Workshop Recap: The Effects of PLAs on Affordable Housing Production
On Thursday, September 9th, SCANPH convened for a new workshop in partnership with the RAND Corporation on “The Effects of Project Labor Agreements on Affordable Housing Production.” RAND Corporation’s Jason Ward, author of a new report that examines how attaching a project labor agreement—a mandatory contract requiring the use of a primarily union construction workforce and regulating other key aspects of staffing and the utilization of labor on a job site—to Proposition HHH developments affected both the amount of housing produced and the cost of producing it. This session was moderated by Joan Ling, lecturer at UCLA and SCANPH Board Member, and encouraged solutions-oriented discussion throughout the workshop.
Jason Ward, Associate Director at RAND, is an Associate Economist and Associate Director of the RAND Corporation’s Center for Housing and Homelessness in LA. Ward presented key takeaways from his important study; providing an overview of PLAs as a pre-bid contract between a funding authority and area trade unions. PLAs require virtually all hiring through union halls. PLA was added to HHH by Los Angeles City Council in 2018, with the goal of reinvesting bond dollars into our local neighborhoods and residents by training and employing them as often as possible on funded projects. The HHH PLA is unique because it applies to pre-specified projects. Overall, Ward’s report finds that there was strong evidence of avoidance behavior among developers that took the form of smaller project proposals. For projects covered by the agreement, the PLA added around $40,000 in construction costs per unit. Ward estimates that if one simulated the outcome of HHH funding without the PLA, roughly 800 more housing units could have been produced at the existing funding level. Ward additionally covered the topic of targeted hiring and how the inclusion of targeted hiring goals in the PLA has grown more common, but little to no meaningful evidence exists on the hiring of disadvantaged workers.
An additional panelist was Dave Egan, VP of Real Estate at EAH Housing. He shared that support for local hire provisions, small and large contractors, as well as minority and women owned businesses are the next steps within the industry. Chris Hannan of the Construction Trades Council of Los Angeles and Orange Counties commented how in order to increase the number of contractors willing to work on prevailing wage projects, we should work with contractors to expand the pool of contractors and subcontractors willing to participate in the multifamily affordable housing construction area.