Two recent studies by the RAND Center on Housing & Homelessness found that the PLA mandated by the L.A. City Council on Proposition HHH – the city’s plan to spend $1 billion to build 10,000 units of affordable housing – increased costs by 21% and added 27% to the time it took to build an affordable unit. In the end, with the funding exhausted, only around 7,300 units were built through the initiative.[1]  The PLA was a major reason for the shortfall.

The author of these seminal studies – Jason Ward – put it bluntly when he said: “A simple rule of thumb is that the use of a PLA incurs a cost equal to 1 of every 5 affordable housing units that could be produced through funding programs without a PLA.” In other words, with a PLA, you get 20% fewer housing units for the same price.

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[1] Ward, Jason M., “The Effects of Project Labor Agreements on Affordable Housing:  Evidence from Proposition HHH,” RAND Corporation, 2021 and “Project Labor Agreements and Affordable Housing Production Costs in Los Angeles,” RAND Corporation, 2024.

The central feature of PLAs is that they place the power to decide who gets to work on a District project (and who doesn’t) in the hands of union hiring halls, some as far away as Philadelphia. These hiring halls place their existing members on projects ahead of District residents. For example, the Douglas Memorial Bridge, a $460 million bridge was built entirely in Ward 8. According to DDOT, the PLA “created DC hiring challenges” and resulted in only 1 new job for a Ward 8 resident.[1]

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[1] District of Columbia Department of Transportation, Special Experimental Project (SEP) – 14 Local Labor Hiring Provision Interim Report.  Note: This report, which overs 15 months between 2021 (Q1) and 2022 (Q1) is the only report on local hiring produced for the South Capitol Street Bridge project. No final report has been produced. As a federal highway project, this South Capitol Street Bridge was not subject to the District’s First Source Law.  But First Source requirements were incorporated as a contract provision in the PLA and referred to as a “Special Experimental Project” to achieve local hiring goals included in First Source.

Nearly all local businesses, including Certified Business Enterprises (“CBEs”), simply will not bid on a project if it requires signing a PLA. History is proof of this. Recent PLAs contained a limited exemption for CBE firms. The reason these exemptions were needed is obvious. Without these limited exemptions, there would have been no CBE participation due to the PLA requirements. These exemptions, however, only apply to the project’s smallest dollar contracts. As such, the District’s public policy, when the Council mandates PLAs, is to effectively consign local businesses to the smallest contracts – the scraps – on District projects.  It is hard to think of a more self-defeating public policy for the residents and businesses the Council is supposed to represent

PLAs are pay-for-play politics in document form. They are pushed on publicly funded projects as a way to reward politically active labor unions for their political support. They have the effect of steering public contracts to a handful of contractors and putting union representatives in charge of determining who gets to work on public projects and who doesn’t. Generally, that means putting their members first and DC residents last.

PLAs stifle bid competition up and down the contracting chain on public projects. The lack of genuine bid competition dramatically increases project costs, and claims to the contrary are not based on sound science. The independent, peer-reviewed research on this issue all supports the conclusion that PLAs significantly increase project costs. Period.