Local preemption bill even worse than we first thought

As we reported earlier this morning, the General Assembly is on the cusp of dramatically scaling back the authority of local governments to protect housing consumers and promote better wages, after a late night conference committee added pages of new—and highly controversial—local government restrictions to SB 279, an essentially noncontroversial bill originally written to update the state’s occupational licensing requirements for teaching sex education. And after a closer look, the bill looks even worse than originally reported.

Many of the new restrictions are highly charged, including provisions that could allow local landlords to deny housing to veterans and seniors, permit local businesses to discriminate against their customers based on their sexual orientation, and prohibit city and county governments from passing living wage and paid sick ordinances to boost their local economies. One shocking provision may even stop local governments from requiring landlords to provide heating, air, and ventilation in their properties.

For a full list of the problematic provisions contained in the bill, follow us below the fold.

HOUSING

SB 279 creates impediments to fair housing. (41A-2)

• The pre-emption of local authority to define the protection for residents of certain groups will make it more difficult for these groups to find safe, stable housing free from discrimination, creating ripple effects through the community and additional costs.
• In particular the language could prohibit protections for veterans and older North Carolinians in any county that seeks to assist its military and senior residents.
• It would limit any further work by local governments to ensure that all of their residents have housing options.
• It could have implications for the state’s funding stream from the U.S. Housing and Urban Development Department as the state has to report that it has made an affirmative effort to further fair housing.

SB 279 would prohibit local governments from requiring housing with heat, for example, and limit their ability to set other housing codes to ensure housing is fit for human habitation. (42-14.5)

• No ordinance or resolution adopted by a city or county can require anything of private businesses pertaining to housing practices under this language.
• This effectively could mean that local governments seeking to ensure that heat, ventilation and sanitary conditions are met could not do so. For that matter, it appears that it could not allow for any building codes that ensure the safety of a housing unit not provided for in state law.

SB 279 eliminates the ability of local governments to consider how local development can help all residents. (42-14.5)

• As many urban centers across the state are seeing people move back and revitalize downtowns, bringing with them strong small business growth and job creation, a provision in this bill would limit the ability of local governments to ensure that all residents benefit from growth.
• This section would prohibit local governments from setting a standard for housing development, for example, that requires a certain number of units are affordable.
• In the context of increasing housing costs and falling wages, this will deter the urban growth that is happening and make it more likely that workers in many essential functions will need to live further and further from their jobs.

DISCRIMINATION BY PRIVATE BUSINESSES

SB 279 sanctions discrimination by private businesses (153A-121).

• Local governments would be prohibited from requiring private businesses to provide goods, services or accommodation to all members of the public.
• Despite strong employer and consumer opposition across the country, this language would allow private businesses to refuse service to gay and lesbian couples seeking a birthday cake for their child or wishing to build a swingset in their backyard, for example.
• It would mean that private businesses could bar people from their stores or restaurants if that person is not protected from discrimination under federal law.
• The effect here is to create a North Carolina RFRA (so-called Religious Freedom Restoration Act).

SB 279 could limit the ability of local governments to enforce claims of discrimination.

• The state Human Relations Commission is the only entity that has fair housing enforcement authority by NC statute.
• If this provision preempts the ability to enforce fair housing by ordinance than it would reduce the ability to ensure that all North Carolinians can be provided fair housing options in their communities.

WAGES

SB 279 clearly prohibits city and county governments from enacting “living wage” ordinances that require private businesses to provide their employees with wages and benefits different than those required by state law. (95-25.1)

• Our state’s economy wins when workers earn enough to afford the basics—put food on the table, gas in the car, the rent check in the mail, and money in the bank for their retirement or their kid’s education. Economy boosting wages create more customers, higher sales, and bigger profits for local businesses.

• Unfortunately, the state has recently sought to restrict the ability of local governments to create these economy-boosting jobs.

• A statute enacted in 2013 (HB 74) originally attempted to pre-empt this local authority, but the legislative language in that statute was extremely unclear, generating significant confusion over the actual scope of local governmental authority to promote the welfare of their citizens by improving wages and benefits.

• Unfortunately, rather than restoring these important powers, SB 279 clearly restricts them, removing an important tool local governments need to create economy-boosting jobs.

• Local governments are also prohibited from passing ordinances that give employees a right to sue their employers (e.g., a private right of action) if they don’t pay their employees a living wage or provide paid sick days.

It is unclear whether SB 279 also prohibits local governments from using whether private businesses pay a living wage or paid sick days as one of many criteria in selecting bids for private contractors.

• While HB 74 originally stated requiring payment of certain wages and benefits could not be used as “a condition” for making a contracting decision, it left unclear whether local governments could consider employment practices as one of many criteria considered by local governments in the awarding of contracts.

• SB 279 does not explicitly reference contractors, which creates additional confusion for what local governments can and cannot do when contracting with private businesses. This creates significant legal and economic uncertainty.

SB 273 does allow local governments to require that employers pay a living wage for any jobs created as a result of local economic development incentives given to those employers.

• Economic development remains one area where local governments retain the authority to promote economy-boosting jobs through ordinance.

• Every incentive deal involves a written contract between the unit of local government and the recipient specifying what the company must do in order to earn the incentive—e.g., the number of jobs to be created, and their wages.

• These incentive contracts allow the government to withhold payment or even take back any portion of the incentive already granted—if the firm fails to live up to its promises.

• SB 273 allows local governments to write this contract to require any company that receives incentives pay a living wage for those jobs created as a result of the incentive.

Given these problems, SB 273 represents a radical departure from a world in which city and county governments are able to pass laws that make the most sense for their own citizens, protect consumers from predatory landlords, and require businesses to pay economy-boosting wages.

Alexandra Sirota contributed to this report.