Berkeley will soon require contractors to provide apprenticeship programs and health care coverage for workers at major construction projects, under an ordinance the City Council adopted Tuesday despite objections from developers and business groups.
Concerns that the new requirements could make housing and commercial projects more expensive led city officials to pledge to consider other changes that could offset the new costs, such as loosening zoning rules or reducing certain fees developers must pay to build in Berkeley.
The City Council approved the ordinance at a special meeting in front of dozens of construction workers. Labor groups say the legislation — dubbed “HARD HATS,” or Helping Achieve Responsible Development with Healthcare and Apprenticeship Training Standards — is the first of its kind in California, and they hope it will become a model for other cities.
Mayor Jesse Arreguín, who led the push for the new standards, said the rules will help ease labor shortages and ensure Berkeley’s boom of new housing and commercial development doesn’t come at the expense of workers’ health.
“We need to level the playing field,” Arreguín said, “and ensure that as we are building more housing, as we are building up our city, building up our region, that we are lifting up people as well — and that we’re not doing it on the backs of people who are building our community.”
It isn’t clear precisely how much the new mandate will cost contractors and subcontractors.
When it takes effect at the start of next year, the ordinance will apply to projects of 50,000 square feet or more, which roughly translates to a 25-unit apartment building.
But developers argued the new expenses — when added to other fees and factors such as high interest rates and soaring materials costs — mean projects may not be profitable enough for investors to consider worthwhile.
Louis Mirante, vice president of public policy for the Bay Area Council, a business advocacy group, told the City Council that Berkeley risks stifling housing construction if it doesn’t cut “significant amounts of fees,” including the fee it charges developers to raise money for affordable housing, to make up for the cost of the new mandate. While the group did not explicitly oppose the ordinance, it asked the council to evaluate how much the requirements cost and how they could be offset before adopting the rules.
“This is a math problem,” Mirante said Tuesday. “These ordinances are really important for workers and are really important for improving people’s lives — but if projects are not feasible at the end of the day, that’s really helping absolutely no one except developers in the Central Valley.”
The council directed city staff to analyze the cost of the new requirements as part of a study already underway into development fees and other factors that affect the feasibility of projects in Berkeley. Depending on the results of that analysis, Arreguín said in an interview that he is open to reducing fees.
“There needs to be some cost offset, whether that’s affordable housing fees or other impact fees, so that projects are feasible,” Arreguín said.
But with many construction projects forging ahead in Berkeley — even as economic headwinds stall development elsewhere in the Bay Area — some questioned whether the new requirements would have as severe an impact on new construction as opponents claimed.
“We always hear, every time we have a discussion like this, that we’re not going to build housing in Berkeley,” said Councilmember Kate Harrison. “We’re going to keep building housing in Berkeley.”
Councilmember Rashi Kesarwani, who abstained from the vote on the ordinance, said she supported its goals but could not vote in favor without seeing an analysis of the costs and potential impact on development.
The ordinance allows workers to report violations to the city, or file a lawsuit against the contractor. City staff said Tuesday night that they’re still determining how they will manage the implementation and enforcement of the ordinance over the coming months.
The council also voted to recommend Berkeley consider allowing for taller and denser development under its zoning code — which could open the door to more profitable projects — as another step to make up for the added labor costs.
An earlier draft of the item that was approved Tuesday specifically called for reconsidering provisions of Berkeley’s Downtown Area Plan that allow for three high-rise apartment buildings in the core of the city, an idea several councilmembers have said they support. But that wording was amended to a more general call for “other zoning modifications,” without mentioning downtown.
The HARD HATS ordinance could be seen as a politically significant piece of legislation for Arreguín, who announced his plans to pursue the ordinance last summer at a press conference flanked by construction union leaders and workers. In the months since then, Arreguín has launched a run for state Senate and picked up an endorsement from the Building and Construction Trades Council of Alameda County.
Union support could be a key factor in the race to replace termed out state Sen. Nancy Skinner — one of Arreguín’s rivals for the seat, Berkeley resident Kathryn Lybarger, is the president of the powerful California Labor Federation. Arreguín rejected the idea that the labor standards ordinance was tied to his run for office, however.
“This is important to me not for any political reasons, but because this is good policy,” he said.