LA council members bypass strict labor standards for most fast-tracked affordable housing projects

Many affordable housing programs in Los Angeles have built-in requirements for developers to staff construction sites with union workers and pay higher wages.

But city leaders decided not to impose such rules on most affordable housing developments using the widely adopted Executive Directive 1 streamlining program after city planners told them the rules could stop many projects from moving forward.

ED1 is popular with developers because it grants fast-tracked approvals from the city, as long as all of a project’s apartments are reserved for low or moderate-income renters. Without this streamlining, the city’s approval process can often take more than a year.

The L.A. City Council’s Planning and Land Use Management Committee voted 4-0 Tuesday to advance a plan that would require union workers on high-rise projects of eight stories or more. The committee’s fifth member, Councilmember Nithya Raman, was absent.

If the 85-foot-high threshold for union labor is sent to the full council and approved in a final vote, it would not affect most of the kinds of projects getting fast-tracked through the program. Project heights are typically below that threshold, often topping out at around five or six stories.

“ED1 projects are almost always privately developed,” Senior City Planner Matthew Glesne told the council ahead of the vote. “They are 100% affordable. They are largely without public subsidies. That makes them more sensitive to added costs. We’ve been told that even modest increases in labor obligations could prevent these projects from penciling out.”

Why the council is considering these rules now

According to planning committee chair Bob Blumenfield, the council’s goal is to pass an ordinance making permanent the program created by Mayor Karen Bass during her first week in office because it has been wildly successful.

Developers have filed plans for more than 430 projects, seeking to create more than 35,000 units of housing that would all be restricted to low- and moderate-income tenants. The city has already approved more than 29,000 of those units.

Some council members have proposed writing more stringent labor requirements into that ordinance. But Blumenfield said the council must be careful to craft rules that still allow projects to make sense financially.

“We want to make sure we do that in a way that doesn't kill the goose that lays the golden egg, but potentially adds some additional labor protections,” Blumenfield said during Tuesday’s meeting.

Unions say construction industry is rife with exploitation

Labor groups had pushed for wider adoption of union hiring and wage standards in the program.

“Given the severity of the exploitive schemes in residential construction, labor protections are essential for ED1’s purpose in addressing housing insecurity and reducing homelessness,” Pete Rodriguez, vice president of the United Brotherhood of Carpenters’ Western District, wrote in a letter to the council.

“If the ED1 policy leaves the residential construction workforce behind, L.A. will create a dangerous precedent for future housing policies that encourages worker exploitation, exacerbates the labor shortage, and drives families into poverty and homelessness,” Rodriguez added.

But advocates for boosting housing development argued that strict labor requirements had caused developers to essentially ignore other housing programs. They pointed to two state laws including stronger wage, apprenticeship and healthcare protections that have resulted in fewer than a half dozen approved developments, according to city planners.

Plan would require union construction workers on high-rises

Representatives for the group Abundant Housing L.A. pushed for labor requirements to kick in only for projects above the 85-foot threshold. They said union requirements for developments at that height made sense, because such tall buildings can’t use simple wood framing, and instead require workers who have the skills to work with steel and concrete.

“City Council should seek to at once support union wages and protections, and protect the pipeline of badly needed affordable housing units that ED1 has unleashed,” Azeen Khanmalek, Abundant Housing L.A.’s executive director, wrote in a letter to the council.

Jason Ward, an economist with RAND who has studied the effects of labor standards on California housing programs, said the proposal approved in committee would be among the “least impactful” of the labor standards the council could have pursued.

Ward’s research on the city’s previous Measure HHH has concluded that union hiring requirements can add around 21% to a housing project’s total costs — an additional expense he said most ED1 developers cannot afford.

“Throwing extra costs into this incredibly successful sort of free lunch seems counterproductive to the goal of getting this kind of housing produced,” Ward said.

Elected leaders have already chipped away at ED1

Bass has already added restrictions to ED1 since she first introduced the program in 2023. First, she banned ED1 projects on the 72% of L.A. residential land reserved for single-family homes. Later, she banned ED1 projects in designated historic neighborhoods and on lots that contain apartment buildings with at least 12 rent-controlled units.

The City Council previously voted to halt some approved ED1 projects in single-family neighborhoods, but courts later determined those actions were illegal and allowed the projects to move forward.

Unlike ED1, which only guarantees developers faster approvals, other programs that require union labor tend to offer public subsidies for getting projects off the ground.

For example, Measure ULA — commonly known as the city’s “mansion tax” — includes strict labor standards in exchange for revenue from L.A.’s tax on high-priced real estate sales.