Wages in 421a Tax-Break Rental Buildings
Q My company is about to start construction on a 50-unit residential rental building that will be under rent stabilization. We have been informed that to receive the tax benefits of 421a in a new 50-unit building, the building superintendent will have to be paid “prevailing wages.” Can you provide me with more information about prevailing wages and what they would be for a superintendent in a residential apartment building?
A When the 421a tax law was revised, lawmakers included a wage requirement that essentially pays a union-level wage for apartment building service employees. A building service employee is any person who is regularly employed at a building and performs work in connection with the care or maintenance of such building. Unions often push for wage provisions not just to raise wages for workers in the new buildings but also to make sure that union-level pay is not undercut.
According to attorney Darius Marzec, the prevailing wage schedules are published annually pursuant to Labor Law 230 and are available from New York City's Office of the Comptroller. For residential “Class A” buildings, superintendents' wage rate per hour is $20.92 and effective April 21, 2009, the wage rate will increase to $21.20. Building cleaners are paid $18.94 per hour, and the wage rate will increase to $19.20 effective April 21, 2009.
The Real Property Tax Law's prevailing wage requirement for 421a tax break buildings does not apply to projects containing fewer than 50 dwelling units. It also does not apply to buildings where the local housing agency certifies that at initial occupancy at least 50 percent of the units are affordable to individuals or families with a gross household income at or below 125 percent of the area median income, and that such units will be subject to restrictions to ensure that they will remain affordable for the entire period during which the units receive benefits under this section.
This requirement applies to all persons employed in care or maintenance work at a building receiving benefits, who are regularly scheduled to work at least eight hours a week in the building. Exemptions apply to buildings with fewer than 50 dwelling units, as well as to buildings where the local housing agency has certified that at least 50 percent of the units are affordable to those at or below 125 percent of area median income, and where they will remain affordable throughout the benefit period.