More Restrictions Placed on Construction in Santa Clara County

As the world has spent most of 2020 to date scrambling to address the COVID-19 pandemic caused by the SARS-CoV-2 virus, most Bay Area counties led the nation in issuing shelter in place orders to help slow spread of the disease.

Hit especially hard within the region, Santa Clara County issued an order on March 19 only allowing for “essential infrastructure” work to continue including, “public works construction, construction of housing (in particular affordable housing or housing for individuals experiencing homelessness).” This differed from a subsequent statewide shelter in place order that requires people to stay at home except for essential service workers, which appears to allow for construction to continue more generally.

However, on March 31 Santa Clara County, along with most other Bay Area counties, issued a new order tightening restrictions on what is considered to be essential activities due to a, “Significant increase in the number of positive cases, hospitalization and deaths from COVID-19, which is beginning to strain healthcare resources.” The latest county order also extends the emergency measures through May 3.

“Extending the stay-at-home order should reduce the number of sick patients seeking care at one time, giving us time to acquire more medical supplies for providers who will be providing care to people sick with COVID-19. The extension will allow doctors and nurses to better treat those who do get sick, and save countless lives,” said Dr. Chris Farnitano, health officer for Contra Costa County.

While the previous order allowed for housing and infrastructure projects in the county to continue, work on most projects will now come to halt. To date, essential construction work only includes projects associated with healthcare, income-restricted affordable housing, public works projects designated as Essential Government Function, shelters and projects providing critical services to disadvantaged individuals, maintenance and repair of essential infrastructure and work necessary to ensure sanitary and habitable conditions.

The City of Santa Clara’s Planning Division is currently not open to the public though some planners can be reached by phone or email. As far as development applications, planners are prioritizing work on “urgent items.” Although planners are still accepting new applications for both residential and commercial, the processing of the applications is currently delayed as the division is working within constraints of the shutdown and not interfacing with the public.

The major Related Santa Clara project has staff continuing to work on development agreements. In Sunnyvale, work on residential projects such as Irvine Company’s 1,076 housing unit project on the former AMD site had been ongoing up until the latest order, but it’s unclear if it will continue.

“The public health orders are definitely having an impact on construction and development, but it’s too soon to tell how significant it will be long-term,” offered Jennifer Garnett, Sunnyvale’s Communications Officer. “We’re working hard to adapt to the orders, provide our essential services and support our residents and businesses. We’re also in touch with many businesses considered essential in Sunnyvale, such as biotech companies that are designing and manufacturing medical products.”

Beyond current disruptions, it’s undetermined how the pandemic and associated shelter in place orders will impact the development pipelines of Santa Clara, Sunnyvale and other cities that already struggle to provide enough housing units. Although construction on certain affordable housing projects is allowed to continue, supply chain disruptions could hit hard as China’s quarantine efforts have slowed production of construction materials. Contractors have hygiene and social distancing measures in place on job sites, however the often-messy nature of construction work environments could exacerbate a pre-existing labor shortage if workers fall ill with COVID-19.

“The shelter in place order is going to slow down commercial development,” said Dave Sandlin, Executive Vice President, Colliers International following the March 19 shelter-in-place order. “There are also going to be supply chain issues that will slow work. There are going to be delays but the positive news is that this is all temporary. Just like with the other disease outbreaks, this will get addressed, but before then 50 percent of Americans could get this.”

“What we need now, for the health of all our communities, is for people to stay home,” said Dr. Grant Colfax, director of the San Francisco Department of Public Health. “Even though it has been difficult, the Bay Area has really stepped up to the challenge so far, and we need to reaffirm our commitment. We need more time to flatten the curve, to prepare our hospitals for a surge, and to do everything we can to minimize the harm that the virus causes to our communities.”