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Is SB 35 a Step in the Right Direction for California Housing?

SB 35, effective as of the beginning of this year, aims to boost housing development in California. The goal is to hold cities more accountable in their efforts to provide adequate housing. The bill will allow a streamlined version of the grueling review process that housing developers go through to get approval for projects. This would effectively cut out some of the more costly and time-consuming procedures (such as city council votes, court challenges, and environmental impact reports).

What exactly will this mean for contractors and agencies? To better understand, let’s consider when these types of situations would apply.

Prevailing Wages a Major Condition of the Bill

Cities will be required to provide this expedited approval process if they are not meeting their housing production goals for various affordability levels (regulated by the Regional Housing Needs Assessment Development). Here are a few of the more prominent conditions that need to be met for housing development projects to be eligible:

  • Prevailing wages must be used on the project
  • The project must be for multi-family housing developments or accessory dwelling units
  • No less than 10% of the units must be affordable
  • The project must comply with preexisting zoning laws

Additionally, there are some conditional restrictions on which projects can apply:

  • Projects must not include demolition of existing rent-controlled housing
  • The height of the development must not be over 200 feet
  • Single-family home developments are not eligible

Details of the full bill can be found here.

Reception Within the Industry?

While this bill is viewed by many as a step forward in ensuring growth of the housing developments in California, some have argued that it does not address all the constraints that have previously slowed things down.

One of the biggest complaints is that the bill does not address any of the issues with existing zoning laws that each project must still comply with, such as project size restrictions in various areas. Compliance with these zoning standards has historically been one of the biggest hurdles for housing development, especially considering many cities’ zoning laws are outdated and not easily changed. It’s also important to note that any requested zoning change – for housing development purposes – disqualifies the project from being eligible for the streamlined process in the first place.

Reactions from affected industry camps have been mixed. Some leaders in the real estate industry might argue that the required conditions will act more as restrictions, and therefore even further limit the full impact of the bill.  Whereas others in the construction industry maintain the notion that only time will tell if this will truly have a significant effect.

Regardless of the outcome, contractors and agencies should be mindful that their next gig on a housing project might require prevailing wages. And with strict regulations surrounding compliance, it’s always a good idea to have your bases covered with a reliable labor compliance solution.

To learn more about potential solutions for certifying payroll reports, check out: https://www.lcptracker.com/solutions

You can also learn more about some of the latest California laws affecting prevailing wage projects at our Ignite Conference, May 29 – June 1, 2018, in Huntington Beach, CA!

Don’t forget to check out our past blog posts about other recent CA bills passed, like AB 1701, AB 618, SB 418, or ACA 5.

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