How State Regulations and Green Initiatives Help Drive Up The Cost of Housing

By Denise Pedrow

We all know that California has a high cost of living and that one of the biggest costs is housing.  I believe that it is important for people to understand that some of the reason our housing costs are so high is a direct result of state and local regulations.  These building and Green Initiative regulations impose extra cost on both developers and landlords.  In a trickle-down effect, the extra regulation costs are then transferred to the buyers and renters of housing and apartment units.

Depending on the local jurisdiction, the regulations have proven to increase costs of development, and the costs can vary widely.  At the state level a Green Code was enacted by our legislature called CALGreen. This resulted in the establishment of an state agency to monitor and make new, mandatory, construction environmental regulations.  At the city level it created a new type of building inspection, added “Green” inspectors and increased the costs associated with permit and plan check fees for every construction project.

In addition, these new Green codes increased the costs of plumbing, HVAC, electrical,  lighting, and other systems on every construction project.  This results in millions of dollars in added costs to the developers of housing projects. These new codes also required the developers to engage the services of Green Consultants from the CalGreen program and HERS (Home Energy Rating System) Raters to verify Green Code compliance. 

These new consultants must review all products installed on the projects and the HERS Raters verify the proper installation of more expensive, energy efficient mechanical systems, windows, and insulation.  These “top of the line” products are not bad in and of themselves; they are just very expensive compared to standard products and are now mandatory.   These added green consultants require additional work and costs for the design consultants, contractors and subcontractors. 

Before a new housing development or apartment complex can begin building, the developer must go through an entitlement process.  The entitlement process consists of agencies within the city reviewing the proposed project and determining the impact it may have on the community or the services they provide.  These agencies then provide reports to city council and stipulate the conditions under which they would support the project.          

The process for getting a construction project through this bureaucratic maze can be painfully expensive and time consuming for developers.  Some projects can take five to ten years before they meet all the entitlement requirements imposed by city planning agencies and the city council. 

An example of this would be the Public Works department who may require the developer to remove and replace the city sidewalk, curb/gutter and pavement in front of the proposed new housing project.  Often some cities will require the repair and replacement of city sidewalks and streets beyond the boundaries of the proposed project. Even though the damage to these areas existed prior to the project being approved, replacement/repair is forced upon the housing developers and ultimately the renters/buyers. Why should housing developers and renters/buyers have to pay for what the city failed to maintain using our tax dollars?

Another example might be the removal of overhead utility lines which could result in costs exceeding one million dollars for the developer and take anywhere from twelve to twenty-four months to complete. The Urban Forestry department may decide to require new trees to be planted in the parkway median. If there is not enough room for the number of trees the department required to be planted, the developer must then write a check and pay for the trees to be planted at other locations throughout the city at the cities discretion. There is no way to track and see what happens to those funds or if the trees were ever planted by the city.  These type of city requirements to the developer directly increase the price of the housing project.  The more expensive the cities make it for the developer, the more expensive it will always be for the buyer/renter.

Recently I reviewed the fee’s associated to the development of multi-family housing in three large cities: Los Angeles, Austin and Phoenix.  I was not surprised to find that Los Angeles was higher by six-to-ten times the comparable fees to these other two cities. Is all this extra cost just because of where we live?  Do we simply have to pay “what the market will bear?”  Or are there extra costs being added to housing development that can be eliminated, especially the type of extra costs do not affect the safety and quality of the building?

Our Democratic-majority in the state legislature is focused on the goal of cutting our greenhouse emissions by 80% by the year 2050 (See Senate Bill 32, 2014).  They do not see the link between these extra regulations driving up the cost of housing for millions of Californians.  It is clear that the extra regulations, driving up housing costs, is one of many factors that push more people into homeless situations. Don’t get me wrong, being responsible about the environment is an excellent goal to strive for, but at what cost?  How are these impossibly expensive green regulations helping thousands of Californians who need shelter now?

To help solve the current housing crisis, I believe that the expensive Green Initiative requirements should be reduced and the aggressive goals set by the legislature should be pushed out by at least a decade or two.  This would help make future green goals phase in slower and be more financially feasible for housing developers.  More time would also allow green technology to advance and hopefully become less expensive. To help solve our housing and homeless crisis, responsible environmental policy must be balanced with conservative monetary policy that will allow home building to be done quickly and more affordably for millions of Californians.

Denise Pedrow is a Republican Candidate running for State Assembly in Ventura County – District 44.  Read more about her at  www.voteforpedrow.com.  Find her on Twitter at @Ad44Pedrow and on Facebook at “Denise Pedrow for Assembly District 44”

Republished with Permission The Epoch Times    SUBSCRIBE

Get Citizensjournal.us Headlines free  SUBSCRIPTION. Keep us publishing – DONATE