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A Call for Prevailing Wages as a Housing Solution

An op-ed written by city officials from two South Bay Area cities argues that reform of land use regulations won't be enough to solve California's housing crisis.
May 19, 2017, 8am PDT | James Brasuell | @CasualBrasuell
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Margaret Abe-Koga, Mountain View City Council member, and Rick Bonilla, deputy mayor of the city of San Mateo, write an op-ed for The Mercury News tackling the thorny issue of affordability in California's large coastal cities.

The duo's argument gives consideration to the construction industry, instead of the more typical punching bag of such polemics—land use regulations.

The driving forces behind our housing crisis are not just a shortage of supply, but also a persistent wage stagnation that has priced entire segments of our workforce out of the market.  A policy solution must speak to both issues.

Enter the construction industry. Blue collar construction workers have seen a 25 percent decline in their inflation adjusted wages since 1990, according to data from a recent report by Smart Cities Prevail. Meanwhile, white collar employees of the same companies are reaping the benefits of soaring housing costs. "Developer fees and builder earnings now constitute a greater share (18 percent) of total project costs than construction wages and benefits (15 percent). Profits have grown 50 percent faster than either materials or labor," according to the article's recounting of the findings of the report.

Abe-Koga and Bonilla cite the report's findings to make the case for state legislation that would require prevailing wages for construction crafts. Streamlining local regulations, as some state legislators are currently suggesting, wouldn't be enough to bridge the gap between low wages and the high cost of living in the state.

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Published on Tuesday, May 16, 2017 in The Mercury News
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