Affordable Housing Bill Standardizes Prevailing Wages, Mandates New Survey Rules for Construction Jobs

If you’ve ever tried to build or finance anything, you know that the rules around construction wages—specifically the federal prevailing wage rules under the Davis-Bacon Act—are notoriously complex. The Affordable Housing Expansion Act aims to simplify and standardize these rules, particularly for federally funded housing projects, by shifting the focus to a single, clear 'residential character' standard and overhauling how the government calculates those wages. This bill is a dense stack of changes that could significantly impact both the cost of building affordable housing and the paychecks of the workers who build it.

The New Math: Changing How Wages Are Calculated

Section 2 of this Act mandates a major shakeup in how the Department of Labor (DOL) determines prevailing wages. Currently, the DOL uses voluntary surveys from contractors, which critics often argue are unreliable or skewed. This bill requires the Secretary of Labor to review and revise the survey methodology within one year, demanding that the new approach use reliable and objective data sources and a defendable methodology. Critically, the new surveys must ensure proportional representation from both union and non-union businesses.

For a construction worker, this means the number the government uses to set your minimum wage on a federal job could be based on a much broader, and potentially more accurate, pool of data. For a contractor, it means the paperwork required to comply with these wage rules might change completely. This is a good step toward fairness, but the vagueness around what constitutes a “defendable methodology” leaves a lot of room for interpretation—and potential disagreement—down the line.

One Wage to Rule Them All: The 'Residential' Standard

Perhaps the biggest change for affordable housing developers is found in Section 3, which mandates that projects covered under several major housing acts (like the National Housing Act and the Native American Housing Assistance Act) must be limited to one wage rate determination corresponding to the project’s overall residential character.

What does this mean in real life? Imagine a six-story affordable apartment complex. Under older rules, a portion of that building might have been classified as “commercial” or “heavy construction” if it had ground-floor retail or certain structural elements, potentially triggering a higher prevailing wage rate for those specific parts of the job. This bill appears to force the entire project into the “residential” classification. While this streamlines the process and is intended to lower construction costs—making it easier to build affordable units—it could also mean that construction workers on these projects might receive a lower prevailing wage than they would have under the previous, more complex classification system. This is a clear trade-off: potentially more affordable housing, but potentially lower wages for some laborers.

The Future of Wages: A Working Group with Teeth

Section 4 establishes the Davis-Bacon Modernization Working Group, a temporary team tasked with recommending updates to the prevailing wage requirements. This isn't just a study group; its duties include analyzing whether the residential classification should apply to affordable housing units five or more stories tall and, more importantly, developing recommendations for when prevailing wage requirements could be waived or streamlined for affordable rental projects receiving Federal Housing Administration (FHA) financing.

This is where things get interesting—and potentially concerning. Giving a working group the power to recommend waiving long-standing labor protections for certain projects could dramatically undercut worker pay in the name of affordability. While the group is required to include representatives from labor organizations, the focus on streamlining and waivers suggests a strong push toward cost reduction. For anyone in the construction trade, the recommendations from this group, due within one year, are going to be essential reading, as they could reshape the economic landscape of federally funded construction jobs.