Two years after workers helping to build San Jose’s Silvery Towers were released from literal slavery amid a criminal probe into their boss, local labor leaders secured stronger protections for builders on city-subsidized projects.
The City Council voted 9-2 Tuesday to expand rules that prevent worker exploitation on publicly subsidized projects. Among the new rules are requirements to hire more apprentices as well as local and underrepresented workers.
Council members Johnny Khamis and Dev Davis cast the dissenting votes.
San Jose will now require that workers who live locally put in 30 percent of the total work hours on a project covered by the ordinance. Construction companies must also use “good faith efforts” to hire “underrepresented workers as entry-level apprentices to perform 25 percent of the total apprentice hours.” The city defines an underrepresented worker as someone who receives government assistance, is at risk of losing a home or has survived labor trafficking, to name some examples.
Tuesday’s newly approved rules build on efforts that began before the month-long summer recess, when councilors passed a law that requires private construction companies to pay workers a prevailing wage on projects that benefit from city subsidies.
The remaining provisions were delayed until Tuesday because they required additional work from city officials. Economic Development Director Kim Walesh and Public Works Director Matt Cano previously said officials faced a myriad of legal and administrative roadblock in structuring a local hiring rule.
With the review of the downtown high-rise incentive program looming later this fall, councilors pressed city staff on whether the tax break constitutes a subsidy. The program, which has been around for some time now, aims to expedite development by slashing certain fees. Its inclusion in the workforce standards law has become a matter of great debate between labor organizers and developers.
Khamis, who’s known for consistently opposing increases to fees and taxes, kicked off today’s meeting by voicing concern over the definition of subsidy.
“It's all about our investments,” he argued. “They're still giving us money for reduced fees. If we move down this path, if we take away a fee permanently that fee reduction should not be called a subsidy.”
Davis agreed with Khamis, adding that she ultimately could not support the proposed law with San Jose still in the thick of a dire housing crisis.
“If we reduce a fee, even if we reduce it temporarily I don’t see that as a subsidy,” she said. “We have a vested interest in building as much housing as we can get built.”
City Attorney Rick Doyle addressed Khamis and Davis’ points by saying, “If you eliminate the tax generally or you eliminate the fee then you’re not subsidizing, you’re eliminating.”
Before the meeting, Mayor Sam Liccardo told San Jose Inside that there’s “no question” that giving land or money to a developer is a subsidy.
“The structure of the agreement we struck more than a year ago was if nobody can build anything because construction costs are too high and you have to reduce a fee to get a shovel in the ground, then that's not a subsidy,” he added. “That's just reducing fees so you can make something happen.”
Downtown Councilman Raul Peralez, who supported the labor-backed proposal, noted that the fees were part of a larger picture.
“I think what is important is why we even have these fees because we are talking about fees for affordable housing, for our parks, for our roads and sidewalks,” he said. “There is a balance to strike in between. If we get zero built, we get zero fees for these things.”
Council members Sylvia Arenas and Maya Esparza also expressed support for the new law, calling it a way to make it easier for the workforce to live here.
“This investment is in our workforce,” Arenas said. “We can’t have it both ways. I don’t want to stop development. I want to make sure we have housing, but I can't have it on the backs of our laborers and our working poor.” She added: “We need to assure there are standards on pay and work for folks who need it. I feel that this is the way to get there while still honoring our goals around housing.”
Labor leaders, who had fought for the new protections for more than a year, were pleased with Tuesday’s decisions. Jean Cohen, a spokeswoman for UA Local 393, said that she was glad that all workers will now have equal protections.
“The building trades, the labor movement and the development community all have a shared goal, which is to build beautiful buildings for the city of San Jose,” Cohen told San Jose Inside. “There are many valuable components in the ecosystem of what it takes to develop a project, and these policies build a strong foundation for all interested parties, which is to have a vibrant and robust downtown.”