The California Building Industry Association (CBIA) is sounding the alarm over the state’s housing crisis.
In the last 10 years, housing production in California has averaged fewer than 80,000 new homes per year, which is not nearly enough to satisfy demand.
Citing a report by the Legislative Analyst’s Office, CBIA says the state should have been building up to 110,000 units of housing per year between 1980 and 2010 in order to have avoided the recent explosion in the cost of housing.
CBIA says home ownership has many benefits.
It not only stabilizes communities and provides access to education and employment opportunities, it also helps maintain physical and mental health.
In addition, owning a home is one of the main ways California families can build wealth that can be passed on to future generations.
However, home ownership rates in California are at their lowest level since the 1940s.
To encourage building more homes, CBIA has put forward its 2024 Housing Killers and Creators list.
It identifies bills moving through the California legislative process that, if approved, would impact California’s housing policy crisis in some way.
CBIA says the bills in question should be either dropped, improved or championed.
Housing killer bills would make the housing crisis worse by increasing the cost and time of building homes in the state.
Housing creator bills, on the other hand, would reduce barriers to home construction and help address the need for more housing in California.
Housing Killers
- Assembly Bill (AB) 2230 (Bennett, D-Oxnard) | Residential Housing Unfair Practices Act of 2023.
AB 2230 adds residential housing to the state’s Anti-Trust Law, Unfair Business Practices law and Unfair Competition Law.
It would expand the scope of housing regulations in the state and create more barriers to investment in home construction, ultimately making housing less affordable.
- AB 2010 (Kalra, D-San Jose) | State contracting: global deforestation.
AB 2010 requires contractors and subcontractors contracting with a state agency to certify the wood used in their projects has not come from certain proscribed regions.
CBIA says the bill is unnecessary and is in opposition to rigorous North American sustainable practices and certification standards.
Enacting a redundant program will disrupt lumber supply to California during the current housing shortage, increase the cost of housing and waste the state’s already limited resources.
- Senate Bill (SB) 903 (Skinner, D-Oakland) | Environmental health: product safety: perfluoroalkyl and polyfluoroalkyl substances.
CBIA says SB 903 creates a complex new regulatory program to regulate all commercial and consumer products that may contain perfluoroalkyl and polyfluoroalkyl substances. Also called PFAS, the substances are synthetic chemicals found in many common products.
This bill could have a significant impact on California’s green housing market by outlawing such building products as heat pumps and electrical wiring that have been mandated to help California reach climate and energy objectives.
The good news is that CBIA has also identified two pieces of legislation that could stimulate the construction of new housing.
Housing Creators
- AB 247 (Muratsuchi, D-Torrance) | $14 billion school bond for K-12 and community college facilities.
AB 247 places a school bond on the November 2024 statewide ballot that will allow for the construction and modernization of safe schools and the building of more housing.
Without this bond, California homebuilders cannot build homes that middle class families can afford.
The bill is crucial for ensuring California schools are able to keep up with the changing needs of its students and teachers.
It will secure funding to build new schools, modernize older ones, improve technology and upgrade security.
New and updated schools are significantly more energy-efficient than older ones and are needed to help California achieve its climate goals.
- AB 2996 (Alvarez, D-Chula Vista) | FAIR Plan
CBIA says AB 2996 makes California’s home and commercial insurance marketplace more stable in two ways.
It would authorize the California FAIR Plan Association, a syndicated fire insurance pool comprising all insurers licensed to conduct property/casualty business in California, to ask the California Infrastructure and Economic Development Bank to issue bonds. It would also authorize the bank to issue those bonds.
The current insurance crisis is hurting many Californians, including people living in single-family homes and condominiums.
AB 2996 would act as a safety net for consumers when they need it most and strengthen the FAIR Plan’s financial stability in the event of major catastrophes, enabling it to be reliable insurance option until the market stabilized.
It will better protect homeowners and buyers who are unable to secure coverage in the traditional insurance market.
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