Rule Reversal: Governor Doug Ducey Is Hellbent on Deregulating Arizona
Just lately, the only thing noisier than the cacophony of dozens of construction sites is the moaning of Phoenicians about what’s going up on those sites. The condominiums are all wrong, according to many: too boxy, or not colorful enough, or aesthetically unrelated to the rest of the block. Others, shocked to see how much chicken wire and plywood is involved in new construction, are grumbling about parsimonious developers.
Pretty soon, dreary and cheaply made buildings might be the standard in Arizona. That’s because, if Governor Doug Ducey has his way, a whole lot of Arizonans who aren’t architects might be designing buildings here. That’s what people in building and design are worried about, anyway.
They may have good reason to be. A new senate bill and an executive order signed by Ducey in late March have combined to shake up Arizona’s occupational licensing laws. The order requires state licensing boards to report only minimum requirements for earning an occupational license, with an eye on “specific reference to potential harm to individual Arizonans.”
Paired with Senate Bill 1437, which was signed into law on March 29, that executive order could spell trouble. Cleverly titled the Right to Earn a Living Act, the bill is designed to restrict regulatory boards from making rules that keep individuals from entering into “a profession or trade” unless doing so puts the public’s health and safety at risk. In other words, if the board believes no one will be hurt by a badly installed bookcase, give the guy a carpentry license.
The point of all this is to create more jobs for more people by changing Arizona’s oppressive occupational licensing game for good. But it may mean that untrained and unskilled professionals will be designing your house, or your leaky dentist’s office, in the near future.
The Arizona Board of Technical Registration has wrestled this regulation beast before. “The governor’s office tried last year to deregulate landscape architecture,” remembers the board’s executive director, Melissa Cornelius. “The result was a groundswell of pressure from architects and other professionals to drop the conversation.”
Ducey did. But the governor remains determined to let the little guy compete for work alongside actual trained professionals.
“I get it,” says Cornelius, whose agency was created in 1921 to represent and regulate local architects and engineers. “An order like this creates jobs and therefore a better economy. But when it comes to architecture, these professionals go to school for a long time, practice their trade for a long time before they’re even allowed to sit for a licensure exam. Should they share the workload with people who haven’t also been properly trained?”
There’s no point in studying drafting or design principles if all one has to do is announce “I’m an architect!” and get busy penciling elevations. And regulatory boards are meant to serve the public by ensuring competent practices, and not necessarily to create more jobs. Credentialing and public safety are important, so a regulatory board is typically charged with creating and administering licensing exams and disciplining naughty workers who bend the rules. A barber who chops off your ear while trimming your flattop may not have a current license, or may never have been properly trained to use that straight razor. A regulatory board is there to make sure he’s gotten the training, taken the tests, and kept up on the latest tonsorial tenets.
Arizona, anxious to revitalize its economy, suddenly appears not to care about such things.
Occupational licensing has been jeered at since its inception. A financial drain and a messy burden, licensing is the surly foster child of commerce, the mouthy teen who refuses to take out the trash or do the dishes. A 2012 report issued by the Institute for Justice found that American licensing laws were draining the US of $200 billion every year by keeping amateurs from working in certain industries. That, the report makes clear, narrows the competition in many professional fields. Fewer professionals mean higher prices charged by workers who, according to their licensure, actually know what they’re doing.
This, according to a 2015 study published by the White House, is a bad thing. That report tattled that five times as many professionals today require proof that they’d passed tests proving their job skills as in the 1950s. Pesky licensing was, the White House groaned, limiting employment opportunities and inflating the price of services by actual professionals. What’s more, people licensed to install windows in Nebraska or trim your bangs in Iowa weren’t necessarily licensed to do that in Poughkeepsie, which was kind of a drag. These high standards just plain had to stop, the White House report implied.
Especially in Arizona. Ranked in that Institute for Justice report as the sixth-most-restrictive state in the country, Arizona really excels at stomping on the untrained proletariat. That’s likely because, when it comes to the number of industries that require licensing, we’re home to more than most states. Sixty-four different professions here need licensure before employees can legally work — everyone from glass-blowers to those nice folks who attach polyethylene hair extensions for a living.
Arizona regulatory boards, which establish licensing requirements, have traditionally been hardasses. A few months ago, the State Board of Cosmetology went after a Tucson do-gooder who’d been giving complimentary haircuts to homeless guys. The board threatened to boot Juan Carlos Montes do Oca from beauty school if he didn’t stop grooming vagrants for free.
Ducey blew a gasket. Calling the cosmetology board’s investigation “outrageous,” he demanded, in a sternly worded letter, that they leave the poor would-be barber alone.
No one who’s been following Ducey was surprised by the freakout. He’s been an advocate of occupational licensing reform for years, and had barely taken office before issuing a moratorium on state regulatory rulemaking. (In his second State of the State address, he complained that Arizona even licenses talent agencies, snarking that we ought to “leave the job of finding new talent to Adam Levine and Gwen Stefani.”)
Ducey was no doubt delighted when Senator Nancy Barto (R-Scottsdale) introduced the Right to Earn a Living Act at the top of the 2017 legislative session. Barto had worked with the Goldwater Institute to craft a bill that would make professional licenses easier to get. On March 30, the House passed SB 1437 by a 34-20 vote, and Ducey (who was reportedly unhappy when Barto revised the bill’s language so that it undermined regulation of occupations in general, rather than focusing on specific professions) signed it that same day.
It’s potentially the first step, says Cornelius, in deregulating the building and design trades, one day making Arizona the least occupationally restrictive state in the union. Such lack of restrictions may well lead to hairdressers and history teachers proclaiming themselves architects and landscapers, with no schooling in either of those trades.
“And the consequences will not be pretty,” Cornelius insists. She’s all for a more efficient government, she says. “But to remove necessary registrations endangers the public’s health and safety. We want to trust the government has vetted our builders, to ensure that their buildings aren’t going to fall down in 20 years.”
Cornelius was stunned last year during a hearing on HB 2613, which sought to deregulate “select professionals such as geologists, landscape architects, etc.” Rep. Jay Lawrence suggested a novel, post-deregulation approach to vetting architects, who were apparently part of that “etc.”
“He told me people could use Yelp to find a competent architect,” Cornelius scoffs. “And if they got ripped off, they could hire an attorney to sue the architect.”
It sounds like the punchline to an especially awful joke. “But I promise you,” says Cornelius, “Representative Lawrence wasn’t joking.”
The governor’s office got smart after HB 2613 flopped, Cornelius says. Language about deregulation was removed from the bill, she recalls, after she and her board pointed out that landscape architects are licensed nationally, and if the state revoked their licensing, they’d likely go elsewhere to run their businesses — a financial loss to the state.
New language tacked onto Barto’s version of the Right to Earn a Living Act may not cop to deregulating any particular industry, but it does allow special-interest groups to sue a board if they feel they’re being unfairly kept from working. If they prevail, the state has to pay their attorney fees and costs.
Variations on this bill have been introduced in the past, according to Jack Black, vice president of the Tempe office of architecture firm Ayers Saint Gross. “The intention is to get rid of the involvement of architects and engineers involved in small projects, like tenant improvements,” explains Black, whose projects include the University of Arizona’s health sciences building and the downtown Phoenix City Hall building. “The trouble with that is it leads to people creating spaces for others that have no analysis or long-term code considerations. These people will create LLCs that exist for one or two projects, then disappear. So there’s no long-term quality to what they’re building. It’s a way for rogue contractors to build stuff they want.”
“What happens to the consumer in all this?” Cornelius asks. “Where is consumer protection? Where will we go to complain or seek recourse if agencies that regulate these professions go away?” And what, she wonders, about public safety?
“Buildings designed by people who aren’t trained architects are more likely to fall down,” she points out.
Innovative projects like blank studio’s “Jacaranda Avenue” designs shortly may be replaced by amateur hour cut-and-paste ventures.
Matthew G. Trzebiatowski thinks so, too. When he moved here from Wisconsin 17 years ago, Trzebiatowski thought of Phoenix as a stopping-off place where he could launch his architecture firm, get some new-build projects under his belt, and move on. Somewhere along the way, he fell in love with the city, and decided to stay. Today, the owner of blank studio design + architecture calls Phoenix “home.” He wants to make it a beautiful home, but he worries about this potential new trend in sanctioning amateurs.
“There are already a lot of licensed architects who don’t do beautiful work,” says Trzebiatowski, whose firm’s proposed Jacaranda Avenue project recently took first place in the American Institute of Architects’ “This is Phoenix” competition. “Frankly, there’s not much to be gained by having unlicensed professionals, even if they’re offering high-quality work. They won’t know how to respond appropriately when something goes awry with your building project. And something always goes awry.”
Trzebiatowski gets it: It’s easier and cheaper for designers to sidestep licensure. “The process is expensive and time-consuming and flawed. But it also protects the safety of the people we serve. The ‘buyer beware’ attitude that may result from deregulation is frightening, because lives may be at stake.”
Recent victories against deregulation give Cornelius hope. House Bill 2333, introduced last year, concerned itself with “commercial tenant improvements by a non-registrant,” and would have allowed unlicensed contractors to work on residential projects. AIA lobbyists, terrified of amateur-hour handymen taking over their industry, successfully beat HB 2333 to the ground.
Governor Ducey remains focused on stimulating the economy by doing away with the messy legwork of licensing and regulation.
“Excessive government licensing regulations often do nothing more than stifle competition, aiding entrenched interests and keeping out the little guy,” Daniel Ruiz II, Ducey’s director of media affairs, told me. “The governor believes licenses should only be required when they are designed to truly protect public health and public safety.”
A white paper published last year by the Goldwater Institute elaborates. “Local, state, and federal governments use licensing laws, government-conferred monopolies, certificate of need requirements, and other regulations to make it difficult for entrepreneurs to start new businesses,” the document explains. “Such restrictions often inflict their greatest burdens on people with little wealth or political clout, thereby cutting off the bottom rungs of the economic ladder.”
By getting all those snotty experts out of the way, the Right to Earn a Living Act will ensure that economic opportunity trumps expertise. Fewer messy, time-consuming, restrictive regulations will mean more jobs for undereducated, unlicensed workers.
But while Ducey means for deregulation to stimulate local economy with more jobs, Cornelius worries it will have the opposite effect. “The unlicensed architect is going to lose business to someone from out of state who is licensed,” she claims, “because developers and builders will insist on hiring a licensed architect over an unlicensed one.” In other words, developers building projects here may hire architects, Cornelius supposes, from states that still require licensure in building and design trades.
Next up, Cornelius says, may be the consolidation of regulatory boards. The result would be boards unfamiliar with the industries they’re charged with standardizing.
In the meantime, no buildings have fallen on anyone’s head. And there’s no way of knowing whether legislation specific to deregulating architects, or additional “right to earn a living” amendments, will be falling from the sky, either.
“We haven’t seen legislation specifically targeting architects,” she says, “but any legislation that seeks to undermine regulation has the potential to impact any one profession.”
Cornelius and her board have reached out to the governor’s office, she says, to discuss the perils of deregulation. “So far,” she sighs, “no one there wants to talk to us.”
Black finds some unfortunate ironies in the idea of deregulating his trade.
“This is supposedly all about protecting industry,” he says. “But removing the restrictions on any building industry could corrupt and kill it. That’s the opposite of stimulating. How do you resolve that?”