YIMBYs & Labor Revolutionize California

The YIMBY Movement had a near perfect victory this session, thanks primarily to the unprecedented alliance.

200 union organizations march on the capital of California to demand legislators pass SB 423 and SB 4.

This article has been made free.

2023 is the second year in a row where YIMBYism has been monumentally victorious in Sacramento. The labor debate’s been settled. A prominent, unified and powerful pro-housing alliance consisting of YIMBYs, labor unions and housing nonprofits will now being the leaders of major housing policy going forward. The governor last week signed into law another suite of housing bills intended to boost housing production.

Looking back a few years ago, not many thought we’d have normalized “ending the housing shortage” as a bipartisan, majority opinion in California in just several years. The idea that California had become overpopulated, overbought by foreigners, or had too many vacant homes was a predominant belief in 2018. While it was also bipartisan and nonpartisan that building more homes would solve the crisis, a lot of electeds thought it was too controversial to act on.

Today, California marches to a different tune. The Pro-Housing Alliance, which in 2022 passed a statewide high-density upzoning of commercial corridors and parking lots, got even bigger. Not only was the Carpenters Union and SEIU (public workers union) pushing the permitting and zoning reform laws, but the majority of union construction workers — residential and non-residential — statewide also joined the pro-housing momentum.

SB 423 and SB 4 were the big ticket laws of this legislative session. I explained the laws here but as a brief recap: SB 4, written principally by senator Scott Wiener (D - San Francisco), rezones lands owned by religious organizations and non-profit colleges to build 100% low income housing. Many churches are seeing declining attendance and are saddled with a lot of real estate that congregations think would be better served as homes for those without. Churches and colleges are seldom zoned for homes, so with SB 4, 171,000 acres of land are now unlocked for high density multifamily homes that are 100% deed-restricted to low income households. As someone who used to work at a low income nonprofit developer, and was tasked with finding sites to build, this is a game changer.

The other bill, SB 423, sought not only to make permanent a law called Senate Bill 35, but change a labor requirement and expand the law into the “coastal zone.” SB 35 was a sleeper-hit law passed in 2016 that allowed housing developers to skip over city councils and zoning boards, and get approval solely from local planning departments based on objective standards like zoning compliance and safety. This reduced approval times from multiple years to just three months. Any housing project was also exempt from California Environmental Quality Act (CEQA) lawsuits, since local planning departments would determine a site’s environmental risk rather than random litigators.

However, in order for developers to access these express approvals, a city needed to be behind track on its housing quota goals (RHNA or Regional Housing Needs Allocation). If the low-income housing quotas of an area were not met, any development project that was at least 50% restricted to low income households would get streamlined approval. The labor requirements for a 50% affordable project required union-level wages (known as “prevailing wage”) for any construction contractor. If market-rate quotas were not met, any development that was at least 10% deed-restricted to low income households would get express approval. But the 10% projects had to hire a plethora of union workers and offer an apprenticeship program to train unskilled workers.

Since SB 35 passed in 2016, no market-rate or privately-financed (10% affordable) projects in the half-decade of the law’s existence were ever built, with the blame being on the costly labor mandate. So SB 423 changed the 10% affordable / mostly market-rate labor requirements to just be union-level wages, as the 50% affordable projects were. Under SB 35, nonprofit, usually publicly subsidized, low-income developers were religiously using the 50% provision, building roughly 18,000 homes mostly in and around San Francisco and Los Angeles between 2018 and 2021. 62% of SB 35’s homes were 100% subsidized, low income housing projects and the rest half-low income projects. (Terner Report, Page 3)

The Building Trades (a consortium of construction trade unions and one of the most powerful groups in Sacramento) initially insisted that SB 423 amounted to a reversal of labor law precedent. The Building Trades had supported union-level wage mandates in 2016, but amid the flurry of new housing production proposals, switched to aggressively supporting only union-mandated hiring and mandated apprenticeship programs, particularly towards nonprofit subsidized developers.

The Carpenters Union pointed out that the labor standards the Trades demanded didn’t work because in 7 years, not a single private developer could finance it. The Carpenters insisted that union-level wages would uplift all workers and prevent the under-cutting of unions with cheaper workers where unions were present. Evidenced by the fact that with SB 35, the majority of projects resulted in unionized labor under the union-wage provision, anyways. With only 9% of California’s residential labor force unionized and mostly focused on the expensive coast, this protected the 90% of residential construction workforce not unionized from unemployment while sectorally uplifting all workers. (my article on this in detail).

At the start of 2023, the Carpenters, nonprofit developers and the YIMBYs were quite alone. The lobby for market developers — the California Building Industry Association — did not approve of union-level wage mandates of the pro-housing coalition and took no position unless amended. Though the Carpenters Union represented the largest share of residential construction workers, the majority of construction workers overall, residential included, had by default taken the side of the Building Trades. A pretty intense negotiation began as the Carpenters courted individual trade unions to support a sectoral approach of union-level wages against strong Building Trades opposition for union-only benefits.

Over the year, sometimes one-by-one, sometimes in large groups, more trade unions switched to the Carpenters’ side. By April, it was as if a new union was joining the Carpenters and endorsing or withdrawing their opposition to SB 423 and SB 4 on a daily basis. By May, with a big new endorsement coming from SoCal Laborers, more than half of all construction trade unions had expressly supported SB 423 and SB 4.

In order to get the most labor consensus, Wiener amended SB 423 such that any project at and over 8-stories had to use the labor standards the Trades wanted of union workers and apprenticeships, but under 8-stories could just require union wages. Carrying over from SB 35, small mulifamilies under 11 units are not subjected to either requirements. If a developer could not secure at least two union bids for a high-rise projects, then they could fall back on prevailing wage rules. This was a good compromise that kept expensive, high rise, steel-frame developments in downtown areas in coastal markets worked on by unions who were skilled, while also ensuring that mid-rise, wood-frame, transit-oriented apartments were open to all workers at union-level wages.

The negotiations worked. Pipe trades, electrical workers, utility employees, sheet metal workers & elevator constructors joined on the pro-housing coalition. The strongest unions within the Building Trades like LiUNA, reversed their opposition and supported SB 423 and 4. By June, the debate had been settled, and non-construction unions like the powerful SEIU once again joined the pro-housing alliance on a platform of union-level wages for all. Sacramento had what it was waiting for: strong majority support among labor to pass the Pro-Housing bills.

But the YIMBYs and nonprofit developers got even bolder and decided to challenge an outdated environmental law. The California Coastal Commission is the quintessential example of 1970s-era environmentalism, where the issues of the day were over-population and over-development. Zoning and land-use in cities like Santa Cruz are heavily controlled by the coastal commission, which has struck down any attempts to reduce car-dependency and forecloses on population increasing policies such as building low income and market-rate housing. (Hence the effects). Up until 2023, it was expected to exempt any land use reforms from the coastal commission’s zone. Nonprofit developers in particular disliked how this foreclosed affordable housing in coastal towns and cities and kept them rich and wealthy.

SB 423 attempted another hail-Mary by exempting itself in areas at risk of sea rise, rather then the entire coastal cities of California. Legacy environmental organizations like the state Sierra Club quickly rallied to stop this. But many climate change organizations, who are more up-to-date on how infill housing policy reduces carbon emissions, sat it out. What’s more, the Assembly Natural Resources Committee, which would’ve ordinarily killed any bill attempting this, instead mediated a compromise: SB 423 would only apply in coastal zone properties that were already zoned for multi-family housing. Which was a tolerable agreement since SB 35 had never been used in a single-family zone.

SB 423 and SB 4 passed resoundingly in the Assembly and the Senate. Then it was signed by Gavin Newsom. California’s most successful housing experiment is now permanent and expanded to all housing types. Also expect your local church or nonprofit college to start looking into housing construction. A last minute amendment was put into the law that I hadn’t noticed which specifically clamped down on San Francisco’s professional and well-entrenched NIMBY problems.

SB 423 requires that HCD check if a jurisdiction is on track to meet their housing targets every four years. Wiener added a provision that re-defined the reporting period exclusively for San Francisco as once a year. So if San Francisco isn’t on track to meet it’s 10,000 homes each year — and so far S.F. has only approved a measly 1,600 this year — then the Board of Supervisors and other commissions will be totally bypassed and compliant housing projects will be approved automatically. And that’s undoubtedly for the best. San Francisco takes the longest time to approve new homes in the state — five times as long as nearby Oakland — and has been under state investigation by the attorney general for its slow production.

Other housing bills that passed included AB 1633, written by assemblyman Phil Ting of San Francisco, which has made immune many housing projects to CEQA lawsuits located in “infill” housing areas, meaning near transit and walkable and thus low carbon. Prior law mandated that housing projects which complied with local zoning must be approved, however the law did not defend those projects against CEQA litigation. Famously, San Francisco Board of Supervisors cited CEQA when rejecting a housing project downtown on transparently non-environmental grounds.

CEQA litigation also made useless the Builders Remedy because any developer attempting a large housing project could be held up for years by CEQA. A developer would conduct a costly, multi-year “environmental impact report” (EIR) to prove its environmental sustainability, which allowed NIMBYs to run out the clock and hope financing collapses even if the project was proven to advanced infill climate policy. AB 1633 now prevents that. If a CEQA lawsuit or environmental challenge is brought forward, a planning department must make an objective ruling on whether it’s a climate-positive infill project within several months and thus is without merit.

This is what CEQA was originally written to do, despite many people not understanding that. Dense, multifamily housing projects located near transit or within developed, urban areas were not supposed to be subjected to CEQA — suburban sprawl was — but the pro-infill provisions were too vague and frequently abused. It was the anti-growth 1970s after all.

AB 1633 also prohibits bad faith litigation by not allowing in most cases attorney fees to be recovered for lawsuits against infill housing that cities approved in good faith or with clear environmental understanding. It’ll be worthwhile to watch how many Builder’s Remedy projects take off with AB 1633. Many readers on my prior article correctly noted that the big news about Builder’s Remedy turned out to be a flop as nobody but disgruntled property owners with no political capital attempted to use the law. AB 1633 provides a major legal shield.

Most other bills were of lower profile, but all were important technocratic fixes to existing laws. A study bill to legalize single-stair apartments was approved and signed into law. Recall my explanation of the problems with dual-stair requirements we uniquely use in the United States building code for fire safety. This will likely set the stage for a future bill to allow small apartments with single-stair corridors like they have in Europe and Asia. The legislature also resoundingly codified into environmental law that people cannot be quantified as a kind of pollution. This prohibits any future attempts to use noise from students as a means to stop student housing, and gives a green light on the very controversial housing project in Berkeley that was held up in court.

There were losses this year for housing. A proposal sponsored by the yimby group East Bay for Everyone to create a public housing developer tasked with building social housing (meaning for both the lower and middle class) like Vienna or Singapore survived the legislature but was vetoed by Governor Newsom. Newsom refused to sign any bill he felt that increased spending obligations, but he also did some baffling vetoes such as outlawing caste discrimination.

A bill, AB 68, meant to reward housing projects in infill areas and discourage projects in firezones collapsed in the legislature. Due primarily to unsettled debate among conservation groups, the pro-housing coalition and single-family home builders about whether carrots or sticks should be used to reshift housing construction back into the cities and away from greenfields.

For a lot of new readers this may not seem like a big deal, but the growth of the YIMBY movement in a small period of time has been tremendous. It was only three years ago when the YIMBYs had been dealt a major blow to big zoning reform laws like the late Senate Bill 50, which would’ve upzoned transit corridors for 5 - 8 story apartments. The attempt at a 3P’s coalition (Preserve, Produce, Protect Housing) with tenant nonprofits, nonprofit developers and YIMBYs collapsed. Suburban lawmakers who were scared of NIMBY groups and homeowner associations killed SB 50.

In 2021, the state Building Trades had obliterated most housing bills since they didn’t contain the union-only and apprenticeship hiring standards. Senate Bill 9, a statewide rezoning of single-family areas to duplexes, got through after huge statewide and even national debate under Assembly leadership. But it was full of caveats and concessions requested by realtors and suburban associations worried of renter influx or suburban decline that reduced its effectiveness.

But the lessons learned from the losses helped fuel the blowout victories of 2022 and 2023. A lot of electeds and organizations realized that the NIMBY boogeyman had a bark much louder than its bite. The passage of Senate Bill 9 proved that the polls showing most voters support more housing construction was indeed real. The Senate Bill 50 battles revealed an invaluable supporter of YIMBYism: nonprofit, low income housing developers. Most of whom had been frustrated that zoning and permitting problems which blocked affordable housing had not been addressed by progressive politics before.

YIMBYs expanded their horizons for allies and found perhaps the best of all: labor power. The invaluable people who build housing and need it, too. The invaluable work led by then freshman Assemblymember Buffy Wicks and the Carpenters Union, got the Pro-Housing Alliance together and made this possible first and foremost. The Pro-Housing alliance which grows every year and now increasingly adds climate activists to its ranks, is one of the most formidable coalitions in housing politics history.

Media has taken notice of the YIMBY triumph and housing groups from around the country are asking me constantly how California YIMBYs managed to get here. At a UC Berkeley housing panel, Wicks told the crowd that supporting building more housing went from controversial to the majority opinion because of groups like California YIMBY and local YIMBY organizations. Volunteers conducting classes, rallies and debates changed minds among lawmakers and advocates everywhere.

No matter how dim it got, no matter how unpopular it seemed, we kept pushing empirical, evidence-based housing policy wherever possible. That’s why about 5 years later, we were marching down the street with union folks and passing legislation with resounding YES votes. Give California YIMBY your support and join your local YIMBY organization if you want to see more.