Photo Courtesy of Thornton Tomasetti

Federally funded reconstruction carries prevailing-wage rules that will slow rehabilitation efforts, some say. Others say the low-cost solution will lead to inferior design for low-income housing.

Walmart has rebuilt and design firms are working on several replacement schools, but a recent hike in federally mandated construction wages could hamper efforts to construct low-income housing and other publicly funded projects in tornado-ravaged Joplin, Mo., some state and local officials say.

Local contractors say the prevailing-wage rate for public-works projects has in some cases nearly tripled—to $21.47 per hour from $7.98 an hour—for area carpenters, who receive $12.65 in fringe benefits, for a total of $34.12 an hour.

The increases, the first to be mandated by the U.S. Dept. of Labor since 1990, have sent builders of public projects back to the drawing board as Joplin continues its recovery efforts after a devastating tornado hit the town on May 22.

Legislators are especially concerned about several proposed low-income housing projects, many of which would be partially funded by federal or state tax credits and therefore subject to prevailing-wage rates. In some instances, project developers have removed environmental and tornado-resistant components from their plans in order to make them more economically viable, says Missouri Rep. Bill White (R).

"Some proposals originally called for insulated concrete frames and foundations," says White. "Now were seeing plans for stick frames on cinder blocks."

The Missouri Housing Development Commission, responsible for allocating federal and state low-income housing credits to prospective developers, has received to date 31 proposals for projects in the Joplin area, according to agency spokeswoman Megan Word, who acknowledges that the agency's Qualified Allocation Plan requires any project awarded by MHDC must adhere to prevailing-wage rules.

Joplin Public Schools Assistant Superintendent Angie Bessendorfer says prevailing wages typically affect school projects but says it is unclear how new wage rates will affect the four facilities planned to replace those destroyed by the tornado. "We've just commissioned the design work and aren't due to break ground until sometime next year," she says. "But the rule of thumb is 30%. Without prevailing rates, we'd be able to build 30% more."

White plans to introduce two bills that would temporarily exempt housing and school projects from prevailing-wage rules in regions of the state that have been designated as disaster zones. Missouri Lt. Gov. Peter Kinder (R), an MHDC member, says he will move to exempt Joplin housing projects from the prevailing-wage rule at a Dec. 16 MHDC meeting.

In 2005, President George W. Bush temporarily suspended the Davis-Bacon Act in areas of Alabama, Florida, Louisiana and Mississippi ravaged by Hurricane Katrina in order to expedite reconstruction of the Gulf Coast. He reinstated it six weeks later amid pressure from both Democrat and Republican members of Congress who believed that paying less than the prevailing wage on public projects would increase poverty in the region.

The Carpenters District Council of Greater St. Louis and Vicinity has similar concerns about Joplin. "Our concern is that developers might recruit less-expensive labor from other regions," says Dave Wilson, council spokesman. "Any meaningful rebuilding of Joplin would ensure that local trades had the opportunity to rebuild their own town."