GRSM's Construction Group is pleased to publish the latest issue of our Construction Law Update, a quarterly take on trends of interest to design professionals, contractors, and developers throughout the country.
Second Quarter 2024
| INSIDE THIS ISSUE |
| I. San Francisco Housing Policy and Practice Review |
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By Matthew Peng |
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In January 2023, San Francisco announced an ambitious plan to build 82,000 new housing units by 2031. However, a report by Governor Gavin Newsom shows the city's progress has fallen short just nine months in. San Francisco needs to add 10,000 new homes annually, including 5,800 affordable units, but the report reveals the city permitted less than one home per day in 2023, highlighting a significant gap in meeting targets. The Governor’s report, known as the San Francisco Housing Policy and Practice Review, unveils the city's struggles as the most costly and time-consuming place to build housing in California. Developers face an average timeline of 523 days for project approval and an additional 605 days for building permits. Governor Newsom stresses that the state's housing affordability crisis, especially acute in San Francisco, demands decisive action to tackle longstanding barriers to housing development. San Francisco's failure to comply with state housing laws, as outlined in the report, leads to delays caused by discretionary review processes and local political decisions. Violations include breaches of the California Environmental Quality Act, the state density bonus law, and the Housing Accountability Act. These violations could occur when local decisions unnecessarily delay or obstruct housing development, contradicting the intent of state laws designed to promote affordable housing construction. To address these issues, the report suggests 18 necessary actions and 10 additional measures, including streamlining the building permit process and limiting objections to projects meeting city regulations. Without reforms, the city risks losing state funding and local control over development decisions. The state has authority to withhold funding from San Francisco if the city fails to meet its goal of adding 10,000 new homes annually, including 5,800 affordable units. It is understood that the threat stems from various violations of state laws such as the California Environmental Quality Act, the state density bonus law, and the Housing Accountability Act, which San Francisco has reportedly breached. If the city continues to fall short, the state could involve itself even more. This scenario could unfold if the state intervenes to enforce compliance with housing targets and streamline the approval process, potentially overriding local regulations that hinder housing construction. San Francisco is likely to resist significant state interventions, setting the stage for contentious debates and legal challenges in the coming years. |
| II. Proposed Legislation Offers the Promise of a Much Needed State-Wide Building Code in Missouri |
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By Alexander Oakes |
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Missouri is one of the few states that does not have a statewide building code by which contractors must abide.¹ Missouri has historically left the adoption and enforcement of such codes to its local municipalities and counties.º However, on February 28, 2024, Representative David Casteel introduced the Missouri Building Codes Act into the General Assembly.² This law would introduce statewide standards for plumbing, mechanical, electrical, property maintenance and other renovation and construction activities.º If passed, the bill would implement baseline standards for the entire State of Missouri thereby creating the minimum standards that those in construction must abide by irrespective of the building codes established by the particular locality in which the work takes place.º Of course, there is nothing preventing said municipalities from requiring more stringent standards beyond those required by the state.ª Additionally, this Act would require that the statewide codes are reviewed and updated at least every six years.ª This law has a proposed effective date of August 28, 2024, although the bill has not yet made it out of the General Assembly.³ ª There is a strong likelihood it will pass given how favorable it will be to contractors’ efforts to obtain requisite permits. The differing standards for each geographical location in Missouri results in great difficult for contractors applying for permits as they consistently are required to reform their approach to the different standards depending on which county or city the work is to be performed in.² For cities and counties which have simply not updated their ordinances for decades, or only amended its ordinances after a major disaster strikes, or adopted the International Building Code, or revamped their ordinances every few years, the uniformity of a statewide standard should provide great clarity to contractors and attorneys, while significantly decreasing the frequency of contractors deviating from building codes.º _______________________________________________________________ ¹ Zind, Tom. “Missouri Bill Calls for Establishing a State Building Code.” EC&M. March 29, 2024. www.ecmweb.com/national-electrical-code/article/55000900/missouri-bill-calls-for-establishing-a-state-building-code |
| III. Recent Successes |
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Partner J. Patrick Norris and Senior Counsel Arden Lowndes obtained summary judgment for framing subcontractor in construction defect action just weeks before trial, on the grounds that the Plaintiff’s claims were time-barred by the 13-year statute of repose. They successfully argued that there was no admissible evidence of gross negligence in the record after four years of discovery. Consequently, the gross negligence exception to the statute of repose was deemed unavailable to the Plaintiff, despite the Plaintiff’s efforts to create a material issue of fact with a last-minute affidavit from its expert, who opined that the contractor had been grossly negligent. ____________________________________________________ Partner Lisa Cappelluti prevailed on a summary judgment motion in a Los Angeles premises liability case. |
| IV. GRSM Construction Attorneys Making Headlines |
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Partner Lisa Cappelluti spoke on the latest in Construction Trends at the 30th Anniversary West Coast Casualty Conference in May in Anaheim, California. ____________________________________________________ Partner Christine Barker hosted “WIC Tuesday Talks – Maximizing Litigation Success: Working with Experts at Every Stage" on June 25, 2024. This webinar discussed working with experts from pre-litigation through post-trial. You can view a recording of this webinar here. |
| V. GRSM Construction Law Blog |
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The GRSM Construction Law Blog continues to post new content addressing topical issues affecting the construction industry throughout the country. From analysis of new court decisions, discussions of timely legislation, and commentary on real-world, project-specific issues, GRSM’s Construction Law Blog provides insight on the issues that affect the construction industry now. We invite you to visit the blog at www.grconstructionlawblog.com and see for yourself what we are up to. If you like what you see, do not hesitate to subscribe under the “Stay Connected” tab on the right side of the blog. There you can choose how you would like to be informed of new content (Twitter, LinkedIn, email, etc.). If you have any questions about the blog or would like to discuss further any of its content, please do not hesitate to contact us. |
| VI. About GRSM's Construction Group |
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GRSM's Construction Group consists of more than 220 lawyers in offices nationwide and is currely ranked No. 4 out of the Top 50 Construction Law Firms in the Nation, by Construction Executive. GRSM's construction attorneys focus their practice on the comprehensive range of legal service required by all participants in the construction industry – architects, engineers, design professionals, design joint ventures, owners, developers, property managers, general contractors, subcontractors, material suppliers, product manufacturers, lenders, investors, state agencies, municipalities, and other affiliated consultants and service providers. We serve clients who design, develop, or build all types of structures, including commercial buildings, single and multifamily residential projects, industrial facilities, universities, hospitals, museums, observatories, amusement parks, hotels, shopping centers, high-rise urban complexes, jails, airports, bridges, dams, and power plants. We also have been involved in projects for tunnels, freeways, light rail, railway stations, marinas, telecom systems, and earth-retention systems. Our experience includes private, public, and P3 construction projects. If you have questions about this issue of the Construction Law Update or our nationwide construction practice, click here to visit our practice group page or contact partner Dan Evans. Daniel E. Evans |