City agencies are consistently failing to enforce a prevailing wage requirement for nonunion doormen, janitors, concierges and supervisors at certain luxury apartment buildings, according to a new investigation by ProPublica. Unchecked by the Comptroller's office, many of these building owners continue to collect large tax breaks, despite the fact that they pay their workers as little as $10 per hour.
The city's 421-a tax abatement program, which incentivizes private developers to build residential housing in exchange for $1.1 billion in annual tax abatements, has been established for more than four decades, and was renewed this June despite considerable opposition from housing advocates.
Prevailing wage requirements were tacked on comparatively recently, in 2007. According to the new requirements, any 421-a-eligible apartment built after December 2007 with more than 50 units is required to pay its employees a prevailing wage in order to receive any tax abatements from the state.
About 400 buildings have come under the 421-a wage requirement since 2007, according to a city estimate.
Politicians who sponsored the prevailing wage legislation told ProPublica that "up to half" of the large apartment buildings receiving tax breaks fail to meet this requirement. For comparison, about 80% of workers at all NYC buildings earn a prevailing wage, which is set by the Comptroller and is intended to keep pace with union-negotiated wages.
ProPublica spoke to Isaac Bowman of East New York, who works as a concierge at The Exo, at 117-unit luxury apartment in Astoria that boasts "a 24-hour concierge service to fit your hectic schedule." In June, Bowman was making just $10.50 an hour to mop floors, vacuum and clean bathrooms on top of traditional concierge duties.
In today's dollars, concierges are required to earn $16.88 per hour, plus benefits valuing about $10 per hour.
While the Department of Housing Preservation and Development (HPD) administers 421-a, it bequeathed enforcement of the abatement's parameters to the Comptroller's office last summer. Still, it's up to the workers themselves to bring wage-theft allegations. And much like tenants unwittingly paying bloated, illegal rents in regulated units, many workers in luxury apartment buildings have no idea that they are owed significantly more than their take-home wages.
While some buildings brazenly ignore the law, others try to skirt it by taking advantage of loopholes.
At The Exo, Bowman was told to join a specific union if he wanted to keep his job—one that required a wage lower than that set by the comptroller. And at 64-unit 220 North 10th Street in Williamsburg, the self-described "pinnacle of Williamsburg luxury," one doorman earned a lower wage during the night shift, when his employer classified him as an "unarmed guard."
To combat wage theft, SEIU 32BJ, the country's largest service-workers' union, has launched a campaign to inform and empower building workers about illegal wages. 32BJ President Hector Figueroa described his role to ProPublica as "neighborhood police."
Recently, the union has stepped in to help doormen and building managers at 341 Eastern Parkway, a new luxury development looming over the Franklin Avenue 2/3/4/5 subway stop that earns an annual $451,000 tax break. There, building super Francis Alphonse earns $15.63 per hour with no benefits. According to the prevailing wage law, he should be making $24.83 per hour plus benefits.
Alphonse and his coworkers didn't learn that they were being stiffed until they made moves to unionize in recent months, and got in touch with 32BJ.
32BJ President Figueroa told us in a statement that 32BJ is currently working with "dozens" of 421-a apartment buildings in NYC that "aren’t paying workers the prevailing wage they are obligated to pay as a condition of getting the tax break."
"We will continue to support the workers at 421-a buildings that aren’t paying the prevailing wage to ensure the regulations are enforced and the workers get the fair pay they deserve," he added.