CBIA In the News
California homes cost more than ever. What are Gov. Newsom and lawmakers doing about it? | SacBee
Dan Dunmoyer, president and CEO of the California Building Industry Association, said some lower-profile laws are making incremental change. He pointed to legislation like a 2019 law that makes it harder for cities to restrict new development.
It’s scheduled to sunset in 2025, but Sen. Nancy Skinner, D-Berkeley, introduced a new measure this year to extend that deadline until 2030.
Dunmoyer said more leadership is needed from Newsom and legislators to reduce other barriers, like development fees and regulations that make construction an expensively long process.
“We need to really look at this holistically, comprehensively,” Dunmoyer said. “We really need to make sure that we take all the necessary steps to address the housing crisis.”
Calif. aims to cut gas use in homes, stops short of ban
California's energy bosses want to make it tougher to put gas appliances in new homes, but they aren't planning to snuff out natural gas use.
A proposed California Energy Commission rewrite of the state's building code adds new mandates to make homes "electric-ready." It creates financial incentives for installing electric options for home heating and hot water.
The California Building Industry Association, a trade group whose members develop 85% of new buildings in the state, said the proposed code would raise costs. The state's median home price in March was $759,000, according to the California Association of Realtors.
"CBIA is concerned with not just the current cost of a new home in [California], but the ongoing costs to the homebuyer as well," Christopher Ochoa, senior attorney with the group, wrote in an email.
He cited data from the California Center for Jobs and the Economy that said Golden State residential electricity prices are 63% higher than the rest of the country.
"Not a good look for going all-electric," Ochoa added.
Draft building code urges more electric, less gas | Bakersfield.com
A newly released draft of California's 2022 building code proposes probably the most ambitious electrification policies in the country but stops short of a ban on new natural gas-burning appliances that climate activists had pushed for.
"Bottom line, these regs are putting the cart before the horse," the California Building Industry Association's senior counsel on codes, regulatory and legislative affairs, Christopher E. Ochoa, said by email Friday.
Ochoa at the building association said the group has stated its support toward an all-electric future "in a planned and strategic manner," similar to the way solar requirements took effect in 2020 after almost a decade of work.
"There is always a need to ramp up market penetration of the products, educate builders and installers of the products, etc.,"he wrote.
He said concerns remain about the costs of residential electrification and whether the state's power grid is up to the task. A report addressing these topics was due in January but hasn't been released, he noted.
SKELTON: California’s population growth has slowed. Blame the exorbitant housing costs
“It takes forever to get through the approval process in California — much longer than any other state,” says Dan Dunmoyer, president of the California Building Industry Assn.
“In California it can take 20 years to get a project going. In Arizona and all neighboring states, they can do it in less than 20 months. Time is money. A lot of the housing cost is built into how long it takes to develop land. Then how much in fees local government charges. No other state comes close.”
The Legislature and various governors have wrestled with the housing crisis for years without agreeing on a comprehensive long-term solution.
The pandemic has created even greater demand for single-family houses, Dunmoyer says. That’s because many employees were ordered to work from home.
“A couple living in a loft in San Francisco, stuck in a small place with a crying kid, they want to have a bigger place with a backyard,” Dunmoyer says.
“We’ve got people buying homes in Bakersfield who now can work there using Zoom for companies located in center city L.A. Sacramento is exploding with people from the Bay Area.”
Skyrocketing Lumber Prices Hit California New Home Buyers Hard
“This is a new record for us,” said Dan Dunmoyer, president and CEO of the California Building Industry Association.
Dunmoyer says this problem on average is adding about $24,000 to the cost of building a home.
“Each thousand dollars in added cost prices out 12,300 families from being able to buy a home in California so, when you add $24,000, you’re talking about pricing out hundreds of thousands of Californians,” Dunmoyer explained.
With State VMT Law Limiting Home Building, Clovis Takes Action
A state law meant to reduce the miles people drive may be unintentionally driving up the prices of new homes. And, according to the California Building Association, the law — commonly referred to as Vehicle Miles Traveled — poses “a big pause button” for residential home construction.
Nixing Single-Family Zoning: Will It Make Housing More Affordable?
Dan Dunmoyer, president of the California Building Industry Association, said his industry welcomes the opportunity to build any new housing. He cautioned, however, that so-called missing middle homes won’t drive down California’s stratospheric home prices that much.
Dunmoyer said the same factors that make single-family homes expensive — the long regulatory process, fees and expensive environmental requirements — will make housing like duplexes and triplexes expensive, too.
There are also questions about demand, he said.
“If you’re out in a more rural or suburban community, single-family detached [homes] are going to sell better, faster, quicker,” he said. “If you’re in an urban core where you can put together some really attractive fourplexes, assuming (municipalities) don’t over-fee it, you might be able to see something pencil-out better.”
The California Building Industry Association blames a new state law implementing Vehicle Miles Traveled as an environmental metric for housing construction, for putting the brakes on building statewide.
The CBIS says the Governor’s Office of Planning and Research ignored organizations, municipalities and local governments last year that clamored for the VMT law to be delayed until the COVID-19 pandemic has passed.
Boards of Supervisors from Fresno, Kings, Tulare, Kern, Madera, and Merced all unanimously passed resolutions seeking a two-year delay of the law.
The CBIA says the OPR is now asking his association to give an assessment of how things are going.
“That’s their job,” says Dunmoyer. “They’re supposed to determine how we plan our cities and our communities and they should know how it’s working.”
Dunmoyer says since Newsom has been governor, the state has had a declining permit pulling process across the state of California.
Developers have viewed Becerra’s actions as overstepping of the state’s authority, particularly when it comes to safety and development laws.
“We think Becerra is stepping over the line, primarily because you can’t build in these areas without putting together a very sophisticated plan fully approved by the local fire chief, fully approved by all the fire officials,” California Building Industry Association CEO Dan Dunmoyer said in a statement on Wednesday. “We are building parks, we’re building entire infrastructure systems that don’t burn and can protect these communities from fires.
“California is a gorgeous state, but it has mudslides, it has fire, it has flooding, it has earthquakes. You plan accordingly. And you mitigate it, you protect it, you use tough codes, and that’s what we’ve done.”
Dunmoyer also noted that rebuilding in urban areas is often much more difficult due to local opposition and higher costs compared to more rural areas.
“We think (Becerra) is stepping over the line, primarily because you can’t build in these areas without putting together a very sophisticated plan fully approved by the local fire chief, fully approved by all the fire officials,” said California Building Industry Association president and CEO Dan Dunmoyer.
Aside from California’s strict building codes in wildfire areas, “we are building parks, we’re building entire infrastructure systems that don’t burn and can protect these communities from fires,” he said.
It’s often unrealistic to rebuild in urban areas, as Miller and advocates including Gov. Gavin Newsom suggest, because of community opposition and the high costs compared to rural single family homes, particularly once structures climb above three stories, Dunmoyer said.
The push to ban natural gas hookups in newly constructed buildings has mushroomed in California since Berkeley passed the first prohibition in 2019.
...the California Building Industry Association, expressed concern to Cortese about potential impacts on “ratepayers, construction costs and grid reliability,” according to Christopher Ochoa, a senior attorney with the group.
“We not only have a climate crisis, we have a housing crisis as well,” he said. “Whether it’s housing inventory, affordability or homelessness. How do you balance the costs?”
‘It doesn’t pencil’
Housing of any kind gets exponentially more expensive the higher you build, said Nick Cammarota, general counsel for the California Building Industry Association. And density housing projects of several stories with 20% set aside from very low- or low-income housing units are going to pass the costs on to tenants paying full fare.
“The reason (affordable housing) doesn’t get built is because it doesn’t pencil,” Cammarota said.
Then there’s local opposition. “Density attracts opposition,” Cammarota added, “even if it’s just the same density as what’s surrounding it.”
Dan Dunmoyer serves as the president and CEO of the California Building Industry Association. He tells GV Wire℠ since the new law took effect there’s been a dramatic slowdown in new residential construction.
“We’re seeing substantial delay because cities and regional governments were not ready for VMT,” said Dunmoyer. “We call it the big pause button, which is exactly the wrong thing we need right now in California for housing and the housing crisis.”
As for what that means for the middle class wanting to buy a home in the Golden State, Dunmoyer doesn’t mince words.
“Move. Move to another state. You really can’t do it here,” said Dunmoyer. “We can build homes. It’s just homes for millionaires.”
He points to places like Idaho, Texas and Arizona as places where builders actively pursue people looking to leave California.
“Even after the Camp Fire, you’d think we would have seen a spike in the number of permits, and yet we haven’t,” said Dan Dunmoyer, president and chief executive of the California Building Industry Association. “Most big insurance companies will just cut you a big check, and you can be sitting there looking at a check for $900,000. And you talk to contractors and they say: ‘Sure, I can build you a home, but I’m backed up for a year and a half.’ So we’re seeing a lot people just cut and run.”
Kristen Miller: Santa Barbara City Council Should Focus on Economy, Not Overreach on Natural Gas Ban
In Santa Barbara, natural gas is four to six times cheaper than electricity. The California Building Industry Association estimates that swapping out natural gas appliances for all-electric alternatives costs the average Southern California household more than $877 a year in higher energy bills.
The California Building Industry Association, a trade group whose members develop 85% of new buildings in the state, is girding for ever-tougher rules over the next five years. "The writing's on the wall," said Bob Raymer, technical director with the industry group. "They're going to want electric space and water heating come 2026."
The California Building Industry Association hopes to shape the timing of natural gas restrictions. Raymer argues that state officials need to allot more time for developers and heat pump manufacturers and installers to shift toward electrification of buildings.
California "has made it very clear it's decarbonizing, and that means both the new and existing housing stock is going to go through some major changes, the same thing for the commercial stock," Raymer said. "We get that."
Whether or not the bill passes, activists hope that the California Energy Commission will ban natural gas in new construction when it updates its building code next year.
Some utilities and developers like the ones represented by the California Building Industry Association have opposed the total elimination of gas hookups.
Morgan Morales, a spokesperson for the group, wrote in an email that “a piecemeal approach to energy usage for homes hurts consumers and jeopardizes power supply.”
“A comprehensive and incentive-based approach is needed to solve our climate problems, not mandates and restrictions," she said.
“He’s really taken on a much more global view of housing and community that few others are even contemplating,” says Dan Dunmoyer, president and CEO of the California Building Industry Association (FivePoint is a member of the trade organization). “The typical model is to put roads and sewers and a school or two, and then sell the land to a home builder. In Valencia, he’s creating an entire community with a commercial center and jobs and net-zero-energy homes. We do need more housing, so how do you do it and find a balance between environmental protection and social equity and the whole community component of building homes? He has the mindset and capacity to do that and is really challenging people to think more holistically.”
Morgan Morales, a spokesperson for the California Building Industry Association, wrote in an email that the group "believes that with housing costs soaring, and California suffering blackouts, a piecemeal approach to energy usage for homes hurts consumers and jeopardizes power supply."
"A comprehensive and incentive based approach is needed to solve our climate problems not mandates and restrictions," she wrote.
Trade groups representing industries that have often been at odds with California's environmental regulations were tentatively optimistic about the executive order. Dan Dunmoyer, president and CEO of the California Building Industry Association, told The Desert Sun in a statement that he looked forward to working with the governor to meet both this benchmark as well as goals set for increased housing across the state.
“The governor’s plan to conserve California’s beautifully diverse environment while ensuring housing for all is a step in the right direction to help solve California’s housing and homeless crisis," Dunmoyer said.
To date, no legislation related to wildfires — or any other climate-related hazard — impacts California’s arcane housing allocation system. (That system tells each region how much housing it’s required to build over a stretch of five or eight years.) But once wildfire risk is codified as a valid reason not to build, what’s next? Extreme heat? Nick Cammarota, with the California Building Industry Association, articulated that viewpoint when he called the bill “a housing killer.”
“We don’t want to have gentrification. We don’t want to have seismic risk. We don’t want to have sea level rise or wetlands, or ag land preservation or floods, or toxics. Or you name it,” he continued. “The entire state is covered with imperfect places to build.”
Dan Dunmoyer, CEO & President of CBIA on Matt Levin and Liam Dillon's Gimme Shelter Podcast discussing the housing crisis in California.
President & CEO of CBIA, Dan Dunmoyer explains the million dollar question, How do you solve the housing crisis in CA?