California wage deal could boost housing development
- A new regulation in the works in California could boost housing construction in the state by giving developers a break when it comes to environmental law compliance in exchange for paying workers a guaranteed wage and other benefits, the Los Angeles Times reported.
- Single-family and small apartment complex builders would pay construction workers a rate less than the union prevailing wage but higher than the average private-industry rate, as well as provide apprenticeship training and medical and retirement benefits. In exchange, developers would likely be rewarded with an easier, quicker route through the often-onerous California Environmental Quality Act process.
- There is some concern on the part of environmentalists that a CEQA shortcut would result in greater greenhouse emissions and other violations the law is intended to prevent. However, the new regulation would expand the state’s union labor force into the residential market, which makes up approximately half of all construction in California. The new regulation would not apply to large commercial or multifamily projects.
CEQA is often used as a big stick by environmentalists or others opposed to a California development because protests under the act can delay a project for a significant period of time. Being able to leapfrog over some of the obstacles created under CEQA would not only grant some relief to developers who can incur hefty legal bills fighting the opposition, but could also give contractors some certainty as to when a project will emerge from the regulatory process and can actually start construction. For now, however, CEQA is a formidable weapon.
When the Golden State Warriors started development of the $1 billion Chase Center and associated mixed-use project in San Francisco, opponents of the project filed suit under CEQA and managed to delay the scheduled opening by a year. The new arena is near women’s and children’s hospitals and other medical offices, and critics of the planned development said the noise from construction and from the center once basketball games and other events taking place there would be disruptive and even harmful to patients and their families. The courts finally cleared the way for construction to proceed and the arena is scheduled to open this year.
California seems ripe for a change in favor of a less-contentious CEQA process, as the housing market, particularly when it comes to affordable units, is struggling to keep pace with demand. CEQA reform would also fall in line with Gov. Gavin Newsom’s goal of increasing annual housing production from 100,000 homes to 400,000 homes during the next three years.
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