Two new laws, signed by Governor Newsom, will bring business to the construction industry, starting next year. 

AB 2011, authored by Assemblyperson Buffy Wicks, (D- Oakland), will fast-track housing development along the ubiquitous strip malls that flank California’s roads. In order to skip lengthy and costly local review processes, including the California Environmental Quality Act, (CEQA), developers agree to pay their workers union-level wages and in bigger projects, offer apprenticeships and health benefits, and cap at least a portion of rents. Apartments would have to be either 100 percent affordable or mixed-use, meaning market-rate but affordable to at least 15 percent of lower income earners, or 8 percent of very low income and 5 percent of extremely low-income earners.

SB 6, by Democratic Sen. Anna Caballero, (D-Salinas), bypasses the first step in permitting housing on commercial real estate while allowing other opportunities for local input, like CEQA. It applies to a much wider swath of land and doesn’t cap rents, but developers must use at least some union labor on every project. If at least two union shops don’t bid on the project, union-level wages kick in.

The Power Behind the Bills

The Building and Construction Trades, an umbrella union of 450,000 workers, and the bigger Labor Federation behind them, supported SB 6, while the state Carpenter’s Union and affordable housing developers backed AB 2011. The bigger unions dropped their opposition to AB 2011 once the Assembly and Senate struck a deal that let both bills through.

California needs 2.5 million more homes by 2030 and almost no one wants them in their backyard. These bills would unlock a glut of empty stores, offices and parking lots for as many as 1.6 million housing units — market conditions permitting — without contributing to urban sprawl. The labor truce also matters: Following years of heated debate and dead bills, unions put their differences aside, at least for this year.

Governor Newsom signed both bills Sept. 28

After calling housing affordability “the original sin” of California, Newsom said that these housing bills would be different. “This is a big moment as we begin… to take responsibility,” he said at a press conference in San Francisco. “Not to give the same speech and expect the same applause, but to begin to do something about it.”

While this approach is more rehab oriented than new construction, there will be utility relocation and additional sewer and water work needed, so keep your eye out for these unconventional projects.

By Dave Sorem, P.E. ECA Government Affairs Chairman Email: [email protected]