DFL passes bill to make affordable housing more expensive

Local media continues to pick over the bones of the 2024 legislative session. Reviewing “What labor bills passed and didn’t in Minnesota this year,” the Minnesota Reformer notes that “Prevailing wage will be required on affordable housing projects:”

In a significant victory for trade unions, Minnesota will be the first state to require developers to pay prevailing wages on affordable housing projects that receive funds through Low-Income Housing Tax Credits. Prevailing wages largely align with what unions pay and are typically required on publicly funded construction projects — like highways, schools and parks — under the rationale that the government should not put downward pressure on wages.

This might be “a significant victory for trade unions,” but, as a great man once said, there is no such thing as a free lunch: someone will be paying for this “victory.” The Reformer notes:

The higher wage requirements will increase the cost of new development amid a housing crunch…

Emphasis added. This, by the way, is another example of those excessive taxes, fees, and regulations, imposed by state and local governments which effectively make affordable housing impossible to build. 

It could have been worse:

Democratic lawmakers and trade unions also hoped to add prevailing wage requirements on affordable housing projects benefiting from other tax subsidies, as well as local construction projects that are exempted from local sales tax, but those proposals did not pass.

Indeed, it might still get worse. As I wrote last week:

Experience shows that none of these bad ideas ever really go away. Like the sanctuary state proposal and the $15 an hour statewide minimum wage, these ideas have simply slipped back into the shadows to await their opportunity.

The price of affordable housing is eternal vigilance.