Currently, California law requires contractors to pay their non-union construction workers union-level wages only if their project involves direct subsidies from the government–such as an outright grant or zero-interest loan. But the new bill would broaden the law to include projects that merely involve rental subsidies, property-tax deferrals or even waivers that allow the builder to avoid a few hundred dollars in permit fees.

The bill was pushed through the state Legislature by powerful construction trade unions, who say the measure will ensure that union members get their fair share of work. And even if a contractor chooses against using unionized help, trade officials say, the law would benefit all of a project's workers by ensuring that they get union-level wages.

Conversely, housing advocates for poor and moderate-income Californians–plus related groups that also have been among the governor's biggest supporters–fought the measure as it wended its way through the Legislature. They say it could add 30% to the cost of building an affordable-housing development, thereby draining their already-scarce resources and forcing them to cancel many projects that are already in the development pipeline.