Springfield City Council Considers Tougher Rules On Tax Breaks For Housing Construction
Housing developers looking for a property tax break in the largest city in western Massachusetts may face tougher rules.
The Springfield City Council has given preliminary approval to an ordinance that would require housing developers to strictly follow labor laws and satisfy residency and diversity goals in hiring in order to qualify for a property tax abatement.
" If they are going to get a tax break from the city of Springfield, then the city of Springfield should get something in return," said City Councilor Orlando Ramos. He sponsored the ordinance, which sets new rules for tax breaks under the Housing Tax Increment Financing program.
A final vote on the proposal could be taken at the City Council’s regular meeting on April 1st.
The proposed ordinance would require that contractors and subcontractors provide appropriate health and accident insurance for their workers, use proper job classifications, and meet the hiring goals of the city’s Responsible Employer Ordinance for city residents, minorities, women, and veterans.
Additionally, developers would be ineligible for the tax incentives if any contractor or subcontractor had been found in violation of labor laws or suspended from doing work by any government entity in the last five years.
The City Council last fall approved an almost identical ordinance that applied to tax breaks for business expansion.
Ramos said part of the motivation for the ordinance is what happened last fall at the construction site for a housing development.
" We are trying to avoid another SilverBrick fiasco," said Ramos.
The city on two separate occasions halted work at the SilverBrick Square project after inspectors found unlicensed plumbing work being done on the renovation of a downtown apartment building. The developer had received a 10-year, $150,000 tax abatement from the city.
" We don't want to incentivize a company who hires contractors that don't play by the rules," said Ramos. " We don't want developers here who are going to hire contractors that don't follow the law."
Labor unions and worker rights groups support the proposed ordinance. Lisa Clauson is with the New England Carpenters Labor Management Program.
" When public funds are being used we want to make sure the developers are not going to hire contractors that have a history of cheating their workers and wage theft," said Clauson. " When wage theft happens it is often cheating taxpayers because payroll taxes are not paid."
Clauson said there are similar ordinances on the books in other Massachusetts cities including Northampton and Lynn.