SBE News

Capitol Update 5/2/2023

AB 1000 – A De Facto Ban on New Warehouses – Dies in Local Government Committee

Assembly Bill 1000 (Reyes; D-Colton), a de facto ban on warehouses, was heard by the Assembly Local Government Committee yesterday, where it failed to receive the required votes to pass through the committee.  The bill ultimately received two aye votes and one no vote, with five committee members abstaining from the vote. Without sufficient votes to pass through committee, AB 1000 failed.  The Committee Chair granted reconsideration making AB 1000 a two year bill, so while it has been defeated for the time-being, it’s likely to resurface. AB 1748, authored by Assembly Member James Ramos (D-San Bernardino), passed through the Local Government Committee unanimously. This bill would establish a 300-foot setback requirement on warehouse developments or expansions with more than 400,000 sq. ft. of building space that are adjacent to sensitive receptors unless the local agency adopts alternative policies relating to industrial land use. AB 1748 only applies to Riverside and San Bernardino counties. 

Construction Safety Week kicks off Monday

Construction Safety Week, the annual, weeklong campaign to raise awareness of the industry’s commitment to a safe workplace, begins May 1 across jobsites in the U.S. and Canada. This year’s theme — “Strong Voices, Safe Choices” — advocates for everyone in the workplace to feel empowered and confident in speaking up when they see potential safety hazards. 2023 Safety Week members include Hensel Phelps, Mortenson, Gilbane, Granite, Suffolk and Fluor, among various other construction firms. A full list of members can be found on Construction Safety Week’s website.

Consumer confidence drops to lowest point in 9 months

The Conference Board’s consumer confidence index declined for the third time in four months and reached a nine-month low in April. Concerns about the economy’s future appear to be growing, as the share of survey respondents planning to purchase vehicles and vacations fell to their lowest levels in months, and plans for household appliance purchases hit their lowest level since September 2011. Consumer outlook on present conditions improved slightly from March, but the six-month outlook declined and remained below levels that tend to indicate a recession is likely in the coming year. Full Story: The Associated Press  Reuters  Bloomberg

Dodge: Construction starts rose 19% in March

Total construction starts rose 19% in March, the second straight month of increases, according to Dodge Construction Network. “Several large manufacturing projects are breaking ground, pushing nonresidential buildings higher, while a nascent recovery in single-family starts has been supporting residential growth,” said Richard Branch, chief economist for Dodge. Full Story: Construction Dive

Subcontractors’ profit hit by $97B in unforeseen costs

Labor and materials cost subcontractors $97 billion more than expected last year, leading to reduced profitability at 57% of firms, according to a survey by Billd. However, over 50% of respondents say their company saw 1% to 20% growth last year, and 58% of respondents express interest in taking on bigger projects this year. Full Story: Construction Dive

Labor Market Remains Strong Despite Cuts Across Tech, Financial Industries

The Washington Post reported the US job market “has remained remarkably resilient” despite continued layoffs, with Meta, Whole Foods, Lyft, and Deloitte announcing job cuts this week. The losses “have been relatively contained within tech, financial services and housing,” which “all saw ballooning growth during the pandemic and are now struggling to readjust.” The rest of the market is “extremely tight, with the unemployment rate holding strong at 3.5 percent in March, and many employers desperate to hire.”

Federal Reserve Expected To Again Raise Rates Next Month But “Signal A Potential Pause”

Bloomberg reported the Federal Reserve is “on track to raise interest rates a quarter percentage point next month and signal a potential pause from the steepest hiking campaign in decades.” Bloomberg reported that while “policymakers across the hawkish and dovish ends of the spectrum stress that inflation is still too high and the US central bank has more work to do,” they are “also concern[ed] that fallout from recent bank failures will slow the economy.”

Yellen: US debt default would bring economic catastrophe

If Congress does not raise the debt ceiling and prevent a default on US government debt, this would lead to an “economic catastrophe” that will push interest rates higher for even longer, Treasury Secretary Janet Yellen said. “A default would raise the cost of borrowing into perpetuity. Future investments would become substantially more costly,” Yellen said. Full Story: Reuters  

FHWA provides $848M in grants for infrastructure resilience

The Federal Highway Administration has offered competitive grants totaling $848 million to make transportation infrastructure more resilient against natural disasters. Applications are accepted until Aug. 18 for the grants, which come under the Promoting Resilient Operations for Transformative, Efficient and Cost-saving Transportation program, created by the bipartisan infrastructure law. Full Story: Engineering News-Record (tiered subscription model)

How states rank in highway quality, cost-effectiveness

Virginia, North Carolina and Tennessee top the Reason Foundation’s ranking of states for highway systems that balance cost and quality. Rated worst in the 27th edition of the list are Alaska, New York and Hawaii, in that order. Full Story: Reason Foundation

March jobless rates down in 18 states; payroll jobs up in 2 states

In March, unemployment rates were lower in 18 states, higher in the District of Columbia, and stable in 32 states. Nonfarm payroll employment increased in 2 states and was essentially unchanged in 48 states and the District.

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Compensation costs up 1.2% Dec 2022 to Mar 2023 and up 4.8% over the year ending Mar 2023

Compensation costs increased 1.2 percent for civilian workers, seasonally adjusted, from December 2022 to March 2023. Over the year, total compensation rose 4.8 percent, wages and salaries rose 5.0 percent, and benefit costs rose 4.5 percent.

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Banks concerned about falling CRE valuations

A decline in commercial real estate valuations and associated risk to banks’ balance sheets are causing concern among bank executives. “The question we all have is whether contagion will spread from the office sector,” says Bryan McDonnell, head of real estate debt at PGIM. “If you get to a confidence issue, then, all of a sudden, people might put all commercial real estate in the same bucket.” Full Story: Financial Times

Executive order signed to prioritize environmental justice

President Joe Biden has signed an executive order to establish the White House Office of Environmental Justice, which coordinates environmental justice initiatives across federal agencies. The order also directs federal agencies to implement climate change mitigation measures in communities and to inform communities if federal buildings release toxic substances. Full Story: The Hill

$562M in federal funds available for climate resilience

Climate resilience is the focus for $562 million the Commerce Department plans to distribute across 30 states. The funding from the bipartisan infrastructure law and the Inflation Reduction Act goes to nearly 150 projects to address flooding, storm surge and extreme weather, Commerce Secretary Gina Raimondo says. Full Story: Construction Dive

Empty downtown offices being turned into housing

Downtown offices in many cities are being converted into housing as demand for offices lags during the pandemic. Cities are incentivizing the process if developers guarantee at least some conversions result in affordable housing. Full Story: The Associated Press  

Key leadership practices meet infrastructure challenges

Amid constantly changing challenges, core leadership practices are vital to accomplish major infrastructure projects that pay off. Lihy Teuerstein reviews three vital practices toward that end, beginning with opening and maintaining a productive line of communication with communities. Full Story: Forbes (tiered subscription model)  

$690M in Calif. grants going to 28 transit projects

Twenty-eight transit projects around California will benefit from a new allocation of more than $690 million in California State Transportation Agency grants. The funding, targeted to help disadvantaged communities while also reducing car usage, is supported by the state’s Greenhouse Gas Reduction Fund. Full Story: Mass Transit  

Implication of Calif. gas pipe ruling seen in N.J.

A court ruling in California that struck down a ban on natural-gas piping in new construction may have implications for New Jersey, according to Eric DeGesero, executive vice president of the Fuel Merchants Association of New Jersey and New Jersey Propane Gas Association. “Not only is mandated building electrification outrageously expensive for New Jersey businesses, homeowners and renters, the Ninth Circuit has ruled states and localities are preempted under federal law from issuing such mandates,” DeGesero says. Full Story: ROI-NJ (N.J.)

Google reportedly halts campus project in San Jose, Calif.

Google has stopped construction of an 80-acre campus in San Jose, Calif., despite completion of demolition, and might not resume the project anytime soon, sources say. The decision comes as fears of a recession and declining ad revenue cut into Google’s growth.Full Story: CNBC

Legislative Calendar:

·        April 28 – Last day for policy committees to hear fiscal bills

·        May 5 – Last day for policy committees to hear non-fiscal bills

·        May 12 – Last day for policy committees to meet before June 5

·        May 19 – Last day for fiscal committeesto hear and report to the floor bills introduced in their house

·        June 2 – Last day for each house to pass bills introduced in that house

·        June 15 – Budget must be passed by midnight

·        July 14 to August 14 – Summer recess