Prevailing Wage set to sink Humboldt’s Affordable Housing?

In just the most recent national publicity about California’s dire housing problems, the New York Times ran a piece which details the depths of the housing crisis that California is sinking into.

The article points to over-regulation, NIMBY-ism, environmentalists, and basically just some really stupid lawmakers as the reasons behind our critical lack of housing.

Good news is that some of our legislators are starting to wake up. Just as the drought created new opportunity to push forward new water regulations in the past few years, the housing crisis – which is on par with California’s pension crisis in terms of severity – is affording us new chances to fix the broken system that got us into this mess.

Heck, the NYT article even highlights one of THC’s most common gripes about housing in CA: “…economists say, the high cost of all housing is first and foremost the result of a failure to build. The state has added about 311,000 housing units over the past decade, far short of what economists say is needed.”

Imagine that? All we need to do is BUILD MORE HOUSING, ASSHOLES.

Here’s a link to the full NYT article:

The Cost of Hot Economy in California: A Severe Housing Crisis

Now, the above New York Times article paints a great picture of how severe the housing crisis is – but makes a pretty bold statement about how California’s housing crisis is “a price of this state’s economic boom”. THC thinks that’s B.S. – the housing crisis is occurring despite the economic boom. You see, a lot of the legislative efforts to alleviate the housing crisis are in fact just get-even-richer schemes cooked up by unions and their pocket politicians.

Logically, a booming economy means more people would want to come here – and they have. It’s just that California’s supremely anti-business, pro-union lawmakers have made it impossible for housing stock to boom along with the rest of the economy. One of the biggest tools at their disposal is the prevailing wage requirements for government-assisted affordable housing development.

Assembly Bill 199, which looks to be on a fast track through a Legislature with a history of accommodating unions, would require private housing developers on projects in which a government “subdivision” has a role, to pay workers on the job the prevailing wage.

According to Beacon Economics, prevailing wage could increase the costs of residential home construction by 46 percent. Even half of that would be devastating.

Estimates from the Building Industry Association indicate that the proposal would boost the cost of a 2,000-square-foot home in San Diego County by about $90,000. The Business Council of San Joaquin County says that AB199 would increase the cost of a 1,500-square-foot home there by $75,000.

To put those numbers in perspective, consider this bit of analysis from the National Association of Home Builders: For every $1,000 added to the price of a California home, more than 15,000 households are forced out of the market.

Folks often understate the impact that prevailing wage can have on a project’s feasibility from a financing perspective – lucky for us, California’s Department of Industrial Relations has a handy list of all the prevailing wage rates for the state, and for specific regions’ wages for specialize laborers.

You can check all of them out at the link below, but we’ll give you a quick run-down of a few Humboldt-specific wages that jump out at us:

Plumber: $71.52/hour

Electrician: Between $50.25 and $89.10/hour

Bricklayer: $74.32/hour

Painter: up to $64.70 per hour

Follow this link if you want to look at any other specific trades in any area of California: CA Department of Industrial Relations: Prevailing Wage

Even better, here’s one of the PDF’s specific to Humboldt’s prevailing wage amounts: Humboldt Prevailing Wage

You’ll notice that the prevailing wage hourly rate, more often than not, is higher than that of our very own (and overpaid) County Supervisors, who clock in at around $38.94 per hour for their yearly salary, not including benefits.

The overarching question that California’s lawmakers need to ask themselves about prevailing wage is this: is kow-towing to wage demand pressure from unions and labor organizations really worth crippling ? Tying up affordable housing projects with prevailing wage issues isn’t just bad for business and development in California, it’s a huge blow to the people in California that are desperate for housing. Should we be screwing all of the low-income families and people scraping together anything they can to keep a roof over their heads in favor or ridiculously high wages?

And make no mistake – it’s our State government’s cozy relationship with unions and the like which will be the biggest factor in torpedoing any realistic chance of meeting the huge need for affordable housing in our state. They’re busy clawing for every last cent they can get their hands on while the little guys are left crowded into tiny apartments, or out in the rain.

There’s a line between ensuring workers receive a fair wage for their hard work and extorting the State government, business owners, an taxpayers for all they’ve got – union forces which push for prevailing wages on any and all subsidized housing development are way, way past that line.

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2 Responses to Prevailing Wage set to sink Humboldt’s Affordable Housing?

  1. John Fullerton says:

    “Projects in which a government ‘subdivision’ has a role”.
    What exactly does that mean? Would that mean any project partially subsidized by gov’t funds? Or is it even worse.
    I dealt with prevailing wage while on the school board and you’re right, it dramatically increases cost of building anything.


  2. sammy says:

    Seriously? Prevailing wage has little if anything to do with housing locally. State and Fed prevailing wage jobs here usually consist of public works projects or those for college campuses and the like.

    If you want more of what you know I know, email me Grover.


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