City of Sacramento
Law and Legislation Committee Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-01620 12/5/2023 Discussion Item 7.
Update - Sacramento Forward Policy Package Stakeholder Process File ID: 2023-01620
Location: Citywide
Recommendation: 1) Receive an update on the stakeholder process for the Sacramento Forward policy package and 2) provide direction to staff prior to returning to the Law and Legislation Committee.
Contact: Michael Jasso, Assistant City Manager, (916) 808-1380, [email protected], Office of the City Manager
Presenter: Katie Valenzuela, Councilmember District 4, 916-808-7004, [email protected], Office of Councilmember Katie Valenzuela Attachments:
1-Description/Analysis
Description/Analysis
Issue Detail: On August 8, 2023, Councilmember Katie Valenzuela, Councilmember Caity Maple, and Mayor Pro Tem Mai Vang introduced “Sacramento Forward: A comprehensive approach to addressing housing and homelessness.” One component of this five-part strategy was to “Stop the Race to the Bottom” by taking the following actions:
· Establish minimum labor standards for projects that receive any public support. · Establish a city compliance process that can also provide technical assistance.
The Sacramento Region made headlines last year when it was announced that the unhoused population had reached a startling 9,278 individuals - a 67% increase from the last count. Numerous studies, including the 2022 Point-In-Time Count and the June 2023 report from UCSF (both summarized in the attachments section), point to lack of affordable housing, escalating rental prices, and low to no household income as some of the primary drivers of homelessness across California and in our region.
File ID: 2023-01620 12/5/2023 Discussion Item 7.
Further driving this crisis is the trend of contractors for residential projects breaking the law, at the cost of workers and the stability of their families. While some developers have cited that enacting prevailing wage requirements would increase project costs by 30 to 40%, the reality is that prevailing wage - which is set by the state and includes costs for healthcare benefits - is not that different than typical industry wages. A 2022 research study focused on affordable housing projects that prevailing wage requirements added - at most - 6% to the total project cost (See Hinkel, M. & Belman, D. “Should prevailing wages prevail? Re-examining the effect of prevailing wage laws on affordable housing construction costs.” British Journal of Industrial Relations, 1-23. 2022. <https://doi.org/10.1111/bjir.12663>
).
The Committee heard this item as a Councilmember Proposal pursuant to the Council Rules of Procedure, Chapter 12, on August 15, 2023. The Committee directed the appropriate council appointive officer to commence work on the proposal and bring it back to the committee for review and consideration. The Committee also directed staff to consult with stakeholders, and a stakeholder meeting was held on November 17, 2023. Representatives from the Sacramento Sierra Building Trades, Nor Cal Carpenters Union, Sacramento Central Labor Council, Building Industry Association, Sacramento Regional Builders’ Exchange, and Construction Employers Association were invited to attend, along with city staff and representatives from the sponsoring Council offices.
Policy Considerations: The true extent of wage theft in the City of Sacramento is unknown, but anecdotal evidence has confirmed it does occur. There is unknown financial costs to workers, as well as to contractors who are complying with the law and being outbid by non-compliant competitors. And while many developers contend that they offer competitive wages and benefits, the true status of that compensation is unknown. Ensuring compliance with labor laws and strong labor standards for projects that receive a public benefit aligns with multiple City policies and goals, including our goal of promoting good jobs, access to healthcare, and stable employment.
Economic Impacts: None.
Environmental Considerations: This action is not a project subject to CEQA because it involves only general policy and procedure making and does not have the potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. (CEQA Guidelines, §§ 15002(d), 15378(b)(2), 15061(b)(3)).
Sustainability: None.
Commission/Committee Action: On August 17, 2023, the Law and Legislation Committee heard this item as a Councilmember Proposal pursuant to the Council Rules of Procedure, Chapter 12, on August 15, 2023. The Committee directed the appropriate council appointive officer to commence work on the proposal and bring it back to the committee for review and consideration. The Committee also directed staff to consult with stakeholders, and a stakeholder meeting was held on November 17, 2023.
Rationale for Recommendation: Not applicable.
File ID: 2023-01620 12/5/2023 Discussion Item 7.
Financial Considerations: Not applicable.
Local Business Enterprise (LBE): Not applicable.