The Fair Wages for New Yorkers Act

Picture via KimTheWolf (flickr), showing a protest sign at Georgetown University in Washington, D.C. (where the living wage is almost $15 per hour.

The Kingsbridge Armory CBA campaign may have tanked, but its supporters have not been deterred. They're hoping the city council will enact the Fair Wages for New Yorkers Act, which would mandate a $10 minimum wage for all projects receiving more than $100,000 in subsidies. As many people have argued of late (including myself), institutionalizing the living wage would be preferable to relying on CBAs and deal-by-deal negotiations. "[T]his debate is not just about one parochial section of the Bronx," explained Ruben Diaz, Bronx Borough President. "This is a citywide debate."

Some details about the bill:

• The law would apply to projects receiving all sorts of subsidies, not just direct cash payments. It would count indirect subsidies like bond financing, tax abatements or exemptions, tax increment financing, fee waivers, energy cost reductions, environmental remediation costs, property acquisition write-downs, and other discretionary assistance.
• Projects used exclusively for affordable housing, or to house social services, arts, or cultural organizations would be exempt from the wage requirement. (Okay, but what does "exclusive" mean?)
• Covered employers include the developer/subsidy recipient; subsequent owners of the property; tenants and subtenants; and contractors that work on the project for 30 days or more (including temp services, food service contractors, and on-site service providers). However, non-profits with annual budgets of less than $1 million would not be subject to the wage requirement.
• Employees would be entitled to a living wage, regardless of their part time, temporary, or seasonal status. Independent contractors would be covered too.
• The living wage would be $10, or $11.50 for employees not receiving health insurance. These rates would be adjusted annually, based on the local consumer price index.
• The living wage requirement lasts for the longer of 30 years or the duration of the subsidy.
• Employers have to post notice of the living wage rules, give a copy of the notice to each employee, and keep records of hours worked and wages paid. The city comptroller's office can inspect those records whenever it wants, either on its own initiative or after receiving a complaint. If an investigation uncovers evidence of a violation, the comptroller would hold a fact finding hearing, and then issue an order, disposition, or settlement. Remedies could include: requiring payment of back pay plus interest to the wronged employee; a fine, not to exceed 200% of the total amount due to the employee; requiring the disclosure of additional records; and/or requiring the reinstatement of any employee retaliated against for trying to enforce the wage requirement.
• If an employer receives two violations in any six year period, the employer would become ineligible for financial assistance for five years.
• Developers and employers would also have include clawback provisions in their financial assistance agreements with the city or city economic development agency, and if an employer failed to cure a violation, it could lose its financial assistance and even be required to pay back already received subsidies.

Well, Mayor Bloomberg has predictably opposed the bill. As explained at the Atlantic Yard Report, his reasoning is completely illogical:

Bloomberg's conclusion: "The free market works much better."

"Having the public subsidize some workers and not others is not fair," he added.

Um, couldn't the same be said about "some projects and not others"?

I would add, isn't it a little unfair when employers, but not employees, get subsidies? And c'mon, we're not really talking about socialism here, we're talking about $10 per hour in one of the most expensive cities in the world. We're talking about ensuring families a decent quality of life.

Bronx Borough President Ruben Diaz, Jr., is one of the bill's chief supporters. City Councilmembers Annabel Palma and G. Oliver Koppell sponsored the bill at his request, and it's received endorsements from about 20 other councilmembers. City comptroller John Liu and Public Advocate Bill DeBlasio are also on board. And about a dozen other community organizations have signed on to the Living Wage NYC campaign.

No doubt we'll be hearing more about this. For more to read:

• Sam Dolnick, Wage Proposal May Prompt Fight at City Hall, The New York Times, May 23, 2010
• Daniel Massey, Living-wage debate gets broader, louder, Crain's New York Business, May 23, 2010
• John Del Signore, Bloomberg Expected to Fight "Fair Wage" Bill, Gothamist, May 24, 2010
• Eliot Brown, Living Wage Bill Formally Introduced; Bloomberg Smirks, The New York Observer, May 25, 2010
• Molly Zelvonberg, Keep the working poor working, fair wages law is "Nice," but stupid says Bloomberg, NY Examiner, May 25, 2010
• Jeanmarie Evelly, Kingsbridge Armory Battle Inspires Citywide Living Wage Bill, Bronx News Network, May 26, 2010
• Michelle Chen, Living Wage Fight Revitalized in New York City, In These Times, May 28, 2010
• Juan DeJesus, Pols, Labor Leaders Launch Wage War Against Big Business, NBC New York, June 2, 2010

D.C. land disposition law requires CBAs (sort of)

The Washington D.C. District Land Disposition Amendment Act of 2009 states that when city property is transferred to a developer for a project requiring government assistance, the developer must submit "Any community benefits agreement between the developer and the relevant community, if any".

The law doesn't seem to require CBAs, since there might not be "any" relevant community. It raises some questions though, like can a community coalition demand a CBA when a developer doesn't want to recognize it as "the relevant community"? What if there are competing community coalitions, who decides which one (or both) is "the relevant community"?

Aside from CBAs, the law also imposes some generally applicable community benefit policies. It requires developers that purchase city land to contract with Certified Business Enterprises (local/disadvantaged businesses) for at least 35% of the project's contract dollar volume and to enter into a First Source Agreement with the city. Transparency and accountability are encouraged by requiring the mayor to prepare an economic analysis for property dispositions. The analysis must describe "The manner in which economic factors were weighted and evaluated," and it must also include a narrative explanation as to why the particular disposition method (e.g., competitive bidding, negotiated sale) was chosen.

Leila Marie Jackson Batties at the Holland & Knight law firm has prepared an article discussing the law in more detail.

Read the fine print

The New York Court of Appeals (the state's highest court) just issued a decision finding that a CBA-like agreement could not be enforced against the project's owner because, by its terms, the agreement had expired. (The lower court opinion is available here.)

The contract expressed quite clearly that it would expire after 10 years, but the corporation that was formed to implement the agreement challenged it anyway. One of the corporation's arguments was that it couldn't have intended such a short duration because the project couldn't have been completed within 10 years. The court didn't buy this, admonishing the corporation that it could have written a longer term into the agreement had it so desired.

While this case doesn't say anything about the general validity of CBAs, it does underscore the importance of paying attention to durational terms and other contract details. Most CBAs specify a term of 30 to 40 years, although the Gateway Center CBA has a duration of less than 10 years and the SugarHouse CBA will remain in effect indefinitely.

CBA legislation to be discussed in Pittsburgh

A public hearing will be held on Tuesday to allow the public to comment on two bills pending in Allegany County, Pennsylvania (read the official notice here).

The first bill would create a Community Benefits Program that would require developers of subsidized projects to meet with community represetatives at least three times prior to receiving any approvals. The bill does not explain how the community representatives would be chosen (except that individuals unaffiliated with any community group would not be eligible), nor does it actually require that a CBA be completed.

The other bill would require economic and social impact analysis reviews for any development over 50,000 square feet that receives subsidies or needs government approval. Completed reports would be made available to the public at least 90 days before any county approval.
After the report is issued, a public hearing would then be held at which the county council would review the report. Contents of the report would include, in plain language, the following:

• Amount of projected financial cost to the County and other governmental entities,
  including subsidies and infrastructure improvements;
• Amount of tax revenue anticipated to be generated by the Proposed Project, and any
  anticipated restrictions on or dedications of that tax revenue;
• Number and type of construction and permanent jobs that will be generated by the
  project, and the wages and benefits likely to be provided for such jobs;
• Any anticipated positive or negative impacts on existing businesses and employment
  patterns in the vicinity of the Proposed Project;
• Number and size of housing units to be created; the affordability levels thereof; and the
  proportion of rental and ownership units;
• Whether or not LEED certification will be attained for the Proposed Project, and, if so,
  what type of LEED certification;
• Current land uses and ownership;
• Proposed uses by size and land ownership;
• Intended timeline for construction and completion;
• Estimated cost of construction;
• A visual depiction of the Proposed Project, such as drawings, photographs of models,
  or photographs of similar, completed projects; and
• A breakdown, by category, of the numbers of anticipated displacements of existing
  residents, businesses, or services to make way for the Proposed Project, as well as the
  name, address, and type of business for each business or service anticipated to be
  displaced.

2 Political Junkies reports that Pittsburgh UNITED is supporting the impact analysis bill.

Connecticut Responsible Growth Task Force recommends CBA legislation

The report of the Connecticut Responsible Growth Task Force, released on Feb. 4, 2008, recommends that the state adopt legislation authorizing CBAs. The report states:

The Task Force recommends that state statutes be amended to authorize
municipalities to utilize Community Benefit Agreements for projects that are consistent with Responsible Growth principles. These agreements would be between the developer and the municipality and could address such things as: off-site developments or improvements; impact fees; Tax Increment Financing (TIF); and Transfer of Development Rights (TDR) or Transfer of Development Credits (TDC), as well as other items of local concern.