Capitol Update Week of June 26 – July 3, 20263
Governor Newsom signed the 2026–27 budget and the $11.25 billion Veterans and Affordable Housing Bond Act in the same week, creating the most significant state construction pipeline event of the year. At the federal level, the U.S. chose not to extend USMCA on July 1, pushing Canadian softwood lumber — already carrying a 45% combined duty — into further uncertainty. May housing starts fell 15.4% to a pandemic-era low, with the West posting the steepest regional decline.
1A — CALIFORNIA POLICY & STATE GOVERNMENT
Newsom Signs $352B Budget — Building Code Freeze Through 2031 Codified, CHHA Launches July 1
The signed 2026–27 budget locks in the residential building standards freeze through 2031, launches the new California Housing and Homelessness Agency, and eliminates impact fees on affordable housing projects competing for state funds after July 1, 2027.
Source: Governor of California / CalMatters
$11.25B Veterans and Affordable Housing Bond Act Signed; Heads to November Ballot
SB 417 authorizes $10 billion in general obligation bonds for affordable housing construction and rehabilitation, plus $1.25 billion in CalVet home loan bonds; voters decide in November.
Source: Governor of California / Assembly Speaker
SB 79 Transit-Oriented Upzoning Now in Effect — Sacramento County Included
As of July 1, SB 79 overrides local zoning to allow mid- and high-density housing near qualifying transit stops in eight counties, including Sacramento; ministerial approval applies when labor standards are met.
Source: BBK Law / Construction Owners Club
1B — LEGISLATIVE BILL TRACKER
Bills with committee action, floor votes, or Governor action in the past 7–10 days. Status as of July 3, 2026.
|
Bill |
Author |
Subject |
Status This Week |
Member Impact |
|
SB 1014 |
Grayson (D) |
Requires cities to provide a list of all onsite/offsite improvement requirements within 30 days of housing application; bars adding new requirements later. |
Passed Assembly Housing Committee June 24; advancing to Appropriations |
Eliminates surprise cost exposure at entitlement — improves bid accuracy for site work contractors. |
|
SB 417 |
Cabaldon (D) |
$11.25B Veterans and Affordable Housing Bond Act — places bond on November 2026 ballot for construction, rehabilitation, and preservation of affordable housing. |
Signed by Governor June 25 |
If voters approve, unlocks the largest state affordable housing construction program in decades. |
|
AB 1621 |
Wilson (D) |
Tightens timelines for local agencies to act on post-entitlement permits; creates remedies when agencies miss deadlines. |
Passed Assembly 67–0; in Senate Housing Committee |
Faster permit processing on already-entitled residential projects — direct schedule benefit. |
|
AB 1294 |
Haney (D) |
Creates a statewide standardized housing entitlement application; limits cities' ability to dispute application completeness. |
Passed Assembly 78–0; in Senate committee |
Uniform application across jurisdictions reduces administrative friction for multi-city contractors. |
|
SB 1036 |
Grayson (D) |
Requires impact fee credits or reduced fees on projects redeveloping previously developed sites. |
Passed Senate 37–0; in Assembly committee |
Reduces demolish-and-rebuild soft costs on infill work in Sacramento and Central Valley. |
Source: leginfo.legislature.ca.gov / Alfred Twu Housing Bill Tracker / CalMatters Digital Democracy
2 — FEDERAL POLICY & REGULATORY
U.S. Declines to Extend USMCA on July 1 — Canadian Lumber Tariff Uncertainty Deepens
The Trump administration declined to renew USMCA at the July 1 joint review, triggering annual review mode; Canadian softwood lumber already carries a 45% combined duty, with no deal in sight.
Source: IndexBox / Mortgage Professional America
Section 122 Global Tariff Expires July 24 — Federal Circuit Granted Stay, 10% Still Collecting
The Federal Circuit on June 11 granted the government a stay of the Court of International Trade's May 7 ruling striking down the 10% Section 122 tariff; CBP continues collecting the duty while the appeal proceeds.
Source: AGC Tariff Resource Center / Tariffs Tool
USMCA Section 301 Investigation Deadline July 20 — New Tariffs on Vietnam, Indonesia Possible
USTR faces a July 20 deadline to complete Section 301 investigations launched March 11; additional tariffs on Vietnam, Indonesia, and Thailand — major sources of engineered wood, cabinets, and hardware — could result.
Source: Tariffs Tool
3 — CONSTRUCTION MARKET & ECONOMIC INDICATORS
May Housing Starts Plunge 15.4% to Pandemic-Era Low; West Drops 17.2%
U.S. housing starts hit a seasonally adjusted 1.177 million annual rate in May — lowest since May 2020 — led by a 41.6% multifamily collapse; the West posted the second-worst regional decline at −17.2%.
Source: U.S. Census Bureau / HUD / TD Economics
NAHB HMI Falls to 35 in June — 26th Consecutive Sub-50 Reading; West Holds at 27
Builder confidence slipped two points in June; 35% of builders cut prices (up from 32%) and 62% offered sales incentives — the 15th straight month above 60%.
Source: NAHB
Canadian Lumber Duty Burden Reaches 45% Combined — Canadian Chamber Estimates $14K Per Home by 2027
A series of escalating tariff actions in 2025 and early 2026 has pushed the combined antidumping, countervailing, and Section 232 duty on Canadian softwood lumber to approximately 45%.
Source: IndexBox / AGC of America
4 — PROJECTS & INFRASTRUCTURE DEVELOPMENT (California)
Homekey+ First-Round Awards $103M to Five Counties — 315 Units in Pipeline
The first round of Homekey+ Proposition 1 awards totals $103 million across five California counties, creating 315 permanent supportive housing units; HCD has received 67 applications requesting over $1.14 billion.
Source: Governor of California
California High-Speed Rail Track and Systems Procurement Active — $507M in RFPs
HSR is procuring $507 million in track, ties, overhead contact system poles, and ballast for the Central Valley segment, with Buy America requirements on all materials.
Source: CA High-Speed Rail Authority
5 — INDUSTRY TRENDS & WORKFORCE
AI Adoption in Construction Doubles in One Year — 38% of Contractors Report Measurable Impact
ServiceTitan's 2026 report finds 38% of contractors now report measurable business impact from AI tools, up from 17% a year ago; Bechtel and Skanska have moved AI safety monitoring to standard operating procedure.
Source: Construction Owners Club
California AI Workforce Executive Order Triggers WARN Act Review, Collective Bargaining Study
Governor Newsom's May 21 executive order directing state agencies to assess AI workforce disruption now has concrete deadlines: WARN Act expansion review and collective bargaining AI protocols due October 15, 2026.
Source: K&L Gates / Governor of California
SRBX / CBA Capitol Update | Week of June 26 – July 3, 2026 | For member distribution
______________________________________________
Ben Bradley, Director of Operations
Sacramento Regional Builders Exchange
Mobile: 916.289.1892 | Office: 916.465-8300
www.srbx.org | www.cie.foundation | www.socalbx.org