EP.22 / Spencer Kallick
The California State Capitol. Sacramento, CA
Is the CEQA rollback enough?
Governor Newsom recently signed a significant rollback to the California Environmental Quality Act (CEQA), creating a new statutory exemption for urban infill housing projects, effective immediately. Spencer Kallick, a land use attorney who's guided everyone from Blackstone to AvalonBay through California's regulatory maze, breaks down what this actually means for developers reassessing their pipelines.
It's not the free-for-all some headlines make it out to be, but it is a major shift for urban infill housing development. Cities still have discretion and the need for a Phase I Environmental Site Assessment and tribal consultation remains. But traffic studies and air quality analyses have gotten significantly easier to navigate.
Spencer walks through the fine print: projects under 85 feet avoid prevailing wage requirements, sites up to 20 acres qualify, and residential density has to be at least 50% of the minimum density in that jurisdiction. The catch is it only works if you're building on land already zoned for residential use and staying within existing height limits. High-rise towers on industrial land still need full CEQA review.
The conversation digs into the political motivation behind this decision and why Governor Newsom is now championing CEQA reform when it was considered untouchable just years ago. The result is a gradual, but accelerating shift toward abundance policies that Democrats hope will demonstrate they can actually get things done.
Spencer also reveals the practical challenges ahead: planning departments are understaffed and unprepared for immediate implementation, some provisions won't take effect until 2026, and environmental groups are considering lawsuits. But, he's optimistic that momentum is building if construction costs moderate and capital markets improve.
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About Spencer Kallick
Spencer Kallick is the operating Partner of Allen Matkin’s Century City office, where he provides his clients with concierge legal services to deliver efficient, practical solutions - the kind that get deals done. He’s worked across virtually every asset class—multifamily, senior housing, retail, digital signage, hospitality—and he brings a rare dual perspective as both a former city attorney and a private sector dealmaker.
Topics Covered
Why CEQA reform is happening now
Details of the urban infill statutory exemption requirements
Understaffed planning departments struggling with immediate implementation
Delayed provisions and political vulnerability of the new law
Is this the beginning of broader CEQA reform?
Development pipeline outlook and LA's building future
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Sam Pepper 00:00
Joining me today is Spencer Kallick, a land use attorney with deep roots in California real estate and a client roster that reads like a who’s who of national development. He’s advised everyone from Blackstone to AvalonBay, Kilroy to JPMorgan, and he’s played a key role in major projects for Lincoln Property Company—helping us navigate local politics, zoning codes, and environmental regulations that come with building in the state of California. Spencer is the operating Partner of Allen Matkin’s Century City office, where he provides his clients with concierge legal services to deliver efficient, practical solutions - the kind that get deals done. He’s worked across virtually every asset class—multifamily, senior housing, retail, digital signage, hospitality—and he brings a rare dual perspective as both a former city attorney and a private sector dealmaker. Today, we’ll talk about what it takes to actually get something built in California—and how that’s starting to shift. Spencer Kallick, welcome to Building LA.
Spencer Kallick 01:05
Sam, I really appreciate it. I'm excited to be here. Very kind of you to say all those nice things about me, although I know you're probably just reading my bio from the firm website, but I appreciate it and excited to be here.
Sam Pepper 01:18
Of course. So I reached out to you immediately, as I saw the headline on the New York Times about the CEQA legislation change, the rollback, I think our entire industry is quite excited and wanted to set this up as fast as we could. What I'd like to start with that I think is interesting is CEQA has been part of the landscape of developing in California for quite some time now, and for a while it was really known as sort of the textbook example of environmental regulation, and actually was a precedent for a lot of other states, a lot of other countries, about how you control development. But there's been this shift in how it's been perceived, and I'm curious to hear your take on why now? What's made this moment possible politically, where Gavin Newsom can comfortably get up on a lectern and say, we're rolling it back and know that he's going to get applause from a lot of his constituents?
Spencer Kallick 02:21
It's a great question. So look, as Californians, we are always leaders. We usually are on the cutting edge of new laws, new innovations, and have a long history of protecting our environment. And that's really what is at the base CEQA, or for those of you who don't know, the California Environmental Quality Act, is it's an environmental law to protect our state, but also a law that's meant to provide public transparency, first and foremost, so that when decision makers decide to approve a project, everybody, both city council members, committee members, developers, investors, understand everything that's going on in making that decision. Your question about why are we here now? And we'll talk a bit about what actually has been passed and what actually has occurred here, but why we are here now is, it is no secret that we are in a big housing crisis here in California, and there's a lot of reasons for it, but everyone can agree that we are in a high housing crisis here in California.
Spencer Kallick 03:25
And when you add the economy and capital market challenges and lots of regulations, it's a challenge to build housing here in California. And then the other piece of this is that for years and years and years, we have a system here in California that has vested local governments with virtual complete control over approving discretionary entitlements for housing and conducting the environmental review or CEQA review for projects. And at a certain point, the legislature decided, Okay, enough is enough, and we've seen over the last four or five years now, the legislature, and particular Governor Newsom, get serious about passing new laws that will spur the development of new housing, the investment in new housing, and they're meant to try and fast track housing. Now, I'll tell you, they've gone about it in an interesting way. We always talk about legislation as sausage, right? You don't want to see how the sausage is made. It's definitely the case when it comes to Sacramento.
Spencer Kallick 04:30
But what we've seen is breakthroughs, slow progress. A lot of nibbles at the issues that slow things down, make it more expensive, but not gargantuan steps. So as an example, we've seen Sacramento get more serious about enforcing the existing laws relative to requiring housing elements be updated and giving the State Housing Department, HCD, greater authority to. Force housing laws. We've seen new laws like AB 2097 ease parking requirements for projects near transit, and we've seen laws like AB 2011 that are intended to allow for ministerial meaning no discretionary approval for new housing projects. So over the years, they've been kind of building, building, building. Throughout the years, there's been a reticence to touch CEQA. CEQA has always kind of been the third rail where you really can't touch it, except for very limited circumstances in which we could talk about.
Spencer Kallick 05:33
But I think that the legislature realized that CEQA really was one of the biggest hurdles to approving new housing projects quickly, and therefore, amongst other things, what they did was they implemented this new statutory exemption. We're calling it the urban infill housing statutory exemption to allow for, in theory, more fast tracked CEQA review for new urban infill housing projects. Now, the devil's always in the details, and we can talk about that, but that's what has changed. Because I think what's happening is legislators in Sacramento and the governor are sitting there and realizing and looking at the production of new housing, and the new building permits have been issued, and the new CFOs realizing, gosh, we are just not keeping pace with what we need to be building. How can we make things go faster?
Sam Pepper 06:26
It's interesting. It seems like as well the maybe the political context of it's a democratic state, the Democrats clearly had a lot of, you know, a very big loss over the past six months. And then there's been new leaders, thought leaders, sort of on the liberal side. The most striking one, I think, is Ezra Klein, who has been talking about abundance. And cleverly, I think he's been able to synthesize almost his entire agenda into one word, which is quite genius. And it does feel like to me that finally, potentially, hopefully, the Democrats in Sacramento are realizing that they need to be seen as a party that is actually going to get stuff done and can move the needle. And so the sentiment maybe is changing, where potentially, I don't put words in your mouth, but potentially 10 years ago, or even five years ago, talking about scaling back CEQA would be thought as being too politically challenging. And now maybe that risk has gone away, and we're leaning to more on the other side, where people really see homelessness on their doorstep, and all the issues that we have that I think can tie back to housing. And housing, which is good for our industry, is really becoming a key political topic, not just in California, but actually nationally.
Spencer Kallick 07:56
I think there's a lot of factors at play, and you're raising a lot of good points, so let me try to dissect a couple of them. The first thing I would say is that there is definitely more political will in Sacramento to fast track CEQA reform and laws that will spur the development of new housing, without question. Because legislators in Sacramento are getting antsy and are getting frustrated that they're not seeing more housing production, that they are spending a lot of money on homelessness, and that local cities, without picking on any of them, some of them don't get it. Some of them are being intransigent, digging their heels in, and are not willing to take the steps to approve housing projects. I think the other thing to keep in mind, though, is housing is not a Republican or a Democratic issue. Doesn't matter how you're registered or how you vote, we all need housing. So I think what you're kind of seeing is a coalescing around the idea that housing is not a political issue. It is something that needs to be solved for everybody. And there's absolutely a pendulum swinging over the last several years where cities are realizing and elected officials are realizing that there is a price to pay if we don't build more housing.
Spencer Kallick 09:12
So what I've seen is there are some cities that just get it, and they have for a while, and they are fully on board. Gosh, what can we do to get new housing production built as quickly as humanly possible? God bless them, by the way, and we've had a lot of success, many with the Lincoln team in getting those kind of projects done. We have other cities where they don't want it at all, and they're going to dig their heels in, and they're going to fight tooth and nail no matter what, because it is unpopular to provide more housing in their cities, they wanna keep it kind of the small hamlet it may bury it always has been. And then there's some cities that, frankly, are kind of on the cusp, and sometimes, even while prodding, sometimes don't have the sophistication to do it and just aren't sure. How to make it happen. But across the spectrum, there absolutely is a shift, a change.
Spencer Kallick 10:07
Because what I'm seeing is it's got to be personal, and so pick a city when we don't have to pick on anyone right now, but when council members personally or their constituents or their friends, their family see that, gosh, they bought a house when they were just starting off. It was affordable to buy in their city. But now their kids, who are maybe are early 30s, married, maybe a kid on the way, two kids can't afford to buy a house in their own community. Have to live far away in a rental, and that the dream, the American dream, of home ownership, is basically inconceivable within their own community. They say, Gosh, this just isn't right. Even if you're working hard, you're paying your bills, you're involved in your child's school and your community, but you can't live there. That just doesn't seem right. And so as a result, a lot of cities, because it's become personal, are realizing, you know what, we need to try to take whatever steps we possibly can to make housing a reality at all socioeconomic levels, to strengthen our communities.
Sam Pepper 11:13
I want to talk about how this actually changes sites that developers and folks are looking at. I'm sure, over the past few days, you and your team have been diving into the fine print of this, which I'm sure there is a lot of.
Spencer Kallick 11:25
My phone has been ringing off the hook, my email blowing up, my text messages. It feels like everyone in their mother wants to talk about this right now, so let's dive into it.
Sam Pepper 11:32
Well, I mean, speaking on Lincoln's behalf, right? We have a handful of multi family projects that we're we have capital partners on board with, and we're in entitlements with, you're involved with them. And then we also have our pipeline of many deals. And this is like every other developer, we have our pipeline of projects which some of them are in the category of it's on the fence. Probably, maybe we couldn't get a capital partner on board, because it's too risky from an entitlement standpoint. This rollback is now reframing a lot of that, where we're now looking back at the deals that we have in the pipeline and seeing whether actually projects that we had pushed off are actually worth evaluating again, and whether there's a value change because of CEQA and because of the risk has come down. So we'd love to understand, we don't need to go in all the details, but happy to, if you want to, but we'd love to understand a little bit about what projects are going to be impacted by this and which ones are not.
Spencer Kallick 12:33
Yeah. Well, the first thing you probably need is a good land use attorney. So I'll look around for one of them, but if I see one, I'll let you know. If I will, let's back up a couple steps, because I think that there's some base knowledge understanding that's gonna be necessary. I know most your listeners are very sophisticated, but let me, let me try and break it down. Because you started the segment chatting about the New York Times headline that came out Monday night, California exempts all housing projects from its landmark environmental law, which is correct and incorrect at the same time. So let's break it down. What does it really mean? Is CEQA gone? No. CEQA is not gone. What does exempt mean to a lay person just reading the New York Times, exempt means gosh, no, CEQA. You can just go walk down with your construction drawings, pull a building permit and start construction. That is not correct. So what is exempt?
Spencer Kallick 13:27
Under CEQA, exempt is a legal term of art. It is a class of projects that either the legislature or the governor have said are not subject to as intensive of environmental review through CEQA. And what the new laws that were passed do is create what we call a new statutory exemption, meaning a statue was passed to exempt certain classes of projects. In this case, the classes of projects are for urban infill developments. There's a very specific definition of urban fill which we can get to but basically at a high level, the project has to be what we call a housing development project, meaning that it's dedicated at least two thirds of its square footage to residential uses. It also has to be consistent with the applicable general plan of zoning and local coastal program, if applicable. The residential density has to be at least 50% of the minimum density in that jurisdiction, which generally works out to be about 10 to 15 units per acre. The project site may be up to 20 acres. Has to be within a municipality. It's an urban area that's generally speaking going to be surrounded by other urban uses, and the new exemption requires that the project has a phase one environmental assessment. If it's near a freeway, there are certain things you got to do with ventilation and heating and cooling.
Sam Pepper 14:58
Which, is common sense to a certain extent, right? Anyone, anyone's gonna do a phase one environmental anyway.
Spencer Kallick 15:04
Correct. And then you've gotta do a tribal consultation as well. So what does this all mean? What it means is that there is a new statutory exemption. It doesn't mean that all housing projects are exempt from CEQA. There's still work to be done. You still got to check all the boxes. You got to do your phase one, your tribal and ultimately, it is up to and this is key, it is still up to the lead agency, in most cases, the city, to determine whether or not a project is exempt. And so there is still a tremendous amount of discretion that is left with cities to make the findings necessary to support that this exemption applies. Let's talk about some of the practicalities of this, though.
Spencer Kallick 15:47
Some of the practicalities are that for many years, projects may have qualified for another type of exemption, what we call a categorical exemption, or Class 32 exemption. That's the one where you had to be General Plan was zoning code compliant. You had to be on a site less than five acres. You couldn't be, you know, on the Cortese list, you had a look at whether there was enough water, the water quality, air quality, noise, traffic. The nice thing is, you don't have to deal with all of that under this new statutory exemption. Again, that urban infill housing exemption. You could be on the Cortese list, and as long as you've been remediated, you're going to be fine. You don't need to do a traffic or noise or air quality or water quality analysis anymore. So in theory, this should fast track the CEQA review necessary for new urban infill housing projects. Now the devil is always in the details, but it should have a positive effect on the processing times and how quickly we can get from a project in concept to people moving into their new homes.
Sam Pepper 16:57
What's interesting is it sounds like I mean, A) the discretion of individual cities and jurisdictions is a huge caveat to all of this, right?
Spencer Kallick 17:06
It's a partnership, right? You're still gonna have to work with your local planners, local planning commission, city council, council members, community that has not gone away.
Sam Pepper 17:16
And nor should it. There shouldn't be carte blanche to now kind of build multifamily wherever you go, because then, of course, then it will go too far the other direction, and then there'll be a push back in five years time to scale it back to more of like what it was today.
Spencer Kallick 17:29
Depends who you ask. Some people might say, we want that, but I agree. I think the best projects are ones where there is cooperation amongst all stakeholders. And that's not just hyperbole. I think it does make sense, but I think there's just a misconception. If you've just read the headlines, gosh, the floodgates have opened, but that's just not the case.
Sam Pepper 17:49
I think that progress is gradual, and so this is probably the biggest bite that, politically, they thought they could get away with now, but potentially, if the ramifications of this are positive and there's not backlash against the impacts, maybe because the impacts aren't as great as we hope, then there may be an opportunity later on down the road to create a new bill to scale it back further, potentially. What it seems like to me is that if you are building on a site that is zoned residential, you are staying under your height limit. Typically, you know 85 feet. You are in an area that is fairly pro development. You have a city council member that wants housing. And you've done all your basics of a phase one environmental you've got sign off from the tribal consultants, then you should actually be benefiting from this. And there's gonna be a lot of sites that are gonna be benefiting from this.
Sam Pepper 18:55
But it does seem like there's a lot of other projects, anything that's a high rise, potentially, and you can correct if I'm wrong here, but anything is a high rise, like a type one tower, or something that is on land that is not zoned residential, they're still going to need to go through CEQA. And I know that a lot of the challenges that we Have, we see development opportunity for multifamily in areas and zones that are not zoned for residential. And I have said on other episodes of this podcast that my hero in city planning is Michael Bloomberg, because he rezoned like a quarter of New York City, and this does seem to still have to be paired with rezoning of certain parts of our city that may be industrial or maybe something else, so that we can actually facilitate more housing more effectively in areas that just frankly need to get updated. Would you agree with that?
Spencer Kallick 19:56
I would, as I said at the top, there's still work to be done. But let me, let me try and drill down on a couple of things you said, because I think they're important. The first is about the height limit. So one of the things that occurred, and we can talk about how this bill kind of came to be, but one of the things occurred is that there was a deal made with the labor unions as to prevailing wage for these exemptions. And at a high level, the decision the termination was between 85 feet below or above. And for those of us who are sophisticated in development, 85 feet, generally speaking, is your five over two, or your rap multi family projects, which are, frankly, the kind of projects that are penciling right now. And anything over 85 feet is your type one construction, your towers, which, at the moment, really don't pencil.
Spencer Kallick 20:40
And so what was decided was that if you're over 85 feet, you got to do prevailing wage. If you're below 85 feet, you do not have to do prevailing wage. That's important. But one of the calls I've been getting very commonly over the last couple days is okay, so if we're under 85 feet and we don't have to be prevailing wage, does that mean that the unions don't have an opportunity to challenge our project, or that we are in the clear? And the answer is no, unions can still challenge your project. This is still an exemption. Now there's less hooks, I would say, because again, now we're gonna get really CEQA nerdy on you. Is that you don't have to do the unusual.
Sam Pepper 21:19
That's what my sophisticated audience members want.
Spencer Kallick 21:22
Exactly. You don't with a statutory exemption, you don't have to look at what we call unusual circumstances. That's not required. So there are some benefits there. The other thing I would say is you raised the question about about what happens when you still need to rezone. Well, one of the provisions of this bill is that you can utilize the class 32 exemption, right? That's the exemption where your general plan zoning code compliant. You look at air quality, water, noise, traffic, your hazardous waste site. What this law says is, if you check all those boxes except for one, you can do a focused analysis of just that one issue area, and look and see how, or to what extent that issue area has an impact on the environment. So you can still qualify for that class 32 exemption.
Spencer Kallick 22:15
Again, the devil's in the details. I'm very curious to see what that analysis will look like. I do think that there is going to need to be a pairing here. It's not enough just to have CEQA reform. You also need a reform of some of our zoning laws, which we've seen in recent years, right? We've seen an increase in the density bonus allowances to allow up to 100% entity bonus. I don't want to get crazy, but what would happen if you went up to 200% density bonus, or allowed for other waivers and incentives kind of outside the box. So there's still work to be done, but this is definitely a step in the right direction.
Sam Pepper 22:49
Going back to comment you made earlier about, you know, the cities and the jurisdiction and the discretion they have over this, we are in a place where there have been a lot of new bills that have impacted city planning across the state and our city planning staff. And not to call anyone out specifically, but Los Angeles is understaffed, and I think they have an incredibly talented planning team, but I think everyone would admit that they could use with a few more folks. Are we in a position where we are land use attorneys such as yourself are going to need to sort of guide certain jurisdictions through this new legislation to actually help them understand their own new policies that they're trying to follow.
Sam Pepper 23:42
Because my feeling and my experience is that sometimes when you're overlaying so many different new bills on top of each other, you can get into arguments about interpretation. And on one side, you can have a land use attorney who is absolutely certain there on the right, and then you have a planning staff person who is not in agreement with that, and there's actually disagreement over the law that's been put in place. So do you have any concern about that going forwards? And I guess it's an argument of, again, why we need to hire our land use attorneys. But do you have concern about that going forwards?
Spencer Kallick 24:16
I am concerned about it. So you made two good points I want to double click on. The first is supreme lack of staffing, unfortunately, with budget cuts and challenges, by the way, not just the city of LA, but in pretty much every city across California, there is a extreme lack of depth of folks who are great planners, who are able to process these projects. And it's really a shame, because, as you know, these projects are economic engines that provide jobs and benefits and pay for police and fire and all sorts of things at the local level. So we really need to really staff up our planning departments more robustly. What's happened with this law is not dissimilar to every single year. Every single year, the legislature passes lots of laws that they hoist onto cities and to developers and folks like you and I, who have to then interpret them, and usually they're not effective till January or maybe even a little further. So cities have a time to kind of adjust. Go to their APA California conferences, talk to their colleagues. Hey, how are you going to implement this?
Spencer Kallick 25:21
This is different. This was passed as part of a budget trailer bill and is effective immediately. So when the governor signed the bill Monday night, it is the law of the land. Now I can guarantee you, because I've made the phone calls to cities, they're not ready to implement this. They've barely even had a chance to let the ink dry and read them and understand them, let alone start accepting them. I will tell you we're working on one project right now where I met with had coffee with the planning director yesterday, walked her through the bill, and they for a project that's going to hearing, actually here in about a month, they're ready to utilize this law and are willing to do so quite quickly. So it is happening, but at the same time, a lot of cities are going to just take time to figure this out, are going to take time to put together memos and educate their staff about how this works. So there's always going to be a curve ball and kind of getting people up to speed.
Spencer Kallick 26:18
I know that the second that the bill was out. I mean, we've been tracking it very closely, and the second the bill was out, you know, I immediately printed out, this is my kind of dog eared version of it, and my team and I met that night and the next morning to really dive into it deep and understand it. And it's a very helpful but very dense law. Some of the cross references don't exactly match up. Some of the terms are not always defined, and so it's up to folks in the planning departments and folks like myself to really try and get into the nitty gritty and figure out, how is this really going to work? Because there's a lot more to it, and also, some of the key provisions of of this new law are delayed, while others are implemented immediately. So that exemption we talked about that statutory exemption goes into effect immediately. There's also a new provision in the law that allows for VMT impacts, or vehicle miles traveled impacts to be mitigated, to go from significant to less than significant by the payment of a fee to the state. But the law says that basically, in 2026 the state can get around to fixing that fee. So could you utilize the fee now? How much is the fee? How are they going to figure it out? I was on a call this morning with one of my favorite transportation engineers talking through this and he didn't even know. He hadn't, frankly, even read the bill yet. Didn't even know how to answer the question. But there's still more things that are going to be figured out, just like any new law that is passed.
Sam Pepper 27:48
I want to double click on the delayed provisions that you just mentioned when I heard that, that was news to me, actually. So are you saying that aspects of this are like that transportation example you just mentioned, that aren't actually in effect yet that are going into effect later on. Is that, did I hear that correctly? Or Am I misinterpreting that?
Spencer Kallick 28:13
You heard that correctly. So the law is effective immediately, but there are pieces of the law that allow the state to basically set a fee for mitigation of transportation impacts at a later date next year. That's the piece that's going to be delayed.
Sam Pepper 28:23
As we look ahead. Is there any political vulnerability to this bill? I would imagine there are some folks who are upset about it. Are there any political vulnerabilities? Is there any chance that this could get scaled back or get litigated against, and is anyone at risk of following these new laws, and then actually it being overturned in 12 months, and then they'll have to go back on their designs, and all the hard work they've done over 12 months. Is that a risk or not at all?
Spencer Kallick 28:52
It is a risk, kind of so I've heard rumblings that some groups may sue the state over the implementation of this law. I haven't seen any lawsuits filed yet, but it was very public that there were hundreds of environmental groups in particular who were vehemently opposed to this law passing made their thoughts very well known to the governor and legislature. So it's not impossible. Like any other state law, it can be amended next year, so it's possible that we'll have what we call a cleanup bill that cleans up some of those definitions that maybe aren't exactly clear, or that maybe scales back or accelerate some of the provisions that are in this bill. So I think that kind of remains to be seen. I think in the meantime, it is a law of the land. And like I said, we're already using it on several projects, and I think people can feel assured that they can use it on projects now, because the legislature has been very clear, as has the governor, that they are in favor of this is a lot of land, and people got to get with the program. And let's go. Let's build some housing.
Sam Pepper 29:58
Let's do it. I am curious about. Out your personal take on whether this is the beginning of wider secret reform or if this is all we're going to get for the foreseeable future. What's your perception of that?
Spencer Kallick 30:15
Hold on. Let me get my crystal ball out here, and then tell you.
Sam Pepper 30:18
Yeah, get it out. I mean, yours is gonna be better than most people's.
Spencer Kallick 30:21
Yeah, I do think that we are going down the road of some CEQA reform. I don't know that it'll be massive, but I think that, you know, there will be some secret reform. And we have, by the way, seen some CEQA reform. In recent years. We've seen, you know, the environment or ELDP, or the Environmental Leadership Development Program, which hastens certain projects, both through the CEQA process, but also in terms of litigation process, speeding that up. We've seen certain what I'll call projects of statewide importance, like the 49ers Stadium, amongst others, given exemptions. So I do think you're going to continue to see exemptions. And by the way we even get to other exemptions there in this law. Like, for instance, advanced manufacturing got an exemption. And there are others, daycare facilities, things that are critical pieces of our daily lives that got exemption. So I do think that you will continue to see changes in CEQA.
Spencer Kallick 31:19
I think that the governor you spoke about political realities. We are in a political environment. It's not a secret to most that the governor is most likely going to run for president at some point, and is looking to score some political winds and basically show folks that he has delivered for his state and can deliver as a result, for the country. This is no political endorsement whatsoever. But you know, politics is certainly involved here. So I do think that there will be further change. Also I got an interesting phone call this morning from one of my clients who does data centers nationwide, which is a whole nother conversation. And they said, Well, gosh, you know, is this law impact data centers. I said, notexactly. But the real question was, is there a move towards deregulation in the state of California?
Spencer Kallick 32:08
It's not a secret that there's a lot of regulation, a lot of rules in California. It's why I have a job. It's why you have a job. I always joke that, and I'm somewhat serious, I'd be very happy to be put out of a job if I could. And you know, the reality is a lot of large real estate investors have kind of red lined California because of a lot of the regulations, and some would say over regulation that we have placed on investors of real estate. And so, you know, the question was, is, is change coming? And is this an indication of that change? And I think not in leaps and bounds, but yes, I think we are seeing, especially with the slowdown in the economy, the tightening in the capital markets and lack of some transactional velocity that the state is looking at, gosh, how do we spur economic development, especially now that the state of California will be receiving less and less money from the federal government most likely we got to figure out how to do more with less. And that really gets back to, how do we spur economic development here in California?
Sam Pepper 33:09
Spencer, it's such a pleasure to speak with you. What are your projections on development over the next kind of couple of years in Los Angeles? Do you think that we're going to see a broader shift to more building as the fact that we do have the Olympics starts to hopefully sink in, although it's already too late, and things like the CEQA rollback starts to materialize? Are you optimistic in the future that we're going to see a pickup in building? I mean, there's so many different factors there, right? Both federal level, state level, city level, what's your sense? Bringing out the crystal ball again.
Spencer Kallick 33:44
I am optimistic, but that's mainly because I've got young kids and I got to work for a long time. No, I'm just joking. Well, that's true, but also, I think usually, as a language attorney, we get the first phone call, you know, hey, I'm looking inside, or I've got a property what's going on, and so I can tell you, knock on wood, not because I'm good at my job, though, I think I am, but we're busy. I've got about 60 projects in various states of entitlement across the state right now. It won't surprise you, a lot of it's housing. I've got about 20,000 multifamily units in various states of entitlement. But it's also hotels and data centers, a car dealership, it's senior housing, it's affordable housing, it's pretty much, actually I have a new office project as well. It's everything you can possibly imagine. And so there's a lot of entitlement going on.
Spencer Kallick 34:32
Now, the key piece is, to what extent and how quickly will those projects get built? And that's another question that's out there, and that's gonna require a lot of things to fall into place. That's gonna require construction costs, hopefully, to come down a little bit, interest rates, to come down a little bit, some of these transfer taxes to be rolled back or reassessed, and then, frankly, some will from some of our developer clients in their capital to take that first step forward and to trust that the economy is going to get get better. And by the way, I'm not trying to get into politics, but you know, we are in a challenging environment, but the way out of that is to push forward in a smart way, in a thoughtful way for well designed projects in great locations. And so I am optimistic. I do think that things will continue to get better.
Sam Pepper 35:22
Well, that's good to hear. Last question for you, what are your three favorite places in Los Angeles?
Spencer Kallick 35:29
So you've got to understand, I'm a native Angelino. There are not a lot of us, but I was born and raised here, and so I have a lot of places in LA that I love. I would say the first place that I love is our public parks in the city. Like I said, I have young kids. I love taking them to our local parks, seeing the joy on their face, but also just seeing my neighbors and seeing their kids and intermingling and seeing the joy that our public spaces provide for our residents and for my family. My other favorite place is some of our hiking trails in Los Angeles. Everyone knows in my house at least that my favorite family member is my dog. I love taking my dog Harlow hiking on some of the great trails around Los Angeles. And then I'm also a foodie, and so frankly, any new restaurant or great kind of institutional restaurant, I love going to, you can find me pretty much any date night with my wife or out with friends on a Saturday night at a new restaurant. So I'd say those are the three places I love in Los Angeles.
Sam Pepper 36:30
Spencer, appreciate your time. Thank you so much. I'm sure your phone will be ringing, hopefully even more after this gets released.
Spencer Kallick 36:36
Sam, it's a pleasure. I really enjoyed the conversation. And hope you have a great day.
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