Scandal Boosts Labor’s Bid For More Housing Contract Disclosure

HPD Commissioner Mathew Wambua testifying to City Council Housing Committee. Photo by William Alatriste

New York City’s housing commissioner said yesterday he wants to shine sunlight on his agency’s development deals for affordable housing projects, but a labor-backed bill to require publicizing detailed contract information goes too far – a plea that won little sympathy from the City Council.

“We need this bill. There are aspects of this bill that are going to go a long way towards helping everybody understand what we do,” Mathew Wambua told the City Council Housing Committee. “There are components of the bill that ask for requirements that are too administratively burdensome.”

Wambua testified for 90 minutes about the bill, which would require the Department of Housing Preservation and Development to maintain weekly pay records for every worker on every affordable housing project, as well as to disclose the name, address and tax identification number of the people behind every company involved in those projects.

“We don’t have the resources to support that heavy of an administrative burden,” he said. “We are desperately trying to figure out how we are going to continue to provide core services while simultaneously also running our development programs.”

Critics say unaccountable contractors have built shoddy homes while taking advantage of underpaid workers on affordable housing projects subsidized with tax dollars, and that HPD needs to do more to help trace which contractors are selected and how they operate.

“It’s for the public to know exactly what’s going on on projects, not where they have to wonder … if they’re paying prevailing wage, and exactly who’s being hired and for what,” said Brooklyn Councilman Domenic Recchia, the top sponsor of the bill.

“This is not to hurt anyone. This is not to put anyone out of business,” he said. “This is just to make people to have knowledge of exactly what’s going on on projects, and so people could know where everyone stands and how this project was given out.”

The bill is a top priority of construction unions, which have chafed at city-subsidized work going to non-union contractors—especially after Wendell Walters, an HPD assistant commissioner, was arrested and charged with soliciting $600,000 in bribes from contractors and developers who wanted city work.

Nicole Vecchione, senior strategic researcher with the Laborers Eastern Region, said the accusations against Walters show how much profit is built into affordable housing deals but hidden from public scrutiny.

“We often hear from people in the affordable housing industry … that the reason for poor-quality construction and worker underpayment is that there just isn’t enough money,” she said. “We now know that profit margins are at least great enough to support hundreds of thousands of dollars in bribes.”

Wambua acknowledged that prevailing wage violations are a problem in some developments – and that the city has to pay to correct substandard construction by some contractors who vanish after finishing their work – but said the City Council bill goes too far.

Still, City Council members were amenable to forcing more scrutiny on those deals – making new legislation seem likely.

“The commissioner states that good developers may not seek work if they need to disclose this information. I believe the truth to be just the opposite,” said Michael McGuire, director of the Mason Tenders’ District Council PAC.

“Right now, few good developers bid on HPD work. The status quo is for corrupt bottom-feeders bidding this work,” he said. “This transparency will have the opposite effect. It will chase the crooks and thieves out of HPD and allow good, honest developers to be able to be competitive.”