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(a) Recognizing that the construction industry is one of the few industries providing a path to middle-class careers for individuals facing barriers to quality employment, the City has supported local hiring requirements since at least 1994 when the Board of Supervisors passed Ordinance No. 286-94. In 2010, after engaging in extensive fact-finding studies and hearings regarding the benefits of supporting hiring of disadvantaged local residents, the City enacted Ordinance No. 311-10, the Local Hiring Policy for Construction, to create mandatory local hiring requirements for its public work contracts. In the years following, the City extended the Policy to apply to construction projects on City-owned property and on City-owned property sold for Housing Development, as defined in Section 23.61 of the Administrative Code, by enacting Ordinance No. 85-14 and Ordinance No. 224-15, respectively. The City has a proprietary interest in the construction contracts it issues, and also has a proprietary interest in the leases and development agreements that it enters that all allow for construction on City-owned property.
(b) The Policy is necessary to counteract the loss of middle-income jobs and disproportionate concentration of high unemployment in several San Francisco neighborhoods, which face concentrated poverty. San Francisco’s job growth rate and changing job base has had major impacts on patterns of income inequality and disparity in the City, with distinctive, adverse, neighborhood-specific effects. The loss of middle-income jobs has been associated with a diminishing middle class in San Francisco, as indicated by rising income inequality. San Francisco’s unequal income distribution threatens the City’s future competitiveness and overall economic stability, and the City’s anti-poverty strategy aims to ensure that the City and its partners are marshaling limited resources in an effective and coordinated way to create economic opportunities in San Francisco’s low-income communities.
(c) The Policy advances the City’s workforce and community development goals, removing obstacles that may have historically limited the full employment of local residents on the opportunities created by covered projects, curbing unemployment, population decline, and reduction in the number of businesses located in certain neighborhoods in the City. Reports show that the Policy has proven to be a highly effective tool in guaranteeing good-paying jobs for local residents.
(d) The Board of Supervisors desires to ensure that employment and training opportunities created by such projects provide consistent and high-quality opportunities to the San Francisco labor pool, especially low-income residents of San Francisco and other disadvantaged residents. The City has made substantial public investments in its workforce development system to create job opportunities in industries such as construction, which are vital to the economic health of the local economy, are accessible to low- and middle-skilled individuals, have career ladder opportunities where workers can move up with additional training and skill development, and provide access to living wage and family-sustaining jobs. Construction projects subject to the Policy provide a crucial opportunity to connect participants to these workforce development programs and to sustained employment and training opportunities.
(e) The Policy initially established a 20% local hiring requirement, with an annual 5% increase towards a 50% requirement. Since its enactment in 2011, the Board of Supervisors has acted twice to maintain the local hiring requirement at 30% through March 24, 2017, by adopting Resolution No. 80-14 and Resolution No. 74-15, based on recommendations of the Mayor’s Construction Workforce Advisory Committee. In order to sustain the Policy’s goals, again based on recommendations from the Advisory Committee, the Board of Supervisors desires to set the local hiring requirement permanently at 30%. The Board of Supervisors, however, has not changed its intent with regard to the aspirational goal of a 50% requirement, and may increase the local hiring requirement through a legislative amendment in response to future market conditions.
(Added by Ord. 84-17, File No. 170004, App. 3/30/2017, Eff. 4/29/2017, Retro. 3/25/2017)
(Former Sec. 82.2 added by Ord. 148-99, File No. 990433, App. 6/2/99; repealed by Ord. 171-03. File No. 030422, App. 7/3/2003)