reflects the strength of Carl Heastie and his people,” he said.
A representative for Heastie didn’t respond to requests seeking comment.
A city spokesperson indicated on Monday that the city likely won’t interpret the exclusion to mean that it can modify the law.
I don t think we re ready to go there, the spokesperson said.
City Hall and Albany haven’t exactly seen eye-to-eye on how the tax abatement should be changed. Mayor Bill de Blasio proposed his own version of the program in 2015, which didn’t include any condo projects nor a prevailing wage requirement for construction employees. During a press conference on Monday, the mayor said Affordable New York was an improvement on the old 421a, but wasn’t perfect.
“On balance, it’s certainly an outcome we can live with,” de Blasio said. “This is not the plan that we originally proposed, which I still think was superior. But I understand that in Albany a lot of things happen.”
The required wages for certain projects receiving the tax break is also a point of confusion.
The law sets wages for large Manhattan projects (300 rental units or more) south of 96th Street at an average of at least $60 an hour. For projects on the Brooklyn or Queens waterfronts, the average is $45 an hour. Because the requirement is an average, the city’s comptroller or an “analogous officer” won’t enforce the wages until the projects are completed. (Bills for the many different subcontractors can’t be averaged until all the work is done).
It’s not yet clear how this will play out and what exactly will be required of developers to certify that — together — hundreds of workers were paid the required average wages. Typically, property owners aren’t aware of how much their general contractor is paying their many different subcontractors; they simply come to some sort of agreement on what to pay the general contractor. That’s likely going to change and will require developers to more carefully map out who they are hiring and what they plan to pay in order to ensure that they get the 35-year abatement, according to Robert Gilman, accounting and audit partner at Anchin.
It could be a very complicated calculation and verification process, Gilman said. “You have to know the entire parameters of what you re doing.
Condo projects eligible for the abatement don’t have to pay these higher average wages. This stands out among the three exclusions laid out in the law, which include projects that are 50-percent affordable and those where the owner has signed a project labor agreement (meaning that they’re paying union wages anyway.) Gilman said condo projects aren’t subject to the wage requirement because the units are “relatively inexpensive” and few in number. Weissenberg agreed, saying the exclusion is a compromise that will aid middle-income buyers. He remarked that the tax abatement is needed to counter “astronomical” land prices.
It s something that the industry really needs, and something the region really needs to create affordable housing, he said. There s only so many multimillionaires who can buy condos and co-ops. Everybody else needs somewhere to live too.
(To see a ranking of the top Manhattan condo developers by number of units, click here)
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