California legislators finally ready to put California housing industry out of its misery for good

THC has been begging our local and state legislators to do something – anything! – about fixing the dire problems facing our housing industries. As it stands now, the housing shortage is becoming far worse, and so housing is becoming more difficult to afford for any but the well-to-do.

The housing shortage is hitting low-income households especially badly, and we can all see the effects in Humboldt County. THC, and many other folks way smarter and less drunk than we generally are, also feel that the housing shortage is one of the biggest contributing factors to homelessness as well.

It looks like the California State Assembly is finally looking to do something about the problem – unfortunately, it appears like they may have decided to just kill off the housing industry entirely with the recently proposed AB 199. If it’s dead don’t fix it, right?

AB 199 is a vaguely worded bill that, on its surface, pledges to ensure that workers in the building trades are paid prevailing wage for work on housing development that are financed by public tax dollars.

But the not-so-publicized side-effects of this bill may be that it will require private housing construction to pay workers at prevailing wage as well. If AB 199 is passed as currently written, then California can pretty much kiss providing enough housing for the impoverished and middle class goodbye.

This article from the San Diego Union Tribune sums up both sides of AB 199 fairly well:

Builders say union-backed wage bill could raise housing costs

Kansen Chu and the California Building and Trades Council, a labor-union lobbyist group, say that the bill would require “workers to be paid “prevailing wage” on residential projects that have any agreement with “the state or a political subdivision” — a provision that extends the requirement beyond the redevelopment agencies, public agencies and low income housing projects covered under existing state law.”

Under current law, prevailing wage is already granted to projects that use public tax dollars. AB 199 is veiled as an attempt to fix some admittedly out-dated issues with how prevailing wages are applied – but the bill is also being used as a spring board to catapult building costs into the realm of the unattainable. Extending the bill to apply prevailing wage to private housing construction that doesn’t involve agencies mentioned above would be catastrophic for builders and people seeking housing alike.

AB 199 would extend prevailing wage to any residential project that has an agreement with any state or political subdivision – which is exactly what a building permit (required for any construction) constitutes, according to a number of opponents including legal experts and building trade advocates.

Borre Winckel, of the Building Industry association, predicts that “prevailing wage would add roughly $90,000 to the cost of building a 2,000-square-foot house in San Diego County.”

Sure, that’s a big house compared to most in Humboldt County, but consider a $45,000 price increase on a 1000 square foot home in Humboldt – how many could afford that? How many renters could afford the corresponding increase in renting such a home?

Understandably, a whole heck-ton of trade organizations have come out against AB 1911 – here’s a link to just one list of the groups that are extremely worried by the bill. (Warning: it’s a looooong freakin’ list.)

According to the San Diego Union Tribune, a little over 75,000 people are employed in building trades in San Diego County – AB 199 would do wonders for their paychecks. On the flip-side, the majority of the other 3.24 million people in San Diego County might be getting priced out of housing entirely. So, please tell us, where is the overall benefit to San Diego? And by extension, to even more impoverished places like Humboldt County with an even greater shortage of housing?

Of course, even if you’re earning at prevailing wage, you still would be hard-pressed to afford a home should AB 199 have the anticipated effects on housing costs. But the special interests that the bill would benefit don’t care – it would just mean more coin for their coffers.

(Here’s a general list of prevailing wages for a number of different trades in Northern California, for your reference.)

You might be tired of hearing THC say this to the powers that be, but, we’ll say it anyway: We need to build more housing, assholes, and the union-crony backed AB 199 looks sure to accomplish the exact opposite.

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3 Responses to California legislators finally ready to put California housing industry out of its misery for good

  1. John says:

    California Democrats putting businesses out of work, taxing the few working citizens and retired folk.
    Mercury News agreed with many of the points you made including “The author of the AB199 represents communities in Santa Clara County, which already has some of the highest housing costs in the country.”


  2. Rusty says:

    “When the people find that they can vote themselves money that will herald the end of the republic.”
    ― Benjamin Franklin


  3. TommyGunn says:

    Seems like a crock honestly. Hard time believing that the bill would have such a big effect on prices, and the author is from santa clara like John says above. Got to be a better explanation. Normally I’m mostly on board with what you write up but seems farfetched unless the guy is getting paid by union or something


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