EV Transition Ripple Effects Call For Just, Careful Planning

A New Paper Outlines Landscape Of Challenges, Opportunities

New rules promoting the transition to zero-emission trucking will have far-reaching ripple effects that can be subtly directed to better benefit those who’ve traditionally been harmed by the logistics industry in the past. That’s the message of a new paper from the Economic Roundtable, “Coming Soon! A Warehouse Near You,” looking at the combined impacts of a state regulation requiring all new drayage trucks serving ports and railyards to be zero-emission and a regional regulation holding warehouses accountable for emissions from trucks serving them. The state regulation went into effect Jan. 1. The regional regulation has been phasing in since 2022, when about 1,000 warehouses were required to take action — a number that more than doubled the next year.

“The ripple effects from these clean-air initiatives are altering land use, road use, electricity infrastructure, jobs, and community health,” the paper says. “If we see these changes coming and intelligently nudge them in the right direction, rather than letting things take their own course, the ripple effects can build environmental justice and environmentally safe communities and livelihoods.”

A key factor is that electric vehicles, or EVs, have shorter ranges, making it less attractive to ship goods to Inland Empire warehouses and then ship back to consumers living much closer to the coast. This combines with two pre-existing factors: the overbuilding of Inland Empire warehouses that peaked during the pandemic (resulting in 30 million square feet of completely vacant warehouse space) and the growth of e-commerce making efficient last-mile deliveries more important, spurring a shift to smaller warehouses — fulfillment centers — closer to affluent neighborhoods.

The vacant warehouses have come at considerable cost to local communities, as well as the global environment. They “represent over 556 million pounds of carbon dioxide that has accelerated global warming,” the paper notes. “New adaptive uses for unneeded warehouses will prevent the environmental cost of building these warehouses from going to waste.” At the same time, it’s important to not repeat the past mistakes of the warehouse siting with new ones.

To explore the issues raised in the paper, Random Lengths spoke with Dan Flamming, head of the Economic Roundtable, and two other co-authors, Anthony Orlando, a Cal State Pomona professor of finance, real estate and law, and Fernando Gaytan, an environmental lawyer with Earthjustice.

The vacancies “surprised us,” said Orlando, “especially given how much of the conversation in the news and in the industry over the last couple of years has been about the heavy demand for industrial properties on how tenants have been gobbling them up throughout the Inland Empire.”

As a result, “The most painful dislocations will be in the Inland Empire, where our projection is there will be some warehouse closure and some loss of warehouse jobs in communities where jobs are scarce,” Flamming said. “One of the upsides is that jobs from electrification have grown more quickly in the Inland Empire than the overall labor market and they pay a lot more,” he added. “So there are some upsides, but it’s not a facile career transition from warehouse to electricians.” Helping to facilitate that transition — with “intelligent collaboration from the job-training system and also the union apprenticeship system” — is a prime example of the kinds of proactive steps that can be taken to make the best of the coming ripple effects.

Orlando highlighted another. “One of the opportunities here is adapting old buildings or buildings that no longer fit within the logistics network to new uses,” he said. “So, one of the audiences that we’re speaking to is both the city planners and regulators who oversee that aspect of the real estate market, as well as the affordable housing developers, a lot of us work with him and saying, ‘Here are opportunities maybe to create more affordable housing or to create industrial buildings that would provide more dense jobs and better paying jobs with living wages.’”

Metal fabrication is “the only durable manufacturing industry. I have found that has a strong foothold in the Inland Empire,” Flamming said. Workers in the industry “earn an average of $66,924 a year” compared to only $28,900 for warehouse workers, according to the paper. And there would be many more jobs in the same amount of space: one for every 758 square feet of space compare to one job for every 9,148 square feet for warehouse jobs.

“The opportunity for highroad jobs, the opportunity to bring in some sort of economic opportunity, what some would call family-sustaining wages, is something that many in our coalition of environmental justice partners would be interested in exploring,” said Gaytan. “But it’s how and what gets to replace the warehousing activity that’s crucial,” he warned, since “we’d be concerned about manufacturing and the potential impact it may continue to have on communities that are already overburdened.”

On the housing side, Flamming cited the downtown LA arts district as an example of warehouse repurposing, and Orlando called it “a good example to look to for both good and bad reasons.” It was good as “an exciting place where a lot of redevelopment has been happening, but it also has taken decades to get to that point,” he pointed out. “Those warehouses, many of them were empty for many years, the better part of the second half of the 20th century” because developers weren’t going to invest until rents went up. “We don’t want to wait that long in the Inland Empire,” Orlando said. “We don’t want to wait till the market is so hot that developers finally decide, after decades of vacancies, that they’ll spend the money to convert these properties.”

Gaytan agreed with Orlando’s observations, stressing the need for “really looking at opportunities to create deeply affordable housing, so bringing in partners that are mission-driven affordable housing providers, community land trusts to look at removing properties out of the speculative market and creating ownership opportunities.” He also noted that, “Many of the warehouses are already along the transportation network,” so, “There’s an opportunity there to create transit oriented development in the way it was meant to be — meaning creating it for affordable housing providers, eliminating greenhouse gas emissions by eliminating commutes and bringing families in dire need of that affordable housing closer to opportunity.”

When it comes to building new warehouses closer to consumers, it’s important not to repeat past mistakes. “In the Inland Empire, we’ve seen extremely permissive siting around warehouses that discounted the quality of life for low income communities and communities of color,” Flamming noted. “It was of negligible importance to allow a huge warehouse to be built next door to homes or even to demolish homes.” What’s needed for new warehouses is “thoughtful zoning where trucks don’t have to traverse residential neighborhoods, and where the bustle and noise and often around-the-clock movement of goods from warehouses isn’t disruptive for residential neighborhoods.”

One serious hitch is the slow pace of infrastructure development. “Utilities move on a pretty different time cycle than environmental regulations,” Flamming noted. “They plan multi-years ahead, and they have five-year plans, they have 10-year plans and they have not been bustling” when it comes to getting electricity out to charging stations where trucking companies need it. “One hurdle to get over is a trucking company saying, ‘Yes we’re going [to] switch to new technology. We like this. We want to be a first mover. Let’s get some electric trucks,’ and then them having to wait two years to get charging equipment and have the electricity for it.”

There’s a similar problem in developing more resilient micro-grids, with rooftop solar and using EV batteries as an energy reservoir. “There’s been a lot of discussion, especially on the East Coast,” Gaytan noted, “although the opportunities for it to takeoff have been slow going in California, unfortunately for a number of different reasons,” but the repurposing of warehouses should start moving things forward. “So the answer there [is] just [not] quite yet, but it’s certainly something that we can think about.”

In short, the big picture here is that there is a big picture change underway, with an urgent need for coherent coordination to avoid repeating past mistakes and ensure that the benefits are equitably shared.