Legislators Want Controversial Tax Credit to Include Women and Minority-Owned Firms

Rodneyse Bichotte and 22 other state legislators called on Gary LaBarbera and John Banks to incorporate a requirement for hiring minority and women-owned businesses.

Assemblywoman Rodneyse Bichotte. (Photo: Bichotte Campaign)
Assemblywoman Rodneyse Bichotte. (Photo: Bichotte Campaign) Bichotte Campaign

A group of 23 mostly black and Latino state legislators are calling upon the development and union interests hammering out a new 421a tax abatement deal to include a requirement for hiring women- and minority-owned businesses.

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In a letter to Real Estate Board of New York President John Banks and Building and Construction Trades Council President Gary LaBarbera, the group of 20 assembly members and three state senators, led by Brooklyn Assemblywoman Rodneyse Bichotte, highlighted that the African-American unemployment rate is twice as high as the white one, while the black community’s median income is roughly half as much. The solution, they argued, is having 421a mandate the hiring of so-called minority and women owned businesses in construction.

“These facts underscore that without equitable access to opportunities, disparity in income restricts the ability to build wealth,” Ms. Bichotte, who chairs the subcommittee that oversees the state’s contracting with MWBEs, wrote in the letter. “The inclusion of M/WBEs will help to address this.”

Mr. Labarbera and Mr. Banks are in the midst of fraught negotiations over the incorporation of new prevailing wage standards into 421a. The exemption, which dates to the 1970s, has long obligated developers to incorporate some affordable housing into participating new projects.

Much to the real estate industry’s chagrin, labor unions demanded that the abatement also include pay floors when it came up for renewal this year. Ultimately, Gov. Andrew Cuomo—a longtime ally of Mr. LaBarbera—and the leaders of the State Legislature agreed that they would let 421a expire unless the unions and developers reached an agreement on wages by January 15 of next year.

In the letter, Ms. Bichotte recommended that Mr. LaBarbera and Mr. Banks also write in a goal of hiring 30 percent minority and women owned subcontractors on any new construction receiving 421a. She noted this proportion would be in line with the governor’s goals for state contracting—and, she asserted, would help struggling MWBEs stay afloat and improve historic female and minority poverty and employment rates.

“It is an opportunity to remedy a history of policies enshrined in our laws that were meant to undermine women and people of color,” she wrote. “When more people prosper, we all benefit from a more robust economy.”

Negotiations between Mr. Banks and Mr. LaBarbera have so far have not produced an agreement, and it remains unclear if any will be forthcoming. Both expressed sympathy with the spirit of Ms. Bichotte’s letter while emphasizing their specific concerns and hopes for the ongoing talks.

“We agree,” Mr. Banks said in a statement to the Observer, reiterating the arguments for low or no prevailing wages in the new version of the exemption. “The 421a program is a good opportunity to ensure city residents have access to good, quality jobs as well as critical to building more multi-family, affordable rental units that the city so badly needs.”

Mr. LaBarbera stressed the needs of those who work on new construction projects.

“The BCTC supports MWBE participation in all types of projects across the city,” he said in a statement. “We continue to meet with REBNY representatives and are hopeful we will reach an agreement on an extension of the 421-a program in the weeks ahead which provides workers with good wages and benefits.”

Updated to include comment from Mr. Banks and Mr. LaBarbera.

Legislators Want Controversial Tax Credit to Include Women and Minority-Owned Firms