Pact between developers and builders could loosen environmental rules and increase residential construction wages

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Representatives of California’s construction unions and home builders are working on a deal that the Los Angeles Times reports “both sides hope could lead to a flood of new building.”

The negotiations, reportedly involving Gov. Gavin Newsom, would (if successful) include new state legislation guaranteeing minimum pay, benefits and training for construction workers, with relief relating to state environmental laws regarding residential development.

“Instead of us being at odds like we were and going to our respective corners, now we’re on a path to not only make it easier to build but also to grow labor,” Dan Dunmoyer, president and CEO of the California Building Industry Association, was quoted as saying.

Meanwhile, Robbie Hunter, leading the State Building & Construction Trades Council of California, indicated both sides as being “very, very close” to an agreement.

The discussions relate to workers’ compensation and the California Environmental Quality Act (CEQA), originally introduced in 1970 and which requires developers to disclose a project’s environmental effects and take steps to reduce or eliminate them.

The issue in part relates to “prevailing wage” requirements for taxpayer-subsidized low-income projects, which (like wages for unionized non-residential construction) are significantly higher than commonly paid to tradespeople working on residential projects.

The Times reported:

Two years ago, the construction workers union floated a bill that developers believed would have expanded prevailing wage requirements to privately built homes. The legislation prompted overwhelming opposition from business interests and the bill was weakened. But later that year, the union won a big victory when the Legislature passed a bill making general construction contractors liable for worker wage disputes with subcontractors.

Hunter said developers told him that they were struggling to build homes because of high fees on new projects and neighbourhood resistance. “We said we’re interested in all that stuff, but we’re not interested if our workers aren’t getting the job,” Hunter was quoted as saying.

The proposed deal would see the workers paid below the “prevailing wager” but still much more than non-union labor is currently earning. Workers would also receive medical and retirement benefits, and would be hired through apprenticeship programs. The “prevailing wage” rules would still apply for condos and large-scale residential projects.

Hunter estimated that the program could increase membership in the construction workers union, which now represents about 400,000 laborers, by 10 per cent.

In return for paying construction workers more, developers would receive incentives intended to speed up construction. Details have yet to be finalized, but they are likely to involve an easier path through the CEQA process, The Times reported.

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