AGENCY TESTIMONY
Financial impact of proposed wage legislation on HPD
0:06:47
·
70 sec
The proposed legislation could cost more than $500 million per year to maintain current production levels, with costs increasing as production targets rise. New wage requirements would result in higher costs for HPD in various forms, including increased wages, administrative costs, insurance, and low-income housing tax credit needs.
- Estimated cost of over $500 million per year to maintain current production levels
- Increased costs in wages, administration, insurance, and tax credits
- HPD, as a gap financier, would bear these increased costs from its capital budget
Ahmed Tigani
0:06:47
Based on our initial analysis, this legislation can cost more than 500,000,000 per year to maintain similar production levels currently.
0:06:57
As production targets increase, those numbers compound and the cost balloon.
0:07:03
New wage requirements of this kind result in higher costs for HPD in the form of 1, increase wages for workers, 2, increase administrative and enforcement costs, 3, higher insurance, 4, higher per project, low income housing tax credit needs, otherwise known as Li Tech, which is a limited federal source, meaning that fewer projects can be built with this critical funding source.
0:07:31
And because HPD is a gap five answer, meaning we cover the gap in projects and project costs between what we can be supported by the project's income and the total cost of the project.
0:07:43
These costs do not get passed on to the developers Increases in project costs are funded from HVD's capital budget.
0:07:52
The increased costs associated with these new requirements would force us to make some very difficult choices.
