The PRO Act is a Threat to Housing Affordability

While the housing affordability crisis in America may be easily blamed on the COVID-19 pandemic and loss of jobs, that would ignore the fact that rising housing costs and under-supply in our country were major issues prior to the pandemic. In fact, housing affordability was a significant issue during the 2020 election cycle. The rising cost of housing coupled with debt the millennial generation carries were all concerns pre-pandemic and were only exacerbated once job loss and supply chain interruptions became a reality in 2020.

While stimulus payments and delayed eviction rules may be short-term salves for those facing immediate housing crises, it is the long-term impact of bills currently in Congress that could truly drive the affordability of housing further out of reach for many Americans.

The PRO Act, disguised as a way to help protect workers’ rights, would have ripple effects on the housing industry, resulting in job loss and even more expensive housing costs.

I’ve been in the housing industry for over four decades and my company creates housing where it is most needed; we build workforce attainable apartment homes. As one of the largest developers of apartment communities in the United States, we understand the demand for housing as well as the sad fact that many families and single adults are priced out of quality, attainable housing. That’s why we strive to create homes with rents affordable to families making only 80% of the area median income.

What prevents us from building even more workforce attainable housing? The pandemic aside, the PRO Act is a major threat to our nation’s housing supply, to our residents and to our business. First, the bill leads to a shortage of labor in the trades. In the construction industry, we have a mix of union and non-union contractors who help build our communities. Everyone from electricians to painters are part of our team in a contract capacity. By forcing unionization, which is what the PRO Act would do, the cost of forced union dues and limited competition will drive up construction costs. As our costs go up, the cost of housing then increases for a large portion of the country’s workers, families, and retirees.

Secondly, the PRO Act may put these independent contractors out of business. In our industry we perform “apartment turns,” the term for work done when residents move out and we prepare homes for new residents. This includes cleaning, painting, and other repairs. At times the demand for these services is more than our full-time staff can handle, so we turn to independent contractors to perform these services. The PRO Act will make that more difficult. If property managers and contractors are not free to make their own contracts but are instead forced to classify independent contractors in new ways, many businesses like ours may turn to larger firms which will push out small independent contractors and businesses. This will kill jobs and limit flexibility for these workers.

The PRO Act is really a behemoth wish list for unions and the cost of that wish list is prosperity. As our business would face increased costs, many new building projects will not be feasible. Volume will decrease and we may not be able to maintain our current level of full-time employees. This will lead to less work for contractors as well. Apart from the question of unionization or independent contractor status, there simply would not be enough work to go around. The trickle-down effect of the PRO Act would limit the freedom of workers, yes, but it also would limit the actual work available. That doesn’t sound like protection for workers, but rather a blow to job growth and prosperity.

While our company has, thankfully, been able to weather the economic challenges of the pandemic and maintain full employment for all of our employees without furloughs, our volume of business declined by 60% last year. We chose to take this time to reinvest in what makes our company great – our people and how they work together. We turned internally to streamline our processes and evaluate how we can improve our efficiency and maintain our mission of providing workforce housing. The freedom to make those decisions is what has enabled us to survive decades of economic changes and market demands. The consequences of the PRO Act would have significant negative impact on our business. We would have to cut projects and staff to accommodate the increase in costs.

We value our team of employees and contractors and our mission of providing attainable housing too much to let that happen. That’s why the PRO Act needs to be taken off the table.

James Schloemer is the Chairman and CEO of Continental Properties.