Of course, this won’t really affect the rich folks in the government of the People’s Republik Of California
This California Law Will Make Housing More Expensive
Last year, Governor Gavin Newsom signed several bills to reform the California Environmental Quality Act (CEQA), the 1970 statute that has long empowered opponents of development to delay or block new housing. Republicans and Democrats alike heralded the changes as a way to address the state’s chronic housing shortage and offer residents an easier path to the California Dream. “We’ve got to get out of our own damn way,” Newsom declared at the time.
But few noticed that tucked into one of the laws is a provision authorizing state and local agencies to impose substantial fees on new residential projects in the name of fighting climate change. The provision creates a hidden tax on housing that would otherwise be affordable for many families.
This provision, and the regime it sets up, is social policy cloaked in environmental rhetoric. Once again, California is blocking the path to making homeownership attainable, let alone affordable or abundant.
Did those who voted on this read the bill? Or, just the summery, and miss the trees for the forest?
At issue in the law, Assembly Bill 130, is how CEQA treats “vehicle miles traveled” or VMT, associated with new development. Under CEQA, passenger vehicles traveling to or from a project during construction and for the first 20 years of occupancy create “impacts” equal to the estimated total mileage traveled. The “total” VMT for the project are then divided by a “per capita” VMT factor. Only projects with an estimated per capita VMT 15 percent less than the “average” per capita VMT for that city (or the entire county, if outside city boundaries) have “less than significant” VMT impacts, according to the regulation.
Projects that cannot meet the “less than significant” threshold must “mitigate” their VMT impact, either by finding ways to reduce driving below the threshold or, under AB 130, by paying a “mitigation fee” into government-run “mitigation banks.” These banks then disburse the funds to support projects elsewhere—such as transit service or subsidized housing—that in theory will reduce driving. For example, money could subsidize income-restricted apartments that cost more than $800,000 per one-bedroom unit to build in Los Angeles or San Francisco—four times the cost in Dallas. Or it might fund expanded bus service at costs exceeding $1 million annually on the theory that someone elsewhere will ride that bus instead of driving.
Or, it might go in the pockets of NGOs and donors who then return a kickback to the politicians, while maybe 20% makes it to those projects.
The costs of complying with VMT mitigation requirements can be substantial. According to the Coalition for Affordable, Reliable, and Equitable Housing, VMT mitigation fees could reach a 20-year total of $324,000 per home or apartment—roughly $16,000 per year, or $1,350 per month.
They do mean raising the costs by $324K per new construction. From that last link
The Coalition breaks down the Impact of the new VMT housing tax:
- Raises new home prices on top of existing mandates that already add $197,000 to the price of a new home.
- Increases monthly rents by $1,350 — a 48% jump over the state median.
- Disproportionately harms low-income and minority households of color.
- Stalls housing production and eliminates construction and trade jobs.
And, remember, this will easily raise the selling costs and rents of existing homes and apartments, because that’s the way it works. But, I have no sympathy or empathy for those in the PRC who keep voting for the same people who pass this cult crap. What did they think was going to happen?
