LA set to approve labor rules for homeless housing construction

As part of L.A.'s goal to build 100,000 units of housing for the homeless over the next decade, city lawmakers are now writing hiring rules for those future construction projects – an effort they say will create more job opportunities for locals and ensure all workers are paid well.

On Friday the city council is expected to approve the use of a project labor agreement (PLA), a move that's opposed by local developers who specialize in public housing construction.

The money for the initiative comes from the voter-approved Measure HHH, which authorizes $1.2 billion in bonds.

While commonly used for transportation and public works projects, PLAs are rare in the world of public housing construction, where margins are slim and the developers are nonprofits. 

The details are still being negotiated, but the PLA would likely require contractors to pay their workers the "prevailing wage," which can translate to between $15-$50 an hour depending on experience level, as well as contribute to a union-sponsored trust fund for retirement and health benefits.

It would also require at least 30 percent of the workers on each homeless housing project live locally, and at least 10 percent be "transitional" workers, defined as people who were once homeless or incarcerated.

The agreement would also require contractors to hire some construction workers from a pool of  union workers who would both supplement a contractor's crews and replace some of that crew's non-union workers in order to meet the 30 percent and 10 percent thresholds for local and transitional workers.

Local nonprofit builders say they already pay their workers prevailing wages, and they support the 30 percent and 10 percent thresholds. However, several have told the city that entering into a union agreement would adversely affect their businesses, namely their longstanding relationships with subcontractors who won't be familiar with PLAs. They believe in today's hot real estate market, subcontractors already have so much business that they can pass up city projects that appear to have high compliance demands.

"Subs have a lot of choice right now in terms of which projects they are working on," said Amy Anderson, executive director of PATH Ventures, a local builder that specializes in permanent supportive housing. "And they are going to choose a project that doesn't involve signing onto a PLA if they have that choice or they are going to offer us a bid that is astronomically expensive." 

Anderson and other builders spoke out at a city committee meeting Wednesday, warning that if subcontractors sour on the PLAs and pass on city work, their pool of subcontractors will shrink, costs will rise and they'll experience construction delays. 

"This requirement stands to disrupt the typical way we do business, and I think it might impact the number of units we can deliver," said Alan Greenlee, executive director of the Southern California Association of Non Profit Housing, a trade organization representing the industry.

Builders seemed resigned that the city would move forward with the PLA. Several in Wednesday's meeting asked for the 65-unit threshold to be raised to 75 units, so that more builders could come in below it and avoid having to abide by any future labor agreement. Others tried to re-set expectations on how many units could reasonably be completed under a PLA.

Greenlee said the city's goal to build 10,000 units of homeless housing in 10 years is already daunting – and amounts to three times more output per year than his industry normally builds.

City officials said they believed the 65-unit threshold is fair, and that the city would have to be sure contractors and subcontractors were being educated on the PLA process and walked through the steps.

If the proposal is approved Friday, L.A.'s city attorney will draft language for a PLA, which will then undergo another round of debate, public feedback and negotiation before getting a final vote from the council later this year.