Many of the people building decent, low-cost housing in New York City are not earning decent wages. But according to a new study, the city cannot afford to pay those workers any better unless it dramatically scales back its affordable housing plans.
The citys Department of Housing Preservation and Development (HPD) is in the middle of a $7.5 billion initiative to preserve or build 165,000 units of affordable housing. As has been true historically, most affordable housing today is built by nonunion laborers who earn significantly lower wages than union tradespeople.
Unions and some analysts have called for subjecting affordable housing to prevailing wage rules, which link workers pay to local collective bargaining agreements. They say the lack of wage rules in affordable housing invites a race to the bottom in which contractors pay low wages and offer few or no benefits, permit unsafe working conditions and produce shoddy buildingsall on the publics dime.
But areport issued last month by the Citizens Housing and Planning Council, a nonprofit research and advocacy organization headed by former HPD commissioner Jerilyn Perine, finds that imposing so-called “prevailing wages” on affordable housing projects would boost construction costs significantly, forcing major changes to the mayors program which the administration has already acknowledged is going to take longer than desired to accomplish its goals.
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CHPCs own calculation is that, even if better-paid labor is more productive, a prevailing wage rule would increase affordable housing costs by 25 percent. That cost would have to be covered. “Youre either going to reduce the number of units you produce, or your going to make those units available to people with higher incomes, or you need more subsidies, which in this environment, we dont think is going to happen,” says Harold Shultz, CHPCs senior fellow. “You dont get it for free.”
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