PHA board approves pact to lower labor costs on big projects

Posted: June 21, 2014

A labor agreement to lower union costs on new construction won unanimous approval Thursday from the Philadelphia Housing Authority's board of commissioners.

Herb Wetzel, a PHA commissioner and executive director for housing and community development issues for City Council, said he "never thought he'd see the day that we'd get an affordable housing agreement in Philadelphia."

Under the pact, the building trades would lower costs by 20 percent on large-scale construction projects for the housing authority.

Local labor leaders and PHA directors hailed the agreement.

Before the 6-0 vote, PHA president and chief executive officer Kelvin Jeremiah said the agreement would "substantially reduce" the authority's construction bills. The cost of building a single-family home should drop from $300,000 to $250,000, he said.

But a lobbyist for a Washington-based construction-industry trade association said the agreement will give "unions a monopoly" on building projects and "a huge advantage over qualified nonunion competitors."

Ben Brubeck, director of labor and federal procurement issues for Associated Buildings and Contractors Inc., warned that such "schemes" distort the free market and could increase costs in the long run.

He said contractors would be forced to hire union specialists for each type of construction job rather than allowing a worker to handle many different tasks.

The PHA agreement covers construction projects worth more than $5 million.

"Nonunion contractors will not be able to compete for those projects," Brubeck said.

The Obama administration and U.S. Department of Housing and Urban Development have encouraged this type of "project labor agreements."

Responding to the PHA pact, John J. Dougherty, business manager of Local 98 of the International Brotherhood of Electrical Workers, called it a "great initiative" that will help PHA to rebuild neighborhoods.

215-854-5659 @j_linq

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