As a person who tries to pay constructive attention to policy it’s important to learn to be open to moments of joy in the political space, especially now, during the dark reign of the fundamentally-unfit-human-now-President. So, I wanted to briefly share the joy I felt listening to journalist Derek Thompson’s interview with California Assemblywoman Buffy Wicks and State Senator Scott Wiener, both authors of ground-changing reforms to the California Environmental Quality Act (CEQA).
I was especially gratified to hear of Wicks’ AB 609 (eventually signed into law under budget trailer AB 130) which provides a “clean” exemption for infill housing construction, including market rate construction, from legal blocking maneuvers through CEQA. After all, infill housing is a giant win-win for both regular working people and the environment. I want to thank both Wiener and Wicks for having the guts to stand against many interest groups who are not living their values on this issue. I also want to thank Governor Newsom. The Governor spent substantial political capital when he linked CEQA reform to California’s budget bill. He’s taking risks; leaning-in like a person fundamentally interested in using his power to make change.
But still, I find myself wondering, why do I feel so grateful to the Governor and these two legislators? After all, even when I try to hunt for it, joy isn’t a usual feeling when it comes to politics.
I suppose one can only make educated guesses at the sources of one’s own feelings. But I know I’m happy in a pure way for young people like my own children who have just had a major barrier to a prosperous financial future in California removed. I also know I’m happy in a messy, more schadenfreude-laced way to watch the central blocking tool of rent-seeking NIMBYs (many even older than I am) go down in flames. Finally, I feel energized to see a new space open up in state politics. This is a style of center-left “win” that didn’t used to be possible when I worked in the policy sphere. CEQA reform is the first big victory, a state-level victory with national implications, for the new “abundance” wing of the Democratic Party. Put another way, nerdy as it sounds to say it, CEQA reform is a true sign of hope. May other victories come soon.
Three Lightly-Covered but Important Housing Details
Beyond registering my delight, I’d like to briefly report here on three lightly-covered details related to housing reform in California. The first relates to technical-sounding provisions in Wiener’s bill, initially written and later gutted by the forces of reaction as SB 607, then passed, once Governor Newsom started playing hardball, under SB 131. These provisions exempt re-zonings from CEQA review if they are consistent with an already approved general plan “housing element.”
This sounds like a dull good government reform, a long-overdue reckoning with the administrative fact that housing elements themselves need to go through CEQA review. But at the same time, this change feels more than just technical. It’s a big deal in terms of placing the focus of environmental review and community input at the plan level, where it can be most meaningful, as opposed to the project level. As a former urban planner, it’s great to see how this single move puts power back in the planning process and takes it away from lawyers hired to make arbitrary project-based blocking actions. For more information on California’s formerly-robust-on-paper, but perhaps now truly robust housing element law, see here.
A second little-covered point, only tangentially related to CEQA reform but central to housing affordability, relates to labor availability. As regular readers know, my wife and I put our money where our mouth is on the infill housing issue early, by constructing an Accessory Dwelling Unit (ADU) in our backyard several years before it was trendy to do so, or easy from a regulatory point of view. What struck me at the time was that the biggest barrier wasn’t regulation, although there was of course the hair-raising incident at City’s former “public service counter” where a municipal employee saw fit to warn me about the old movie Pacific Heights, in which nightmare tenant played by Michael Keaton tries to wreck the lives of yuppies Melanie Griffith and Michael Modine.
Annoying as this was, the biggest challenge to building our sweet ADU was the degree to which it was hard to find skilled labor in the various construction trades—everything from plumbers and electricians to drywall contractors to insulation companies to kitchen tile specialists to masons to—basically you name it. What struck me even more was the age of people with the right skills. Our subcontractors were mostly people even older than myself, practically all white and Latino men. Every day during our ADU project I merely had to look in my backyard to see the lack of an adequate skills pipeline for younger people to get into the construction trades.
The data bears this observation out. Take, for instance, this 2024 informer through the Harvard Joint Center on Housing Studies indicating that by 2022 there were some 800,000 fewer people working in the construction industry than were before the 2007 recession. Fifteen years had passed, in other words, and the construction workforce had still not recovered to its level at the tail end of the George W. Bush presidency. The informer also notes that women comprised a tiny 3.3 percent of the construction trades workforce in 2022, despite inroads in construction-related office and professional services occupations.
A clear opportunity exists here, and one in which organized labor has a very powerful role, if it chooses an expansionary vision as opposed to rent-seeking blocking maneuvers (see this Sacramento Bee article on how procedural blocking can take place even outside of CEQA).
After all, apprenticeship programs, mostly union-based, have long served as a key point of entry to the construction trades. It would be great to see expanded state-level investment in these programs, extended in a spirit of true partnership with organized labor. Nor would this be just some kind of feel good reform. I could be wrong, but I have a strong suspicion that it’s going to be hard to ramp up housing construction in California even with CEQA reform. The construction skill base just isn’t there at scale big enough to the task at hand, and it’s going to take time to get there, together with the active participation and goodwill of organized labor.
The need for cooperation between government and labor brings me to my third little-covered housing policy item, which is my desire to call attention to this important RAND study, released earlier this year The study, which I found out about through this CalMatters article by stalwart former Bee columnist Dan Walters, is on the high cost of producing multi-family housing in California.
The apalling numbers in the RAND study remind me, frankly, of the data on the high price of health care I talked about in my last post. This is because the per square foot price of producing multi-family housing in California compared to other states looks just as outrageous and unsustainable as the price of US medical procedures compared to the same procedures in other countries. To quote Shakespeare, when it comes to building low income housing, I don’t know if there is something rotten in the state of Denmark. But there is definitely something rotten in the State of California.
You can read the report yourself, but take for instance the fact that it costs more to build publicly subsidized affordable apartments in California than it does even high-end market rate projects. This is bananas. Or take the fact that, based on RAND analysis of Trammel-Crowe data, it costs $271 per square foot to produce an affordable apartment in Colorado, hardly a deep red or (at least in modern times) profoundly anti-union state. Then contrast the Colorado number to $481 in San Diego, $626 in Los Angeles, and $731 in the San Francisco Bay Area.
Nor, as many might casually assume, are high costs in California primarily related to the cost of land. The “hard” labor cost alone to construct a low-income apartment in the Bay Area, according to the RAND study, is $518 per square foot. This contrasts with the Bay Area market rate hard cost of $292 per square foot, the market rate hard cost of $238 per square foot in Colorado, and the market rate cost of $118 per square foot in Texas. Again, these numbers exclude both land costs and “soft” costs for items like architects and engineers (which are also extremely high in California, especially in Los Angeles and the Bay Area).
Perhaps low income apartments in San Francisco are truly almost twice as good as market rate apartments in the same city, and nearly five times as good as market rate apartments in Texas? I’ll let you be the judge. Or maybe we can let the lower- and middle-income Californians moving to Texas be the judge. I guarantee you, these people aren’t moving for the weather.
All in all, I want to end up back on a high note of joy. There’s a lot of work left to do to ramp up housing construction in California. There’s always a lot of work to do to make anything important happen. But CEQA reform is big, maybe even huge step. Sometimes it’s best not to worry too much, take the win, smile, and move on.