Agenda - Council Work Session - 07/28/2026

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from public subsidies and been employed on affordable housing projects. The authors reviewed public evidence from court rulings, publicly -available legal settlements, and media reports, and we also interviewed construction workers and worker advocates. Over recent years, worker advocacy organizations including Centro De Trabajadores Unidos En La Lucha (CTUL), the North Central States Regional Council of Carpenters (NCSRCC) and the Laborers International Union of North America (LIUNA) have uncovered numerous cases in which public housing dollars have apparently fueled worker exploitation. While the focus of our analysis is on publicly funded projects, the scale of wage theft and other forms of abuse is often worse in non -subsidized segments of the industry. What we detail below is sadly just the tip of the iceberg. Tht uANGER OF WORKER EXPLOITATION ON PUBLICLY FINANCED AFFORDABLE HOUSING PROJECTS In recent years, contractors that have a record of cheating workers or face serious allegations of exploitation have worked on 33 affordable housing projects across the Twin Cities metropolitan area, including 25 LIHTC- funded projects since 2016 and 14TIF-funded projects since 2018.39 In total, these projects have received taxpayer -funded subsidies in excess of $84 million. The following are among the more egregious case studies that we have uncovered in the subsidized affordable housing industry. Painting America Hudson, Wisconsin Painting America is a drywall and painting contractor based in Hudson, Wisconsin. They have worked on commercial and residential projects in Minnesota and Wisconsin. The company also hired Douglas Drywall, a 39 Some of these projects had both TIF and LIHTC funding. labor broker, to supply and manage labor. On December 27, 2017, the Minnesota Department of Labor and Industry issued findings that Painting America violated Minnesota law, acting together with its labor broker, by misclassifying employees as independent contractors.4° Painting America has a history of wage theft complaints. In 2019, construction worker Arturo Hernandez testified before the Minnesota House of Representatives Labor Committee alleging Painting America failed to pay him the full wages they owed him. Hernandez testified that he worked for Painting America for three weeks without pay, and when he demanded the money he was owed, the company offered to pay him in drugs.41 We have documented Painting America on the following publicly financed projects: Amundson Flats - MWF Properties (Edina) • Ellie Apartments - United Properties (Eden Prairie) • Legends of Minnetonka - Dominium (Minnetonka) • Legends of Spring Lake Park - Dominium (Spring Lake Park) • Legends of Woodbury - Dominium (Woodbury) • Lexington Flats - MWF (Eagan) • Preserve at Shady Oak - Dominium (Minnetonka) • Red Rock Square - MWF (Newport) • Rosemary Apartments - MWF (Hugo) • Texa-Tonka - Paster Properties (St. Louis Park) 4o State of Minnesota Department of Labor and Industry, Licensing Order with Penalty issued to Painting America. REGi6o8-00028/JOR. December 27, 2017. See also: State of Minnesota Commissioner of Labor and Industry, Consent Order issued to Painting America. REGr6o8-000z8/JOR. January 8, 2019. ("[Painting America} acknowledges that it engaged in the conduct leading to the allegations here- in"). FuI1 consent order https://lims.minneapolismn.gov/ Download /FileV2 /23 0 9 7/4 r 6-420 -Hennepin-Ave-E-REz oing- Public-Comment.pdf. 41 February 6, 2o19, testimony by Arturo Hernandez in front of the Minnesota State House Legislature available here starting at 32 minutes and 25 seconds: https://youtu.be/ wttVvPg_xlo. 10 North Star Policy Action