Middle Class Hurt by California Mandate for New Home Batteries and Solar Panels

(p. B1) This month, state regulators updated California’s building code to require some new homes and commercial buildings to have solar panels and batteries and the wiring needed to switch from heaters that burn natural gas to heat pumps that run on electricity. Energy experts say it is one of the most sweeping single environmental updates to building codes ever attempted by a government agency.

But some energy and building experts warn that California may be taking on too much, too quickly and focusing on the wrong target — new buildings, rather than the much larger universe of existing structures. Their biggest fear is that these new requirements will drive up the state’s already high construction costs, putting new homes out of reach of middle- and lower-income families that cannot as easily afford the higher upfront costs of cleaner energy and heating equipment, which typically pays for itself over years through (p. B3) savings on monthly utility bills.

. . .

Adding solar panels and a battery to a new home can raise its cost by $20,000 or more. While that might not matter to somebody buying a million-dollar property, it could be a burden on a family borrowing a few hundred thousand dollars to buy a home.

“You’re going to see the impact in office rents. You’re going to see it in the cost of the milk in your grocery store,” said Donald J. Ruthroff, a principal at Dahlin Group Architecture Planning in Pleasanton, Calif. “There’s no question this is going to impact prices across the board.”

. . .

The Sycamore Square townhouses were the last ones developed in San Bernardino before the solar mandate took effect last year. Glenn Elssmann, a partner in the project who hired Mr. Marini’s company as the contractor, said the added cost of the solar requirement would have made construction of the development impossible. Homes in Sycamore Square started at $340,000 for the four-bedroom, three-bath units and reached as high as $370,000.

Jimmie Joyce, 44, who works in payroll at the Los Angeles County Department of Public Health, will soon close on the purchase of a house in Sycamore Square after trying for almost a year to buy closer to Inglewood, a city near the Los Angeles International Airport where he lives now. His commute will likely increase from about 40 minutes to an hour and a half.

“I, for one, didn’t even plan on moving out that far,” Mr. Joyce said. “The way the market is, people are just overbidding to just try to get in things.” He said he made an offer $10,000 to $15,000 higher than the asking price on a home that ended up with more than 70 bids, including one that was $60,000 more than his.

His new home is already expensive for him, he said, and adding $10,000 to $20,000 more for solar, a battery and other amenities “would make that much more challenging.”

The changes regulators adopted this month will also require most new commercial buildings, including schools, hotels, hospitals, office buildings, retailers and grocery stores, and apartment buildings and condos above three stories to include solar and batteries. And regulators will require single-family homes to have wiring that will allow them to use electric heat pumps and water heaters, rather than ones that burn natural gas. About 55 percent of California’s homes use electric heat and 45 percent use natural gas.

For the full story, see:

Ivan Penn. “Greener Buildings, for a Lot of Green.” The New York Times (Monday, August 30, 2021): B1 & B3.

(Note: ellipses added.)

(Note: the online version of the story was updated Sept. 9, 2021, and has the title “California’s Plan to Make New Buildings Greener Will Also Raise Costs.”)

Californians Move to Texas, to Prosper

(p. 5) A Californian will feel right at home in Dallas even before touching the ground. Like the suburbs around Los Angeles, San Diego and across the Bay Area, Dallas and other Texas metros are built on the certainty of cars and infinite sprawl; from the air, as I landed, I could see the familiar landscape of endless blocks of strip malls and single-family houses, all connected by a circulatory system of freeways.

. . .

My guide through the Dallas suburbs was Marie Bailey, a real estate agent who runs Move to Texas From California!, a Facebook group that helps disillusioned Californians find their way to the promised land. Bailey is herself a Californian. She and her family moved in 2017 from El Segundo, a beach city next to Los Angeles International Airport, to Prosper, a landlocked oasis of new housing developments north of Dallas. In El Segundo, the median home list price is $1.3 million; in Prosper, it’s less than half that.

And in Prosper, the houses are palatial, many of them part of sprawling new developments that brim with amenities unheard-of in California. “It’s like living in a country club,” Bailey told me, which sounded like hyperbole until she showed me the five-acre lagoon and white sand beach in the development where she and her husband purchased a home. Their house is 5,000 square feet; they bought it for about the same price for which they sold a home they owned in Orange County, which was 1,500 square feet.

Bailey’s move gets to the heart of the great California-Texas migration: housing. As she drove me around Dallas’s suburbs, Bailey would point out cute house after cute house now occupied by a Californian. I had been talking about the idea of choosing between California and Texas, but for many people moving here, Bailey suggested, there really was not much choice at all — it was simply that, economically, they could not make their lives work in California, and in Texas, they could.

. . .

Texas, now, feels a bit like California did when I first moved here in the late 1980s — a thriving, dynamic place where it doesn’t take a lot to establish a good life. For many people, that’s more than enough.

For the full commentary, see:

Farhad Manjoo, Gus Wezerek and Yaryna Serkez. “Is Texas the New California?” The New York Times, SundayReview Section (Sunday, November 28, 2021): 4-5.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Nov. 23, 2021, and has the title “Everyone’s Moving to Texas. Here’s Why.”)

Most of Supply-Chain Delays Occur in U.S.

(p. A17) Mr. Levy, 53, says he doesn’t see the supply chain’s “unprecedented crisis” ending before 2023. He’s chief economist for Flexport, a San Francisco-based tech company for global-logistic services.

. . .

The typical transit time for a container in pre-pandemic days was 71 days, Mr. Levy says. That’s how long it took for a full container to depart from Shanghai; discharge in Los Angeles; proceed to a warehouse near, say, Chicago; get trucked empty back to California; and then return to Shanghai. The current transit time is 117 days or more. The greatest delays are in the U.S., owing to port bottlenecks and trucking shortages. The Los Angeles to Chicago leg, for instance, now takes 22 days, 12 more than before. It takes 33 days for the empty container to return to California, compared with 20 in the old days.

Not only does it take much longer to import goods, it’s also become eye-wateringly expensive. “Where it might have cost $1,500 to move a container across the Pacific,” Mr. Levy says, “you’re seeing them go for more like $15,000 per container.”

This surge in transport costs has hit lower-value goods hardest and made quick restocking all the more of a challenge. Mr. Levy talked to a company that sells office supplies. “They were moving a container whose contents were in the order of $15,000 in value. Well, if that now costs $15,000 to move, you have a problem, right?”

. . .

The key question: “When will we start seeing people behave the way they used to in their consumption?” It’s possible we won’t. “People are creatures of habit,” Mr. Levy observes, and the pandemic has led them to take on new habits. So far, at any rate, “we have not seen a reversion to the previous patterns.”

The supply-chain crisis, Mr. Levy contends, has no parallel in history. We’ve had shocks before, such as the oil crisis of 1973. But “global-trade liberalization and distributed specialization,” allied to an ease of shipping and transport, fueled by ideas like “just-in-time inventory”—that’s all new.

. . .

There are specific short-term measures that governments can take, such as liberalization of trucking rules, traffic control, land-use regulation for stacking containers and port-opening hours. But Mr. Levy is “loath to put a small subset of these forward as a panacea.”

For the full interview, see:

Tunku Varadarajan. “THE WEEKEND INTERVIEW; An Insider Explains the Supply-Chain Crisis.” The Wall Street Journal (Saturday, Dec. 18, 2021): A17.

(Note: ellipses added.)

(Note: the online version of the interview has the date December 17, 2021, and has the same title as the print version.)

Bans on Natural Gas for Cooking and Heating Could Most Hurt Low-Income Citizens

(p. A13) This week, New York City moved to ban gas hookups in new buildings, joining cities in blue states like California, Massachusetts and Washington that want to shift homes away from burning natural gas because it releases carbon dioxide, which causes global warming.

Instead, developers in New York City will have to install electric heat pumps and electric kitchen ranges in newly constructed buildings.

. . .

But the gas industry is fighting back and has lobbied in statehouses across the country to slow the shift away from gas. It argues that gas appliances are widely popular and still cost less than electric versions for many consumers. Opponents have also warned that a rush to electrify homes could strain power grids, particularly in the winter when heating needs soar, at a time when states like California and Texas are already struggling to meet demand.

Karen Harbert, president and chief executive of the American Gas Association, an industry group, said efforts to disconnect homes and businesses from the extensive network of gas pipelines would make it difficult to supply those buildings with low-carbon alternatives that might be available in the future, such as hydrogen or biogas.

“Eliminating natural gas and our delivery infrastructure forecloses on current and future innovation opportunities,” she said.

The question of whether to use natural gas in homes has become part of the culture wars, pitting climate activists against industry and other interest groups. Some chefs and restaurant owners have argued that they won’t be able to cook certain dishes as well without gas.

. . .

In a statement, Bill Malcolm, a senior legislative representative at the AARP, said the group had “supported legislative and regulatory initiatives allowing customers to continue to use the fuel of their choice to heat their homes and cook their food.” He added: “Outright bans on certain fuel options would run contrary to that choice.”

. . .

For now, natural gas remains the dominant fuel in much of the country, heating nearly half of American homes. Electric heat pumps, by contrast, satisfy just 5 percent of heating demand nationwide.

. . .

Experts have warned that as more homeowners go electric, gas utilities will still have to pay to maintain their existing network of pipelines, which could mean higher costs for the smaller base of remaining customers, many of whom may be low-income.

For the full story, see:

Brad Plumer and Hiroko Tabuchi. “Gas vs. Electric Stoves Join Partisan Battlefield.” The New York Times (Friday, December 17, 2021): A13.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 10, 2021, and has the title “How Politics Are Determining What Stove You Use.” The online version says that the New York print edition had the title “Gas vs. Electric Stoves on a Partisan Battlefield.” My National print edition had the title “Gas vs. Electric Stoves Join Partisan Battlefield.” Where there is a slight difference in wording between the versions, the passages quoted above follow the online version.)

California Labor and Environment Policies Reduce Nimble Response to Supply Chain Backups

(p. A17) The backup of container ships at the Long Beach and Los Angeles ports has grown in recent weeks despite President Biden’s intervention to get terminal operators to move goods 24/7.

. . .

The two Southern California ports handle only about 40% of containers entering the U.S., mostly from Asia. Yet ports in other states seem to be handling the surge better. Gov. Ron DeSantis said last month that Florida’s seaports had open capacity. So what’s the matter with California? State labor and environmental policies.

Some 20 business groups recently asked Gov. Gavin Newsom to declare a state of emergency and suspend labor and environmental laws that are interfering with the movement of goods. Opening the Port of Los Angeles 24 hours a day “alone will do little without immediate action from the state to address other barriers that have created bottlenecks at the ports, warehouses, trucking, rail, and the entire supply chain,” they wrote.

One barrier is a law known as AB5. Before its enactment in 2019, tens of thousands of truck drivers worked as independent contractors, which gave them more autonomy and flexibility than if they were employees. As contractors, truck drivers can work for multiple companies, which allows them to nimbly respond to surges in demand.

. . .

Another problem: a shortage of storage space. “There is absolutely no available capacity in the warehousing sector due to the difficulty in developing any new capacity,” the businesses noted in their letter. The vacancy rate for warehouses near the Los Angeles and Long Beach ports was a mere 1%, compared with 3.6% nationwide.

If warehouses don’t have space in their facilities or parking lots to unload goods, drivers can’t make deliveries. Some truck drivers are leaving container boxes along with the chassis outside storage facilities and are picking them up later, but that results in a shortage of chassis at the ports. (About half of chassis are leased to truckers from a common pool supplied by private companies.)

. . .

. . . in California warehouse growth ignited opposition from environmental groups, which complain of pollution and noise. Many cities have limited new logistics facilities.

For the full commentary, see:

Allysia Finley. “California Is the Supply Chain’s Weakest Link.” The Wall Street Journal (Friday, Nov. 5, 2021): A17.

(Note: ellipses added.)

(Note: the online version of the commentary has the date November 4, 2021, and has the same title as the print version.)

Disney’s Imagineers “Brain Trust” Leaving California for Florida’s “Business Friendly Climate”

(p. B3) Disney executives told roughly 2,000 workers in Southern California—including many members of its famed Imagineers force—that their jobs would be moving to a new campus in Orlando.

. . .

Though Disney’s narrative on Wall Street has lately focused on its streaming efforts, any change to the parks that are beloved by consumers and protected by employees carries symbolic resonance.

That is especially true for the Imagineers, which have become one of Disney’s most revered and mysterious workforces. Since their founding in the mid-20th century, the Imagineers have been credited by fans and Walt Disney himself with innovating some of the signature touches found in Disney theme parks, including beyond traditional entertainment.

. . .

The costly nature of Disney’s new office points to the sophistication of the tech operations moving there. The Imagineers in particular have come to be known as a Disney brain trust, with new employees joining from Google Inc. or the National Aeronautics and Space Administration.

As the scope of Disney’s parks division has grown, smaller groups of Imagineers have been based in Florida, Shanghai and other parts of the world. With this most recent announcement, the largest concentration of Imagineers will no longer be based in Southern California for the first time since their founding.

Imagineer projects have included the Haunted Mansion and Soarin’ Around the World as well as newer additions such as the Avengers Campus and a “Zootopia”-themed land. Employees are immersed in the Imagineer way: to constantly “plus” their work—that is, make every detail a bit better—and think of each project in a “blue sky” way with no limitations.

Josh D’Amaro, the Disney executive overseeing the relocation, recently ended a parks presentation with a clip of Imagineers watching a walking robotic “Groot” from the film “Guardians of the Galaxy.” And then he wielded a “Star Wars” lightsaber.

“It’s real,” he added, two words that sent online fandoms into frantic speculation over what the Imagineers were cooking up. Patent applications routinely stream out of the division, many dissected by parks disciples for clues about what changes might be afoot.

In announcing the change, Mr. D’Amaro, head of Disney’s parks, experiences and products division since May 2020, said the decision didn’t come lightly since he had moved his own family across the country while climbing Disney’s ranks. He cited Florida’s business-friendly climate in announcing the move and pointed out to employees that the state offered a lower cost of living with no state income tax.

For the full story, see:

Erich Schwartzel “Disney Magic Makers to Relocate.” The Wall Street Journal (Saturday, July 24, 2021): B3.

(Note: ellipses added.)

(Note: the online version of the story has the date July 23, 2021, and has the title “Disney Looks to Relocate Its Theme-Park Magic Makers to Florida.” Where there is a slight difference in wording, the quotes above follow the online version.)

Longshoreman Union Reduces Efficiency of American Ports

(p. A15) Global supply chains are buckling, driving up prices, creating shortages and frustrating consumers.

. . .

One problem is productivity. In Asia, ships are worked 24/7, or 168 hours a week, compared with 16 hours a day, or only 112 hours a week, at Los Angeles-Long Beach. Terminal gates used by truckers to deliver and receive seaborne containers operate only 88 hours a week, vs. 168 in Asia. For larger ships, it takes 24 seconds on average to move a container at the Chinese ports of Shanghai, Qingdao and Yantian, vs. 48 seconds at Los Angeles, according to IHS Markit port-performance data.

. . .

A decades-long history of toxic labor-management relations has led to huge cost increases that discourage operators from expanding work hours, limit their ability to automate terminals, and end in avoidable delays during contract negotiations. Many companies won’t soon forget six months of costly delays at West Coast ports during contract negotiations with the International Longshore and Warehouse Union in 2014 and 2015. More than 30 container ships were backed up at anchor off the ports during that episode. Companies will be closely watching the next round of negotiations in 2022.

There is no sign that the labor-management paradigm will change, and a Democratic administration is unlikely to challenge longshoremen’s unions to make compromises.

For the full commentary see:

Peter Tirschwell. “Behind Your Long Wait for Packages.” The Wall Street Journal (Thursday, June 3, 2021): A15.

(Note: ellipses added.)

(Note: the online version of the commentary has the date June 2, 2021, and has the same title as the print version.)

30% of U.S. Manufacturing Job Growth Is in Southwest

(p. A1) Companies producing everything from steel to electric cars are planning and building new plants in Southwest states, far from historical hubs of American industry in the Midwest and Southeast.  . . .

The Southwest, comprising Arizona, New Mexico, Texas and Oklahoma, increased its manufacturing output more than any other region in the U.S. in the four years through 2020, according to an analysis by The Wall Street Journal of data from the Bureau of Economic Analysis.

Those states plus Nevada added more than 100,000 manufacturing jobs from January 2017 to January 2020, representing 30% of U.S. job growth in that sector and at roughly triple the national growth rate, according to data from the Bureau of Labor Statistics.

. . .

(p. A8) Manufacturers in the Southwest have been relatively insulated from pandemic shutdowns and layoffs, and job growth there is expected to continue.

. . .

Some growth in the Southwest has come at the expense of California, classified in U.S. statistics as part of the Far West. In 2019, nearly 2,000 manufacturing workers in Texas and more than 1,300 in Arizona arrived from California, the most in a decade, the most recent Census Bureau data show. More than 2,700 manufacturing workers have come to Nevada from California in 2017 through 2019.

For the full story, see:

Ben Foldy and Austen Hufford. “Southwest Emerges As America’s New Factory Hub.” The Wall Street Journal (Weds., June 02, 2021): A1 & A8.

(Note: ellipses added.)

(Note: the online version of the story has the date June 1, 2021, and has the same title in search list, but on the article page has the title “The Southwest Is America’s New Factory Hub. ‘Cranes Everywhere.’”)

California Regulators Banned Angela Marsden’s Customers from Eating Outside, but Allowed Next Door “Essential” TV Comedy Workers to Eat Outside


The news report above was posted to YouTube by ABC channel 7 in Los Angeles on Dec. 5, 2020.

(p. 4) For more than a week, tensions have flared between Los Angeles restaurant owners and politicians over the county’s ban on outdoor dining, which health officials say is necessary to slow the surging pandemic — and restaurateurs say is destroying their livelihoods.

The controversy came to a head on Saturday when a restaurant owner shared a video on social media showing tents, tables and chairs set up as a catering station for a film crew — just feet away from her eatery’s similar outdoor dining space, which has sat empty since the restriction went into effect late last month.

“Tell me that this is dangerous, but right next to me — as a slap in my face — that’s safe?” Angela Marsden, who owns the restaurant, Pineapple Hill Saloon & Grill, said as the video panned from her outdoor dining space to the film crew’s catering site.

Ms. Marsden had already organized a protest against the outdoor dining ban before discovering the film tents. On Saturday, she and others gathered outside County Supervisor Sheila Kuehl’s house, saying the government’s uneven application of the rules was crushing small businesses.

. . .

The catering site was for a crew filming “Good Girls,” a comedy television show that airs on NBC, according to Philip Sokoloski, a spokesman for FilmLA, which helps Los Angeles manage film permits. Mr. Sokoloski said the catering site and the film location nearby were both authorized under a permit issued by the city.

. . .

California has declared entertainment industry workers essential, and in Los Angeles County they must follow strict guidelines such as eating in staggered shifts or in an area large enough to stay six feet apart.

Ms. Marsden said in an interview that she saw two people eating without masks at the tables when she went to her restaurant on Friday to pick up paychecks for her employees and supplies for the protest.

. . .

She said she had worked hard to make her outdoor patio compliant with the previous guidelines for outdoor dining before it, too, was banned.

“You name it, we did it,” she said.

For the full story, see:

Giulia McDonnell Nieto del Rio and Nicholas Bogel-Burroughs. “Restaurant Owners See Cruel Disparity in Los Angeles’s Outdoor Dining Ban.” The New York Times, First Section (Sunday, December 6, 2020): 4.

(Note: ellipses added.)

(Note: the online version of the story was updated June 4, 2021 [sic], and has the title “She Couldn’t Open for Outdoor Dining. The Film Crew Next Door Could.”)

California Tech Firms Move to Texas for Its “Laissez-Faire Environment”

(p. B1) Moves by high-profile companies to Texas from California are likely to improve the personal finances of executives and offer employees more affordable housing—but make little difference to the firms’ tax bills.

Oracle Corp. and Hewlett-Packard Enterprise Co. are the latest big corporations to announce moves to the Lone Star State. Elon Musk, the chief executive of Tesla Inc., is also moving to Texas, and the electric car company is expanding there.

The announcements have highlighted the vastly different tax and regulatory systems in the country’s two most populous states. California relies more on taxing personal income, particularly of high-income households, and operates a growing regulatory structure. Texas leans on more regressive property and sales taxes and boasts a more laissez-faire environment. The biggest difference: High-paid executives who move can see their state income-tax bills go from 13.3% to nothing.

. . .

(p. B2) Changing addresses or even moving people and facilities doesn’t necessarily change a company’s tax costs on its own.

. . .

The bigger factor—outweighing any change in business taxes—is likely to be the lower cost of employing workers in the state. For most people, that calculation is more about housing costs, said Darien Shanske, a tax law professor at the University of California, Davis. Housing scarcity and land-use regulations are bigger drivers of payroll costs than taxes.

“Moving a headquarters to Austin where people can afford a place to live, that dominates whether they pay the personal income tax, for most people,” Mr. Shanske said.

For the full story, see:

Richard Rubin and Theo Francis. “Lower Costs Draw Tech Firms to Texas.” The Wall Street Journal (Thurs., Dec 17, 2020): B1-B2.

(Note: ellipses added.)

(Note: the online version of the story has the date December 16, 2020, and has the title “Texas’ Tax Advantage Is All About Individuals, Not Business Taxes.”)

Salt Lake City’s ‘Robustly Redundant Labor Market’

(p. B1) As the pandemic raged through the U.S. in 2020, no metropolitan area in the country expanded the size of its labor force more on a percentage basis than Utah’s capital. It also had the lowest average unemployment rate and the highest share of people working or looking for jobs. These signs of strength helped it rank first among 53 large metro areas in an annual examination of U.S. labor markets conducted by The Wall Street Journal, after ranking No. 4 in 2019.

Other cities that emerged as beacons to job seekers and businesses during the pandemic were, like Salt Lake City, located far from the coasts. Hubs in the Southwest and Midwest such as Austin, Denver, Indianapolis and Kansas City minimized employment losses, kept unemployment relatively low and retained and attracted workers in a year when the U.S. lost more than 9 million jobs.

Some benefited from technology jobs that became even more critical during a time of isolation for many Americans, while others relied on older corners of the economy that were also in high demand. Workers gravitated to these places due to the job opportunities, lower costs and a quieter lifestyle that appealed to some migrants from bigger population centers who were now allowed to work remotely.

The losers were tourist hot spots such as Las Vegas or densely-populated cities such as New York, Los Angeles and Chicago that lost workers as the coronavirus spread. Even once-hot tech hubs of San Francisco, Raleigh, N.C., and Boston suffered de-(p. B8)clines. Some of these laggards were more aggressive with their business lockdowns, allowing rival metros with fewer restrictions and lower costs to capitalize on the chaos.

. . .

Salt Lake City wasn’t immune from the spread of Covid-19, but it was able to avoid multiple shutdowns that crippled other cities. It did so partly because of a shared local effort to keep businesses open. The local chamber of commerce and state health department partnered on a campaign where participating local companies committed to having their employees maintain distance from others, wear masks and stay home when they are sick.

. . .

“It appears to be exceptionally friendly to business here,” Mr. Mulligan said. His company, Pubtelly LLC, sells software to sports bars and similar establishments to manage content playing on their TVs. The Salt Lake area has a healthy (p. B9) mix of growing startups and well-established companies, he said, plus a strong local university network that serves as a pipeline for younger talent.

If his current venture doesn’t pan out, Mr. Mulligan said he would be happy to stay in the Salt Lake area, either working for a local company or launching another business. “I don’t see a challenge with either going to work for someone else, or forming a company with others,” he said.

For the full story, see:

Danny Dougherty, Hannah Lang, and Kim Mackrael. “The New American Boomtowns.” The Wall Street Journal (Saturday, April 10, 2021): B1 & B8-B9.

(Note: ellipses added.)

(Note: the online version of the story has the date April 9, 2021, and has the title “Where Can You Find a New Job? Try These U.S. Cities.”)