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California Republicans Argue New Bills Will Increase Housing Costs

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Sacramento, CA — Republicans in the state Senate argue that bills awaiting the Governor’s signature designed to bring down housing costs would have a reverse impact.

Under long-standing law, public works projects in California are required to pay a “prevailing wage” that is often higher than what would be paid if it was a private development project. Assembly Bill 520 would require prevailing wage to also include private projects that receive over $500,000, or 2-percent of the overall funding, from public subsidies such as grant funding. This would impact many low-income housing projects.

Senate Republican Leader Shannon Groves has written a letter to Governor Gavin Newsom, arguing, “Some California builders have already paid up to $100,000 in permits and waited months, if not years, before they pound their first nail.”

Groves has also sent a letter in opposition to Assembly Bill 1482 which would only allow a landlord to terminate a lease “for cause” and limits rent increases to 5-percent per year. Groves writes, “This bill is deeply flawed and does almost nothing to address the shortage of housing in California.”

The letter goes onto state, “Just last year, researchers at Stanford University published a study that looked at the effects of rent control on cities in the Bay Area. They found that rent control caused the rental housing supply to decrease by 15% and rental prices to increase by 5%. The study also found that buildings subject to rent control are 10% more likely to convert to a condominium or other arrangement to avoid rent control.”

Groves argues that reforms to the California Environmental Quality Act are a better avenue to address California’s housing shortage.