Chamber Opposes California Assembly Bill 199
Monday, April 03, 2017
The Greater Irvine Chamber of Commerce joined a coalition of numerous business, housing, and industry organizations to oppose California Assembly Bill 199, which would require prevailing wage be applied to certain private residential building projects. It is estimated that this bill would add more than $70,000 to the cost of a 2,000 square foot home.
The Chamber anticipates that this legislation would only exacerbate the current housing crisis in Southern California, especially in regard to affordable housing.
Through a letter to the State Assembly, coalition members communicated the reasons for opposition to AB 199:
Countless newspaper articles and recent reports have highlighted the dire condition of housing in California. California's Department of Housing and Community Development (HCD) estimates that we must build at least 180,000 units to keep pace with demand, not accounting for the backlog of 2 million units that has accrued over the past several decades. Homeownership rates are at abysmal levels – the lowest level since the 1940s – currently 49th nationally.
The Legislative Analyst Office and HCD found that (1) California’s average housing costs are two and a half times the national average; (2) faced with high housing costs, commute distances and the resulting adverse environmental consequences are significantly increased as they search for more affordable housing; (3) higher housing costs shift spending away from paying health insurance resulting in adverse health consequences, increased likelihood of becoming homeless, increased dependence on government subsidized services and shortened lifespan1.
With the current crisis of undersupply, highest-in-the-nation housing costs, and exploding unaffordability ranking at the top of the state’s most pressing political, social and economic concerns, it would seem that a proposal to add as much as 45-50 percent to the cost of a newly built home is ill-advised as it will definitely hamper housing production in the state and make housing more expensive and more out of reach for an ever-growing number of Californians. Given that for every $1,000 increase in the cost of a home, 15,000 California households are priced out of the market,2 this measure would directly impact hundreds of thousands of Californians and their ability to attain the American dream of homeownership, disproportionately impacting teachers, firefighters, police, nurses, service employees in the public and private sector, minorities and millennials. This can only increase inequality in California.
While the legislative session is already witnessing an influx of bills hoping to ameliorate the housing crisis, AB 199's mandate to pay prevailing wages for private residential projects constructed on private property would undoubtedly further exacerbate it.
1 National Coalition for the Homeless (http://www.nationalhomeless.org/factsheets/health.html)
2 National Association of Home Builders - 2016 “Priced Out” Estimates
Category: Chamber News