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• In total, we have documented the use of contractors tied to proven or alleged <br />exploitation of workers on affordable housing projects that have received over $84 <br />million in taxpayer subsidies. <br />Three of the largest for -profit recipients of LIHTC and TIF funding - Dominium, MWF <br />and Roers - repeatedly used contractors that have records of labor law violations or <br />face serious allegations of worker exploitation. <br />Affordable housing projects sponsored by Dominium, MWF and Roers were awarded <br />over $47 million in taxpayer -funded subsidies across the Twin Cities metropolitan area <br />between 2016 to 2021 to build 30 projects. This includes housing tax credits issued by <br />Dakota County, Washington County and Minnesota Housing Finance Authority; TIF <br />funding from the cities of Richfield and St. Louis Park; and gap funding from Dakota <br />County. <br />Wage theft and exploitation remain persistent problems in the construction industry. <br />This report highlights widespread use of contractors that have a record of wage theft <br />or other abuses on publicly financed affordable housing projects. We can prevent <br />exploitation by increasing transparency, adopting responsible contractor standards, <br />holding project owners accountable for abuses that occur on their watch, and investing <br />in enforcement and worker education. <br />Introduction <br />Minnesota faces a significant shortage of <br />affordable housing. Middle and low income <br />Minnesotans are finding it increasingly <br />difficult to rent or buy a home. The supply <br />of low-cost rental housing in Minnesota <br />has actually fallen by a quarter over the last <br />decade, while the cost of buying a home has <br />more than doubled between 2012 to 2022.' <br />In recent years, state and local governments <br />have taken steps to fund new affordable <br />housing while promoting development of <br />market -rate housing to help ease a shortage <br />that is pushing up prices for all Minnesotans. <br />Yet without stronger oversight over the use <br />of Low Income Housing Tax Credits and Tax <br />Increment Financing programs, there is a <br />danger that new housing projects will be built <br />on the backs of vulnerable workers who earn <br />too little to live in the homes they build. <br />Greta Kaul, "Why home prices in the Twin <br />Cities keep going up," MannPost, April 7, 2022, <br />https://www.minnpost.com/economy/2o22/04/ <br />why -home -prices -in -the -twin -cities -keep -going -up/. <br />Worker advocacy organizations have <br />documented cases of wage theft, disturbing <br />safety lapses, and the use of irresponsible <br />contractors on affordable housing projects. <br />While tax incentives and direct public <br />financing are critical tools for addressing our <br />housing shortage, we cannot afford to allow <br />public dollars to fund worker exploitation. <br />We can better protect vulnerable workers by <br />tying robust labor standards to eligibility for <br />grant and tax incentive programs. <br />This report seeks to fill a significant gap <br />in our understanding of the prevalence of <br />worker exploitation in affordable housing <br />construction. Our goal is to document <br />the extent of worker exploitation in the <br />industry, examine how public investments <br />inadvertently exacerbate the problem, and <br />to provide a roadmap for policy changes to <br />ensure that affordable housing is not built on <br />the backs of vulnerable workers. <br />4 North Star Policy Action <br />