Feb. 4, 2025
What happened: On Dec. 18, Gov. Kotek issued an executive order that requires the use of project labor agreements (PLAs) on construction projects funded by the state. In effect, the order requires the use of collective bargaining agreements for most state-funded projects for which on-site labor costs will make up at least 15% of total costs – in other words, everything. PLAs, the executive order said, will ensure that a project “will have the highest standards of quality and efficiency at the lowest responsible cost … (emphasis added).”
Actual cost impacts: On Feb. 3, TMT Development President and CEO Vanessa Sturgeon told the House Committee on Economic Development, Small Business and Trade about the effect the PLA requirement will have on an affordable multiunit project her company is building. TMT, she said, recently calculated the per-square-foot cost of units before the governor’s executive order and the cost after the executive order. The pre-EO cost was $273 per square foot. The post-EO cost is $373 per square foot, a 37% increase. Click the video to the right to hear her testimony.
Why this matters: The governor’s executive order will substantially increase the cost of state-funded projects, eroding the buying power of tax dollars for, among other things, affordable housing. Solving Oregon’s affordable housing crisis is one of the governor’s top priorities.
Does it apply? The governor’s office has added an FAQ to its executive order claiming, among other things, that it does not apply to “(a)ffordable housing projects that are owned by non-state entities.” However, the order itself contains no such exemption. Meanwhile, TMT’s estimate is a valuable response to the order’s claim that it ensures that the projects to which it does apply – which currently include affordable housing – will be built at “the lowest responsible cost.”