by Manny Fernandez

Two seemingly like-minded political allies — labor unions and nonprofit developers of lower-cost housing — have taken opposing sides in Albany over a bill that would require the developers to pay construction workers the prevailing wage, essentially a union-level wage far higher than nonunion pay.

The developers, many of whom rely on government subsidies to build housing for low- and moderate-income families, say the bill would cut the production in half and increase rents at a vulnerable time for the industry, when the economic downturn has hampered the financing of low-cost housing. Supporters, however, argue that a prevailing-wage law would ensure quality construction and a decent standard of living for workers.

The bill, introduced in the Assembly in January and in the State Senate in April, would require developers of government-subsidized residential housing projects to pay the prevailing wage. It will be debated as part of committee hearings in Albany on Tuesday. Another bill in the Assembly and the Senate would require prevailing wages on projects financed by industrial development agencies.

Under state law, laborers on public works projects must be paid the prevailing wage, which varies according to the trade and location. The proposed legislation would expand the definition of public works to include all government-subsidized building projects by for-profit and nonprofit developers. Most workers who build subsidized low-cost housing in New York City are not currently required to be paid the prevailing wage. Projects receiving federal subsidies are required to pay it, under federal law.

“There is always arguing about what is public work and what is not public work,” Assemblywoman Susan V. John of Rochester, chairwoman of the Assembly’s Labor Committee, who introduced the bill, said in a phone interview on Monday. “This is an effort to try to clear it up.”

A report released last year by a nonprofit policy research group found that imposing prevailing wages on low- or moderate-cost housing projects could increase total development costs by about 25 percent and increase rents in a typical apartment by about $400 a month. The report was prepared by the Citizens Housing and Planning Council, which is made up of housing developers, construction company executives, bankers and academics.

The median nonunion wage for New York City construction workers in selected trades was $13.50 an hour in 2007, and the union median wage was $19.57, according to the report. Because of the increased costs associated with paying the prevailing wage, developers would need larger government subsidies to build the same number of units, according to the report.

“It will mean a lot of projects will not be feasible, or in order to make them feasible, they would be feasible for higher-income residents,” said Michael D. Lappin, president of the Community Preservation Corporation, a nonprofit lending consortium that has financed about 125,000 low-cost units around the state. “It will really have a direct impact on all the affordable housing being done. Much of that affordable housing is what has rebuilt New York’s urban neighborhoods.”

The New York State Building and Construction Trades Council of the A.F.L.-C.I.O., an influential labor group that represents the state’s major construction unions, has been pushing lawmakers to expand the prevailing-wage requirements for years.

“Is the cost of construction higher? Yes it is,” said Edward J. Malloy, president of the group. “But I think we deliver a better product, on time and in budget.”

Phillip Morrow, president and chief executive of the nonprofit South Bronx Overall Economic Development Corporation, which builds low-cost units, said the financial impact of paying the prevailing wage was only one concern. Mr. Morrow said he also worried that the nonunion, largely black and Hispanic work force that builds these projects would be replaced with mostly white union labor. “The unions don’t have the best record for employing minority workers and workers from the community,” he said.

Mr. Morrow said that if he had to pay the prevailing wage, his options would be limited. “We’re going to ask for more public dollars. In the Bronx, we don’t have the option of raising the rents. The market is not going to support these higher rents. We have to get more subsidy per unit.”

Opponents of the bill said federally financed projects receive additional money in order to pay the prevailing wage, but the proposed state legislation includes no extra financing. They said that because many of these projects receive private financing, they should not be considered public works, like schools or roads. “It’s absurd,” Mr. Lappin said. “Who thinks of public works as a 40-unit apartment building in the Bronx that needs some public help to keep it affordable?”

Assemblywoman John said developments such as Atlantic Yards in Brooklyn, a residential and commercial project for which the city and the state have agreed to provide subsidies, were clearly public works. “I do believe that it’s important that we uphold the provisions of our State Constitution that say that when we’re spending tax money, people are paid prevailing wage,” she said.