Construction

Boston’s Diversity Hiring Mandate For Construction Projects Is All Bark, No Bite

Top view of group of engineering team is meeting, planning construction work, looking paper plans at construction site,overhead view,Concept for team work. | Photo: PITIPHAT57/Getty Images Top view of group of engineering team is meeting, planning construction work, looking paper plans at construction site,overhead view,Concept for team work. | Photo: PITIPHAT57/Getty Images

The city jobs policy, first passed in 1983 and updated by Mayor Marty Walsh in 2017, requires work crews to be 51% Boston residents, 40% people of color and 12% women for most major building projects in the city, whether private or city-funded.

BOSTON, Massachusetts. October 31, 2020 (GBH News) — Travis Watson had hit his limit. “I’m sorry. I’m sick of this,” said Watson, the chairman of the Boston Employment Commission, as he recapped for his colleagues a local construction firm’s failure to hire minorities and Boston residents to work on a major downtown construction project. “These projects, these contractors need to come into compliance. They know it. They need to come into compliance from day one. And what happens is, they don’t.”

Watson was chairing — remotely, via Zoom — an August hearing of the commission, which was created to enforce the Boston Residents Jobs Policy, a city ordinance requiring builders to hire Boston residents, women and people of color. The commision was reviewing work on the Beth Israel Deaconess Medical Center’s new inpatient building at the Boston-Brookline border, which has been under construction since last summer.

The city jobs policy, first passed in 1983 and updated by Mayor Marty Walsh in 2017, requires work crews to be 51% Boston residents, 40% people of color and 12% women for most major building projects in the city, whether private or city-funded. As of July, contractors working on the Beth Israel project had employed 20% city residents, 24% people of color and 7% women.

Watson said that the problem was three subcontractors who had been brought on by lead builder Turner Construction — in particular, a firm called J. Derenzo, which had hired only 12% people of color — and he asked the city’s Economic Development Office to lower the boom. “I recommend in the strongest way possible that you consider precluding J. Derenzo from the award of municipal contracts and competitions for public development rights for a period. And the ordinance allows for up to three years.”

But it’s not going to happen. The city says it does not have that authority. In fact, the GBH News Center for Investigative Reporting could locate no evidence that the city has ever issued a formal sanction under the nearly 40-year-old ordinance. Celina Barrios-Millner, head of the Economic Development Office’s Equity and Inclusion Unit told the commission in September that the city simply can’t enforce the workforce participation goals the ordinance lays out.

“We are not able to sanction on their workforce participation numbers because that would require us to be able to prove that there is a pool of workers that is available that they’re not using, and that’s not legally sound,” she said at the commission’s monthly meeting. Her boss, Economic Development Director John Barros, told GBH News that tough sanctions pose a legal challenge for the city. “If we don’t do it right, we end up losing or potentially risk losing entire program,” Barros said.

Two decades ago, a series of state and federal court cases overturned city ordinances very similar to Boston’s that mandated the hiring of local workers, minorities and women on municipal construction projects. Ordinances in Lowell and Worcester were among those thrown out, mostly on the argument that the cities couldn’t prove that out-of-town hires were directly taking jobs away from qualified local workers.

And that remains a problem in Boston — the city doesn’t know how many local construction workers, people of color or women are available to join these job sites. Unions are not required to collect and report racial and gender data on their members, and not all construction workers are union members anyway, so the city has no baseline to measure against.

Greg Maxwell, general superintendent at Hub Foundation, another subcontractor on the Beth Israel project that failed to meet the hiring goals, told GBH News that the unions simply can’t provide enough trained workers to meet the goals of the jobs policy. “Although we endeavor to reach the BRJP’s goals, there are a limited number of sufficiently trained union workers who meet their criteria,” Maxwell said in an email.

“To reach the BRJP goals we will need more Boston residents, people of color, and women in the union pipelines.” Watson agreed. For now, he said, “The unions do not have the black members to hit the goal of the BRJP on downtown projects.” That leaves the city’s hands tied. And even if the city could get over that hurdle, “we don’t we don’t have the legal standing to bar anybody from bidding on city contracts,” Barros said. Bidding on public contracts is governed by state law, he said.

Instead, Walsh’s amended ordinance set up a reporting system that requires contractors to file detailed payroll records and report on their efforts to locate and hire qualified workers — such as contacting union halls to seek women and people of color who are available. The city can then penalize contractors for failing to file that paperwork.

Barrios-Millner told GBH News in an interview that “if someone’s out of compliance with their reporting, which they’re contractually bound to … then we withhold payment until they get their reports in. And that’s a tool that’s used all the time.” She also argues that the city ordinance is one of the most ambitious in the country, and the only one she knows of that applies to both public and private construction projects.

But it doesn’t appear to have had a significant impact on the hiring of minority workers on construction crews. An analysis of construction payroll data by the Dorchester-based Black Economic Justice Institute (BEJI) shows that minority employment on major city construction projects has remained flat — at about 35% — each year since Walsh signed the new ordinance in 2017, raising the minority workforce target form 25% to 40%. Boston’s population is more than 50% people of color.

Mukiya Baker-Gomez says the numbers prove the city isn’t taking its ordinance seriously. “What we have right now is there’s no value added for Boston residents and there’s no value added for people of color and women,” said Baker-Gomez, who used to lead the Massachusetts Minority Business Assistance Office and is now a consultant to BEJI. The fundamental problem, she said, is that “the city has not determined that they’re really gonna put their arms around this program and make it work.”

Baker-Gomez says city officials have taken a self-defeating approach. “Their perception that the program is vulnerable is because they’ve never tried it. Because they’ve been intimidated by the contractors who do business with them, who have been telling them to step back and leave us alone,” she said.

Meanwhile, Commission Chairman Watson says he is left with a situation where contractors that have filed the paperwork are deemed technically in compliance with the city’s ordinance even though they are nowhere near the goals for hiring Boston residents and people of color. “The sanctioning aspect of it is really geared toward the process and not the result,” he said in an interview.

And the overwhelming majority of major construction projects are not meeting the hiring goals in the ordinance, which he finds “incredibly frustrating.” But he remains hopeful that he is part of “a slow, steady process to what I think will be hopefully built up to a very strong ordinance” that is able to both sanction contractors that are poor performers and “make it very clear to both for-profit and nonprofit developers who the … good and bad players are.”

Watson said developers should refuse to hire subcontractors like J. Derenzo if they are not going to make better efforts to hire city residents and people of color. Data collected by the city and analyzed by the GBH News Center for Investigative Reporting shows Derenzo has reported more than 400,000 work hours on construction projects since 2017, with only about 26% of the work being done by people of color.

The company did not respond to numerous requests for comment on this story. For its part, Beth Israel Deaconess says meeting the goals of the city ordinance has always been part of its construction plan for the new building. “Having people of color, women and Boston resident construction workers is very important to us and we are committed to supporting the comprehensive recruitment and hiring efforts of our construction manager, Turner Construction, to meet this goal,” said Walter Armstrong, the medical center’s head of capital facilities and engineering, in a statement to GBH News.

“Up until now, we have had a small number of workers on the jobsite and we expect the ongoing committed efforts of BIDMC and Turner will improve percentages as the number of workers on the site increases.” Meanwhile, Watson and the Boston Employment Commission can push the hospital and its contractors to do better, but it does not appear to have any tools to punish them if they fail to meet the city’s hiring mandates.