Watchdog Group: Treat Construction Workers On Affordable Housing Projects Fairly

A 2021 UC Berkeley Labor study revealed that nearly half of the families of construction workers in California were enrolled in public safety net programs.

More recently, a new state law went into effect to crack down on wage exploitation of construction workers by placing more responsibility on general contractors to police their projects for cheating subcontractors.

To David Kersh, executive director of the California-based Carpenters/Contractors Cooperation Committee, known as Quad C, workers’ dependence on public programs to make ends meet while experiencing unscrupulous employment practices are closely related to the issue of building affordable housing. 

“We need to think about housing and employment issues as integrated because when you're building affordable housing, you're also creating jobs,” Kersh said. “And we have to approach this from multiple angles, as it involves policy changes to speed up and streamline the development process. It also requires vigorous labor compliance efforts to prevent wage theft and reduce risk and project delays, increasing apprenticeship opportunities to address labor shortage issues, and encouraging more contractor bidding participation to reduce costs.” 

Bisnow spoke with Kersh about the link between the exploitation of construction workers and California’s need for more affordable housing. 

Bisnow: Can you explain the connection between the construction of affordable housing and well-paying jobs?

Kersh: Basically, it is pretty straightforward: We shouldn't have a situation where the people building affordable housing are getting paid poverty wages. It perpetuates the very problem that we are trying to fix. These should be good middle-class jobs with benefits, such as healthcare for the worker and their family.

Not only did the University of California, Berkeley Labor Center show such staggering numbers about construction workers relying on public assistance to make ends meet, it also found that 26% of California construction workers don’t have healthcare coverage, which is about two-and-a-half times the rate for the rest of the workforce.

There are opportunities to address this situation. Many affordable housing projects rely on some form of government funding, which triggers prevailing wage requirements. This policy has been in place since the 1930s, and it has been proven to be the way both to make sure that all contractors can compete on a level playing field, and to support middle-class jobs to build not just projects but strong communities and rewarding careers. We need to support such policies as we continue to create new funding programs or new approaches to building affordable housing.

Bisnow: What has Quad C learned from monitoring affordable housing projects in Southern California?

Kersh: There's clearly more public attention being paid to affordable housing today. This is a positive development given the critical need to address the issue. More is clearly needed to be done given the scope of the affordability problem.

In terms of specific observations, when we look at different geographic areas in Southern California, Los Angeles has a higher percentage of prevailing wage projects. In San Diego County, on the other hand, the affordable housing developer community has relied more on financing sources that do not trigger this wage requirement. From our experience, there is a correlation between the middle-class and community-enriching jobs created because of this.

There are also fewer exploitative labor conditions that come from using labor traffickers that facilitate wage theft, along with criminal payroll tax or workers’ compensation insurance fraudulent practices. Prevailing wage helps create a dignified workplace, and it limits the Wild West, low-road labor practices in the residential sector.

Our operation is focused on cleaning up the industry and creating a culture of compliance, which is good for workers, good for responsible contractors and good for taxpayers and the community as a whole.

Bisnow: SB 727 went into effect this year. How does this law impact these issues?

Kersh: This is a law that holds general contractors liable for subcontractor wage violations. It was strengthened to add penalty provisions to be more effective in rooting out wage theft practices. It is critical that general contractors do a better job of vetting their subs for wage violations and hire law-abiding, responsible subcontractors. With more skin in the game, we are expecting this to help create a broader market shift in terms of subcontracting practices.

Between prevailing wage provisions on covered projects, and private affordable housing projects where SB 727 can be applied, we are hoping that across the board on all affordable housing projects there is less cheating and more responsible employment practices.

Ultimately, we should be doing everything we can to support a more vibrant affordable housing market. The affordable housing development community along with worker advocates and watchdog groups like Quad C share a common goal of improving our communities and making them more livable places.

This article was produced in collaboration between Studio B and the Carpenters/Contractors Cooperation Committee. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to [email protected].