East Brooklyn, everybody deserves a wage they can raise a family on,” he said. 

When asked what developers need to compromise on, Elkins said they may have to lose a percentage of profit because they have to pay workers a little bit more.

He’s urging REBNY to come the table prepared to negotiate.

“The compromises we offered were based on on-and-off negotiations for two years,” Elkins said. “But REBNY keeps taking the ball and moving it back just a little bit. That’s how children act.”

In 2017, REBNY reached a construction wage agreement with the Building and Construction Trades Council (BCTC) that paid construction workers, on average, over $109,000 per year on large rental development sites in Manhattan below 96th Street and nearly $82,000 per year in certain locations of Brooklyn and Queens. 

An emailed statement from REBNY Senior Vice President of Policy Zach Steinberg indicates developers are ready to continue working with unions like Elkins’. 

"Governor Hochul has put forth a proposal in the budget to spur much-needed rental housing production and REBNY is committed to working with a broad range of stakeholders, including public officials, labor unions and other advocates to advance this plan. That includes continuing to work with the Building and Construction Trades Council and its constituent unions to pay good construction wages and benefits as part of any new program that spurs the creation of multi-family, mixed income rental housing." 

Both groups, the union and REBNY, say they support tenants. 

In a letter to members of the state Assembly, the Carpenters’ Union states it’s for “common sense tenant protections and expanding the Housing Access Voucher Program”. REBNY’s website states it supports the Housing Access Voucher Program, but it was critical of last year’s Good Cause bill because “it would exacerbate our housing shortage and does nothing to address tenants’ rent burdens nor failures of code enforcement by local governments.”