The Houston City Council on Wednesday passed a new set of requirements for companies seeking tax abatements – requirements that include specific federally certified safety training for construction workers and providing affordable housing.
The tax abatement guidelines also require companies seeking tax breaks for development to choose one from a list of eight “community benefits” including paid internships for low-income students, designs of buildings meant to reduce crime, and site improvements adding to the value of a neighborhood and not just the business itself.
Among other things, firms seeking tax breaks would need to try to hire 25% of their construction and non-construction labor from “communities in census tracts with poverty rates higher than the city’s poverty rate,” per city documents. They’d also need to “pay prevailing wages for each craft or type of laborer, worker, or mechanic for all public infrastructure or public improvement projects.”
“Qualifying developers will commit to 20% workforce or affordable units for residents earning between 30% and 120% of area median income,” per the city.
The administration provided a list of Frequently Asked Questions and answers about the changes. (List is attached below.)
As the council debated the measure, Mayor Sylvester Turner portrayed the final product as a compromise.
“We’ve got people who would like us to go even further and others who say we’ve gone a little too far,” Turner said.
Those who would like to go further include Laura Perez-Boston with the Democratic Party-aligned Texas Organizing Project. Just last week, she and others said tax breaks should be tied to higher wages for construction workers as well as janitors and other employees who end up working inside the finished buildings.
“What we're asking for is very simple,” Perez-Boston said during a news conference outside Houston City Hall. “If you're going to be giving multi-million dollar tax breaks to corporations, then we deserve fair wages, we deserve local hire, affordable housing on housing projects and real accountability,” she said.
Meantime, those who say the city government is going too far include trade associations representing the construction industry. Those groups were disappointed to see the council reject an amendment that would have allowed employer training programs to qualify for tax abatements. The council voted overwhelmingly with the mayor to require that tax breaks only be granted on projects with Department of Labor-certified safety training.
“If they are as good as they are represented to be, why not seek certification from the Department of Labor?” Turner asked of employers currently using their own training programs. “No one has addressed that issue.”
Employers, however, say the catch with Department of Labor certification is the bureaucratic red tape. It can easily take as long as four years to earn certification for a safety training program through the DOL, employers said.
Meantime those programs that meet the standards set by the National Center for Construction Education & Research (NCCER) – or other comparable organizations like regional or local community colleges – allow the industry to move much more quickly in putting people to work.
“The unions win this one and business loses,” said one longtime observer of Houston city politics, suggesting organized labor is much better-positioned under a system requiring federal approval for training programs.
Councilman Mike Knox, who offered an amendment to expand types of qualifying training programs, said it made no sense to force employers into a one-size-fits-all scenario. “It’s counterproductive to our mission, which is to welcome everyone here to do the things they want to do to grow our economy,” Knox said.
Councilwoman Brenda Stardig, who supported Knox’s amendment, said she was disturbed to see the city “limiting opportunities for employment and training.” “I’m trying to open those doors instead of narrowing those opportunities,” Stardig said.
Dwight Boykins, who on council represents parts of Southeast Houston up to Midtown, praised groups like the Associated Builders and Contractors for running great training programs but said he would be voting against Knox's amendment and in favor of Mayor Turner’s position.
It’s a position Turner said he worked hard to negotiate.
“What we have tried to do is strike a pretty healthy balance and move the ball forward,” Mayor Turner said.
