The Perfect Storm Educational Series

INTRO

There is a regulatory Perfect Storm descending on us. You’ve heard warnings like this before, but the threat now is so dire that if it hits us with its full strength, it threatens to put most California homebuilders out of business. The storm’s four converging new threats will ravage builder’s profits and in the worst case, national builders would be forced to leave the state for less regulated markets and local builders would have to cut back or close.

BIA exists for challenges like this, but this is the biggest challenge we have ever faced. To succeed in beating back any of these threats, we will need our Builder Members, our Associate Members and their employees to join us.

The Perfect Storm Educational Series is intended to give Builders, Associates, and all their employees an understanding of the building industry regulatory elements and how they could change your business and impact staff.

THE PERFECT STORM ADVOCACY ISSUES KEY

• Vehicle Miles Traveled – Vehicle miles traveled (VMT) per capita is calculated as the total annual miles of vehicle travel divided by the total population in a state or in an urbanized area. These data are calculated as the total daily miles of vehicle travel in an urbanized area divided by the total population.
  • ISSUES: A study by the San Diego County Board of Supervisors found that as currently written, VMT would add as much as $2 million to the cost of a house. That’s the worst case, but when the better-case adds $200,000, it’s still enough to kill projects. Here’s just one VMT mitigation measure the study identified: The developer would have to buy transit passes for every resident of the development for every year in the life of the development – typically 50 years!

• Stormwater – New statewide stormwater regulations requiring more water quality tests at all construction sites. Process and administrative changes require more labor resources to complete the compliance process, which increases costs and delays marketing and sales.
  • ISSUES: Newly adopted statewide stormwater regulations will require more on-site supervision and water quality tests, potentially costing the industry millions of dollars for non-compliance.  Administrative changes increase costs at all job steps, especially at job close-out.
    Our modeling shows that it would cost a four-year construction project $500,000 or more to comply. And worse yet, failure to comply would result in fines of $64,618 per violation per day even though technology doesn’t exist to meet the new standards. As if that’s not bad enough, the State Water Board is talking about halting all construction during the wet season – from October through May!

• SB 12 and Wildfires – SB 12 allows for the Office of Planning and Research control over development approvals in high fire risk areas.
  • ISSUES: Although this bill was stopped last year, it will be back again with another tragic wildfire season pushing it forward. This bill gives the anti-housing Office of Planning and Research control over development approvals in high fire risk areas – even though new developments are subject to fire safety standards that make them effective fire breaks that often protect existing homes. The 2021 version of the bill acknowledged that up to 49% of the regulations it triggers don’t even need to be reasonable – just “a majority” of them have to be!

• Assembly Bill 68 – Authored by Assemblyman Christopher Ward of San Diego, this legislation prohibits approval of any tentative, final or parcel maps for the subdivision of property if such property is located in “climate risk lands,” or “climate refugia lands.”  It would also prohibit jurisdictions from increasing planned density on “climate resilient lands.”  Further, this bill would prohibit any extension of water or sewer services on “climate resilient lands” with very few exceptions.  Finally, exceptions and approvals for use of lands would be given to the Governor through his Office of Planning and Research.  The same Office of Planning and Research that brought us the Vehicle Miles Traveled requirements.  These restrictions are “tempered” with potential streamlining steps for parcels the state considered to be “climate-smart parcels.” 
  • ISSUES:
  • For years, the Building Industry Association of Southern California has fought against Urban Growth Boundaries that remove land critically needed for addressing the housing crisis.  Removing land is exactly what this bill does.
  • In the middle of a housing crisis, AB 68 seeks to restrict 93% of California land that is currently undeveloped from any housing use.
  • This bill prohibits housing where construction is proven to be most affordable and only allows for construction in urban areas where costs are exponentially higher.
  • Intentional or not, this bill creates a new paradigm of land scarcity that will significantly increase costs and result in monopolistic pricing.  The potential for naturally affordable housing will be decimated by this legislation.

WHO SHOULD JOIN

RESOURCES