Big news from CA: new budget "trailer bill" will effect biggest CEQA reforms ever (should it pass), and points toward plausibly workable detente between key labor unions & housing developers.
Kudos to @BuffyWicks, @GavinNewsom & @cayimby.
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Kudos to @BuffyWicks, @GavinNewsom & @cayimby.
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The bill marries @BuffyWicks's AB 609, a clean CEQA exemption for infill housing, w/ new labor standards & tribal consultation rules.
The labor standards and tribal rules are different--and much better--than those of other recent CA housing laws.
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The labor standards and tribal rules are different--and much better--than those of other recent CA housing laws.
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https://x.com/CSElmendorf/status/1904693925429838087
The "prevailing wage" rules imposed on public works projects (& housing projects per previous CEQA-exempt housing bills) establish detailed job classifications and a way-above-market wage for each classification.
By contrast, this bill is more like a minimum-wage law.
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By contrast, this bill is more like a minimum-wage law.
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All construction workers on a CEQA-exempt housing project will have to be paid at least the "low rate" wage, which varies by market tier.
Additionally, 60% of the workers must be paid at least the "high rate" wage, which is about 1.5x the low-rate wage.
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Additionally, 60% of the workers must be paid at least the "high rate" wage, which is about 1.5x the low-rate wage.
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Crucially, that prescribed minimum "high wage" rate is ***about equal to the average market wage in the construction industry***
E.g., for S.F., the bill's high-wage rate is $40/hour, and per BLS, the mean construction wage in S.F. is ~$43/hr.
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E.g., for S.F., the bill's high-wage rate is $40/hour, and per BLS, the mean construction wage in S.F. is ~$43/hr.
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To put this in context, the misnamed "prevailing wage" required for public works projects -- and previously for CEQA-exempt housing, per bills like SB 423 and AB 2011 -- is, I think, ~2x the market wage.
It's also more than 2x what this bill requires.
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It's also more than 2x what this bill requires.
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Moreover, the bill's wage requirements sidestep one of the biggest admin costs & legal risks faced by contractors who perform "prevailing wage" work: the risk of lawsuits over misclassification of work variously assigned to dozens of craft guilds.
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E.g., if a contractor has a "painter" perform work that should have been classified as "drywall" or "carpentry," he can be charged w/ "wage theft."
By contrast, under the new bill, the contractor can have any worker perform any task w/o risk of labor-law liability. Phew!
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By contrast, under the new bill, the contractor can have any worker perform any task w/o risk of labor-law liability. Phew!
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The bill also exempts small projects of up to 25 units from the labor rules entirely, in recognition of the fact that admin costs and legal risks are harder for small-scale contractors to handle. This is great!
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OTOH, the bill continues to require "prevailing" (i.e., way-above-market) wages for high-rise projects, for 100% low-income projects, &, in S.F., for any craft that secured prevailing wages for more than 50% of market-rate projects b/t 2022 and 2024.
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(The carveout for projects of <= 25 units is also reduced, in S.F., to projects of <= 10 units.)
Presumably these compromises were made to secure support from NorCal Carpenters and maybe other unions.
That's legislative sausage being made...
/11
Presumably these compromises were made to secure support from NorCal Carpenters and maybe other unions.
That's legislative sausage being made...
/11
But don't lose sight of big picture:
- for most big projects, the bill's wage rules will function mainly as an enforcement mechanism to prevent wage theft, not as mandate for way-above-market wages
- for most small projects, there's no special wage requirement at all
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- for most big projects, the bill's wage rules will function mainly as an enforcement mechanism to prevent wage theft, not as mandate for way-above-market wages
- for most small projects, there's no special wage requirement at all
/12
Next up: the tribal consultation rules.
Under SB 35 / 423, there's a requirement of notice to tribes when a housing project is proposed. Tribes may veto the project if they "find" that a "potential cultural resource" could be affected.
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Under SB 35 / 423, there's a requirement of notice to tribes when a housing project is proposed. Tribes may veto the project if they "find" that a "potential cultural resource" could be affected.
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Under this budget-trailer bill, by contrast, there's no tribal veto. At most, the tribe can insist that the developer hire a "tribal monitor" to observe excavation work.
There's also a strict 60-day time limit within which tribe must assert its interest in the project.
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There's also a strict 60-day time limit within which tribe must assert its interest in the project.
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There's definitely a risk that the bill's tribal-consultation rules will become a boondoggle, generating make-work jobs for tribal members at large cost to housing supply.
I wish small projects w/ minimal excavation work had been exempted.
Still, it's better than SB 423.
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I wish small projects w/ minimal excavation work had been exempted.
Still, it's better than SB 423.
/15
Beyond CEQA, the budget trailer bill also has many other small-bore provisions about housing. Mostly these operate to remove sunset provisions from existing laws.
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Of the new provisions (beyond CEQA), probably the most notable is a moratorium on local building code amendments.
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All in all, this bill is a big step forward and an important test of whether the "YIMBY-Carpenter alliance" can enact housing bills that generate housing production at scale. We shall see!
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