A slew of state laws meant to spur new housing projects in California has had a marginal impact on development, while other factors continue to stall construction. 

Across the state, new housing hasn’t grown significantly despite various laws and bills to foster development, according to Mark Schniepp, director of the California Economic Forecast in Santa Barbara.

“As you can see, they’ve done virtually nothing,” Schniepp said of housing laws. “There’s not much meaningful impact to these. It’s just been a very marginal impact on housing in California.”

He was one of several speakers Thursday afternoon at the Santa Maria Valley Housing Summit. 

The Santa Maria Valley Chamber of Commerce organized the summit held in the Boyd Concert Hall at Allan Hancock College. Speakers outlined what’s helping and hindering efforts to develop new housing on the Central  Coast.

Santa Maria Community Development Director Chenin Dow and Grover Beach City Manager Matt Bronson also spoke about development projects in their communities.

Of the hurdles interfering with housing projects, Schniepp declared the biggest culprit to be the California Environmental Quality Act. 

“CEQA’s the problem, and not necessarily CEQA alone, but also along the coast it’s going to be the California Coastal Act,” he said. “If Sacramento is really serious about wanting to get housing going in California, they would modify CEQA because that’s what’s holding everything up for the most part.”

Other challenges include high interest rates affecting developers and buyers trying to get financing and sellers facing steeper mortgage rates.

Insurance also is becoming “a huge issue” in California for buyers to qualify to mortgages, and for renters since higher rates are passed on to them. Builders also have seen higher rates for risk insurance policies.

“So in all areas, insurance is bogging down the development of housing over time, too,” Schniepp said. 

High prevailing wages for construction workers also increase the cost of construction for housing projects, he added. 

“The other issues are economic uncertainty, which we have a lot of right now because of how rapidly the current administration is moving to unwind government and to deal with the tariff issue, so it’s created a lot of havoc in the capital market as you well know,” he said.

The uncertainty causes buyers to pull back and be indecisive and keeps developers from starting projects, he added. Surveys show builders have a generally pessimistic view of market conditions because of the uncertainty and how tariffs will affect building materials plus the job market in general. 

Declaring we’re in “an age of uncertainty,” he said he expects a correction once the tariff policy is more fully understood. 

Santa Barbara-based housing and land-use attorney Chris Guillen of Brownstein Hyatt Farber Schreck, LLP agreed that state laws have not resulted in an uptick of housing projects across California.

In the past three or four years, Gov. Gavin Newsom has signed more than 150 laws linked to housing, many dealing with issues beyond construction.

However, Guillen said, several laws touted as groundbreaking tools to expedite housing construction haven’t fulfilled the promise.

“These bills are often painted with broad strokes that may streamline permitting but render projects infeasible,” he said, adding that he has heard of projects that received permits, but the developer realized they met the requirements for affordable housing and needed to sell.

That doesn’t mean prevailing wage rules, affordable housing standards or other requirements can’t be beneficial, Guillen said.

“It’s to say when all of these things are packaged together, it really renders some projects difficult to push over the finish line,” he said. 

The state’s ideas, including converting commercial space into housing or allowing for gentle density in single-family neighborhoods, can be good, he said.

“Perhaps what we can do locally is pick up on those ideas and make them fit to the Central Coast where we can actually make movement,” he said. “Is it lowering prevailing wage requirements? Is it lowering inclusionary requirements? Maybe allowing for some construction in a high fire zone where it might not so dangerous to do so?

“Those are all the ideas we need to be thinking about.”