NEVADA VIEWS: How to drive up the costs of government ‘affordable’ housing projects

The Desert Pines Redevelopment Project, which will transform the Desert Pines Golf Club in east Las Vegas into a master-planned affordable housing community, will surely be a pivotal step forward amid our affordable housing crisis. With a total investment of $450 million, the project promises not only much-needed homes but also jobs and a boost for local businesses, positioning Southern Nevada for economic growth while addressing the growing need for affordable housing.

Beneath the surface of this opportunity, however, lies a significant concern. The project is constrained by unfair, government-mandated conditions of employment.

Cloaked in a promise of better benefits, equity and conditions for workers is a stipulation mandated by the State Infrastructure Bank that disenfranchises the vast majority of Nevada’s construction workforce. To access financing for a project such as Desert Pines, a commitment to use a project labor agreements is required.

The bank’s board is effectively shutting out more than 80 percent of construction professionals who choose not to affiliate with unions through this requirement.

This leaves a disproportionate number of workers excluded from the economic benefits of this project, as well as all future affordable housing projects that may otherwise benefit from State Infrastructure Bank dollars. While unions may play an important role to many workers, these agreements unfairly skew job opportunities for the majority, limiting the full potential of what can be a far more inclusive economic boon for Southern Nevada.

While some PLAs allow open-shop operations with limited capacity, the environment can still devastate companies and their employees. Usually, workers lose out on wages and benefits they are forced to contribute to union plans for the duration of a typical PLA project — unless they join a union, pay union fees and meet strict vesting requirements.

This is a form of wage theft that harms hardworking families in Nevada’s construction industry.

Government-mandated PLAs exacerbate the construction industry’s skilled labor shortage because they force qualified nonunion contractors to replace all or most of their existing employees with workers from specific union hiring halls. This creates excessive cost burdens as well as safety and quality risks for high-performing nonunion contractors, who in turn cannot effectively compete for projects.

Again, nonunion firms employ the vast majority of Nevada’s construction workforce. Quality and experienced nonunion contractors have built more than half of the federal government’s large-scale construction projects since 2009 (and are more likely to be owned by women and minorities).

Recent studies, including one conducted by the Beacon Hill Institute in Massachusetts, found that PLAs raised the base construction cost of Ohio schools by 13 percent — $23 per square foot in 2016 prices — relative to non-PLA projects. Studies on the effect of PLA mandates on California, New Jersey, New York, Connecticut and Massachusetts school construction all reached similar conclusions — PLAs increase the cost of construction between 12 percent and 18 percent.

Simply put, Nevada can’t afford such waste while outcomes imply fewer infrastructure improvements and reduced job opportunities.

Nevada’s entire construction workforce is eager to contribute to solving critical issues such as the affordable housing crisis. Moreover, these are projects that have been largely constructed by open-shop contractors. However, policies that unfairly force the majority of the state’s skilled labor force to sit on the sidelines should not be something we have to live with.

With more affordable housing projects planned for our state, it’s time to steer our economy in the right direction and adopt policies that empower all Nevada workers to maximize job creation, housing and infrastructure improvements.

Mac Bybee is president and CEO at ABC Nevada, the leading advocate for free enterprise in construction.