The Pandemic Is Exacerbating CA Regulatory Hurdles

The pandemic is exacerbating California’s regulatory development hurdles. California already has some of the strictest construction regulations in the country. During the pandemic, they have gotten worse. In addition to new health and safety guidelines, the pandemic has also delayed the entitlement and permit process for development.

“COVID-19 has introduced another level of complexity and uncertainty into a market that was already challenging to navigate,” Sonnet Hui, general manager and VP of Project Management Advisors, tells GlobeSt.com. “The permitting and approval process has stretched out because you can’t have the face-to-face meetings. You can’t go talk to the planning department to get clarification or direction like you would in the past. Those local departments are spread thin, trying to navigate a new reality. It’s harder to get their attention.”

In terms of health and safety, the pandemic has led to new regulations for contractors to follow, including social distancing on construction sites and sanitation rules. “COVID-19 has also complicated construction, which was deemed an essential business in most areas of California,” says Hui. “The same social distancing rules apply on site and there are additional rules around cleaning to try to keep everyone safe. It’s reduced the size of the crew who can be on site, which can slow down projects and increase cost. All of that has to be factored into the project plan.”

Many experts believe that construction costs will decrease as a result of the pandemic, but that is a trend that might not come to fruition. “The conventional wisdom is that construction costs will come down because there’s less of a project demand, but we’re not certain that will play out,” says Hui. “Good contractor and design teams are always in demand. They’ll stay as busy as they can be through this time, even through an economic downturn. And developers that treat them fairly now will be first in line to work with them when the world turns right side up again.”

Overall, a lengthy regulatory process is par for the course in California. “Approvals take time, whether that’s weeks or years,” says Hui. “Developers need to come to the project with that understanding and plan accordingly. Having partners who know the local requirements and have successfully navigated the state regulations is critical. Otherwise, you burn a lot of time and money waiting for approvals, or you’re caught flatfooted when the project is ready to move forward.”