Dive Brief:

At a Sept. 17 press conference, Detroit City Council President Pro Tem Mary Sheffield proposed a measure that would require all city-funded demolition and construction work to be performed by at least 51% city residents, the Detroit Free Press reported. The ordinance will be presented to the city council during the next few months as part of a package of "People's Bills" aimed at helping Detroiters.

Sheffield told the Free Press that the push behind the construction-related measure was the revelation that local residents were not well represented in the city's Land Bank demolition program, which funds the razing of blighted homes in Detroit. Of the $70 million spent on the initiative so far, more than 50% of the contracts have gone to suburban Detroit companies, 26% to minority firms and only 16% to African American-owned companies.

Detroit Mayor Mike Duggan instituted a similar program in 2014, but Sheffield's proposal differs in that it would lower the current threshold of $3 million — at which hiring requirements kick in — to a lower, undetermined amount; include demolition projects; and impose expensive fines on companies that do not comply. The fines would go into a workforce training fund, though Sheffield maintains there are plenty of qualified Detroiters that simply have not been given work opportunities. Sheffield said her ordinance would pursue more rigorous enforcement and collection of fines, but Duggan's office said they have been conscientious about going after violators.

Dive Insight:

Sheffield's plan is similar to those instituted in other areas of the country, but at 51%, it's higher than what is outlined in most other regulations, and many agencies forego fines and rely on contractors making their best efforts to comply.

The City of Sacramento is one of the latest municipalities to enact a local hiring law, the Local Hire and Community Workforce Training Program. The regulation, passed last month, requires that contractors use local workers when performing city-funded work valued at $1 million or more. The ordinance also requires that 20% of apprentices either live in an economically disadvantaged area or be a member of a special class — homeless, a woman, former offender, foster youth or recipient of public assistance.

But unlike the proposed Detroit ordinance, those contractors doing city work in Sacramento aren't subject to monetary fines and are able to hire from outside the area if local unions cannot provide them with adequate labor within 48 hours.  

In a market where there are plenty of qualified workers, these mandates don't present much of a problem for contractors. However, staffing a major construction project in Detroit has proven to be a challenge in the not-too-distant past.

During construction of the Detroit Red Wings' Little Caesars Arena, contractors could not meet the 51% local hiring requirement despite city officials lauding them for trying their best to recruit from the Detroit labor pool, and fined them a total of $5.2 million.