SANTA ROSA – Regulators are cracking down on unlicensed contractors in California who underbid licensed professionals and slow the economic recovery for an industry hit hard by the recession, according to Steve Sands, executive officer and registrar for the state’s Contractors State License Board.

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Speaking to a group at the North Bay Business Journal’s annual Construction Conference on May 15, Mr. Sands said that the construction industry remains challenged during the state’s slow economic recovery, currently leaning on California’s willingness to fund public works projects during strained budgetary times.

“If we don’t get our hands on it, the whole social fabric involving construction could fray beyond repair,” Mr. Sands, the keynote speaker, said.

A number of factors continue to create challenges for the construction industry, Mr. Sands said. New home construction has significantly slowed in the state, as young adults put off plans for housing and older residents look to downsize. In the case of California’s Inland Empire, a glut of housing inventory will likely mean no need for single-family home construction for the next 10 years or longer, he said.

In addition, the underground economy of unlicensed contractors continues to take jobs away from those who are properly licensed and insured, amounting to an illegal industry worth $60 million $150 billion in California. If all were properly insured, premiums on workers compensation insurance could stand to decrease 50 to 60 percent, he said.

“Those people are taking jobs and money out of your pockets,” he said.

Mr. Sands pointed to some positive indicators for the broader economy, including the 400,000 payroll jobs that California added last year. Demand for remodeling has risen recently, though that activity varies by region, and shifting demographics have created more interest in apartments and multifamily developments.

Joining Mr. Sands at the conference were a number of other presenters:

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Tony Cinquini, principal and CEO of Cinquini & Passarino, Inc. and Stephen Jackson of the Sonoma County Office of Education, discussed the construction of a new Geospacial Science Center at Santa Rosa’s Piner High School and how the district’s mandated vocational programs have helped some students prepare for a career in construction. Said Mr. Cinquini, “The career opportunities for people are changing dramatically, and we need to change with them."

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Doug Hilberman, chairman of The Construction Coalition, shared the results of his recent survey of contractors, including that most responders cited California’s regulatory environment as a bigger impediment to the industry than demand for construction.

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Chuck Regalia, director of community development for the city of Santa Rosa, and Robert Cantu, president of Western Builders, described the importance of streamlining the permitting process for new construction, including the development of a same-day permit in Santa Rosa and a loosening of requirements for a conditional use permit.

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Mary McEachron, chief administrative officer and general counsel of the Buck Institute for Research on Aging, discussed the need for reform to the California Environmental Quality Act and highlighted cases like a required Buck Institute environmental impact study that examined how research on mice affected the self esteem of Marin County residents. The construction industry should spearhead reform, she said. “The CEQA has become as tool to simply add cost and delay a project.” One proposal – suspend CEQA for five years as an economic stimulus.

Two of the region's major construction projects also were discussed, Sutter Medical Center of Samta Rosa upcoming Sonoma-Marin Area Rail Transit system.