An in-progress accessory dwelling unit program in Foster City could boost housing production, but there are mixed opinions on whether a prevailing wage requirement could stifle or help the effort.
Prevailing wage stipulations mean that those involved in the construction of housing developments are paid based on the average rate for their occupation and often in their geographic location. Because it is often tied to union wages, it creates additional labor cost for projects. While developments receiving public financing are typically subject to the requirement, privately financed ventures are not.
As part of its state-mandated housing element, the city intends to implement a variety of new policies and programs over the next eight years to meet its required housing goals. One of these is a loan program for those wishing to construct an ADU on their property, and the city could use both state and city funds. While there are some prevailing wage exceptions for publicly financed projects, ADUs are not exempt per state labor code.
According to a recent staff report, a prevailing wage requirement built into the loan funds would make the program “extremely challenging,” and staff introduced the possibility of sponsoring legislation that would add ADUs to the list of exemptions.
“We did see this firsthand when we were trying to look for a contractor to do very minor work at our workforce housing unit, and we were unable to find a contractor,” Community Development Director Sofia Mangalam said.
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But most councilmembers were not in favor of legislation that would expand the exemption.
“I think we can all agree that we want to find ways to spur and incentivize people to build, especially ADUs and [junior accessory units], but seeing what we have been able to do in the last several years, I don’t know that focusing on this particular issue is going to help change anything,” Councilmember Phoebe Venkat said.
About 12 ADUs have been built in the city since 2020.
Speaking on behalf of the San Mateo County Building and Construction Trades Council, Bart Pantoja said during public comment that the prevailing wage standard ensures all construction workers receive adequate salaries and benefits.
“The exclusion of ADU projects from prevailing wage will exclude workers from standard compensation for work performed and exclude the use of state registered apprenticed workers,” Pantoja said. “Furthermore, without the prevailing wage standard as it is, there will be no certified payroll requirement … the underground economy may find cover to avoid payment taxes by paying cash for misclassifying workers as independent contractors when in actuality they are employees.”
Thanks for the report, Alyse DiNapoli. My takeaway from this article is that Foster City, instead of encouraging ADU’s, is attempting to reward their campaign donors and also attempting to persuade workers to join unions. Worst of all, however, is this policy forces increased costs to build which will result in inreased property tax assessments folks will pay for an ADU. BTW, 12 ADU’s in Foster City in the past 5 years? With this “requirement” I’d be surprised if they get more than 12 in the next 5 years. Or will folks build “illegally” and hope that Foster City, in the future, gives everyone a “pass.” Kind of like folks getting traffic tickets and then having their fines waived because they never bothered paying them?
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Thanks for the report, Alyse DiNapoli. My takeaway from this article is that Foster City, instead of encouraging ADU’s, is attempting to reward their campaign donors and also attempting to persuade workers to join unions. Worst of all, however, is this policy forces increased costs to build which will result in inreased property tax assessments folks will pay for an ADU. BTW, 12 ADU’s in Foster City in the past 5 years? With this “requirement” I’d be surprised if they get more than 12 in the next 5 years. Or will folks build “illegally” and hope that Foster City, in the future, gives everyone a “pass.” Kind of like folks getting traffic tickets and then having their fines waived because they never bothered paying them?
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Keep the discussion civilized. Absolutely NO personal attacks or insults directed toward writers, nor others who make comments.
Keep it clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Don't threaten. Threats of harming another person will not be tolerated.
Be truthful. Don't knowingly lie about anyone or anything.
Be proactive. Use the 'Report' link on each comment to let us know of abusive posts.
PLEASE TURN OFF YOUR CAPS LOCK.
Anyone violating these rules will be issued a warning. After the warning, comment privileges can be revoked.