Report warns of widespread risk of worker exploitation on taxpayer-funded construction projects

Report warns of widespread risk of worker exploitation on taxpayer-funded construction projects

November 17th, 2023

A newly-released report by North Star Policy Action sheds light on the troubling lack of workers’ rights protections on many of Minnesota’s publicly-subsidized housing projects. This report is the product of extensive research and inquiry, including a Confluence-hosted input session in earlier this year where representatives of worker centers, building trades unions, and housing justice organizations shared their thoughts on an early draft.

Some of the report’s key findings:

  • Minnesota faces a severe housing crisis caused by a shortage of affordable homes, and the problem is getting worse. The supply of low-cost rental housing in Minnesota has decreased by a quarter over the last decade, from 408,599 affordable units in 2011 to 308,733 units in 2021.
  • State and local governments are making unprecedented investments in new housing development. In 2023, lawmakers earmarked a record $1 billion for housing affordability. 
  • Unfortunately, use of contractors that have a record of cheating workers or face allegations of exploitation is far too common on affordable housing projects.
  • Three of the largest for-profit recipients of Low-Income Housing Tax Credit (LIHTC) and tax increment financing (TIF) funding – Dominium, MWF and Roers – repeatedly use contractors that have records of labor law violations or face serious allegations of worker exploitation. 
  • Affordable housing projects sponsored by Dominium, MWF and Roers were awarded over $47 million in taxpayer-funded subsidies across the Twin Cities metropolitan area between 2016 to 2021 to build 30 projects. This includes housing tax credits issued by Dakota County, Washington County and Minnesota Housing Finance Authority; TIF funding from the cities of Richfield and St. Louis Park; and gap funding from Dakota County.

North Star’s press release quoted Rep. Michael Howard (DFL – Richfield), chair of the House Housing Finance and Policy Committee, on his plans to introduce a bill to address the issue during the 2024 legislative session:

“The Minnesota Legislature must take heed of this report and take action. We will be working in partnership with workers to bring forward legislation to ensure greater transparency, standards, and accountability in the development process. When we build affordable homes, we must ensure we’re doing so with respect for the Minnesotans who are building them.”

We at Workers Confluence look forward to continuing to partner with North Star Policy Action around our shared goal of making Minnesota work for working people.

Read the full report here.


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