Cost and Legal Concerns Raised Amid Push for Local Hiring, Union Jobs in De Blasio Rezonings

In the neighborhoods that the de Blasio administration has targeted for a rezoning, many residents are asking whether the city can guarantee that development would produce good construction jobs for local residents.

In East New York, where City Council has already approved a rezoning, community advocates demanded that the city fund a new Workforce1 center to facilitate local hiring, fund other training programs, and require developers receiving subsidies to hire locally and provide training and living-wage jobs with pathways to careers in the construction industry.

Similarly, the Bronx Coalition for a Community Vision’s plan for Jerome Avenue calls for a local hiring requirement in the zoning text, policies mandating that subsidized projects hire locally, the creation of union jobs, and increased funding for apprenticeship and employment programs.

While the city has sought to expand local hiring programs and has invested in the creation of a new Workforce1 center in East New York, critics say the administration has still not done enough to guarantee residents’ other labor demands, including good wages, apprenticeships, safe conditions and union jobs.

The administration has so far resisted mandating that developers work with unions, pay prevailing wages (which are set according to union pay-scales), or use state-approved apprenticeship programs, which advocates say improve safety on the job.

City officials say these requirements would add development costs that would significantly reduce the amount of affordable housing built over the next 10 years. Deputy Mayor Alicia Glen has said prevailing wage requirements would reduce the amount of affordable housing the city can build by one third. The Independent Budgeting Office projects a substantially more modest but still significant impact: It says requiring all housing projects that include affordable units to pay prevailing wages would increase the cost of the mayor’s affordable housing plan by 13 percent.

Union advocates dispute those numbers and argue that unions keep development expenses low because they work more efficiently and offer better safety records that lead to lower insurance costs. Furthermore, they argue that even if there were a slight reduction in development, it would be worth the cost to protect workers’ lives and create middle-class jobs. In the past three years, construction deaths have surged to levels not seen since the previous building boom in 2007 and 2008, with the overwhelming majority on non-union sites.

“The horrible thing that I think this city has done more than anything is to make New Yorkers choose between affordable housing or safe jobs, paths to the middle class and quality construction,” said Pat Purcell, executive director of the Laborers-Employers Cooperation and Education Trust (LECET), in an e-mail to City Limits.

Last March, the Real Affordability for All Coalition voiced support for Mayor de Blasio’s mandatory inclusionary housing plan on the condition that the administration study how to create more deeply low-income housing and better job standards in rezoning areas. The results of that study are expected to be released in the coming months.

In the meantime, community, labor advocates and City Council members are proposing a number of reforms to improve labor standards and opportunities in rezoning neighborhoods. While they don’t always see eye to eye, they are united in their desire for a greater show of will from the administration to stand up to developers and create better construction jobs in low-income communities.

Existing labor policies and their limits

There are already state laws and city policies that aim to further the creation of good jobs and local hiring, but critics say that they are insufficient to ensure that residents in proposed rezoning neighborhoods will benefit from potential development.

New York State Labor Law requires that contractors who receive a public work contract pay workers prevailing wages. A carpenter hired for a New York City project, for instance, must be paid about $50 an hour. Yet projects are only considered public work if they meet several conditions, including that they serve a public purpose. Economic development projects, housing, and rent-restricted housing are not considered a public purpose, even when the developer takes advantage of subsidies and tax breaks.

Both de Blasio and Gov. Cuomo have worked to ensure that developers enter into agreements with unions for large economic development and housing projects on public land or receiving public money. For instance, developers involved in the city’s Hunter’s Point South project have engaged union labor to build rent-restricted housing and a school.

However, that still leaves a large number of private residential projects, even those that receive city subsidies, using non-union, low-wage labor to keep costs low. The Wall Street Journal reports that, according to members of the industry, in the 1980s almost all residential projects were built with union labor while now about half or less use union labor exclusively.

The latest proposed rendition of the 421a tax credit—which many community advocates protest constitutes a huge giveaway to developers— also won’t do much to improve construction wages in rezoning neighborhoods. The deal now before the legislature only sets wage standards in Manhattan below 96th street and on the Brooklyn and Queens waterfront, excluding all of the proposed rezoning neighborhoods except for Chinatown and Long Island City.

De Blasio has not fought to tie public funding to prevailing wages for construction workers, but he has shown interest in expanding local hiring provisions. As of 2015, any project that uses more than $1 million in subsidies from the New York City Economic Development Corporation (EDC) or more than $2 million from the Department of Housing, Preservation and Development (HPD) is required to register with the city’s HireNYC program. That program connects contractors to prospective candidates from a target population of low-income residents recruited by a neighborhood’s Workforce1 center. Employers are not required to hire these candidates, but must “comply with NYCEDC’s process of engagement, including providing an explanation as to why it did not hire the candidates referred by the city,” or face penalties or even default of the contract, according to EDC.

The city has said that mandating local hiring, as some advocates demand, could face legal challenges. Baltimore and San Francisco have successfully implemented legislation requiring that developers receiving public contracts ensure a percentage of hires are city residents. However, the comparatively small size of those cities—their combined population is about equal to that of the Bronx—means that “city hiring” and “local hiring” are equivalent in a way that doesn’t translate in a New York where Wakefield and Tottenville, Douglaston and Bay Ridge are all within the borders.

Calls for local hiring mandates, union apprenticeships

Rezoning residents have expressed a unanimous desire for union jobs and local hiring, but in practice those two goals have often been in tension in low-income communities of color. If a developer agrees to use union labor, they may end up importing workers from outside a community, as many construction unions are still dominated by white male workers.

On the other hand, locals recruited through the city’s Workforce1 center aren’t guaranteed jobs with prevailing wages or safe working conditions. Job postings for carpenters currently listed with Workforce1 pay between $15 and $25 an hour, as opposed to the $50 prevailing wage.

“If there is nothing in which you would be able to hold a corporation or real estate developer or contractor to a specific standard of protection for workers, then the [Workforce1] programs don’t necessarily mean much,” says Maritza Silva-Farrell, executive director of ALIGN NY, an alliance of community and labor organizations.

Yet Bishop Taylor, the executive director of Urban Upbound, which hosts a Workforce1 center in Long Island City, says that Workforce1 providers are increasingly trying to place workers in better-paying jobs, connect workers to training opportunities, and facilitate pathways to careers. He values high standards on these jobs, but is concerned that if the city required union labor, that could reduce opportunities for Long Island City residents.

“There’s a possibility that these union members could live in the geography that the construction is being done, and it could be that they don’t,” he cautions. “Getting into the union is a whole process in itself.”

Silva-Farrell says the solution to the conflict between union and local hiring demands are programs like Build It Back, which de Blasio revamped in the wake of Hurricane Sandy. Under that program, all contractors who receive more than $300,000 of Sandy recovery funding were required to enter into an agreement with the NYC Building and Construction Trades Council. In turn, the union agreed that 20 percent of hires would be Sandy-impacted residents, and pledged to train 100 new employees, especially Sandy-impacted residents, recruited through the city’s Workforce1 centers. As City Limits reported in October, the program has been a success, with 21 percent of residents hired from Sandy affected communities, and 108 new trainees, of whom 76 percent are minorities.

Silva-Farrell says the program should be expanded—with even higher goals for local hiring—to all neighborhoods affected by a rezoning. While the city argues that attaching labor requirements to a zoning text would be illegal, she say similar results could be achieved by requiring any developer receiving city subsidies to enter into a program modeled on Build It Back. (Many, but not all, buildings that are constructed after a rezoning will likely use subsidies to achieve the component of rent-restricted housing required under the city’s new mandatory inclusionary housing rule.)

Labor advocates will have to wait for the completion of the city’s feasibility study to hear the de Blasio administration’s take on this proposal, but they will likely have the support of other public officials. In 2015, Councilmember Elizabeth Crowley introduced a bill that would require prevailing wages on any project that receives more than $1 million in subsidy; the bill remains stalled in the Committee on Finance. Manhattan Borough President Gale Brewer has proposed requiring all workers in projects of over 10 buildings to enter an apprenticeship training program approved by the State Department of Labor. Developers lambasted both proposals, arguing it would make the cost of building affordable housing prohibitive.

Councilmember Daneek Miller, who says he strongly supports a measure to link labor standards to subsidies or zoning, said that it might be wise to create different labor provisions for non-profit affordable housing developers like churches, which have fewer resources and often aim for deeper affordability, versus for-profit developers looking to make a windfall.