Transcript
Speaker: Hello, welcome to John Nerds Out on California housing legislation. i am John and, well, we have had quite a week. It is now June 27th, as I record.
Speaker: I wanted to get out an update to my previous episode because my previous episode was out of date the moment i published it. So I am calling this episode, Episode 10, SB 79 and CEQA Part 2, Newsome Steps In. 79 has been a little on hold in the past couple of weeks because, thankfully, it did pass the Senate.
Speaker: And that was by no means a sure thing. It took a lot of work. And I'm really happy that it happened. It has been amended a lot, but it is still a lot stronger than what could have passed five years ago. So what did happen? When I last left off, it had rolled two chairs, meaning it had passed against the wishes of the committee chairs of housing and local government and was going to the Senate Appropriations Committee.
Speaker: It did pass the Senate Appropriations Committee, but even that had not been a given. If you look at the list of who voted for it, it is mostly people who had voted yes in previous committees voted yes.
Speaker: and vice versa but from what i can tell there was at least one switch which was tim grayson of contra costa and some of alameda county had failed to vote for or against in the housing committee which meant he was not supporting it in practice but in the appropriations committee he voted yes on it and that brought it over the line to the four needed votes why did he change Can't say for sure. However, one thing that feels like it might have made a difference is that Contra Costa County did get some exemptions.
Speaker: Specifically, the amendments that brought it to the Senate floor introduced the new concept of urban transit county, which was simply defined as a county with 15 or more rail stations. Now, this is a very rickety definition, in my opinion.
Speaker: It doesn't account for the population of the county. 15 rail stations is a lot better transit in a county of 500,000 than a county of 5 million. So it's very possible that it was designed to achieve something. And as it happens, Contra Costa County has 14 stations.
Speaker: Now, not being an urban transit county does not exempt a county from having SB 79 applicable. It just changes the standards somewhat. Remember, the basic premise of SB 79 is it upzones, allows more housing within a half mile, but it allows the highest within quarter mile of a heavy rail station.
Speaker: And then it allows less as you go further out, but also to lower capacity kinds of transit. from Tier 1, which is heavy rail station, to Tier 2 and Tier 3. The amendments carved out the transit-oriented development stops not in an urban transit county, so let's say Contra Costa. For Contra Costa, even if it's a BART station, which would count as Tier 1,
Speaker: you have to look it up as if it were tier three so that puts it in a lower category so before within a quarter mile of the bart stations in contra costa county you would have gotten 75 feet of height but now within a quarter mile it goes down to 45 feet and then if you go to the area more than a quarter mile but less than half a mile from this station if we're talking about the non-urban transit county like contra costa Under the amended law, it actually does not require any particular height limit.
Speaker: It still requires that the government allow 60 dwelling units per acre and floor area ratio of up to two. But the city is allowed to apply its own height limit.
Speaker: So you have the odd situation where a city could permit up to no more than two stories, but then they have to have a residential floor area ratio of two, which to make that math work, you would actually have to let them build on 100% of the lot because two stories on all the lot is a floor area ratio of two. So that may come back to bite them a little bit because again, they still have to allow the density, they still have to allow the bulk.
Speaker: but they don't have to allow the height. And remember, the density bonus law does not allow them to increase the height under 79 as it otherwise would. So adding affordable units will not get them over that limit. I don't know that it was Contra Costa's interests that were being sought here. It's possible.
Speaker: It could have been some other county that I'm not aware of in Southern California that is also bumped down in stature. But it is still a pretty muscular bill because it still goes up to 75 feet for a lot of areas with the best transit, 65, 55, 45 for many other areas and corresponding density limits for the same areas. What were the other changes that happened leading up to the Senate floor vote?
Speaker: One small one was that previously it had allowed for this upzoning to take place in areas that were zoned for residential or commercial or mixed use or light industrial.
Speaker: One of the amendments took away light industrial. So someone wanted light industrial to not be built on. Not a huge issue. There's not a ton of that near the rail stations, but sometimes there is. I don't know. Here's the big one. I talked about this being the sort of plain bagel up zoning, meaning that it just increased the zoning and it did not load on requirements about wages or labor standards such as union labor or guaranteed income based deed restricted affordable units or units that legally had to go to people of certain income levels.
Speaker: Well, although that is still the direction of the bill, it did get an inclusionary requirement requiring a certain number of affordable units. And again, i don't think that affordable units are bad. I think that they are problematic when they are unfunded, but they can to some extent be used with the density bonus law that helps them pay for themselves by adding more density, but not in this case more height.
Speaker: Now, how much affordable housing is required? Basically, all it says is that it has to meet the standards to get a bonus under the density bonus law. And if you look up the density bonus law, the minimum for getting a bonus is 5% of your units to very low income residents or 10% to low income residents.
Speaker: Or if it's condos, that is for sale units, 10% to moderate income residents. And there are some other options you can use, like 20% for full-time students who meet income thresholds, or senior citizen housing developments, in which case it doesn't have to be affordable.
Speaker: It just has to be guaranteed to seniors. In cities that require a baseline amount of affordable housing, in some cities that's 10%, some it's 15%, some it's even 20%, that requirement would still apply. It does not supersede a city requirement. Also, if it requires inclusionary housing fees in lieu of units, that is also allowed to stay where it is.
Speaker: One good thing, I think, is that there is no inclusionary requirement for a development of 10 units or less, because as I think I've mentioned in previous episodes, small developments of 10 units or less are not very well suited to guaranteed income-based restricted units.
Speaker: The other big change that came to it as it came to the floor was that it allowed cities to create their own alternative to basically say, hey, we think we can do this better and in a more locally appropriate way. But there are pretty good and clear standards for what an alternate city plan has to look like.
Speaker: It has to increase zoned capacity by the same amount, both in terms of units and in terms of floor area. So you can't say, well, you want to be able to build, you know, a thousand two bedrooms, but we think it's okay to build a thousand studios.
Speaker: You can't do that. You have to have the overall floor area. It cannot reduce the capacity in any one station zone. Cannot reduce it by more than 50%. So you can't say, we don't want to develop at this station. Let's build at some other stations.
Speaker: It cannot increase the density by more than double, which I don't get. Whatever. Why shouldn't a city do that? But they could do that outside the zone. They have to keep the capacity feasible, which they actually define. Feasible means capable of being accomplished in a successful manner within a reasonable period of time, taking into account environmental, economic, social, and technological factors.
Speaker: They may choose other stops, other transit stops. You know, maybe there's a very popular bus line that they think should count like a tier three, and they can add that to their plan. But they can't just pick anything and say this is a good alternative plan.
Speaker: They have to submit it to the state housing department and the state housing department has to say, yes, this does work as well as the state law would in creating feasible yeah and developable units at the same number or more and the same floor area or more.
Speaker: And that is a pretty simple calculation. Unlike the housing element process, which is very subjective in a lot of ways, this is something where you just need to make some calculations. How much is being zoned? One risk that you see in the housing elements is that they make the new density feasible on paper, but they do it on sites that they know are not going to be redeveloped.
Speaker: There is less ability to do that here because you have to keep upzoning the same broad areas. You cannot cut areas out entirely because you cannot downzone any one site by more than 50%.
Speaker: So limited room for shenanigans. but it does give cities the flexibility that they crave. One thing that I am not sure has been clearly put in place yet is the timing.
Speaker: On what date does all this come into effect? And if a city wants to come up with its own plan, how long does it have? Can developers propose buildings under the state law if the city is just developing an alternative plan?
Speaker: Or is there going to be some timeline for cities to sort of stop the clock you know Would they come up with an alternative plan just so that they can stop the clock? I don't think that those timelines have been mapped out in the law yet.
Speaker: And that brings me to the bigger issue, which is that although it did, as I said, pass the Senate floor, there is a lot still to be worked out. It does happen in the legislature that often you get legislators saying, well, I don't want to stop this bill.
Speaker: I don't know that I'm going to support it in the end, but I want you to keep working on it. And so I'm going to vote yes for it now in hopes that it continues to be improved and in hopes that it will eventually meet with my approval.
Speaker: So when it got to the Senate floor, there were a number of people saying something like that. And often it was related to union labor, to other things. But in the end, it was kind of scary watching that vote that day.
Speaker: They went through their speeches. Several people spoke. I think at least 10 people spoke for and against. And it got very close to 20 when 21 yes votes were required.
Speaker: And then we didn't hear much for a while. They held the vote open as they often do. And we were not sure if we were going to get to 21. And then suddenly we did. And I think a lot of people were surprised, a lot of opponents especially. They didn't think that it was going to get over the line.
Speaker: But there are going to be negotiations and the assembly is going to want to make its own changes. The senators may want to see changes by the time it comes back to them for them to vote for it.
Speaker: But it really shows that we have come a long way because the Senate Bill 50 that failed to pass the Senate floor in 2020 was not actually this ambitious. This is a lot more ambitious, in my opinion.
Speaker: Now, how did the vote break down? Well, if you go by party, it was a lot like the previous committee votes that I talked about. The Democrats were mostly yes. The Republicans were mostly no. But there were a lot of exceptions on both sides, and the Republican yes votes were still needed to get to the majority.
Speaker: Out of 30 Democrats in the California State Senate, 18 or 60% voted yes. Six voted no, six did not vote. Out of the 10 Republicans, three voted yes, seven voted no.
Speaker: No one declined to vote. So even though 30% of Republicans voted yes, without the Republicans, the bill still would have only gotten 18. So it needed all those three that it got.
Speaker: I think the division of how the regions broke down is pretty interesting as well. Out of 11 senators in l LA County, only three voted yes. So about a quarter.
Speaker: Out of 11 senators in other parts of Southern California, The Inland Empire, San Diego, Orange County, five of those 11 voted yes. So there's more support than LA County, but not majority.
Speaker: The Bay Area was 75% in favor, six out of eight. Sacramento was two out of four, so split down the middle. Central Valley was three out of three. Every senator from the Central Valley voted yes.
Speaker: Miscellaneous, there are two from the coast, one yes, one declined to vote, so 50% support, and one from rural far north, Lassen County. So ah LA County still has a lot of skepticism, but those three yes votes were also on their own necessary to get it over the line. the LA senators that voted for it, by the way, Wayna Gonzalez of Long Beach, Sasha Renee Perez of Alhambra, and Laura Richardson of San Pedro.
Speaker: An interesting thing I'm seeing here is that some of the more traditional or maybe slightly better-heeled suburbs often voted no, and suburbs that are a little more diverse, maybe a little more down at the heels, so South LA, San Gabriel Valley, were those three yes senators, they voted yes.
Speaker: But one senator from the San Fernando Valley, which I don't know where I classify that, did vote no and said on the floor some things that were very silly. This was Menshevar.
Speaker: Senator Menshevar complained that the transit lines being upzoned went from, quote, nowhere to nowhere. She was saying that her constituents drive and how can it possibly happen that they would use transit?
Speaker: And so you shouldn't build housing in these areas just because there is transit there. And I looked up the transit that she was talking about, and it's a new light rail line in the San Fernando Valley. She was at the opening for it.
Speaker: Like she supports doing it, but now suddenly if it means housing, she doesn't support it. Aisha Wahab of Hayward continued to vote no, but she was the only no in the Bay Area. The rest of the Bay was quite in favor, as I said. And the Central Valley was in favor, including Democrats and Republicans.
Speaker: Senator Grove from Bakersfield, Republican, voted yes. Senator Hurtado from Bakersfield, Democrat, voted yes. The third there is Caballero, Merced, voted yes.
Speaker: I suppose looking back on it, realizing how long it took to get to 21 votes and all the persuasion that took of so many different senators by so many different activists really showed me that although we've come a long way, it is still a big fight and the fight is not done.
Speaker: It is very possible that some kind of labor standard is going to be written in and the question will be, how problematic is it? Does it pull up the ladder? Does it reserve projects for an aristocracy of labor in a way that prevents...
Speaker: those same workers from being housed where they work. So since most stuff has either passed its house of origin, whether that's the Senate or the Assembly, or has failed by now, the legislature took a break on all that and moved to the budget.
Speaker: The budget has to be passed out of the legislature halfway through June, has to be fully passed with the governor's signature by the end of June. to start the budget year in July 1st and that is really a very hard deadline it didn't used to be up to about 15 years ago it was delayed all the time but there is now a constitutional amendment that for every day past July 1st that no budget has been passed the legislators don't get paid now sometimes that has meant that they put in sort of placeholder budgets but usually not. There's also a law, a part of the Constitution, that says that the budget has to be in print, all its provisions written out for the public to examine for at least three days before passage.
Speaker: So really, the deadline was June 27th, so that the final vote can be on June 30th, if necessary. Now, why am I talking about the budget? Well, the budget is sometimes important because it gets into how much is funding is going to housing and transit.
Speaker: But in this case, I'm talking about it because something big happened with those CEQA bills. Remember I mentioned AB 609, which created a broad exemption from the California Environmental Quality Act for infill housing, housing in built-up areas, simply said, it is good to build where we have already built,
Speaker: and we are not going to require it make huge long environmental impact reports and allow itself to be blackmailed by opponents and by people trying to get a pound of flesh out of it. And then there was sb six so seven made some technical improvements, but its big change was it said, it is no longer going to be the standard That you have to prepare an environmental impact report if there is only a fair argument that there could be an environmental impact.
Speaker: That you have to prepare an environmental impact report if you think it is likely, based on the evidence, that there will be an environmental impact. You don't have to look at... out there scenarios that are still a Judge Wood decree fair.
Speaker: So those had gone through. That is, AB 609 had actually passed the assembly unanimously. SB 607 had not passed the Senate yet, but it had gotten through some committees, I believe. And then it froze.
Speaker: and the reason was that gavin newsome came in and said i think we need to reform sequa i think that these two bills are very important and i'm endorsing them and to get them through faster and easier i am going to get them into the budget now what does it mean to get it into the budget because obviously they are not spending items but when you pass a budget you have to pass a lot of legislation that talks about you know for example if you're setting up a program that program often has to have legislation saying how it works So you have what are called trailer bills.
Speaker: So the other legislation that is not itself the budget, but needs to pass alongside the budget. And trailer bill legislation can, in some cases, take effect not on the first day of the next year, but on July 1st, on the first day of the budget year.
Speaker: Additionally, it doesn't go through the same committees. Previously, remember SB 79 had to go past two hostile chairs in the Senate, one of them Aisha Wahab in housing, and the other Senator Durazo in Senate local government.
Speaker: Well, if your bill is part of the budget, it gets passed by the budget committee and then it goes to the full floor. It bypasses potentially hostile committees. So it seemed like a great thing when Gavin Newsom stepped in and said, I am going to shepherd these bills as part of the budget. Was he going to follow through?
Speaker: We had no idea at the time. Well, in the past week, he followed through and although the jury is still out, it is exciting because they are getting pretty far, but there have been some negotiations, especially with labor.
Speaker: The big one that we know is being fought hard for is AB 609, the Broad Housing Exemption for CEQA. A few days ago now, we got bill text, trailer bill text, AB 130, and I believe it has a companion bill SB 130, I guess they they are paired up, had most of the same provisions, but it had additional provisions about wages.
Speaker: Now, conceptually, it's weird because ah project is not better or worse for the environment based on the wages that it pays its construction workers. but this is the sausage getting made. Basically, someone thought that the best next step would be to set some basic wage rates to show that the construction workers that were building this would not be underpaid. The wages were not prevailing wage. Prevailing wage is a concept that is usually used in union law, I believe, union projects or union affiliated projects.
Speaker: And prevailing wage depends on county, depends on the exact trade, but this was a much broader one, much simpler to apply. just taking the Bay Area standard, because there was basic there was Bay Area, there were a bunch of other urban counties, and then there was everywhere else.
Speaker: The Bay Area said 60% of the construction workers shall be paid $40 per hour. 100% of the construction workers shall be paid at no less than $27 per hour.
Speaker: Now, by contrast, a carpenter in Alameda County, the prevailing wage... which again is not the typical wage, but it's the prevailing wage that is often used as a standard before now, is over $60 an hour for a carpenter.
Speaker: So this was not an increase over prevailing wage. This was a decrease. This was the strategy of lifting all boats. This was saying all the construction workers, no matter whether they're in a union, no matter whether they meet a certain standard, they all get a certain amount, $27, and In LA, it was 24.
Speaker: And most of them, 60%, should be being paid much more, $40. forty dollars There were some additional changes. i believe that it still required prevailing wage for some workers on larger projects in San Francisco.
Speaker: So the idea was this is giving labor something in exchange for not letting the them hold up projects under CEQA the sake of getting union workers hired, which definitely happens now. And then the State Building and Construction Trades Council, well, they went ballistic.
Speaker: They're the ones for whom usually prevailing wage is not enough. Their preferred standard has always been skilled and trained, which effectively means they have to already be union, and that would be paid usually even higher than prevailing wage.
Speaker: And remember, there had previously been the big fight over Senate Bill 423 a couple of years ago over whether skilled and trained was even a reasonable requirement ever because it really, really narrows your field of workers. And when you can find them, it greatly increases your costs.
Speaker: At that time, it seemed like there had been a compromise that for buildings over, I believe it was 85 feet, you would get skilled and trained because that involves steel and concrete and types of construction labor that are much more often maybe entirely union-labor.
Speaker: And then below 85 feet, it would usually be prevailing wage. Well, this would, if you wanted it to be exempt from CEQA, would not require prevailing wage like 423 had. It would just require, I would say, decent wages.
Speaker: If this was meant to be a compromise with the State Building and Construction Trades Council, it did not work. because they started talking about chain gangs and saying that this was tantamount to slavery and saying everything under the sun. And this was the last week to pass the budget and its trailer language.
Speaker: So clearly, it was meant to appease them, it did not succeed. And all the pro-housing groups got action awards to call their led representatives. And then I believe last night, Thursday night of the week, a new set of amendments came out.
Speaker: It took out all that basic wage. All the stuff about $27, $40, $24, all that was gone. But it brought back skilled and trained, but only for 85 feet plus.
Speaker: So it's weird. It's more standards for even the less affordable projects if they're over 85 feet, but then no new standards for under 85 feet.
Speaker: Although I should say something that was in and remains in was something I believe the carpenters, who are more reasonable, had wanted, making sure that they have payroll records, that they create Labor Management Cooperation Committee, basically provisions that make it a lot easier to monitor and sue for wage theft.
Speaker: But it really seems like if this change that brought in skilled and trained was at the behest of the trades, then they were very much only looking out for their own members and not trying to lift all boats, which was always the critique that the Carpenters level that. But we're seeing it really clearly here, I believe.
Speaker: This still has not passed. Just because it says that there's a skilled and trained requirement doesn't mean that the trades have come out and said, yes, this is the compromise that made us happy. We don't know if this is going to pass.
Speaker: There is a lot of pressure around it because everyone wants the budget to pass. Everyone needs the budget to pass. But when a very powerful group of unions, coalition of unions, the trades council is begging them not to vote for it.
Speaker: It can be hard to know where everyone jumps. We won't be sure what happens until the governor signs the budget into law. But as amended, the legislation would still exempt pretty much all infill housing that was under 85 feet high from CEQA, regardless of the labor standards. And that would be a really big deal because under 85 feet is the usual wood frame department buildings that if we can build a ton of, we might start to get a handle on rents.
Speaker: ye The high rises are good in some places, but they are extremely expensive and they only make sense in the very middle of the cities. We need a lot more in a lot more places, not just near transit.
Speaker: So that's what happened to AB 609. It is still TBD, but the governor seems to be fighting hard for it. Then there was SB607. This was changing the standard from fair argument to preponderance of the evidence.
Speaker: Well, now there's been trailer bill language, a b one thirty one that also imports a lot of SB607. But here here, honestly, I think it's been more watered down than AB609 was.
Speaker: Because, unfortunately, the conceptual change, the change from fair argument to preponderance, is no longer in there. It does have changes to the process that are going to make it a lot easier to go through a regular yeah EIR process.
Speaker: It still has the concept of a but-for EIR, meaning that if you would have been okay to not do an yeah EIR but for one factor... then your EIR, your environmental impact report, only has to study that one factor and whatever stems from.
Speaker: It still, I believe, limits the record ah when it defines the record in terms of what the agency has to assemble to compile the yeah EIR so that you can't use that as another cudgel in court saying you didn't include this email and therefore the record is incomplete and therefore you need another six months.
Speaker: It does also seem to put in CEQA exemptions for new things like broadband and public right of ways, but not for a lot of housing things. So I assume some other discussions have been happening with relation to other industries, also maintenance facilities for electric high speed rail, just a lot of stuff that is not housing and is not urban transit either.
Speaker: But remember, if this gets passed as part of the trailer bill language, most of the infill housing will not need the exemption from fair argument because it will get an exemption from CEQA altogether for being infill housing.
Speaker: And it does seem like Gavin Newsom is going strong on this. because he has said he is not going to sign the budget unless it has these provisions in it. So we will know in a few days. We will know on Monday. Or the budget will be late at the end of Monday, June 30th, and then we would be in uncharted territory.
Speaker: Now, Gavin Newsom has not been nearly this gung-ho about housing policy in a while. He did help get state rent caps over the line back in I think it was 2019 in his first big year.
Speaker: The first thing that could be called similar to statewide rent control. And that was his intervention. In fact, the bill had been watered down somewhat, and then he came back and made it ah stronger, more like its original conception. He did not intervene in the housing production question of SB 50. And we sometimes joke about how he said after SB 50 had fallen,
Speaker: that he thought there was now a, quote, new clarity about housing production, implying that he thought that something else like it would pass. But his attention really wandered. Granted, after that, there was the pandemic, but that did not put a hold on our housing supply problem. And then, as people may remember, especially if you're very online, a few months ago, in the first months of Trump, he seemed to be really changing from the previous year. He had been very gung-ho liberal. He had been trying to challenge Trump on a lot of fronts, challenge Ron DeSantis, talk about how much better California was than Florida, trying to be kind of the blue state standard bearer in preparation for what everyone assumes is a presidential run 2028.
Speaker: But then oddly, in the first months of Trump, it seemed like he was the one obeying in advance because he brought on a lot of dyed-in-the-wool Trumpists onto his new podcast.
Speaker: Honestly, the fact that he's taking up his time with a podcast says something about how he's kind of checked out, in my opinion. He also did some, not huge in terms of all the policy he could have done this on, but still kind of despicable, concessions on trans athletes, where it seemed to be he was making some changes to go along with the transphobic trends out of Washington. So it seemed like he was thinking the wind was blowing rightward and he was trying to go with it.
Speaker: But now he is suddenly intervening on the side of housing, which I believe is a blow against entrenched interests and is an inherently progressive move to build more housing for more people.
Speaker: So what happened? It seems like a lot of people in the legislature are reading that Ezra Klein and someone or other book Abundance, Ezra Klein Derek Thompson, maybe he's one of them. But that book argued that Democrats needed to work on getting housing and other things people needed built and reducing cost of living as part of their basic proposition. Another possibility is that he looked back and he thought, housing has always been a huge deal.
Speaker: I promised that I would build, I think it was three, five million homes when I was running for governor. That didn't happen. If I leave office next year and have to campaign for president for two years, what am I really going to have to campaign on? What did I do for California?
Speaker: Maybe this is his attempt to actually do something that will be noticeable. It's not 100% impossible, i suppose, that he is trying to show that he can stand up to unions. There may be Democratic donors who like to see that, unfortunately.
Speaker: That would not be a very good motivation for this, but if we want to explain it, that would be one possible explanation. But it is gratifying, whatever the motivation to see this level of power and seriousness brought to the question of housing.
Speaker: There are some interesting provisions in the trailer bill language that are not adapting a bill that was previously submitted, as far as I can tell. There are some tweaks to SB 1123, which I've talked about a lot. That's the bill for ownership housing that was passed last year that allows up to 10 units on single-family vacant lots.
Speaker: It is very in the weeds, and I'm not sure i understand it yet, so I'm going to come back to that in a future episode. The one I can speak to is the Housing Crisis Act, which I think passed around 2021 or 2022, basically banned cities from doing any downzonings and it increased cities' obligations to give housing a fair process.
Speaker: For example, restricting how many meetings you could require and how long a review could take. That had originally been passed with a sunset, meaning that it stopped being effective after five years in 2025. I think it did take effect January 1st, 2020. Then a couple years later, the sunset got extended to 2030. Well, under this budget act, the sunset would be deleted.
Speaker: All these provisions would be in effect forever, which is good because they're good provisions. They shouldn't have had a sunset. but that is something slipping in potentially. And I'm looking to see if there are others. There's other legislation moving forward, including the third party plan check provisions, third party inspections and so forth. But that will need to be a future episode because I am pretty tapped out now.
Speaker: Housing is still big. The housing policy field seems to be getting more ambitious. The state of Washington and Oregon have passed more ambitious laws. So has Texas. New York passed its city of yes proposal.
Speaker: And I'm hoping that we achieve a lot more. Broadly, if all the bills that I've been talking about today pass, zoning... itself is not going to be as much of a constraint as it was. There will be a lot of places that you can buy and build on.
Speaker: Historically, because cities were so tightly zoned, the places that it was feasible to build on and that did not have lucrative enough uses on them to make it hard to buy them were scarce.
Speaker: And if an opportunity came up for a place that was suitable to demolish and build something big on, you might often find yourself bidding against several other developers, which would push up the price. If these things happen, that scarcity would be much less the case. There would be lots more opportunities, locations for developers to build, and they would be in transit-friendly places disproportionately.
Speaker: But you still have construction costs. You still have building codes. You still have a landscape of developers that are not organized around rapid and frequent building when it is buy-write process as opposed to going on a big lobbying spree.
Speaker: How quickly is everyone going to take advantage of this? Still hard to say, but there will be a lot more opportunities. And critically, if all this passes, we will start to be able to see what is working, what is not working, what cities are building, what cities are not building, what can we learn from that?
Speaker: And hopefully that will bring us closer to fixing the housing crisis, not just on paper in terms of what's zoned, but also in practice. da da Once again, this is John coming at you from the future after i recorded the rest of that episode.
Speaker: It is now July 7th and the budget cycle is over and I am going to do a very brief update to bring this episode up to date. It is good news. AB 130 and AB 131, the trailer bills reforming CEQA comprehensively, both passed by wide margins.
Speaker: I would say they passed largely on party lines, pretty different from how their predecessors broke out across parties and across regions, because ultimately it seems like the State Building and Construction Trades Council was in fact assuaged by the compromise that allowed their members to still be more or less required for taller high-rise buildings.
Speaker: And with that last freakout abated, it was basically a matter of, do you support the budget? Do you want all the other things in the budget to go effect? I believe there was some homelessness money for cities also in these trailer bills.
Speaker: And it was, are you on the Democratic side passing the Democratic budget? Which the vast majority of Democrats were, the vast majority of Republicans weren't. There were some interesting things said on the floor.
Speaker: Many Republicans were saying, oh, you Johnny-come-latelys talking about reforming CEQA. We were talking about reforming CEQA before it was cool. I'm not actually sure that they went this route of reforming CEQA specifically to encourage infill housing.
Speaker: If they were doing it 10 years ago, I did some cursory looking for that legislation and did not find it, but maybe I just haven't found it yet. Anyway, they said, yes, we should reform CEQA, but maybe we shouldn't do it this way, or but this is the wrong way, or but I hate Gavin Newsom.
Speaker: And so they mostly did not vote for AB 130. In the end, that was it. As I said, Newsom wielded his muscle to reform CEQA, and he has reformed CEQA. Pretty wholesale.
Speaker: It is in law. It is in effect. There were no final amendments. Now, I really hope he goes on to endorse SB 79. I hope we don't lose momentum because people saw what a big deal this was and think that they can rest on their laurels.
Speaker: But that is a topic for a future episode. For now, we have had a major victory, and I hope we have more to come in the rest of the year. Thanks again for listening. I'll see you in a couple of weeks. And until next time, keep on learning.
