By David M. Greenwald
Executive Editor
Sacramento, CA – This week the San Diego Union-Tribune Editorial Board put the blame for high home prices squarely on CEQA and the State Legislature. I won’t say they are wrong, just that I believe their answers are not enough.
The Editorial notes, “The Census Bureau reported in February that the state’s population had dropped by about 509,000 people between April 2020 and July 2022, and that the gap between those moving out of the state and those moving in was the largest in the nation.
“The consensus among demography experts is this is largely spurred by the extreme cost of housing.”
This trend has been exacerbated by the “emergence of remote work options for white-collar employees” who are fleeing California to places “where $300,000 buys a home that 
could cost $1 million here.”
“Is there an easy solution to this problem?” they ask. No.
“Is there a promising one?” they ask. They think so.
They note, “Despite some modifications in recent years, the well-intended but often-abused California Environmental Quality Act remains a potent tool for those trying to block housing projects they don’t like, forcing cost-inflating, project-killing delays. CEQA is a weapon for Not In My Backyard forces who want the status quo and construction unions that oppose non-union building alike, and tolerating this state of affairs is a choice by the Legislature.”
They add, “Another choice would be to ease the uncertainty that inhibits new construction by ending CEQA reviews of projects that meet long-established building standards and limiting who has standing to use CEQA to challenge projects and how long government reviews of projects take.”
I have already written a lot about CEQA reform and CEQA abuse. But the issue of unions here is very complex. If you look at the list of supporters and opponents of Senator Scott Wiener’s SB 423 which would make SB 35 permanent, you will find a long list of unions—on both sides of the issue.
Senator Wiener has had to actually work very hard to bring unions on board with housing reform. There are those who have suggested that union support actually explains his position on housing, in fact, I think it’s largely just the opposite—unions have been a barrier to a lot of the meaningful reform.
As an article last week in CalMatters noted, “For nearly a decade, lawmakers hoping to tackle the state’s housing crisis have faced a choice: win the support of the coalition that represents California’s construction unions — or watch those legislative aspirations sputter and die.”
The State Building and Construction Trades Council, the article notes, “an umbrella group representing hundreds of thousands of bricklaying, pipefitting, bulldozing and foundation-laying union members across the state, has stood as a formidable political force that even governors have been forced to contend with.”
The article continues, “That’s not just because the trades are reliable campaign contributors to California’s ruling Democrats — though they are. It’s also because they turn out motivated members, rarely shy away from a bare-knuckle political fight and reliably present a unified front against bills they aim to quash.”
The unions you see supporting Wiener’s bill actually are two affiliates of the trades council that defected, “throwing their weight behind a housing bill that the parent organization had been fighting for months. It’s a surprising and surprisingly public break that could help shift the political balance long defining California housing policy.”
It’s not a monolithic opposition. For example, California’s unionized carpenters have long been battling the trades council “over mandatory labor standards for housing projects fast-tracked under state law.” The carpenters argue that “a union hiring rule isn’t workable, as there aren’t enough unionized construction workers to build all the new housing California requires.”
That’s the big issue that a lot are missing here. Building housing isn’t enough, as the unions want project labor agreements and guarantees for the use of unionized construction workers or they are not willing to back these reforms—and more importantly, they will actively oppose them, causing Democrats in the legislature to block passage of housing bills.
With that said, I think what we have seen is not nearly enough. CEQA reform might stop some of the lawsuits holding up projects. SB 9 and SB 10 may end some of the restrictions on multi-family housing and duplexes in existing neighborhoods. SB 35 and SB 423 deliver a stick to cities in the form of the builder’s remedy.
But in the end, I don’t think that’s going to solve the housing crisis.
For one thing, the data seems to show neither SB 9 nor SB 35 has meant much in the way of actually producing housing.
For another, what I see as a bigger barrier than CEQA is local governments who are actively attempting to block housing reform and falling well short of RHNA calls for additional housing.
Another reason still is the lack of funding in most places for affordable housing. So even if you can lower the barriers to housing, there is no longer the funding available to allow communities to build them where land is not ample and the cost of construction remains at all-time highs.
The state has failed several times to solve this problem by passing a replacement to the increment tax and Redevelopment Agencies.
It is no coincidence that part of the housing crisis resulted after the dissolution of the RDA.
What is clear is that change is going to be difficult because, despite what some people will argue, the problem is that there are too many vested interests standing in the way of reform.
Is there even a problem? they (should) ask. No.
In fact, the “problem” above IS the “solution”, both on an individual and societal level.
“The consensus among demography experts is this is largely spurred by the extreme cost of housing.”
And . . . ? (What is your point?)
(Though I’ve read that other factors are involved, as well – e.g., taxes).
But in regard to your point, this is exactly how the market is “supposed” to work, and is the reason that everyone doesn’t move to Carmel. Prices differ widely in California itself, and sometimes even with the same city.
In a capitalistic system, when prices get too high (for the value one perceives), that’s when folks seek and compare alternatives. The same reason that so many move from the Bay Area to the Sacramento region.
Seeking and comparing alternatives is not limited to the housing market.
Again, this is exactly how supply/demand works. The same model that the growth advocates are so fond of.
The point is that if the demographic shift is “largely” based on cost of housing, then pointing out the decline of population is not a justification for not building the housing.
That makes even less sense than your first comment.
You want to build housing for a population that’s leaving?
By the way, when folks leave – it reduces housing prices (as has been occurring in San Francisco in particular).
Of course, there’s also the impact of rising interest rates (and the downturn in the job market), reducing the sales price of housing. Not to mention the ability to telecommute, so that folks are freed-up from staying in overpriced, challenging locales (e.g., high taxes, homelessness, general difficulties associated with dense cities, etc.).
Again, the market at work.
“You want to build housing for a population that’s leaving?”
Wow, you really don’t get this at all.
I was thinking the same thing of you, and was waiting for some type of logical explanation.
I can’t even tell what your goal is.
It’s not worth engaging with someone who lives in a different reality and ignores the facts and analyses put before him. Again, I’ve posted the Dept. of Finance projections that show a rising California population for the foreseeable future. These assertions about declining population are identical to the ones we’ve seen since the 1980s about how businesses and jobs are fleeing California, yet state has been a fixture in the top 5-10 fastest economically growing states. Focusing on a single statistic in a single year (or even a couple of years) misses the much larger picture.
Ron’s circular reasoning noted by David leads to his justification that market prices are telling people not to live in California, but he then ignores the local government policy intervention that is distorting those market prices, thus invalidating his assertion that free market forces are at work. Relieve the market distortion and the housing supply corrects and more people can affordt to live here.
“My” reality is the same as yours (and everyone else’s). The one that shows California’s population dropping by 500,000 people, over the past 3 years. Totally unpredicted (by the Department of Finance – or any other organization), and unprecedented in the state’s history.
It’s also the reality which shows that businesses have also been fleeing California, taking their workers with them. As reported nearly every day, in every major media source.
Perhaps “your” reality is the same as the governor’s reality – in which he was forced to cut his projections by half or so, regarding the amount of housing that he claims California needs. With no explanation, no support at all for his original projections, or his latest projections. Let alone how any of the Affordable units get funded and built to the level that the mandates state. (See California State Auditor’s report, regarding the complete lack of basis for California’s RHNA mandates.)
“My” reality also shows that the population is abandoning dense cities like San Francisco, for the continuing sprawl in the Sacramento region. In other words, the EXACT OPPOSITE of what the state claims they are trying to accomplish.
Excellent – should help drive up the cost even higher. Which then circles-back to the “solution” described in the first comment, above.
Interesting article below in regard to a former mayor of Bend, Oregon (and the “results” of his earlier success to encourage growth). Which ended up biting him (personally) in the you-know-what.
Of course, in the former mayor’s case, mental illness and substance abuse were reportedly the primary causes (as usual). But apparently did not surface until later in life.
Also, the article notes that homeless people were a presence in that city even before the mayor and his friends made it expensive via their pursuit of growth.
https://www.sfgate.com/news/article/homeless-west-coast-city-mayor-17926268.php?IPID=SFGate-HP-CP-Spotlight