Home builders, housing advocates and Fresno leaders say a new law making its way through the California Legislature could raise home prices, widening the gap of housing affordability for central San Joaquin Valley families.
Assembly Bill 199, authored by Assemblyman Kansen Chu, D-San Jose, and the California Building and Construction Trades Council, a labor group, would require workers to be paid the prevailing wage rate on new, privately constructed homes built with any sort of public money or government agreement.
The current wage rate in the Valley is two to four times higher than what is identified by the state Department of Industrial Relations depending on the job class, said Mike Prandini, president and chief executive officer of the Building Industry Association of Fresno and Madera Counties. If the bill passes, it would increase the cost of a house by $35,000 to $60,000, depending on size, and “that’s huge here.”
“It just adds a tremendous cost to housing and people in this area can’t afford that impact, especially lower-income people,” Prandini said.
Local opposition is strong. The building association, the California Apartment Association, and the Fresno, Porterville, Tulare and Visalia Chambers of Commerce have joined the Coalition for Affordable, Reliable and Equitable Housing. CARE Housing is a newly formed group of organizations that oppose the bill.
Mayor Lee Brand wrote a letter of opposition to Chu. “This bill would have major implications in Fresno, which is one of the poorest areas of the state and a city where homeownership is a struggle for the average family,” Brand wrote.
The Fresno City Council weighed in during its Thursday meeting where five council members abstained from voting on a resolution to oppose the bill. Councilmembers Steve Brandau and Gary Bredefeld voted yes.
“It was a record. The most I’ve ever seen is two abstentions on one thing (item),” Brandau said.
“If that bill passes and becomes California law, it’s going to be very detrimental to a state that is just terribly short of all forms of housing – market-rate housing, affordable housing,” he said. “We’re short-stocked now and it will add incredible pressure on the building industry to continue working in California.”
Council president Clint Olivier said abstaining is more a matter of principle and time. There are lots of laws making rounds in Sacramento that are awful, he said. “I don’t believe cherry picking bills from the state Legislature and discussing them at the city of Fresno is a good use of taxpayer time.”
But there are exceptions, he said, such as when a local legislator comes before the board to ask for support on something that would help Fresno.
“There’s no question I oppose AB 199 with all my heart…but I don’t believe that it helps my constituents to have a food fight about something we cannot control.”
The bill passed through the Committee on Labor and Employment on March 15 and will be heard in the Appropriations Committee.