Cracks in California labor coalition raise hopes for YIMBY breakthrough on housing bill

For nearly a decade, lawmakers hoping to tackle the state’s housing crisis have faced a choice: win the support of the coalition that represents California’s construction unions — or watch those legislative aspirations sputter and die.

The State Building and Construction Trades Council, an umbrella group representing hundreds of thousands of bricklaying, pipefitting, bulldozing and foundation-laying union members across the state, has stood as a formidable political force that even governors have been forced to contend with.

That’s not just because the trades are reliable campaign contributors to California’s ruling Democrats — though they are. It’s also because they turn out motivated members, rarely shy away from a bare-knuckle political fight and reliably present a unified front against bills they aim to quash.

Last week, a few fissures appeared on that unified front.

Two affiliates of the trades council defected, throwing their weight behind a housing bill that the parent organization had been fighting for months. It’s a surprising and surprisingly public break that could help shift the political balance long defining California housing policy.

The bill in question would make permanent a 2017 state law that expedites affordable housing construction in many parts of the state. Under the reauthorization proposal, developers who make use of the law would be required to pay union-level wages — a standard that some in the building industry say still makes construction untenably expensive in many parts of the state. But it scraps a provision that mandates the hiring of union members for some projects.

The breakaways — the California Council of Laborers and the state Conference of Operating Engineers — join California’s unionized carpenters, which have been battling with the larger trades council over mandatory labor standards for housing projects fast-tracked under state law. The carpenters argue that a union hiring rule isn’t workable, as there aren’t enough unionized construction workers to build all the new housing California requires.

“We say, represent and raise all workers up,” said Jay Bradshaw, executive secretary of the Northern California Carpenters Regional Council, in an interview last month. “It’s an organizing opportunity and we’ll produce housing at all income levels. It’s what the state needs. Our own membership needs it. Desperately.”

The executives of both unions refused to discuss the shift with CalMatters. But in separate letters of support for the bill, shared on Twitter by its author San Francisco Democratic Sen. Scott Wiener, they described the proposal “a step in the right direction” and one that will “ultimately lead to more affordable housing…(for) our membership and those in need.”

That has not been the line from the council, nor many of their union allies, who have decried Wiener’s bill as a reversal of hard-fought labor protections.

“We represent our affiliates and our affiliates as a whole still remain opposed to the bill,” said Beverly Yu, a lobbyist for the building trades.

Democrats in the Legislature pride themselves on being on the side of unions. Hearings earlier this year, in which trades members rhetorically sparred with carpenters and other housing supporters, left many members of the Legislature feeling uneasy and frustrated. Supporters of Wiener’s bill hope the crack in the trades’ coalition could help allay some of those concerns.

Two new trade unions backing the bill “sends a strong, strong message,” Wiener said. “This is definitely a big move.”

Few housing projects use union-only labor

Wiener’s bill is a legislative repeat.

The goal of the 2017 state law, also written by Wiener, was to let developers in housing-strapped sections of the state side-step some of the early bureaucratic hurdles that often delay, curtail or stifle budding projects. In exchange, they must set aside at least 10% of the new units for low-income residents.

They also have to abide by higher labor standards. For anything over a certain size, developers have two options:

• Option 1: Build something that sets aside all new units for lower-income residents. Developers of those projects are then required to pay their construction crews “prevailing wages,” generally the equivalent of what a unionized construction worker earns on a public infrastructure project. 

• Option 2: Build something with market-rate units. Those developers not only have to pay union-level wages, but are required to ensure that roughly half of their workforce has graduated from an apprenticeship program. Because the vast majority of these programs in California are run by unions, this “skilled and trained” requirement is effectively a hire-union rule. Back in 2017, the building trades made the inclusion of that provision the price of their support for the new law.

Half a decade later, the impact of that law has been lopsided. Roughly two-thirds of the proposed streamlined projects have been entirely affordable, meaning they are subject only to the higher wage rule, according to an analysis by UC Berkeley’s Terner Center for Housing Innovation.

Of the remaining third, it’s unclear whether any “skilled and trained” projects have actually broken ground.

Left untouched, the 2017 law will expire in 2026.

The market-rate side of the law “has not worked very well,” said Wiener, who argues that there are not enough apprenticeship graduates in the state to build the new housing the state requires. “The 100% affordable piece has worked like gangbusters.”

Citing that uneven experience, Wiener’s renewal bill this year scraps the “skilled and trained” standard entirely.

Under this version 2.0, the higher wage rule would apply to all projects — regardless of what is being built. But the bill does include a few other goodies for workers on large projects, including the provision that developers must request workers from an apprenticeship program first, effectively giving unionized workers a right of first refusal.

Even with these add-ons, the change in approach earned the bill the fierce opposition of the building trades and Wiener the ire of many in organized labor.

Yu accused Wiener of “rolling back the critical labor protections that we believe were negotiated with our leaders in good faith back in 2017.”

Joining the trades in their opprobrium has been the California Labor Federation, which claims more than 2 million union members.

“Please tell me the last time a bill that red-lined labor standards out of existing law was passed in California?” tweeted Lorena Gonzalez, the Labor Fed’s executive secretary and a former Assemblymember, a week after Wiener introduced his proposal in downtown San Francisco.

“More profits for developers, less benefits for workers,” she added. “That makes zero sense from folks who claim to be pro-labor.”

California Democrats seek truce on housing bills

Even if the terms, the players and the goal posts have shifted over the years, this is a familiar debate in California’s Capitol.

In 2016, then-Gov. Jerry Brown pushed a streamlining plan for affordable housing projects. The bill died without a hearing. Among its long list of politically powerful antagonists were the building trades, who insisted that any housing developer using the law should have to pay their construction workers union-level wages. Back then, the prevailing wage standard was their demand.

The following year, Wiener, newly elected, took a lesson from that impasse and wrote the “prevailing wage” requirement into his streamlining bill. The building trades pushed further, securing the union-hiring requirement for mixed-income projects.

If getting the trades on board for a streamlining bill was seen as a major breakthrough, getting developers on board was arguably a bigger one, said Ray Pearl, executive director of the California Housing Consortium, which advocates for affordable housing construction.

“We made a really big leap in 2017,” he said. Though developers were reluctant to agree to pay higher wages, it was deemed a worthwhile concession in exchange for the bill’s promise of letting projects dodge years of litigation and administrative review.

But that moment of coming together was short lived.

In 2020, a raft of pro-housing production bills went down in flames. One of the key reasons: The trades demanded across the board “skilled and trained” requirements and legislators were unwilling to go along.

Then, last year, an unlikely coalition emerged.

Oakland Democratic Assemblymember Buffy Wicks, then newly named as housing committee chair, teamed up with Bradshaw, the newly elected head of the Northern California carpenters’ union, and Pearl at the California Housing Consortium.

The goal: hammer out a counteroffer to the trades’ “skilled and trained” requirement that both the carpenters and the developers could live with.

The final deal, which Wicks happily included in her bill last year that fastracks the redevelopment of old stripmalls into apartment complexes, requires developers to pay their workers union-level wages. But for larger projects, per the terms of Bradshaw and Pearl’s negotiations, developers would also have to pay for their employees’ health insurance, make a first effort to hire union members, and open their payroll records for inspection to guard against wage theft.

These benefits would apply to union and non-union workers alike.

The trades remained vociferously opposed until the last minute when legislators agreed to pass both Wicks’ legislation and another, similar bill that included the trades’ favored hiring requirement.

Neither bill will go into effect until later this summer. But Wicks’ approach has already become the go-to template for pro-housing legislators this year. That includes Wiener’s proposal to make the 2017 law permanent.

Wicks said she’s confident the approach will work again this year. With unions representing two trades now signing on, the odds of her prediction bearing out have likely ticked up.

“I think a lot of members feel like we litigated this,” Wicks told CalMatters before the two unions submitted their letters of support for Wiener’s bill. “We are ready to be, like, done with a ‘no to housing’ framework.”

“Like, done, done, done, done, done.”