Assembly Standing Committee on Local Government

We do have the authors now for this special order of today, and that is AB 1751, by Assembly member Quirk Silva and Buffy Wicks.

Good afternoon, chair and members. Before I begin, I want to thank the committee members and committee staff for their thoughtful conversations on this bill. I'm here to present AB 1751, which builds on recent housing reforms by expanding access to one of the most attainable paths to home ownership, town homes. Home owner oh, home ownership is moving further out of reach for too many Californians. Only 18% of Californian of households can afford a median price single family home.

A family now needs an annual income of roughly 221,000 to purchase that home. These numbers reflect a market that is pushing tradespeople, nurses, teachers, and firefighters out of their communities, and in some cases, out of California. That is a structural failure. AB 1751 allows for ministerial approval of qualifying townhome projects that meet clear objective standards. This approach reduces delays, provides certainty, and helps bring more ownership opportunities with within reach for working Californians.

If we are serious about addressing affordability, we need to create more pathways into homeownership. With recent amendments, AB 1751 includes a minimum wage of $28 an hour for construction workers on townhome projects. I want to address this minimum wage standard directly and clearly. There are no prevailing wage adjustments in this bill. Under current law, many workers on private nonunion townhome developments can be paid as little as the state minimum wage of $16 per hour.

This bill more than doubles that floor and ties it to inflation through the consumer price index. This bill raises wages where no meaningful standard exists today. It does not replace prevailing wage. It does not replace prevailing wage. It does not undercut prevailing wage.

This bill leaves prevailing wage exactly as it stands under current law. The language is explicit. Nothing in this legislation alters the determination of prevailing wage under the labor code. That protection is preserved. A minimum wage of $28 will significantly improve the lives of hundreds of workers who are working on nonunion private developments.

This bill also strengthens accountability. It extends direct wage liability to development as per labor code section two eighteen point eight. The developer, general contractor, and subcontractors are each jointly responsible for compliance with wage and hour requirements. In practice, this closes a significant enforcement gap that exists today for workers on private residential construction. This bill further grants joint labor management committees independent standing to enforce these provisions.

These committees may bring civil actions for wage statement violations, pursue remedies related to workers' compensation compliance, and seek injunctive relief against unlicensed contractors operating on covered projects. This requires an award of attorney's fees to a prevailing committee ensuring that enforcement is both viable and sustained. Members, the status quo is not working. It prices family out of home families out of homeownership and leaves too many workers without meaningful protections. California cannot meet its housing goals without rebuilding a path to homeownership.

California cannot ask workers to build that future without fair rate wages and real accountability. AB 1751 does both. With me to testify today is my colleagues, assembly member, Buffy Wicks, Ed Manning on behalf of the New California Coalition, and Danny, Curtin, director of the California Conference of Cow Carpenters and strong advocate of prevailing wages.

Thank you. Thank you to my lead author here on this bill. I am supporting this bill in large part because we have failed folks who are trying to buy homes. We've actually done quite a bit of work in the past eight years or so, making it easier to build multifamily housing, but most of our housing is not for homeownership opportunity. And these townhomes can serve as a really important, part of that aspect.

We all know we need to build more housing, and so this bill provides, as mentioned, really important ministerial approval and creating certainty and reducing delays so that we can build the townhomes to serve our communities. I wanna talk more specifically about the, the wage aspect of this building. I think that is what has, stirred up most, of the conversation, over the past couple days. The and and, obviously, mister Curtin can speak more directly.

He's representing the the Carpenters Union, which is builds more housing than any other union in California and has a lot of expertise in this space.

But, you know, having been the author of AB 2011, I've lived in this space now for years of this conversation around wage rates, particularly as it pertains to housing. So what I have learned in that process, one, residential construction work is mostly nonunion in California. This bill does not affect those parts of residential construction that are unionized. So high rise buildings, obviously, you can't build a high rise townhome. That is not a part of this bill.

Affordable housing, which, has public subsidy triggers prevailing wage, that is not a part of this bill. San Francisco, which is a very organized, highly union density density city is explicitly exempt from this bill. So for market rate low rise building in the private sector, this sector is almost a 100% nonunionized. So nonunionized residential construction workers are some of the most exploited workers in California. It's a highly immigrant community, low income workforce, mostly small subcontractors who have poor record keeping.

In the words of Jay Bradshaw, he calls it a crime scene. So the and and I think that is in fact true for many of these projects. That is just the reality of this workforce. And so what this bill aims to do is to create a floor, not a ceiling, and to raise the floor for many of these workers right now who are getting less than this wage. This bill does not impact prevailing wage.

There was explicit language put into the bill to ensure that. It has no impact on unionized workers who are getting these prevailing wages. And I I had an opportunity to look at the opposition letter, and there were terms like, you know, wage grab, undermining prevailing wage, you know, lowering wages of workers, legislatively mandate lower lower wages, a, quote, harmful and unprecedented anti worker proposal.

And I just have a hard time believing that the Carpenters Union worker proposal given that that is in fact their entire sole mission is to lift up the bottom rung of workers, which is exactly what they are trying to do here. And the example given of residential prevailing wage rates in the letter, by the opposition, that has nothing to do with this bill.

These wages have nothing to do with this bill. This bill is good for housing. This bill is good for for folks who need the housing desperately. This bill is good for workers.

And I'm very pleased that we're having this conversation in the first house in a policy committee so we can flush out the conversations, have an adult conversation about what we think is the right way to approach this, how we can provide the meaningful streamlining that we need to do while still lifting up the workers that are some of our most exploited in the state of California.

And with that, we'll turn it over to our expert witnesses here to testify.

Please go ahead.

Thank you, mister chair. Ed Manning with KP Public Affairs on behalf of the New California Coalition. New California Coalition's about a four year old organization. It's both civic and business organizations coming together to focus on trying to solve some of the biggest affordability challenges in California. And one of the areas of interest is housing.

And I think I'll stay in my lane a little bit and talk about housing. So and let mister Curtin address some of the more of the labor issues. But this bill focuses exclusively on townhomes and why. The data is overwhelming in terms of townhomes being in the sweet spot of affordable entry level housing and middle class housing that's sadly lacking. Last year, we had 110,000 housing starts in California.

Of those, 25% roughly were ADUs. So the good news is the policy on ADUs is working, and the reason it works is we're making it easy to build them. The bad news is that means we're at about 75,000 housing starts. And, you know, many of those are out of the reach of ordinary Californians, and we're losing a new generation of Californians for those of us.

I've talked to some of the committee members about, you know, having adult children who have no prospect of owning a home in California.

And that's what we're zeroed in on this bill. If you look at the numbers, the California, the UC Berkeley study of the Clea Center, you know, it's at least a median of 30% cheaper, more affordable to buy a townhome than a single family home. The numbers are even the disparity is even higher in urban areas in coastal urban areas. We have hired a consultant called MapCraft who's worked on previous legislation.

They are looking at all the sites that would be eligible in the state for opportunities to build housing.

And two seventy five of of AMI will have tremendous additional housing opportunities with this bill, and they can get into the market. That's the goal of the bill. The bill makes eligible infill sites in rural and suburban areas, infill sites only, and in urban areas, housing sites, multifamily, and single family homes. We think it's an important and critical step, and we support, as a business organization, the $28 minimum wage floor in this bill.

And as was said earlier, I can point you to the exact language in the bill.

This this bill has zero impact on public works and the applicability of prevailing wage to public works.

Thank you. Thank you, mister Manning. Second witness.

Thank you, mister chairman. And this is on Danny Curtin, California Conference of Carpenters. Honestly, pretty much everything I wanted to say has been said, but I will emphasize a few more things. Number one, for carpenters, the Carpenters Union, housing is the number one issue for us bar none. You've heard about the difficulties of people owning a home, I might add.

Congratulations on that staff issue, but your staff cannot afford to buy or even rent, in some cases, a home in California. So it's gonna all be done by video. There's no question about this townhome being an entry level, not for poverty level, but an entry level for young professionals. And I wanna point out that a carpenter at the absolute top of their game in in the industry now does not qualify for a mortgage for a bottom tier home.

And I think amazing amounts that you have to work make to qualify.

I do wanna stress, and I've been around a long time. Anybody's been around here for thirty years or so, raise your hands. But, otherwise, the fact is we have the strongest prevailing wage laws in the country, and that has been a process over thirty years. Some of it has it's been driven largely by the carpenters and bills we've put in, usually with the support of the building trades, I might add. Occasionally, some differences, but not often.

Those who may remember Senator Richard Alcon, one of the biggest bills, and I'll tell you exactly what that did. It essentially made the collective bargaining wage, the prevailing wage for public works. There's only two other states in the country that actually do that. The others have complicated processes to determine some vague number that is not actual wage. But the other two states, Minnesota and Washington, did that and followed our lead on that.

So that was mission critical. And some of the other things that happened, and I wanna emphasize this, this is the per transition of the prevailing wage now. We have expanded the coverage of what would be covered in prevailing wage, not simply the construction process, but interior systems, installation of interior systems, modular systems, things that weren't covered originally are now covered. And very, very importantly, we have sort of redefined what is covered by prevailing wage by redefining the concept of money.

It it used to be just that the when the government paid for a project, it would be prevailing wages.

But it's a much more expansive recognition of cost associated with prevailing wage that I mean, with public works that create prevailing wages. The second thing we focused on in those years was self enforcement, which is more and more happening in in the latest set of bills that we've been doing and joint liability, which is a very, very important factor. So we have the strongest enforcement law and the strongest prevailing wage law.

we can wrap up in one second because I I wanna emphasize that. But I also wanna tell you the housing workforce is over 300,000 people, and it is the worst conditions in the industry. They have nobody speaking for them, including the building trades and ourselves in some cases. It really is up to you in this committee to help that process along. Raising that wage will not impact prevailing wages, but it will help raise those workers up.

And that's mission critical for honest contractors to compete in this industry and eventually to organize the union. K. Thank you.

Thank you, sir. Anybody that wants to add in support, please state your name, affiliation, and position on the bill. Bob Naylor for Fieldstead and Company in support.

Chair and members, my name is Emmett Cromwell from Inland Empire Southern California with the Western States Regional Capital Carpenters out of Mirai Local, twenty one fifty nines in strong support of AB, 1751.

Thank you.

German Iniguez, member of the Western States Regional Council of Carpenters Local one ten. Strong support. Thank you.

Good afternoon, mister chair, committee members. Jimmy Elrod with the Western States Regional Council of Carpenters out of Local 714 Orange County in strong support. Thank you.

Good afternoon. Joseph Fuchs, thirty nine year member of the carpenters union who started out in the residential trades. And I'll tell you this, it hasn't changed much since 1987. I am in strong support of AB 1751. Thank you so much.

Good afternoon. My name is Julio Flores, represent for the Western States Regional Council of Carpenters, out of Local 951 Riverside County in full support. Thank you.

Good afternoon. Richard Burns, Western States Regional Council of Carpenters. Strong support. Thank you.

Thank you.

Good afternoon. Juan Luna with the Western States Regional Council of Corp Carpenters in strong support. Thank you.

Eugene Morris, North Coast State's Carpenters Union, strong support.

Timothy Rife, North Coast State's Carpenters Union in strong support.

Hello. Jesus Camargo from the Western State Region of Carpenters from local ninety one in South LA. Strongly support.

Good afternoon. Martin Espinosa, proud member of the North Coast State's Carpenters in strong support.

Kurt Voskiel, North Coast State Carpenters and strong support.

Any anybody support? Support.

You Guys got a lot of people out there. Catherine Charles on behalf of the Bay Area Council in support.

Andrea Deveau on behalf of the Cal Asian Chamber in support.

Mr chair members, Michael Gutting, Lighthouse Public Affairs here in support in behalf of AlphaX, San Diego Housing Commission, Fieldstead, and Habitat for Humanity California.

Thank you. Is there no one else outside?

Hi. I'm Harvey McKeown, Carpenter's Local seven thirteen, speaking in support. Thank you.

Seeing no one else coming in support, those in opposition, please step up at the desk. Yeah. Sit down.

Mister chairman and members, Scott Wetch, on behalf of the State Association of Electrical Workers, California State Pipe Trades Council, the California Coalition of Utility Employees, Western States Council of Sheet Metal Workers, and the construction the Elevator Constructors Union of California. Despite what we've said today, this is absolutely a race to the bottom. It's an agenda of one union to try to drive down prevailing wages and wages so that they can perform the work of the rest of the building trades.

And it absolutely does undermine prevailing wage. I'll explain how.

First of all, the language in the bill that tries to say that it won't affect determinations, of prevailing wage, we don't think would actually have that impact. But one thing that this bill can't change is federal law. And the Federal Government sets prevailing wage for federal public works projects.

So if you create a minimum wage in California of $28, it will quickly become the mode across electrical work and plumbing and sheet metal work, and the Federal Government won't give a rat's ass about what this bill says, and they will set the prevailing wage weight for all the crafts at $28. Secondly, the residential wage rate for an electrician in Sacramento is $51 an hour with all the fringes.

What sets wage rates in in a market is supply and demand. Now the sponsors and the authors of the bill can't have it both ways. For two years, they've been telling us that we have, we don't have the adequate workforce to build all the housing that we need. And now they're saying that the the, that that the labor market is so wide open that that people are making less on average than $28. So I just happened to look up job listings.

These are all nonunion job listings in Sacramento for residential electricians. Here's one for just just as they come up. Modern Edison, $40 to $75 for a residential electrician. ...Electric, $40. American Home Energy Savings, 45 to 55.

Kibo, $40. Bayside Electric, 40 to 50. Vasco, 40 to 50. It goes on and on and on. If they're true this is one of the most constrained, labor markets that we've had.

And the wages that you can find by just googling it for residential construction work, at least in the the specialty trades that I represent, are well, well, well above what they're trying to establish to that. So for those reason, we would we would urge a no vote.

Thank you. Thanks.

Thank you, mister chair. Members of the committee, Jeremy Smith here on behalf of the State Building and Construction Trades Council. Because we're all spread so thin today, I'm speaking for Keith Dunn from the District Council of Ironworkers as well. We are here today in in respectful opposition of this bill. As mister Curtin mentioned in 2001, the legislature passed SB 97975.

You guys and us, I looked at the analysis. We were both on there, by Senator Richard Alarcon. They rec they recognize a simple principle. When public resources are used to support a project, the public deserves a return, starting with fair wages and the workers building it for the workers building it. SB 975 clarified that public funds aren't just a blank check written by the state.

It includes the real world tools local governments actually use, fee waivers, below market financing, and other forms of public support. That was intentional because those are public investments. And with that investment came a clear expectation. If you take a public benefit, you meet real public standards. In this case, middle class wages in the form of the prevailing wage.

Now SB seventeen fifty one is being used to carve out an exception to that long standard. It moves certain market rate housing into a category that avoids those standards while still benefiting from the same kinds of public assistance that trigger prevailing wage in the first place. And let's be clear about what that means. It means public value goes in, but a meaningful public standard now comes out.

The public standard in this case, the posted residential prevailing wage rates, which include benefits such as health care and a pension.

That's not how the legislatures operated for the last two decades, and it's not how we build a high road economy in California. Don't let developers tell you that the prevailing wage is a barrier. It's a baseline. It is the minimum wage. It already exists that they are choosing not to pay out of concerns for profit.

All it does is ensure skilled workers, safe jobs, and a middle class pathway in the very communities these projects are supposed to serve. Where will workers get their health care under the scheme and vision in s p 70 '51? Prevailing Wage provides that. They are they will now be pushed off onto our underfunded underfunded medical system and will likely use it since construction is so dangerous. While housing developers get to not pay the prevailing wage, which includes health care coverage.

Where will these workers get their pension contributions? They will be left without access to a defined benefit pension plan, another benefit provided by the prevailing wage. You are lowering wage rates and giving developers in the housing construction market the right to pay lower wage rates with no benefits that currently exist. This is a wage decrease and step and a step back from what this legislature Democrats have said they believe.

We have fought for one hundred and nine years for these labor standards, and this is the beginning of the end.

I'll wrap up with this. Workers in this industry are in the shadows created by developers who refuse to pay the wages that already exist. They are the reason we are here today, and instead of holding them to account for an under for an under the table business model and making them pay the posted residential prevailing wage rate. So you're giving them yet another opportunity to not pay what is already a construction worker minimum wage. The wage that prevails county by county, the prevailing wage. For those reasons, we are in opposition today. Thank you.

Thank you. Anybody that wants to add on in opposition? Anybody outside, maybe?

Good afternoon, chair and members. Brady Guertin on behalf of the League of California Cities in a respectful Oppose unless amended, and look forward to the continuing conversation with the assembly member. Thank you.

Good afternoon. Rocky Rhodes, City of Simi Valley, City Councilman, and incoming chair of the Community Economic and Human Development Committee of SCAG, and I oppose.

Mister chair, member Sara Flocks, California Federation of Labor Unions in opposition.

Good afternoon, chair members. Connor Guston on behalf of Teamsters California in opposition.

Good afternoon, chair members. Crystal Moreno on behalf of the California Nevada Conference of Operating Engineers, and we are in strong opposition.

Thank you. Seeing no one else, first, I'll go to committee members if you wanna I don't need please.

Yeah. Thank you, chair. I first wanna start by thanking the author and for her work. We have had conversations as well as with, assembly member Wicks. I will make it clear that I do have some concerns. I but I I think I'm gonna start with some questions first.

I wanna know were the trades included with this $28 amount that we we got? So how did that $28 amount get set? And and and if you could help me with that, I think that might lead me to my next question.

As you know, bills are work in process progress. We if we go through where these committees are referred to, it was first, presented last week in housing, and we've had conversations. I'll be very candid. No. We have not worked with the trades on this 20 to $8 minimum floor.

What I will say about this wage is it's a minimum floor. This does not prohibit, as was mentioned, the $40 electrical engineer coming on and getting a higher wage. It's a minimum floor. As far as conversations with the trades, those are ongoing. And also, it's not just the trades who are opposed.

We also have some cities that are listed and has just came up, the League of Cities. So we, as many others do in this legislative body, we will continue conversations. We have a long way to go before this becomes a law. If it does, we are very pragmatic. We understand what we're facing.

But the stern opposition, which you just heard, is not unexpected. Because something has always happened in this legislative body doesn't mean it always will happen. It was presented to me by the opposition right here. You're leaving me personally, meaning I'm termed out. And when you leave, there could be ramifications because of this bill well after you're gone.

This is true of every piece of legislation. No. I didn't say you said that, mister Wedge, but it was presented to me. But my point is that every piece of legislation not only evolves, it can come back and be amended. But if we do nothing, we stay.

And I have heard now I'm the longest serving member along with assembly member Almar Estucci, who started our tenure here in 2012. Now this might be forgotten by some of the people and for the new people. Not only did I start in 2012 under another governor, but I lost in 2014 and came back in 2016.

What some of my friends from the trades might forget is I was one of the members that came up on one of the biggest piece of legislation that has sustained many of the trades to this day, which, by the way, that my colleagues on the other side constantly are at us about related to the gas tax. That has provided jobs to this day for thousands of trade workers.

So to infer that I don't care about construction jobs, that I don't understand this issue, is not accurate. But what I have seen in a decade in a decade of now and now we have, I believe, 13 people on the housing committee. When I first started, there were seven because nobody wanted to work in this space. And we have been pushing and pushing about how do we build. What I hear over and over from constituents across the state is the homeless issue.

We're not making progress. We're spending billions of dollars. Homelessness intersects with housing construction. If we cannot build housing units, and, yes, this is a specific type of housing. It is townhomes.

This is not, our very, low affordable housing. It's townhomes. It's sort of the middle income. But if our middle income individuals, as mentioned, maybe it's a teacher, maybe it's a construction worker, they cannot get into these units, then they stay into the rental market. They stay in the rental market, those prices stay inflated.

So we have to do something. We're not even close to our housing goals. And we say, well, this is gonna impact our industry. I mean, when we look at $28, it is a floor. It is a floor.

When we look at the nonunion union construction workers, we know they're exploited, and we need to do something about that. They are exploited. Because, by the way, I know many of them, and they are the people working in these residential units. So it can't be from the trades unless we agree with you, you just can't build. And offer any other from my

I'm I'm actually still Yeah.

More discussion.

I'm actually good. Thank you. Okay. Okay. Thank you.

I don't wanna start a fight.

Yeah. I I wanted to share some thoughts here. I think there is very good, and I've shared with both of my colleagues. I think there's some very good policy here. I think the challenge in, you know, is that you've said it.

If we do nothing, we'll continue to get nothing. But as the root also the root cause of what happens here in Sacramento, we continue to do the same thing over and over, and we expect different results. And that's the definition of insanity. Right? So, you know, the part for me is communication is the root of all our challenges.

And so I asked that question about the trades, and I asked that because I understand the policy. I think it's good, but I also believe in communication. So I've got a lot of engagement from district. And I I wanna say that while I I think communication is is how we get there. And I appreciate you all being a part of the conversation is what I would ask so that they we can get to a place where not not everyone's gonna be happy.

And that and that's the that is not possible in our world. But I do wanna say there is good policy, and I don't wanna see a fight happen where nothing happens and we continue to do the same thing over and over and we get to the definition of insanity continuously. So, chair, I I will say, I know we don't have quorum, but I I really would like to move this bill.

And I I would like them to continue on in conversation, and I hope today they get out of committee to be able to have that conversation.

No, there's no agreement with Johnson. Thank you.

I was gonna ask if you wanted to answer some of the questions from the opposition without making it into a debate. I wanna be clear. We're gonna go back and forth. Did did you wanna address any of the concerns from the opposition?

Thank you.

I do. I will just start because I think we both or all of us can get wound up on this, and you can see I'm getting wound up. And, certainly, the opposition is wound up. But I think we have to base our discussion on what we believe this bill will do. And so I'm just gonna if you don't mind, read a few of of our statements.

And so does AB 1751 lower wages for construction workers? No. The bill establishes a new twenty eight hour minimum wage floor for construction workers on covered townhome projects. Again, this does not mean they can't make more and as was stated, many are making more. For most of the projects which are private, so we need to kind of underscore private for sale developments with no public subsidy, No prevailing wage obligation currently applies.

Workers on those projects are currently only entitled to state minimum wage of state of $16 an hour. Now, again, we know that many make far above that. AB 1751 more than doubles that baseline of our current state minimum wage. What happens to prevailing wage? The bill explicitly preserves prevailing wage law.

Nothing in this chapter shall affect the determination of prevailing wage. Does the bill include any other labor protections be beyond the $20 floor? Yes. The bill includes several protections. Wage violation liability extends directly to the development proponent, not just contractors and subcontractors.

This is stronger than what standard prevailing wage requires. A prevailing JLMC is entitled to reasonable reasonable attorneys fees and costs. How does $28 an hour compare to what workers earn on these projects today? Today, a construction worker on a private and, please, I'm underlining private because this is what this pertains to. For a for a sale townhome project in California is entitled to a minimum of $16.

A B 1751 raises that floor to 28. 75% increase with automatic inflation adjustments going foe forward. What about the building trades opposition letter? The state building and construction trades council opposes the bill arguing that it undercuts residential prevailing rate wage. However, residential prevailing weight wage rates do not currently apply to private market for sale to in home.

And I think that's I understand what we're talking about, public subsidy for public projects. And I don't disagree with that, but that's not what this bill is pertaining to. The bill does not reduce any wage that workers currently receive on these project. It creates a new floor above what workers are entitled to today. There are many other questions.

I'm not sure if that answers some of yours. There is one that I think is important. The trades argue this this bill provides no benefits such as health care and pension. That is true. This is a valid concern.

This is a point that I don't disagree with, and it deserves an honest answer. The $28 hour floor is a base wage rate and does not mandate, if you want to say, fringe benefits the way prevailing wage does. However, two things are worth noting. First, no benefits obligation exists for these workers today. This bill does not take away benefits.

It simply does not add them. And I understand the whole having those fringe benefits, as what you were talking about, individuals being on Medi Cal or other, government government resources. Second, the developer liability provision under labor code 2.218, it creates accountability of the contracting change that does not exist under standard employment law, which provides some structural protection. And this I have heard about over and over being in committee on housing is whether it's wage theft, these type of issues that are serious concerns for workers.

So we wanted to address these.

I know there's still work to do on this bill, and I pledge to I I believe some of the members might be watching or coming in. They're all participating. That we will continue to work on this. As I said, it's not just the trades that have concerns, but we also have some cities that are concerned. But with that

Thank you. Assemblymember Ward. Just walk in. Do you have any comments?

No. I I had a chance to both, review material and deep, take a take a sip of sort of last minute input, have conversations with our joint authors as well. And so I just wanted to get some clarity on some questions here because I'm hearing, you know, very specific conflicting information about what things would or wouldn't do. First of all, from a land use perspective, you you know, we're talking about the development of townhomes and as I see the parameters of what this would ministerially authorize.

Lands that are already either urbanized or infill development in the case of suburban or rural areas.

Lands that are already zoned for multifamily development. I guess the first question is, what is it already in local permitting law that is a barrier today to these kinds of housing products from being ministerial approved if it's already multifamily outside of an s p 79 zone and within these mole and densities that you're able to do something of this scale? And where are the discretionary barriers that are being exploited right now?

I'm gonna let mister Manning answer that one.

The settlement, thanks for the question. Even though something is zoned for multifamily, it doesn't necessarily mean that you don't have to go through existing entitlement requirements including sequel analysis, local entitlement hearings, opposition, etcetera. All of those things apply for any townhome project unless of course it go you know, you go through the sequel checklist and you say it's it's, it doesn't trigger, the requirement for environmental impact report.

Isn't isn't this already exempted through AB 130?

No. Why not? AB AB 130 is a CEQA exemption that applies to, certain sites, in urban areas, as I recall, and infill sites. In fill 20 acres or less. And, and it's CEQA only. It doesn't apply to suburban infill sites, for example, number one. Number two, it's also not ministerial. And one of the things that this bill enables you to do is down zone on certain sites unless they're unless they're designated as affordable sites in the housing element.

If they're designated as affordable sites, you cannot down zone, but it does allow for some down zoning opportunities in urban areas. If nothing is being built on those sites, those sites are vacant, and, you can come in at three quarters of the mall in density as a minimum. The bill has a minimum density for, urban, suburban, and rural sites. So for urban sites, it's a minimum density of 25 units an acre. Right.

And then townhomes are defined as three habitable floors Right. With a height limit, and they have to be either have the normal air gap or be connected. Some of them are condominium. Some of them are not. They could be either depending.

So let me flip over to our opposition. When in today's practices, do the labor, the skills of those who are skilled and trained actually bid on work that is of this development type, small to medium scale, townhome style, three stories or less.

Because I feel like that's something that, you know, we are having a principal debate on, which is righteous to have, but in practice is not something that the workforce is the skilled workforce actually wants to go after because we need that and there the the the the work opportunity could be greater for something that's a little bit more intensive of a structure.

Well, first of all, our reading of the bill is all housing projects of three stories or less. So that doesn't just mean townhome development. That would be single single family home developments. And, we have we have contractors and who who build all types of housing throughout all of California. You know, you could perhaps go to jurisdictions and and and and there probably hasn't been townhome specific developments built, but there have been other small scale developments where we've had unionized labor.

It may not be union wall to wall, but the electrical may have been done union or the plumbing or the all the mechanical. It it we do all of this.

Right.

Well This pertains to townhomes.

It does. And I and my reading of the bill is that that is specifically what is called out as something that they're trying to be able to have this ministerial, authorization. And I yes. We do we do we do we do all that work and everything. You're you're able to do all that work, but do we do all that work in today's context?

I give you a a big development in Sonoma County, Oakmont. K. Oakmont is a senior living facility, and we had all kinds of union contractors back in the day and after the fires who who did work in those we we do this work.

How big is it?

I couldn't give you the specific area of units. That's correct.

And it feels to me like the parameters of what I'm seeing here is something that is small to at best mid scale.

But our biggest concern here, Assemblymember, is the impact, the precedent this will create, and how it will impact prevailing wage. And despite the best intent of the authors Yes. They can't change federal law and federal setting of prevailing wage.

I do I do I do wanna get to that. I'm just trying to sort of, you know, first, like, have a series of, kind of understanding on land use, but also to this point, like, to know, is this even something that is applicable to the context of how we develop different kinds of building types and and sort of, like, you know, in in kind of common practice?

Not that, you know, we don't miss and shouldn't have, you know, a strongly more unionized workforce like we enjoyed fifty years ago. But how do we kinda get there? Well, let me come back to the economics question because I'm not your I don't think we're entirely wrong here either.

So I I've I've got some uncertainty again. Like, you know, if something, you know, doesn't doesn't apply here for, you know, the for opposition's, workforce right now, then why wouldn't we wanna lift up the opportunities right now to make things a little bit easier? But I'm also still trying to appreciate. Right? What I'm not sure I got some clarity on what today's barriers are in municipal government that are preventing the the ministerial the the the by right, and and and seek a proof, exemptions.

I there might be some nuance here and there might be some, like, you know, additional, allowances here in a suburban setting, a rural setting on some of those infill parcels within, you know, more rural towns. Great. I'm trying to see, does this bill, like, have the impact we hope it would have for the housing type, but we also do very much need to be able to develop for for for California for, a more affordable homeownership opportunities. And I I get that very well.

So let's off of land use and I guess onto the economics here of of of the different prevailing wage.

On one hand, we're saying that somehow this is going to very much undercut the prevailing wage standards that we we we adhere to. We're hearing from supporters that we wanna be able to lift up a bare minimum. Right? Because if something is not unionized construct constructed with unionized labor right now, very often, you could have very unskilled and, you know, sort of under the radar minimum wage workers that are being exploited for construction and development. That's not okay either.

And so I see what the supporters are trying to do is, in their argument, raise the floor here, but also in the bill's language is specifically saying that nothing undercuts existing prevailing wage requirements, nor would local requirements on in on on on adherence to prevailing wage construction within within those jurisdictions be undercut. That that that I see in the bill here too.

So I wanna come back to what, you know, sort of the the meta about whether or not this is gonna affect future, like, work and where we're driving to. But but on today's sort of work project, bar in totality for more work? And how could this undercut work when an IBW member, for example, is coming in who is subject to prevailing wage on a given project?

Because I've heard an argument that this is gonna lower the wage for them, and I and I'm and I'm and I'm not not reconciling that.

Well, there's a lot there. Let me answer all two pieces to your question. The first piece is we do believe this will undermine wage growth in areas because I went through, for instance, in Sacramento, the residential prevailing wage rate for an electrician, a residential electrician is $51. If you go through the vast majority of job listings right now on the Internet for residential electricians in Sacramento, you will find that those wages, typically are right about where our residential prevailing wage rate are.

Maybe a little bit lower, but much, much higher on average than that $28.

If you create a $28 minimum wage, that's going to be where where you're going to see the pressure of the wages go. It's gonna put put downward pressure on wage rates is our belief. We also and then ultimately that that underpins the preventative wage across the board. But here's the the the problem the the significant problem. The authors have said that this won't have impact on anything else but townhome projects, and it won't undercut prevailing wage.

And they put language in the bill that says, DIR, you can't use these wages to determine prevailing wage. But guess what? The Federal Government doesn't care what the California legislature says. And the Federal Government sets prevailing wage rates for all projects in California that receive any federal funding. It's Davis Bacon applies.

Okay? They will go in, and now you create a $28 minimum wage. The Federal Government sets the preventive wage by the mode. Okay? So what is the wage rate that is, is most common in that particular market?

That will then easily become this minimum wage. That will get posted by the Trump administration, and now the prevailing wage for electricians in San Diego will be $28 an hour. And there's nothing that we can do about it in California. Okay.

Miss Warder's rebuttal. Mister Ward?

I'll just take the first part. Because I'm I'm I'm I'm not beyond sensitive. I, you know Yeah. I'm concerned.

Sure. Right?

About whether or not this could be a catalyst.

After that explanation, you should be, but that's not the reality of how the housing market works. So in the real world, a builder goes to build a townhome. He bids out various parts of the project, HVAC, you know, flooring, etcetera, the whole house. They get bids. The bids include not only the wage rate, but also the materials, etcetera, bid in for the various components of the home.

The only wage protection that's in current law is the minimum wage. We have a minimum wage in California.

Right.

It's $16.90 an hour. Yep. And guess what the minimum wage is for every private work townhome built in California? $16.90 an hour. So that is not undermining Davis Bacon last time I checked.

So how is raising the minimum from $16.90 to 28, and it's a minimum wage. We have separate minimum wages in California. We have them for fast food workers. You voted on that bill. I'm sure.

We have them for health care workers. How's that any different? So we're agreeing on behalf of New California Coalition, and we have some developers in our group, to raise the minimum wage on these projects. What what they really want, and we should just have the discussion, is they would like prevailing wage to be applied in this bill to all these townhome projects.

And we this is we

just not what they're saying.

Good. But but that's at the root of the issue. And because because this bill has nothing to do with prevailing wage.

Let let me take a shot because I know

you don't want to again, we're not gonna get into back and forth. Okay? And we try to set that up when just before you walk.

I I I appreciate that.

Let me clarify one thing. Look. The federal prevailing wage does not apply in California except when there's federal dollars, as Scott said. But if there's a state prevailing wage, which also applies, if there's any state money, the state prevailing wage supersedes the federal prevailing wage. End of discussion.

It's the higher of the two wages. To imply that raising a minimum wage up $12 or a minimum standard $12 will actually bring everybody else's wages down, defies comprehension. And that's kind of where I'm gonna leave. But the federal minimum of prevailing wage only applies in federal projects if there's no state money. If there's state money, then it's the state prevailing wage.

It's not what I do. Okay. So, well, I wanna Yeah. You have more questions?

Thank you, mister chair. I'll just maybe have some closing, like, thoughts. Obviously, this is a a consequence of having a important, but late amendment here of this nature that could have significant merit, but also raises legitimate concerns with individuals I work closely with on housing conversations as well.

And I will have ongoing concern whether or not we are missing the long term economic challenges here with personal economics when it comes to workers' economics that might seem like we're doing something beneficial in the short run at the risk of having a long term consequence that is going to depreciate and devalue the work of skilled workforce in the in in the long run here too.

And it's not enough time for me, I think, to have, like, a full vetting of that economic study here, especially when we're having such important and heated conversation over this issue.

Somebody is right here, and it's gonna take more for me to be convinced in the end that which side is right here.

I will be supporting this to be able to go forward today, but I will stay engaged with these viewpoints because we can't send this to the governor if we are gonna have some kind of long term economic harm on the and and depreciation, from what we see as righteous wages for the skilled trains the skilled workforce and these these these skilled professions that that deserve those those wages. That that can't be a consequence and outcome of this.

And I don't know if through further conversation, again, this all hit very last minute. There are ways to build in those protections in here as well to make sure that this work is not and these workers are not superseded by the lifting up of minimum wage workers who are being exploited.

Is there an opportunity here for a shared outcome as we sometimes find with s p four twenty three or other language as well? That's what I'm hoping this is heading for, should this move forward in the legislative process. So thank you for a chance, mister

Thank you, Assemblymember Ward. I I do believe that you guys made a question statement. If not, you wanna do that?

As I was saying, I think, right before you, came in, is I am committed. We are committed to continuing conversations. And I know that this is said in almost every committee, and I know that many times members will say I'm going to give a courtesy vote to move this out, but I'm gonna, make sure that I kind of reserve my right on the floor. And I 100% agree that we are not close to agreement, and we have work to do. And I can commit that we will keep working on this.

And that is the way we craft legislation here. It's not pretty. Sometimes it can be quite ugly and contentious, but we have to have these conversations. And I'm pleased to be in a position where if we can move this and get to a place where there will be less opposition, that would be our goal, but we'll see each step of the way. But you are right that it has been a very quick turnaround from last week.

This is not the only bill that adds this type of, if you want to say, drama or excitement or last minute amendments. Let's be honest. This happens many, many times, and so, certainly, a light is being shined on this, and we'll continue to work on it.

Well, I thank you both. You're working in leadership in this issue is something that we appreciate. Assembly member Quirk Silva, you stated that, you're trimming out and and the work that you've done. It's certainly appreciated by Californians and by the legislature. Thank you for what you've done, and thanks for getting into how you started and and how you were supportive of these kind of measures.

I really appreciate your work and same thing for US amendment. We actually continue to be a leader in this space. And, we'll continue working on this issue because we do need to find a solution for this housing crisis. Still, some of the member work said somebody's right, somebody's wrong.

What we've been doing is not working clearly, and I do believe that this is one step in the right direction so that we can actually peel those housing units that we need along with all the packages that we're working for housing too.

So with that, thank you again. I will be supportive of your bill today. Again, we don't have a quorum yet. As soon as we do, we do have a motion by Assembly member Johnson, and we'll go through that once we get a quorum. Thank you both for being here.

And one second. Another bill.

Assemblymember, we actually you have a a bill.

Thank you.

That's item seven AB 1976.

Yeah. And I think that When

you're ready, please.

My witnesses yeah. Are coming. But I will start