Editorial
 
 


If there's one place in the United States that cannot afford to get any more expensive to live, it's 
California.  It's a state where only 1/3 of the population can afford the median home price, which 
now hovers around half a million dollars.  Take into account the absurdity of Bay Area housing and 
the fact that California's average monthly rent is 50% higher than the rest of the country, and it's 
obvious why the market needs to be reigned in.
	
One way to completely destroy the possibility of affordable housing in California is to increase 
litigation between contractors, remove them from the workforce, and monetarily penalize them.  How can California's housing demand level out when contractors are being pulled into the courtroom?  That's what California's recent legislation, Assembly Bill (AB) 1701, is aiming to do.  This bill, effective in January 2018, will require a contractor to assume, and be liable for, specified debt owed to an employee of a subcontractor.  AB 1701 also allows the employee to bring civil action to the general contractor, not the subcontractor, in an attempt to receive payment.  In fact, AB 1701 effectively makes frivolous and time-consuming litigation seemingly the only way unpaid workers can receive payment in these types of circumstances.  
	
This makes it very likely that a general contractor, who has already submitted payment to their subcontractor, could then be responsible for paying another company's employees who have taken civil action for nonpayment.  Paying twice for a job completed is a guaranteed way to discourage growth within the industry.  What kind of business owner in their right mind would want to sign up for that?  California has a handful of roadblocks that stand in the way of overcoming their housing crisis.  Overly complex regulations, residential opposition to new developments, and high land costs all contribute to the affordable housing shortage.  Adding an assembly bill that gives a green light to costly and time-consuming litigation will only make matters worse.
	
The bill was authored by Assembly Member Tony Thurmond, D-Richmond, California, and is sponsored by the California Conference of Carpenters.  Thurmond remarks that his bill is intended to incentivize the industry to use responsible subcontractors so as to aid in the creation of more middle class jobs.  He notes that general contractors have had the luxury of ignoring the disreputable practices that subcontractors have frequently employed.  Sure, those in the industry should make it a habit to choose reputable subcontractors, but to harshly penalize one contractor for another contractor's delinquencies is unfair.  In addition to harming general contractors and the industry, unintended consequences of AB 1701 include the reduction of affordable housing, increased homelessness, and a lower standard of living for low-income families.
	
It goes without saying that under normal circumstances, employees deserve to be paid.  However, AB 1701 has a catastrophically odd way of ensuring that happens.  AB 1701 isn't protecting workers, which can be assumed that's what the legislation intended when it was introduced.  Instead, it is rewarding crooked subcontractors, condemning general contractors, discouraging new housing growth, hurting the industry, and ultimately driving up the cost of housing further out of reach for Californians.

Marcus Dodson
editor & publisher
Adding Fuel to the Fire
California's New Legislation 
Rewards Crooks & Condemns Contractors