Chris Elmendorf Profile picture
Jun 25 19 tweets 5 min read Read on X
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.

🧵/18 Image
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.

/2


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.

/3
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.

/4
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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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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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.

/7
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!

/8
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!

/9
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.

/10
(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
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

/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.

/13 Image
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.

/14 Image
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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.

/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.

/16
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!

/end
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More from @CSElmendorf

Jun 26
For years, California environmentalists have been MIA or worse on an absolute no-brainer of green policy: building dense housing near transit.

Are changes afoot? ⤵️

Maybe! But @NRDC's SB 79 support letter also shows persistence of addled Groups-blob thinking.

🧵/14.
First, some context:

- How I came to be an environmentalist without a home in the environmental movement,


/2
- How CA enviros were duped or white-guilted into letting greenfield developers get their dream policy enacted, even as the same orgs continued to fight infill housing,

/3motherjones.com/environment/20…
Read 15 tweets
Jun 25
Further thoughts on the construction-wage provisions of AB 140, the @BuffyWicks & @GavinNewsom budget trailer bill.

🧵/17.
As a matter of principle, I *do not* support industry-specific, let alone task-specific, wage requirements.

I've tweeted that so-called "prevailing wage" rules are the Democratic Party's version of crony capitalism.

/2 Image
I think it's profoundly embarrassing that "intellectuals" with Democratic Party career ambitions won't publicly acknowledge this point.

/3
Read 17 tweets
Jun 25
Joe C. points out that CA housing trailer bill also modifies the Permit Streamlining Act (PSA) in important ways.

I see the PSA provisions as a work in progress, whose ultimate payoff (if any) will depend on future legislative & judicial tinkering. 🧵/15

x.com/CohenSite/stat… x.com/CSElmendorf/st…Image
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The big idea of the PSA is that if a city doesn't approve or deny a project w/in defined period of time, the project becomes "automatically approved" by operation of law.

However, opponents can attack it in court if project didn't comply w/ applicable rules.

/2
That is, a project which has been "deemed approved" by operation of PSA is not "deemed to comply" with applicable zoning & development standards. (Though certain provisions of the HAA may render project "deemed compliant" too.)

/3
Read 16 tweets
May 29
Does U.S. Supreme Court's big new NEPA decision have implications for CEQA?

Yes!

The liberals' (!) concurring opinion strongly reinforces an argument that @TDuncheon & I made for judicially narrowing the scope of CEQA review of housing projects.

🧵/16 Image
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Current convention under CEQA prescribe analysis of the "effects" of a project as a whole, relative to a no-project (a/k/a status-quo, a/k/a current-conditions) baseline.

/2
But b/c the whole point of CEQA (like NEPA) is to inform the agency's exercise of *discretion*, Tim & I argued that the current convention is misguided.

Analysis of "effects" should be limited to effects caused by (and thus within scope of) agency exercise of discretion.

/3
Read 17 tweets
May 17
Worth taking a moment to observe just how far the politics of CEQA reform have shifted over the last 3 years.

A timeline 🧵.

1/15
- spring 2022: CEQA ruling blocks UC Berkeley from expanding enrollment. Met w/ outrage, but Leg musters only very narrow fix.

/2


courthousenews.com/legislature-pa…
- winter/spring 2023: court holds that "student noise" is CEQA pollution, blocking UC Berkeley campus housing & again triggering outrage + super-narrow fix

/3


sfist.com/2023/05/23/sta…
Read 18 tweets
May 7
City of L.A. is swinging for the fences w/ demurrer to YIMBY lawsuit challenging adequacy of housing element rezoning.

I think city will lose at this stage, but its demurrer does illustrate a real problem w/ manner in which cities & HCD implement the Housing Element Law.
1/5 Image
L.A. argues that *none* of its housing element commitments is enforceable, owing to HE's prefatory description of programs/deadlines as aspirational.

(L.A. concedes it must rezone by statutory deadline, but insists it needn't do any specific rezoning actions listed in HE.)
2/5 Image
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The nub of the problem is that *some* housing element programs must be real commitments, enforceable in court. See GC 65587(b) (enforcement by traditional mandamus) & GC 65589(d)(2) (burden of proof on city w.r.t. adequacy of rezoning & constraint removal programs).
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Read 5 tweets

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