New Orleans City Council last fall unanimously passed the Hire NOLA ordinance to increase local worker participation in the city’s construction boom. That law is now in limbo, as Louisiana State Senator Conrad Appel introduced a bill that would nullify Hire NOLA and any other programs similar to it. A vote on the bill is scheduled for May 23.
“We knew this was a possibility,” says Ashleigh Gardere, senior adviser to New Orleans Mayor Mitch Landrieu and director of the Network for Economic Opportunity. Gardere was the point person on passing the Hire NOLA ordinance. “We were hopeful given the amount of engagement around community stakeholders and advocates and contractors that it wouldn’t happen,” she adds. “The bill is hopefully the last collective stand for the construction industry.”
The construction industry has been pushing back against the ordinance, saying the city has overstepped its legal authority and that it represents an unfair burden on private business.
“We’ve carefully crafted this to be legally defensible, and checked it against the state constitution,” Gardere says.
Hire NOLA was largely a response to the fact that more than half of the working-age African-American men in New Orleans are out of work. From 2005 to 2013, median income for white New Orleanians has gone up by more than $10,000, while the median income for black residents has gone up just $1,000.
Technically, federal regulations prohibit local hiring requirements on federally subsidized projects. For that reason, Hire NOLA does not have local hiring requirements. Instead, the ordinance begins with goals, such as, in 2016, 30 percent of work hours of any tax-subsidized project in the city be completed by city resident workers.
Additionally, there’s a goal of one-fifth of that 30 percent be completed by disadvantaged local workers, defined by the city as someone with an income less than 80 percent of the area median income or someone who is homeless, or a single parent, a military veteran, eligible for public assistance, having a prior arrest or conviction, suffering from chronic unemployment, or having been in the foster care system.
Hire NOLA does not include explicit racial preferences, which was a contentious point during the ordinance’s passing. Rather, the disadvantaged local worker classifications were chosen to specifically target factors that have historically been barriers to employment for the city’s African-American population.
The goals also go up over time. By 2020, 50 percent of work hours on subsidized projects within city limits would be done by local workers, with 30 percent of that 50 percent going to disadvantaged local workers.
The ordinance makes the city a partner to the construction industry in order to achieve those goals. Gardere’s team at City Hall will maintain a database of local workers including disadvantaged local workers, and will also be providing worker training through local partners to ensure a healthy pipeline of qualified workers for upcoming projects. Hire NOLA does have a first-source requirement, so that prime contractors and subcontractors must give the city five days head start to fill positions, after which they may hire as desired.
Hire NOLA technically went into effect on January 1 this year, but the city allowed an extra month of conventional hiring while they invited contractors and subcontractors to training workshops on what the new law would require (and wouldn’t require). Since February 1, five contractors have already submitted hiring plans, essentially a timeline of a project from start to finish, with approximate dates of hiring periods and skills needed for each period, so that the city can be aware of what it will need in terms of training workers and ensuring Hire NOLA’s goals are met.
Only tax-subsidized construction or renovation projects in excess of $150,000 are affected by Hire NOLA. Gardere estimates there will be around a billion dollars’ worth of Hire NOLA-covered projects this year.
As in many states, Louisiana’s state legislature is a part-time position. When he’s not in session in Baton Rouge, Conrad Appel, the state senator whose bill would nullify Hire NOLA, is the president of two construction firms, including Construction South, based just outside New Orleans.
“It’s going to be down to the wire,” Gardere says. “For us, this is not only the fight for the values of local hiring and the ability to have a local hiring policy, but equally as important is that it is a law that was created by local leaders in response to real community challenges. The idea that the state could preempt that local law is really frightening.”
The Equity Factor is made possible with the support of the Surdna Foundation.
Oscar is Next City's senior economics correspondent. He previously served as Next City’s editor from 2018-2019, and was a Next City Equitable Cities Fellow from 2015-2016. Since 2011, Oscar has covered community development finance, community banking, impact investing, economic development, housing and more for media outlets such as Shelterforce, B Magazine, Impact Alpha, and Fast Company.