On Wednesday, September 15th, the USC Price Center for Social Innovation, the Homelessness Policy Research Institute, the Lusk Center for Real Estate, and DUPSA & Urban Growth Seminar Series hosted a Virtual Research Seminar presenting results from the recent RAND Report “The Effects of Project Labor Agreements on the Production of Affordable Housing: Evidence from Proposition HHH.”
Proposition HHH is a $1.2 billion funding initiative intended to incentivize the production of 10,000 units of housing aimed at addressing chronic homelessness in Los Angeles. More than a year after the passage of this ballot measure, a project labor agreement (PLA) was attached to the initiative by the Los Angeles City Council requiring that any funded projects of 65 or more housing units steer virtually all hiring through union halls, utilize specific ratios of workers by experience level, follow a specified set of formal grievance and arbitration procedures, and also outlining voluntary goals for the associated unions around the hiring of local and disadvantaged workers.
This new report presents evidence that the presence of PLA and its unusual threshold significantly affected both the size of projects built—by inducing developers to propose smaller projects to avoid the agreement—and the construction costs of larger projects that were covered. The report’s author, Jason Ward, presented these findings and discussed some of the report’s implications for future housing policies.
Dr. Ward is an associate economist at RAND and the associate director of RAND’s Center for Housing and Homelessness.