Committee shelves union‑labor density‑bonus proposal amid fiscal questions, requests AFL‑CIO trust testimony

A contested provision in S.328 that would have given a 20% zoning density bonus to multi‑unit residential projects (more than 45 units) that use a project‑labor agreement was set aside after sustained fiscal and policy scrutiny.

Senators who questioned the proposal raised practical concerns about whether private developers would take on the extra units even with a density bonus. One committee member argued that, assuming a modest labor‑cost premium, the bonus might require a very high marginal profit on the additional units to make projects feasible. Advocates and some committee members countered that the incentive could encourage prevailing‑wage, union‑built housing and attract investment from the AFL‑CIO Housing Investment Trust; they asked the committee to hear directly from that trust and to request financial modeling demonstrating whether the bonus would produce additional housing.

The committee's working resolution was to remove Section 9 from the current draft "out for now, but not forever," leave open the option to reinstate a revised incentive later, and direct staff to arrange expert testimony and fiscal analysis before reintroduction. The committee did not adopt specific alternative bonus levels during the meeting and requested further work on how such an incentive would interact with local zoning, construction costs and available financing.

Next steps: staff will seek testimony from the AFL‑CIO Housing Investment Trust and other experts, commission cost modeling to test how different bonus levels would affect developer economics, and report back to the committee before any new density‑bonus language is added to the bill.