Governor Jerry Brown of California recently pledged to spend $400 million on low-income housing subsidies, as part of a plan to scrap local restrictions that make it difficult to build more housing in California—a primary driver of the state’s skyrocketing housing costs. (California is seeing a mass exodus of residents to neighboring states for that same reason.)
Under Gov. Brown’s proposal, housing developers would be allowed to bypass certain regulations if they set aside between five and 20 percent of their projects for lower-income residents (the exact number depends on the proximity of the development to public transportation).
So who’s building obstacles between developers and residents in need of an affordable place to live? Big Labor.
The State Building and Construction Trades Council (SBCTC) wants Gov. Brown to force developers to pay construction workers so-called prevailing wages—the (inflated) going rate for union labor. But the greed of California’s union bosses has now put affordable housing projects in jeopardy. Forcing developers to pay employees significantly higher wages makes them far less likely to build new homes. As Ben Metcalf, the governor’s director of Housing and Community Development, put it: “The cost-benefit analysis is such that few developers could actually afford to do that.”
Legislators are now “feeling the heat” from the SBCTC to reject Brown’s plans. In Metcalf’s words: “They are getting a lot of political pressure from significant constituencies that don’t want this to happen.”
The real losers here are working-class Californians with nowhere to live, forced to sit idly by as union bosses put their interests first.