Only the most powerful of special interests are engaged in the high-profile dealmaking of the last days of the legislative session. Well, amongst this exclusive list of the powerful are billionaires, such as the owners of the New York real estate investment firm Millennium Partners, the online social media giant Facebook – and Steve Ballmer, the billionaire owner of the Los Angeles Clippers NBA franchise.
These interests are seeking special favors from the Democrats who control California state government to waive costly and time-consuming environmental regulations to build, respectively, a new headquarters, new office buildings, and a new arena.
All of the development proposals are replete with very profitable retail and commercial construction projects as well. All are seeking exemptions from the California Environmental Quality Act (CEQA) for their BFP’s – big fact projects. These are exemptions that only seem to be granted to the rich and powerful – for a price.
In 1970, Golden State political leaders passed CEQA, making environmental protection a mandatory part of every California state and local public agency’s decision-making process. There is no doubt that CEQA, as it was first adopted, and through various amendments to it over the years, has become the nucleus of a burdensome regulatory regime (see the chart) that has been used, abusively, to stifle even the most responsible growth in California.
CEQA, and lawsuits stemming from its provisions, have made it substantially more expensive, and in many cases impossible, to build in this state, thus creating scarcities and driving up costs. The end result is an imbalanced system that makes construction of projects – including all types of housing – considerably more expensive.
It is said that the final weeks and days of the legislative session are when the worst pieces of sausage-making take place. It is when bills that have gone through most of the legislative process, including policy hearings, are suddenly gutted like fish and replaced with new wording that has no relation to the original bill. It is when dealmaking takes place that is unsavory – “You support my bill which was dead over here, and I will support your bill in return” – and such. Quid-pro-quos like that are potentially illegal, and often are endemic to the corruption of which the California capitol reeks.
Even worse in this case is that the unions actually file many of the lawsuits under CEQA to drive up costs, and force developers, on bended knee, to approach the legislators who often act as pawns for the unions’ agenda.
To quote Assemblyman Dante Acosta (R-Santa Clarita) in a recent column in the Los Angeles Daily News editorializing against such bills, “Big labor uses the threat of a CEQA lawsuit to leverage builders into agreeing to expensive contracts. A project’s competitors will tie up proposals in years of faux-environmental litigation, costing builders millions of dollars in legal fees and delays before they can break ground.”
So what does deal-making look like for these particular bills, SB 699 and SB 789? Theses sorts of deals typically include requirements that all construction be done with union labor. Less spoken of are the politically connected construction firms and vendors – usually donors to political candidates and causes – that are given the work. For the sporting arenas, it’s not uncommon to see the politicians eventually enjoying the perks of skyboxes and the patrician life that comes with power used to help political allies. The tradeoff? Exemption from CEQA’s regulatory regime, which can shave years off of a development timeline, with savings in the tens of millions – and more. This is big money stuff!
Of course, what really needs to happen here is broad-based reform of CEQA – to the benefit of all that would seek to develop their property responsibility. This kind of broader reform, for all, would have a hugely positive impact on housing construction, and do much more to create new housing in California than some socialistic housing bond measure, borrowing from our children to pay CEQA-inflating housing prices for those priced out of the market.
While I am sure there is a temptation, if you are a legislator who thinks that CEQA’s regulations are too onerous, to vote for any bill that would exempt anyone, anywhere, from any part of it, that is a short-sighted point of view. As long as the unions and the well-connected can play this sort of shell game, it actually makes the goal of real reform of CEQA that much more elusive.
I will end this column with an appropriate quote from conservative former Louisiana Republican governor Bobby Jindal, who said: “We need an equal opportunity society, one in which government does not see its job as picking winners and losers. Where do you go if you want special favors? Government. Where do you go if you want a tax break? Government. Where do you go if you want a handout? Government.”
Truer words have not been spoken. Reform CEQA for all. Don’t pick winners, and losers, through narrowly crafted legislation.
Jon Fleischman is the Politics Editor of Breitbart California and his columns appear on this page. Follow him on Twitter here.