Newsom signs law prompted by Berkeley housing projects that dodged labor standards

Two Berkeley housing projects that used a powerful state program to exempt themselves from local labor mandates have inspired a new law barring future developments from following their playbook.

Gov. Gavin Newsom on Wednesday signed a bill from state Sen. Jesse Arreguín requiring that large developments comply with local labor standards — such as the Berkeley ordinance Arreguín championed as mayor that mandates builders of major projects provide apprenticeship programs and health care coverage to workers.

The ordinance, which went into effect in 2024, was backed by unions in the building trades who argued it would provide job training to boost the construction workforce and ensure workers who do dangerous jobs have coverage if they are injured. Developers opposed it, saying the mandates add millions of dollars in new costs and can make projects too expensive to build.

The companies Laconia Development and Collab Home asserted they could exempt their projects — a 23-story development at 2029 University Ave. and a 20-story building at 2425 Durant Ave., respectively — from the labor mandate because of California’s “density bonus” law .

That law lets developers bypass certain local regulations if they include a share of affordable housing in their project. It’s commonly used to let developments exceed physical regulations such as height limits, but the law also allows builders to claim exemptions from other local requirements that might increase their costs. In addition to the health coverage and apprenticeship requirement, Collab Home also used the density bonus to exempt itself from a requirement that major projects in the Southside neighborhood near UC Berkeley pay workers a prevailing wage.

Arreguín and other supporters of Berkeley’s ordinance charged that the developers were exploiting a “loophole” in the density bonus law to bypass the labor standards. Members of the Berkeley City Council reluctantly approved the projects earlier this year.

The law Arreguín authored, SB 1383, tightens that loophole but doesn’t close it entirely: It blocks developers whose projects are at least 85 feet tall from claiming density bonus exemptions from labor standards. Berkeley’s mandate applied to smaller projects — those of at least 50,000 square feet — meaning many mid-size developments could continue using the bonus to avoid the city’s health care and apprenticeship requirements.

The law also won’t affect the two projects that prompted it, since they have already been granted permits.

“SB 1383 ensures that increasing our housing supply does not come at the expense of worker health and safety, a good-paying job, or construction quality,” Arreguín wrote in a statement Wednesday.

This story was originally published by Berkeleyside and distributed through a partnership with The Associated Press.