By Cezary Podkul, ProPublica
Doormen, janitors and other service workers at scores of luxury apartment buildings in New York City can now check to see if they deserve higher pay because of taxpayer subsidies the owners receive.
After a public records request from ProPublica, the city’s housing and finance departments have provided a list of 210 properties that are subject to the wage requirement, which can lift worker pay from as little as $10 per hour to $17 or more, depending on length of service.
ProPublica is publishing the list as a resource for workers, who often don’t know about their right to higher pay and benefits as a result of the tax break.
The higher pay is required at big buildings that benefit from the city’s 421-a program, which grants about $1.1 billion a year in property tax relief to developers of residential housing. As one condition of the tax break, owners must pay “prevailing wages” to service employees — rates set by the city comptroller that are benchmarked to union contracts covering similar work.
Lawmakers tied the massive tax break to prevailing wages to ensure that, if taxpayers were subsidizing the construction of luxury apartments, they wouldn’t also have to subsidize building workers who earn too little to pay rent or buy food.
Yet, that’s precisely the case at some luxury buildings across the city. In a December story, ProPublica profiled Isaac Bowman, a concierge in a Queens building who had to rely on food stamps and a federal subsidy for his rent because he earned only $10.50 per hour. The building’s 421-a tax savings total nearly $1 million a year, requiring the owner to pay Bowman closer to $17 per hour, plus benefits.
After the story ran, the building’s management agreed to negotiate with workers for higher pay. But it doesn’t always end that way. At another 421-a building we wrote about, 341 Eastern Parkway in Brooklyn’s Crown Heights neighborhood, management is planning to fire the building’s doormen and replace them with a buzzer service. Tenants and workers are now fighting that move.
Building owners can flout the wage laws thanks in large part to ineffective oversight of the 421-a program. A variety of conditions – such as wage requirements and tenant protections – apply to buildings receiving the tax break, which can eliminate more than 90 percent of property taxes owed.
Last year, ProPublica detailed how thousands of landlords receiving the tax break had failed to register their apartments for rent limits, while others who did still charged tenants more than was allowed by the city’s Rent Guidelines Board – often in luxury buildings collecting tax relief worth millions.
One reason for the weak enforcement of the wage rules is that it is driven by employee complaints. But the city’s Department of Housing Preservation and Development (HPD), which keeps a list of buildings covered by the wage requirement, did not make it public, leaving workers in the dark about their rights.
HPD provided the full list to ProPublica in January under a public records request. But the data included properties that weren’t built or didn’t receive 421-a benefits. So ProPublica asked the city’s Department of Finance, which gives out the 421-a tax break, to review the list and remove properties that aren’t getting the subsidy. The updated list includes 210 properties that can be searched by address.
What can workers do if their building is listed and they’re not getting paid prevailing wages?
New York City Comptroller Scott Stringer, whose office recently took on oversight of the 421-a wage rule, has vowed to step up enforcement. Workers who suspect they are underpaid can file a complaint with Stringer’s office, which also publishes a schedule of prevailing wages and related information.
“Hopefully workers can begin empowering themselves and getting the money that they’re owed,” said James Murphy, a labor lawyer at the firm of Virginia & Ambinder in New York. “Left and right I run into the circumstance where workers have no idea they are entitled to get paid more money.”
Murphy said workers who prevail in wage complaints filed with the comptroller typically get back pay plus interest, which is set by law at 9 percent from the time of the underpayment.
Even when the law is on their side, asking for higher pay can be a risky proposition for workers, who can face threats of termination. That’s the situation facing the staff at 341 Eastern Parkway – a 63-unit luxury apartment building that received a 92 percent property tax reduction of $451,000 last year.
When we contacted them for our December story, the building’s five workers had just voted to join the 32BJ Service Employees International Union to negotiate higher pay. Pay stubs showed they had been paid less than prevailing wages and didn’t receive health care benefits.
But in January, when 32BJ contacted management to negotiate a contract, they were told the owners had decided to fire four of the building’s five workers, leaving just one employee – the building’s superintendent. Federal labor laws don’t require management to recognize a union for one person.
“It sure sounds as though the building has taken a concerted effort to retaliate against these workers,” said Brent Pelton, a New York labor lawyer who ProPublica interviewed about the case. Federal labor law prohibits retaliation, Pelton said, and he thinks the workers would have a strong case if they complain.
32BJ said it has filed a wage complaint on behalf of the workers with Stringer’s office but has yet to file an unfair labor practice complaint with federal labor regulators. A spokesman for Stringer declined to comment on the case but said his office “will investigate underpayments for any worker who contacts us.”
Jereme Herring, a doorman at 341 Eastern who led the effort to join the union, said there’s “no shred of doubt” that the workers are being retaliated against. “It’s definitely in direct response to it,” he said.
Red Group Management, which runs the property, did not respond to repeated requests for comment.
Tenants have joined the workers to push back against the plan. The building boasts “the best of modern luxury and convenience,” including “doorman service,” on its website. Getting rid of doormen goes against that promise, said tenant Matthew Marolla.
“I have a six-month-old kid, and I pay for a building that has a doorman watching the door,” he said. At $4,200 per month, his annual rent alone is more than double Herring’s yearly pay.
The building lobby wouldn’t be wholly unattended. Management is trying out a system to replace Herring and his colleagues with a “virtual doorman” that would monitor the lobby offsite via a video camera. A sticker of a faceless man wearing a top hat, tuxedo, bow tie and gloves now adorns a lobby button that guests must press to be allowed into the building by an outside vendor, Virtual Doorman.
The service is supposed to be better than a live doorman and costs only 10 percent as much, according to the company’s website. Virtual Doorman did not respond to a request for comment.
Nearly all the building’s tenants have signed a petition asking management not to fire the doormen. Marolla personally brought the petition to Red Group Management one Friday afternoon as a reporter looked on, but no one opened the door.
Because of the building’s 421-a tax break, tenants are entitled to protections against certain actions by the landlord, such as elimination of building-wide services like security. The landlord must file a form with the state to modify such services, and tenants have a right to ask for a reduction of rent via a complaint form that includes an addendum specifically for services like doorman duty.
Marolla said he’s considering organizing a rent strike if management doesn’t back down.
“The best way to convince them not to do what they are trying to do is to hit them in the billfold,” he says.
ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for their newsletter.