1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 1 Date: January 16, 2026
To: Christian Clegg, City Manager
City of Bakersfield
From: Sharon Gonsalves
Managing Director
California Public Policy Group
Re: CPPG Summary of Housing Informational Hearing on January 14, 2026
KEY TAKEAWAYS
• We anticipate proposals on the following topics will be introduced as a result of this hearing:
o Bills that establish consistent statewide codes and policies to remedy inconsistent local codes, policies, and processes.
o Bills focused on permitting for manufactured homes.
o Bills that further shorten and standardize local government process timelines. • It is worth noting that while much of the policy discussion focused on local government, no local government representatives participated in either informational hearing to speak to the factors driving the current challenges in the housing sector.
HEARING SUMMARY
On January 14, 2026, the Assembly Select Committee on Housing Construction Innovation—chaired by Assemblymember Buffy Wicks (D-Oakland)—held its second informational hearing on how California can accelerate housing delivery through construction innovation. While the first hearing focused on identifying promising methods and potential cost and schedule savings, the second centered on what it will take to scale factory -built and modular housing in real -world conditions— particularly the administrative, financing, and workforce systems that shape delivery. For cities and local governments, the most relevant takeaway was developer concern about inconsistent building codes and processes across jurisdictions; witnesses argued that predictable local review, clearer state–local coordination, and coordinated demand are essential to scaling factory-built housing.
The Department of Housing and Community Development (HCD) defined factory-built housing (FBH) as housing manufactured offsite to California standards, allowing onsite work to proceed in parallel with factory production and potentially reducing timelines an d material waste. HCD emphasized that design approval is handled by third -party agencies overseen by HCD, but local governments remain responsible for permitting and for elements outside the FBH scope, including site work, utilities, and inspections. The practical message for cities was that even with state-approved factory processes, local permitting clarity and inspection coordination can determine whether offsite construction delivers time savings.
The Strategic Growth Council (SGC) framed FBH as an underused tool and argued that scaling requires regional “ecosystems,” not one -off pilots. SGC noted that prior funding has gone unawarded due to limited applicants, and pointed to fragmented demand, inco nsistent local standards, and misaligned financing timelines as core barriers. SGC described grant programs intended to build local capacity and support cross-jurisdiction coordination. For cities, the takeaway
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 2 was that participation, and repeatable local processes are seen as prerequisites for accessing and effectively using state resources.
Lenders, manufacturers, and innovation funds emphasized that modular projects require large early deposits and rapid factory payments, which often do not align with conventional construction lending draws or public subsidy schedules that typically materialize at closing. Speakers noted that while factory -built projects can be attractive from an efficiency standpoint, lenders still perceive risks—especially where logistics failures or damage can create outsized losses. Across the discussion, standardization emerged as the most consistent de -risking strategy: consistent approval pathways, repeatable local processes, and standardized plans can reduce uncertainty for both lenders and builders. Some speakers highlighted emerging financial products designed to cover factory deposits and other pre-closing costs.
These financing concerns aligned with Terner Center findings that each additional public funding source can add months to project timelines and increase per -unit costs. For cities, the implication is that factory -built approaches only deliver value if time lines can be compressed; when local permitting uncertainty or financing delays create long pauses, the benefits of offsite production can evaporate.
The workforce discussion framed industrialized construction as both a productivity opportunity and a labor-standards issue. Witnesses highlighted potential improvements in safety and job stability, while labor leaders expressed openness to modular approach es if accompanied by strong “ high road” employment standards. Themes included locating factories in California, preventing wage theft, and ensuring wage and benefit protections as factory-built housing expands.
Terner Labs summarized policy priorities in four areas directly relevant to implementation: reducing variation in building code enforcement; providing targeted financing support (including tools like loan guarantees); using incentives to reward faster and less wasteful delivery while aggregating demand (e.g., coordinated procurement); and investing in research and training, including for code enforcers and standardized outcome data.
The Select Committee’s first hearing featured extensive testimony emphasizing rising construction costs—particularly the increasing expense of construction labor and declining workforce participation—as key drivers of California’s housing shortage. By cont rast, the second hearing largely shifted away from that narrative, with labor leaders contending that construction workers remain underpaid relative to other industries. Labor representatives did not identify a single definitive cause of the housing shorta ge, instead focusing primarily on ensuring that construction labor has a meaningful role in decision-making as FBH moves toward broader implementation.
Overall, the second hearing shifted the conversation from identifying innovation to addressing the systems needed to scale it . Cities and local governments were repeatedly positioned as essential actors because local predictability, coordination, and consistency ultimately determine whether factory-built housing leads to faster delivery on the ground.
The agenda for the hearing can be found here.
###