Gov. Gavin Newsom and California’s Democratic lawmakers are celebrating a major shift in the state’s housing laws, aiming to tackle the housing crisis by cutting back the environmental red tape that often slows construction. Two new bills, Assembly Bill 130 and Senate Bill 131, will dramatically reduce the reach of the California Environmental Quality Act (CEQA) for urban housing and some non-residential projects like clinics and food banks.

But there’s a catch that wasn’t front and center at the Capitol press conference: Developers who want to benefit from these new fast-track rules must sign project labor agreements. That means they’re required to hire union labor only, a move that effectively sidelines thousands of independent construction companies and nonunion workers who make up the bulk of California’s construction workforce.

While union labor can deliver strong wages and protections for workers, it also drives up the cost of building and in some cases adding millions to a project’s price tag. Critics say this undercuts the promise of “affordable” housing and leaves small, nonunion contractors locked out of big opportunities funded by taxpayers.

So while the state’s environmental laws just got looser, the labor rules just got tighter and that’s a win for unions, but a tough break for independents hoping to build California’s future.