The pricing of home construction could change dramatically, as both the labor and construction industry gear up for a fight in Sacramento.
Industry analysts feel AB 199 could raise home construction costs by up to 46%. That would make a house going for the Fresno average of $325,000 rise to $422,500
The bill, authored by Kansen Chu (D-San Jose) would allow laborers on private construction projects like home building, to be eligible for a higher wage scale. Some industry experts say that can increase the price of such projects up to 46%.
While the bill would literally change one line of Labor Code 1720, there is uncertainty over this key question: How broadly will “public works projects” be defined?
Chu says he is just trying to update the law after Gov. Brown closed redevelopment agencies. He wanted to make sure that homes built in part with city funds qualify workers for a higher prevailing wage rate.
But those in the industry worry that any project that receives something like even a fee credit qualifies.
The Assembly Labor & Employment committee hears AB 199 this Wednesday. The committee is chaired by Tony Thurmond (D-Richmond). He says it is a matter of cleaning up legislative language.
“What I’ve heard from the Building Trades (union) is that this bill clarifies that if there is any public funding involved in a development that that triggers a need for a prevailing wage,” Thurmond tells GV Wire.
“We don’t want to do anything that will stop development in the state, especially around affordable housing and we need it. As I’ve said, while I’m not the author of the bill, I’ve sort of taken it up as my capacity as chair to see if I can help facilitate some conversations. My understanding is that the Building Trades folks are interested in the possibility of some amendments that might further clarify.”
The bill is officially supported by 21 labor groups. A coalition of more than 100 groups including those in the building industry, chambers of commerce and local cities oppose. Among the Central Valley groups to officially oppose AB 199 include the City of Clovis, Fresno Mayor Lee Brand, the chambers of commerce from Fresno and Tulare and the Fresno chapter of the Building Industry Association.
Stay tuned to GV Wire for complete coverage.
[Editor’s note: This story was not subject to approval by corporate owner Granville Homes]
Contact David Taub
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