The same week that Minnesota’s third largest city voted to remove prevailing wage requirements on single-family home projects receiving tax increment financing, the fourth largest city had discussions about adapting prevailing wage requirements for some projects.
Bloomington’s Planning Commission, during its Thursday meeting, heard a presentation on and discussed an ordinance that, if instituted, would mean laborers working on developments that have an estimated cost over $175,000 and use some type of public assistance, would earn a prevailing wage.
No formal action on the drafted ordinance was taken. The formal hearing for the ordinance will be the June 17 meeting of the Bloomington City Council.
Bloomington Compliance Manager Amir Malik presented the draft to the commissioners, many of whom voiced their support for the idea.
Malik said the belief around prevailing wage is that it increases the end-cost on a project. However, he said the research the city looked at says prevailing wage does little to final cost. This, he said, is because prevailing wage involves using qualified workers, which in turn decreases the number of project-site injuries occurring and allows bringing on apprentices who are paid less.
The potential move by Bloomington comes after the Minnesota Legislature passed a provision in its omnibus package that will require prevailing wage be paid to those working on a project receiving Low-Income Housing Tax Credits. Minnesota is now the first state in the nation to require this, according to a press release from North Star Policy Action.
Adam Hanson, the president of the Associated Builders and Contractors, said in an interview that Bloomington adopting a prevailing wage will have a costly impact.
“Whether we’re looking at multifamily housing, whether it might be a single-family construction that solicits tax increment financing or other tax abatement measures from the city, it will drive up those costs,” he said.
At its May 20 meeting, the Rochester City Council voted to exempt single-family projects receiving TIF money from prevailing wage requirements, as previously reported on by Finance & Commerce . The exception, which does not apply to multifamily developments or any commercial real estate assets, comes as Rochester finds itself in the hole for creating for-sale homes.
Bloomington Planning Commission Chair Paige Rohman said he was shocked to find out Bloomington doesn’t already have a prevailing wage requirement for projects wholly funded by the city.
“Will it have an impact on project costs?” Rohman said. “Probably. But that cost is likely coming from people who have been exploited. And more often than not, those are people who are new to our country and may not have the paperwork to be doing these jobs and the employers know that Regardless your situation for how you are here, anything that’s exploiting an employee for financial gain of a business is not something I want us supporting with city dollars.”
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