It’s not hard to recognize that California is mired in an ever-expanding housing crisis. From San Diego to Redding, housing stock is in short supply and working-class home buyers are being squeezed. We find ourselves in this situation because developers have artificially held the market back, driving per-unit prices and profit margins to unimaginable levels. Coupled with historically high inflation and rising interest rates, working families are quickly being priced out of the market.
As politicians in Sacramento have tried in recent years to address this problem, far too much attention has been given to concepts that singularly help developers. Lawmakers have floated legislation that would ease the permitting of both market-rate and affordable housing but have often pushed back on adding worker-friendly provisions. Land barons and housing speculators love this approach because it keeps their profit margins ever-expanding.
It’s no secret to our membership that the housing market is one we’ve been unfairly priced out of. Afterall, it’s tough for our contractor partners to compete with companies operating in the underground economy. The industry as a whole is rank with the stench of piece-meal wages paid under the table and willful disregard for California’s wage and hour laws.
What lawmakers should be doing is working with the State Building Trades to elevate workers in the residential sector. By tying so-called ‘streamlining’ or funding legislation to the utilization of fairly paid, skilled and trained workers, legislators can help develop pathways to the middle class for a new generation of California workers. Doing so would have a tremendous impact on local economies as workers spend their hard-earned wages on everyday staples like groceries, fuel, and clothing.
We often hear the argument that raising wages in the residential construction industry would make housing even more unaffordable in California. The argument is flawed, of course, as study after study has shown that only a small portion of housing costs are directly connected to wages. By most estimates, about 15% of the cost to construct a home is attributable to labor costs. That means the other 85% is made up of land acquisition, permitting costs, developer fees, materials, and profit margins. Clearly, wages aren’t the problem.
As developers chomp at the bit to get access to streamlining and state funding around housing, legislators must demand that workers get incentives, too. Tying any streamlining or funding to worker protections like ‘skilled and trained’ or prevailing wage requirements are crucial and will be a requirement to get the State Building Trades support. We cannot allow any more breaks for developers that do not include breaks for workers.
By elevating the wages in the residential construction sector, we will snuff out one of the last underground economy strongholds. Workers in this space are among the most abused in construction, often working for crap wages in jobs that offer little to no benefits, missing rest periods, working long hours without overtime pay, and even being physically and emotionally abused on jobsites. Women and minorities in residential construction have it far worse than others, as supervision on jobsites is lax and harassment training is unheard of.
Our diverse and inclusive membership is the solution to California’s housing crisis. We have the horsepower to deploy our members to jobsites in every corner of the state to start making a real dent in the housing shortage. Our apprenticeship programs have the ability to ramp up training at the local level to make sure we can meet the demands of an increased presence in the residential sector. The wages and benefits our current and future members earn will dramatically benefit the communities they live in.
More housing is absolutely going to be built in California. Legislators can use this opportunity to create more pathways to the middle class, statewide, by simply following our lead and bringing workers along for the ride. Their actions in Sacramento this year will tell us whether the plight of workers or the plight of developers is more important. Hopefully they’re on the right side of history. If they aren’t, we won’t forget it come November.