“Don’t California my Arizona” has become a popular rallying cry for Arizonans fearful that new residents fleeing the neighboring state might bring its destructive big government policies with them. One important change the Arizona Legislature could make to prevent Arizona from turning into California is to prevent abuse of the zoning process against the development of new housing when a company builds new headquarters in the state.
New legislative language amended into SB 1543 will streamline the zoning process for housing developed in coordination with new company headquarters. This small reform will ensure that when local officials provide zoning approval for a company’s headquarters, the company won’t have to jump through duplicative red tape in order to build new housing nearby to accompany the project. On the housing front, exclusionary zoning represents a major barrier to affordable housing, and there is no shortage of literature outlining the numerous ways that zoning and local regulations depress our housing supply and keep prices unaffordable. For companies looking to build new headquarters, a lack of affordable housing nearby can create significant challenges to building a qualified workforce and retaining the most talented employees.
Importantly, this reform would prevent abuse of the referendum process for individual zoning approvals that has become rampant in states like California. In Arizona, out-of-state unions, particularly from California, have attempted to do the same thing here and are standing in the way of economic progress that would benefit Arizonans. Around the country, but in California in particular, the zoning process has been weaponized by labor unions, environmental groups, and entrenched business interests to prevent development of new housing or retail and recreation spaces. These unions threaten to hold the zoning process hostage in until companies give in to demands for union labor in construction or even workers in the finished site.
While California has seen dozens of abusive votes on local zoning, here is a sampling of some of the more high-profile examples. In 2019, West Hollywood Measure B would have blocked development of a new building for a private social club, retail and office space. The Arts Club project was spearheaded by Gwyneth Paltrow and other investors, but it was opposed by Unite Here Local 11, a hospitality union. Why did this project in particular meet the ire of the local union? Because the developer told the union it was planning to staff the club with non-union workers, so the union decided to hold the development hostage as a result and trigger the referendum. While the referendum ultimately failed, more than a million dollars was spent as a result, and the threat to future developments was clear.
Just North of San Diego in Carlsbad, an even larger development proposed by Los Angeles developer—and future mayoral candidate—Rick Caruso was blocked in 2016 by a similar referendum. The development had already been approved by voters once and would have included a new movie theater, restaurants and multiple retail outlets. There would also have been outdoor trails, and the development preserved a popular u-pick strawberry farm nearby. Instead, environmental activists accused Caruso of evading environmental laws and the environmental process and stepped in to block the development. This time, the development lost on the ballot by fewer than 1,700 votes, and the project did not move forward as planned.
California Unions were most shameless in their opposition to a new football stadium in Inglewood that would bring the Rams back to LA. After the Rams ownership received zoning approval for a new stadium site, the LA County Federation of Labor, AFL-CIO held the process hostage until the developer agreed to union jobs in construction and after the project was complete. Union leadership explicitly agreed to pull their referendum petitions if the developers signed a written agreement with the union. In case there are any doubts about the union’s motives, they simultaneously supported a proposed stadium development in nearby Carson for the Chargers and Raiders because that developer had promised union jobs from the start.
Here in Arizona, we face a major crisis of affordable housing and our economy is slowing down under Katie Hobbs. On the economic front, a process that holds economic progress hostage while extracting additional concessions from companies putting their own capital on the line is not compatible with free enterprise. It’s clear that California unions and environmentalists see an opportunity to weaponize the zoning process in Arizona like they’ve done in California. Out-of-state interest groups like the California Nurses Association—a front group for the AFL-CIO—and environmental groups immediately lined up to oppose other legislation to prevent them from abusing the process. If the Legislature wants to protect Arizonans from these same abuses holding back progress in California, passing the new reforms is an important first step.