SACRAMENTO, CA - Now that the celebrations are over, Californians should get ready for more expensive housing and more expensive driving, both courtesy of the government.
 
Beginning on January 2, any private housing project that receives a public subsidy in any form, such as donated land, waivers on fees, cash, or forgivable loans, must pay construction workers the “prevailing wage.”

The prevailing wage, set by the state Department of Industrial Relations, is always interpreted as the union wage. According to low-cost housing activists, this will raise the cost of housing from 15 to 30 percent. The law that will cause this increase, SB975, signed by Gov. Gray Davis last October, is so sweeping that it will affect even the smallest emergency program for seniors.

The law exempts those projects built exclusively with assistance from redevelopment agencies, but since virtually all affordable housing projects include a mixture of funding sources, the exemption is meaningless. Activists fear that housing projects already in the works may be affected.

This law is a subdivision of the federal Davis-Bacon Act, a measure from the 1930s that mandates union labor, under the “prevailing wage” doctrine, on all government projects. Davis-Bacon is a primary reason that everything built for the government is expensive. This rewards supporters in labor unions, whose political clout far outstrips their numbers in the work force. Unions represent only about 15 percent of workers, down from 30 percent during the 1950s. Put differently, approximately 85 percent of workers are not union members. Only the public-sector unions are growing, both in numbers and militancy.

In addition to higher prices, SB975 prevents companies from bidding on the very projects that their taxes subsidize, a codification of unfairness. State law also allows unions to confiscate money from non-members and use it for political purposes, such as lobbying to require union labor on low-cost housing projects.

In the Sacramento scale of values, it is more important to reward a powerful group of supporters rather than make housing, a basic need, more affordable. For those who want to lower the cost of housing, there is a better way.

As a matter of policy, all public projects should be open to bids from all companies, not just unionized companies. The company with the lowest bid, regardless of ethnicity, gender, race or union affiliation, should get the job. The regulatory burden that builders face could also be lightened. These measures would lower costs but provoke reaction from unions and environmentalists who, safely established in suburban homes, do everything in their power to prevent new housing from appearing. Those workers who must live farther from their jobs may soon find another surprise the next time they get a notice from the Department of Motor Vehicles.

The current administration has rung up a huge deficit and wants to get rid of it on the backs of workers. Bay Area politicos, led by San Francisco Assemblywoman Carol Migden, want to turn back the clock to the days when the yearly car tax was truly punitive, not affordable as it is now. Restoring high car taxes, of course, comes billed as a way to soak the rich but will hurt working Californians the most.

Californians will want to remember this strange New Year greeting when it comes time to vote.

K. Lloyd Billingsley is editorial director of the Pacific Research Institute in San Francisco. He can be reached via email at klbillingsley@pacificresearch.org.