Make Use of Federal Programs

The Federal Government operates various policies that link federal construction to local employment needs.  Enforcement of these programs is generally weak and their sphere of application is narrow.  That said, it is important to recognize what the federal government offers, in order to know when these programs can be applied.

• HUD Section 3 was passed to "ensure that the employment and other economic opportunities generated by Federal financial assistance for housing and community development programs shall, to the greatest extent feasible, be directed toward low and very low income persons, particularly those who are recipients of government assistance for housing."  Enforcement of this policy is quite weak and requires a complaint to be made, which may or may not result in an investigation, then a voluntary resolution, and potentially an administrative hearing.  For more information see: www.hud.gov/fhe/sect3faq.html

• HUD Community Development Block Grants. Firms receiving CDBG grants, and related Section 108 loan funds are required (with some exceptions) to create one permanent position for every $35,000 in loans received. Low- to moderate-income residents must fill 51 percent of these jobs.  Geographic restrictions are not automatic, but may be added, depending on the particular situation. Unlike most of the programs profiled in this tool, Section 108 explicitly requires the creation of permanent, non-construction jobs.  Section 108 loans target commercial businesses, creating jobs in industries varying from manufacturing to technology.  For more information: www.hud.gov/local/stl/108faqs.html
• The Workforce Investment Act (WIA) of 1998 created state and local Workforce Investment Boards (WIBs) to be responsible for how WIA money is spent. These boards are composed of business, labor, and community interests.  Working to get local resident and labor leaders on WIB boards is one way to influence decisions on local employment opportunities and to help make certain that federal money is spent in a way that ensures community residents will receive maximum impact from those dollars.

Link Local Hiring and Living Wage

Local hiring initiatives combine well with living wage ordinances. Living wage provisions have been passed in dozens of cities in the past several years. They require firms who benefit from public money (either through subsidies or service contracts) to pay their employees a living wage.  Visit our Living Wage Tool for more information. 

Some living wage ordinances have incorporated local hiring provisions into their requirements.

• Tucson's ordinance requires that employers with city contracts in certain services - facility and building maintenance, refuse collection and recycling, temporary employee services, janitorial and custodial, landscape maintenance and weed control, pest control, security, or moving services - maintain a workforce of at least 60 percent city residents, in addition to paying a living wage. 

• Minneapolis and St. Paul, MN, require businesses that receive more than $100,000 of city assistance in a year to pay a living wage and hire local residents for at least 60 percent of newly created jobs. 
• Cleveland, OH's living wage ordinance covers businesses participating in service contracts or receiving city subsidies with an aggregate value of $75,000, for-profit employers with 20 or more employees, and nonprofit employers with 50 or more employees and a wage ratio greater than 5:1.  It requires these businesses to pay a living wage and hire Cleveland residents to fill 40 percent of new jobs.

Pay Attention to Transportation Projects

Transportation projects bring very large amounts of public money into communities, often leveraging federal, state, and local funds.  But they are also often so large they can uproot and displace whole neighborhoods.  When complete, if the construction itself didn't displace community members, the increase in property values that accompanies better transportation often will. Transit-oriented development, therefore, is an area of redevelopment where linking the hiring of residents - or other community benefits like affordable housing or contracting local, minority firms - to publicly funded construction, can make or break the stability of the community.

Institute Comprehensive Community Benefits Analyses

An alliance of PolicyLink, Los Angeles Alliance for a New Economy, East Bay Alliance for a Sustainable Economy, Center for Policy Initiatives, and Working Partnerships is advocating that jurisdictions adopt a formal assessment process - a community benefits analysis - for use on any development project that meets certain thresholds (generally the scale of the development or the size of subsidy).  This assessment would evaluate the effect of the development on a community's job, housing, and environmental health, and could be used by public officials or community groups to craft an agreement including an appropriate mix of community benefits, such as local hiring provisions. 

A standard community benefits analysis combines the best of both local hiring strategies: it provides in-depth evaluation of each project's impact like individual agreements, but is applied on a broad scale like an ordinance.

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