Divided council waives wage requirement for affordable housing development
The Rochester City Council voted narrowly on Monday to waive a prevailing wage requirement for the Northern Heights affordable housing project.
Joseph Development had sought the exemption from the city policy, saying the requirement would likely make the project unfeasible.
The company’s plans call for building a 66-unit residential housing structure along the north side of 26th Street NE, near East Circle Drive.
Councilors Nick Campion, Molly Dennis, Patrick Keane, and Council President Brooke Carlson voted in favor of the motion to waive the prevailing wage mandate, despite some reservations.
However, they pointed to confusion regarding the timeline of the city’s wage requirement, along with the need for more affordable housing as deciding factors in their approval of the waiver.
Campion added that while he would be willing to lose projects over the requirement moving forward, he believes the developer was acting in earnest in bringing the request forward.
“We can look at this situation objectively and say, there’s a potential here that they were doing these numbers at the exact same time we were making a change in the policy,” said Campion.
According to city administration, Joseph Development was unaware of changes to the city policy as it was putting together a budget for the project. The city first introduced the requirement in March 2020, and then modified it later that year to exempt some projects dependent on state tax credits. In April 2021, the council amended the policy once again to require a prevailing wage requirement for all TIF-supported projects.
Joseph Development told the city the requirement would have added approximately $2 million to an existing $1 million funding gap.
Councilor Shaun Palmer, however, said the developer should have been aware of changes to the policy before moving ahead with the project.
“We have as a council made a decision that prevailing wage is important and that it should be provided on all of these projects,” said Palmer, who voted against the original zoning change for the development.
“In my opinion, they should have known,” he added. “Part of their business as a business is to know the environment that they are working in.”
Palmer was joined by Councilors Mark Bransford and Kelly Rae Kirkpatrick in opposing the exemption to waive the prevailing wage requirement, the rates of which are set by the state (more on that here).
“I don’t think the worker, the laborer, should ever be the brunt of savings for a for-profit company,” said Kirkpatrick.
Ultimately, the motion came down to Council President Carlson, who paused for more than 30 seconds prior to casting the deciding vote — before later acknowledging the competing interests at play.
“We just allowed a project that has now set a precedent that somebody said, ‘oh I am sorry, I didn’t know,’” said Carlson. “I hate this, but we will also provide housing for families and individuals in need.”
Once complete, the four-story complex will include 33 units affordable at 60 percent AMI and another 33 units at 50 percent AMI.
Sean Baker is a Rochester journalist and the founder of Med City Beat.
