450 affordable apartments-part of the larger Astoria Cove development in Queens, have fallen victim to the narrow self interest of organized labor:
“A second major affordable housing development touted as part of Mayor Bill de Blasio’s citywide intitiative is in jeopardy as a result of the state’s 421-a tax break program expiring, the developer told DNAinfo.
The builder behind the Astoria Cove development — which would bring some 1,700 apartments, 27 percent of them affordable, to the Hallets peninsula — said without the 421-a a tax break, the project can’t move forward.” (https://www.dnainfo.com/new-york/20160713/astoria/demise-of-421-a-tax-break-stalls-second-major-housing-development)
This latest development reinforces everything that BNYC has said about the shameful holding of affordable housing hostage to special interests that put their own organizational needs over the greater needs of NY’s citizens. As BNYC spokesperson Brad Gerstman pointed out in Crain’s earlier this year:
“Essentially, the tax breaks in 421-a, which Mayor Bill de Blasio sought to strengthen so even more units could be built, have become hostage to special interests that are trying to preserve their expensive niche in an industry that has begun to bypass their old-fashioned protectionism.” (http://www.crainsnewyork.com/article/20160211/OPINION/160219987/op-ed-what-killed-421-a-old-fashioned-protectionism)
And as we predicted, without the incentives built into the 421-A program many projects that could be promoting greater affordability will wither and die. Astoria Cove wasn’t the first development to flounder:
“The $1.5 billion Hallets Point project broke ground last month promising Astoria a new mini-neighborhood with 2,000 apartments — 483 of them affordable — along with a supermarket, school and waterfront esplanade to rise over the next 7 years.
A day later, key pieces of the project stalled. With the expiration of the state’s 421-a tax abatement program the day after the Hallets Point groundbreaking, the project’s developer, the Durst Organization, said it would cost too much to build.” (https://www.dnainfo.com/new-york/20160218/astoria/hallets-point-project-halted-day-after-mayor-attended-its-groundbreaking)
Get the picture? Political deals that scuttle this important program are harming New Yorkers who are most in need of affordable housing. But the construction unions are not done by any means. They have aligned themselves with the anti-gentrification crowd in an unholy alliance that will, if successful, stymie most of Mayor de Blasio’s far sighted affordable housing initiative:
“Construction union bosses are launching a new push to stifle affordable housing in New York City. Led by the Building and Construction Trades Council of Greater New York, the unions are demanding a virtual monopoly on housing construction and the ability to pay some of their workers more than $200,000 per year in prevailing wages and benefits.
They’ve now started running that political operation behind a smokescreen. The most galling thing is that they’re doing it under the guise of affordable housing advocacy. (https://commercialobserver.com/2016/07/the-construction-union-war-on-affordable-housing/)
No one is really fooled by these kinds of self aggrandizing smokescreens. Building any kind of affordable housing must by financial necessity involve a mix of market rate and affordable units. If you block the market rate aspect of this housing initiative, you are also making it very difficult if not impossible to get the needed affordable units built.
The irony here is the injection of prevailing wage into the equation can only be feasible if the value of the developments is ratcheted up so that the entire project can become affordable-for the developer and the contractors, without whom nothing will get built.
If we are going to get the most affordable housing possible built, we are going to need to bring back the 421-A subsidy that makes the building of below market rate units affordable. This will not happen unless, as Brad Gerstman has said, we jettison the “myopic and selfish pleading by organized labor.” (http://www.crainsnewyork.com/article/20160211/OPINION/160219987/what-killed-a-popular-construction-incentive-old-fashioned-protectionism)