IT’S A WRAP, LEGISLATION SESSION OVER FOR THE YEAR

Posted: October 20, 2017 | Posted by Crystal Whitfield | No Comments

Sunday was the final night for the Governor to sign or veto bills on his desk.  In 2017 the Legislature sent 977 bills to his desk.  He signed 88% of the bills (859) and vetoed 12% (118).

Last year, Governor Brown vetoed 159 out of 1059 bills, for a 15% veto rate.  To put this year’s actions in context (lowest year to highest year of vetoes):

Between 2011 and 2016, Governor Brown vetoed between 10.7% and 15% of the bills

Between 2004 and 2010, Governor Schwarzenegger vetoed between 22.3% and 35% of the bills

Between 1999 and 2003, Governor Davis vetoed between 6% and 25% of the bills

Between 1991 and 1998, Governor Wilson vetoed between 8.6% and 24.5% of the bills

Now, here are some of the bills we followed closely.

BILLS SIGNED BY THE GOVERNOR WE OPPOSED

Posted: October 20, 2017 | Posted by Crystal Whitfield | No Comments

This is the most important category of bills to look at.  Our industry opposed these measures, yet they were signed into law.  These are the bills that are most likely to have a negative impact on your operations:

AB 168 (Eggman D) Employers: salary information. (OPPOSE)

AB 1180 (Holden D) Los Angeles County Flood Control District: taxes. (OPPOSE)

AB 1701 (Thurmond D) Labor-related wage liabilities. (OPPOSE)

SB 2 (Atkins D) Building Homes and Jobs Act. (OPPOSE)

SB 63 (Jackson D) Unlawful employment practice: parental leave. (OPPOSE)

BILLS SIGNED BY THE GOVERNOR WE SUPPORTED

Posted: October 20, 2017 | Posted by Crystal Whitfield | No Comments

Here are some bills signed by the Governor.  Our industry was in support of all these measures:

 AB 72 (Santiago D) Housing. (SUPPORT)

AB 73 (Chiu D) Planning and zoning: housing sustainability districts. (SUPPORT)

AB 246 (Santiago D) Environmental quality: Jobs and Economic Improvement ACT (SUPPORT)

AB 879 (Grayson D) Planning and zoning: housing element. (SUPPORT)

AB 1223 (Caballero D) Construction contract payments: Internet Web site posting. (SUPPORT)

AB 1284 (Dababneh D) California Financing Law: Property Assessed Clean Energy program (SUPPORT)

AB 1515 (Daly D) Planning and zoning: housing. (SUPPORT)

AB 1553 (Cervantes D) Economic development: Capital Access Loan Program. (SUPPORT)

AB 1583 (Chau D) Proposition 65: enforcement: certificate of merit: factual basis. (SUPPORT)

AB 1598 (Mullin D) Affordable housing authorities. (SUPPORT)

SB 145 (Hill D) Autonomous vehicles: testing on public roads. (SUPPORT)

SB 167 (Skinner D) Housing Accountability Act. (SUPPORT)

SB 205 ((G&F) Local Government Omnibus Act of 2017. (SUPPORT)

SB 229 (Wieckowski D) Accessory dwelling units. (SUPPORT)

SB 242 (Skinner D) Property Assessed Clean Energy program (SUPPORT)

SB 329 (Leyva D) Manufactured homes: financial assistance programs. (SUPPORT)

SB 540 (Roth D) Workforce Housing Opportunity Zone. (SUPPORT)

SB 564 (McGuire D) Joint powers authorities: Water Bill Savings Act. (SUPPORT)

SB 653 (Moorlach R (County tax collectors: notices: publication. (SUPPORT)

SB 711 (Hill D) Electrical corporations and gas corporations: rates and charges. (SUPPORT)

BILLS VETOED BY THE GOVERNOR

Posted: October 20, 2017 | Posted by Crystal Whitfield | No Comments

Finally, here are some bills vetoed by the Governor that we were happy he did not sign into law, as we opposed most of them:

AB 248 (Reyes D) Hazardous waste: facilities: permits. (OPPOSE)

AB 890 (Medina D) Land use: planning and zoning: initiatives. (OPPOSE)

AB 978 (Limón D) Employment safety: injury and illness prevention program. (OPPOSE)

AB 1179 (Kalra D) Hazardous waste facilities: inspections. (OPPOSE)

AB 1239 (Holden D) Building standards: electric vehicle charging infrastructure. (NEUTRAL)

SB 42 (Hill D) Public lands: Martins Beach: property acquisition. (OPPOSE)

That’s a wrap for the 2017 legislative year!  If you want a full list of bills reply to the email and we will send you the big long report.

STRATEGIC ISSUES CONFERENCE- DECEMBER 7-8, NAPA, CALIFORNIA

Posted: October 20, 2017 | Posted by Crystal Whitfield | No Comments

TEN major groups have come together to host an event you don’t want to miss!  California Business Properties Association (CBPA), the American Council for Engineering Companies (ACEC), the Building Owners and Managers of California (BOMA CAL), the California Alliance for Jobs (CAJ), the California Building Industry Association (CBIA), the California Business Roundtable (CBRT), the California Manufacturers & Technology Association (CMTA), the Commercial Real Estate Development Association (NAIOP), the National Federation of Independent Business (NFIB) and the Retail Industry Leaders Association (RILA) are co-hosting one of the premier biannual policy gatherings, 2017 Strategic Issues Conference. 

 The Strategic Issues Conference offers a unique opportunity, in an intimate setting, to enjoy significant exposure to key decision-makers and policymakers from both the public and private sectors.  The goal of the Strategic Issues Conference is to increase public policy and political awareness of state and national issues, and to foster collaborative efforts among business leaders from all sectors of the California economy.  Your sponsorship will contribute in achieving this goal, and will signal your strong support for the commercial, industrial, and retail real estate industry. 

 Click here for more information!

L.A. COUNTY FLOOD CONTROL TAX

Posted: September 29, 2017 | Posted by Crystal Whitfield | No Comments

On behalf of our industry, we have requested that Governor Brown veto AB 1180 (Holden; D-Los Angeles), legislation that seeks to allow Los Angeles County Flood Control District to levy special taxes to manage stormwater, because it lacks basic taxpayer safeguards.

While our industry understands the intent of this action and share the common goals of conserving and capturing stormwater, we are very concerned that AB 1180 doesn’t provide basic guidance and protections to assure the monies are levied and spent appropriately.

We support our Los Angeles County members who oppose this measure based on the following: The funding does not have an independent oversight component; Legislative authority needs to be included for the Regional Board to accept funding from this tax source for purposes of a complete update of the Basin Plan for storm water; 100% of these funds should be dedicated to compliance with the MS4 permit; and finally, authority should be included for these funds to be used for a pollution credit trading program with the approval of the Regional Board.

PACE BILLS SUPPORTED

Posted: September 29, 2017 | Posted by Crystal Whitfield | No Comments

On behalf of our industry, we have requested that Governor Brown sign two bills enhancing to the Property Assessed Clean Energy (PACE) program.

We believe that AB 1284 (Dababneh; D-Encino) will strengthen the consumer protections associated with PACE financing. This measure builds upon the nation-leading PACE disclosures put in place last year.  In addition to expanding access to financing for sustainable property improvements to a larger swath of Californians, PACE plays an important role in California’s plan to meet our greenhouse gas reduction goals by promoting greater adoption of energy-efficient technologies.

Additionally, we have asked the Governor to sign SB 242 (Skinner; D-Berkeley) as we believe the bill will strengthen the consumer protections associated with the PACE program.

Much of California’s existing building stock was built before the adoption of the state’s mandatory energy standards.  These bills will strengthen a financing option that allows owners to take on deep energy retrofits without a state forced mandate.

WATER BILL SAVING ACT

Posted: September 29, 2017 | Posted by Crystal Whitfield | No Comments

On behalf of our industry, we have requested that Governor Brown sign AB 564 (McGuire; D-Healdsburg) which creates the “Water Bill Savings Act.”

The Act allows local agencies to issue bonds to fund the purchase and distribution of drought tolerant landscapes, upgrades to hot water systems, gray water systems, high efficiency toilets, and high efficiency showerheads at private property within their jurisdictions.

The property owners and tenants can then repay the fixture upgrades over time through their utility bills. The ability to repay bonds with customer efficiency charges enables those receiving the benefit of reduced bills to pay for efficiency, and create benefits to the water system at scale.

The Water Bill Savings Act is a voluntary program and will create another tool for local governments to respond to drought that is regionally efficient, financially sustainable, and available to all municipal utilities, large and small.

We support SB 564 because it will help people save money on water while reducing wasted water and provide a voluntary tool to meet state conservation mandate. SB 564 is a sustainable model for investment in water efficiency.

MANDATOR BENCHMARKING REGULATIONS

Posted: September 29, 2017 | Posted by Crystal Whitfield | No Comments

Regulations to guide California’s implementation of the state’s mandatory benchmarking law are in the final stages of being finalized.  Basically, if you will have to benchmark any building over 50,000 s.f. and report that information to the CEC.  The regulations are a bit more complicated, as they get into lots of detail about many compliance scenarios.  The last round of amendments to the regulations included the following:

  1. Modifying the definition of “active” as it applies to utility accounts (§1681(a)).
  2. Modifying the methods a building owner or owner’s agent may use to demonstrate

building ownership or agency when requesting energy use data from a utility

(§1682(a)(1)(B)).

  1. Clarifying and simplifying the processes by which a building owner, owner’s agent, or

utility may obtain customer permission to share building-level energy use data with a

building owner or owner’s agent (§1682(b)(4)).

  1. Specifying that a utility will not be required to provide whole-building energy use data

more than once in a three-month period (§1682(b)(7)), except for requests made for

compliance with the benchmarking and public disclosure requirements.

  1. Adding requirements for a building owner or owner’s agent to notify a utility of certain

changes when the utility is providing recurring automatic upload of whole-building

energy use data (§1682(b)(8)).

  1. Removing items from, and making modifications to, the list of metrics the Energy

Commission may make available on a public website (§1683(c)(3)).

Our industry has paid very close attention to this issue, has provided comments and feedback to the CEC through every step of the process, and we remain in support of these regulations.  Click here to see all the details.

GOOD NEWS FOR NEWHALL RANCH

Posted: September 29, 2017 | Posted by Crystal Whitfield | No Comments

Great new for sustainable development in California.  A settlement has been reached in the decades long battle to build Newhall Ranch, a development in the Santa Clarita Valley city of Valencia.  Reportedly, the deal will allow the $13 billion, 21,500-home Newhall Ranch project, move forward without lawsuit entanglements from environmental groups.

FivePoint Holdings reached the deal with the Santa Ynez Band of Chumash Indians, the Wishtoyo Foundation, the Center for Biological Diversity, and the California Native Plant Society, which includes further protection of the endangered unarmored three-spined stickleback, a scaleless, freshwater fish.

Click here to read all the details of the welcome announcement.

STRATEGIC ISSUES CONFERENCE- DECEMBER 7-8, NAPA, CALIFORNIA

Posted: September 29, 2017 | Posted by Crystal Whitfield | No Comments

TEN major groups have come together to host an event you don’t want to miss!  California Business Properties Association (CBPA), the American Council for Engineering Companies (ACEC), the Building Owners and Managers of California (BOMA CAL), the California Alliance for Jobs (CAJ), the California Building Industry Association (CBIA), the California Business Roundtable (CBRT), the California Manufacturers & Technology Association (CMTA), the Commercial Real Estate Development Association (NAIOP), the National Federation of Independent Business (NFIB) and the Retail Industry Leaders Association (RILA) are co-hosting one of the premier biannual policy gatherings, 2017 Strategic Issues Conference.

The Strategic Issues Conference offers a unique opportunity, in an intimate setting, to enjoy significant exposure to key decision-makers and policymakers from both the public and private sectors.  The goal of the Strategic Issues Conference is to increase public policy and political awareness of state and national issues, and to foster collaborative efforts among business leaders from all sectors of the California economy.  Your sponsorship will contribute in achieving this goal, and will signal your strong support for the commercial, industrial, and retail real estate industry.

Click here for more information!

LOTS OF BILLS STOPPED IN THE LEGISLATURE

Posted: September 22, 2017 | Posted by Crystal Whitfield | No Comments

Last Saturday the California State Legislature Adjourned for the year.  With a two-thirds vote Democrat party supermajority in both houses, many bills of concern and many we like, actually, were sent to the Governor, some with last minute changes, and we are working with our members to assess the good, the bad, and the hopefully vetoed.

However, not to dwell on bad, dead bills, we do want to provide some information about some of the bills we, in coalition with our friends at the CalChamber leading the charge on behalf of business, and economic expansion, were able to stop:

SB 100 (de Leon; D-Los Angeles) died on the Assembly Floor.  It would have created uncertainty for businesses in the state and potentially increases the cost for energy by creating an ambiguous zero-carbon energy planning goal and requirements for regulatory agencies in the state. Achieving our aggressive and ambitious 2030 goal of reducing our greenhouse gas (GHG) emissions 40% below 1990 levels will be very difficult, and we argued the state should do everything we can to minimize costs on business and disruptions to energy production and cost increases.   Ultimately this bill died because of an argument with some of the state’s public and private labor unions.

AB 1250 (Jones-Sawyer; D-Los Angeles) a de facto prohibition on contracted services originally for cities and counties, and eventually just focused on counties. The measure would hinder services provided by organizations in our 58 counties. AB 1250 created onerous new burdens on contracting firms that are defined as “a corporation, partnership, non-profit organization, or sole proprietorship.” The significant hurdles imposed by AB 1250, including paying for an annual audit, would deter or prevent non-profit organizations from entering into contracts with counties and limit service options and availability and was viewed by many as public employee unions trying to ban private businesses from being able to business with local Governments by making the rules to do so onerous and expensive.

AB 127 (Committee on Budget) was identified as a job killer on September 13 when language was added to a budget bill that threatened energy reliability by mandating the closure of the Aliso Canyon natural gas storage facility. CalChamber had identified AB 127 as a job killer because it would have eliminated jobs and placed regional energy reliability at risk. The bill was never taken up for a vote on the Senate Floor.

SB 49 (de León; D-Los Angeles), which would have created uncertainty and increased potential litigation regarding environmental standards, was held in the Senate Rules Committee.  The bill would have given broad and sweeping discretion to state agencies to adopt rules and regulations more stringent than the federal rules. SB 49 would have increased the potential for costly litigation by creating private rights of action under California law, which may be triggered when a state agency takes the foregoing discretionary action.

SB 774 (Leyva; D-Chino), was held on the Assembly Floor inactive file, just days after being amended with onerous provisions. It would established the California Toxic Substances Board within the Department of Toxic Substances Control (DTSC), requiring DTSC to adopt a new fee schedule by January 1, 2019 “at a rate sufficient to reimburse the department’s costs to implement” its statutory requirements.

WATERS OF THE STATE

Posted: September 22, 2017 | Posted by Crystal Whitfield | No Comments

The commercial real estate industry, along with a broad coalition of other groups, have submitted a comment letter on the State Wetland Definition and Procedures for Discharges of Dredged or Fill Materials to Waters of the State, formerly known as the Wetland and Riparian Area Protection Policy, as there are significant concerns with how the procedures are drafted.  If you are interested in infrastructure improvements and economic development these proposed rules could place significant hurdles to achieving those goals.

As currently drafted, the Procedures will create unnecessary conflict by proposing a new wetland definition that differs from the definition that has been used by the U.S. Army Corps of Engineers (“Corps”) since 1977. This will result in features being classified as a wetland by the Water Board but as non-wetland waters by the Corps, leading to conflicting alternatives analysis determinations and mitigation requirements.

The Procedures will also set new regulatory requirements that will affect projects across the state — from large infrastructure projects to smaller projects necessary for the operations of many medium and small business owners, who are now complying with a multiplicity of new and costly water quality regulations.

Unless modified, the Procedures will slow to a crawl the U.S. Army Corps of Engineers’ streamlined Nationwide Permit (“NWP”) program. The thresholds under consideration are so low that, ironically, even small projects involving operations and maintenance improvements will be forced to prepare an alternatives analysis. We estimate that each year more than 200 projects that qualify for a Corps NWP will be subject to costly and time-consuming application requirements, forcing project sponsors to engage biologists, engineers, economists, and attorneys to identify, design, and evaluate a range of on- and offsite alternatives. Medium and small businesses and many local governments cannot afford these added costs. Improvements will not be undertaken, and good-paying jobs in disadvantaged rural areas lost.

Our coalition is asking the State Board – if it even determines it needs to act – to move forward with the adoption of a program that fills the regulatory gap by protecting non-federal waters of the state as if they were regulated by the Corps’ current procedures, including adopting a wetlands definition and delineation techniques that are identical to the well-established definition used by the Corps.  Alternately, if the Board does decide to act, comments that would make the program work better have been submitted.  We will keep you posted.

STRATEGIC ISSUES CONFERENCE- DECEMBER 7-8, NAPA, CALIFORNIA

Posted: September 22, 2017 | Posted by Crystal Whitfield | No Comments

TEN major groups have come together to host an event you don’t want to miss!  California Business Properties Association (CBPA), the American Council for Engineering Companies (ACEC), the Building Owners and Managers of California (BOMA CAL), the California Alliance for Jobs (CAJ), the California Building Industry Association (CBIA), the California Business Roundtable (CBRT), the California Manufacturers & Technology Association (CMTA), the Commercial Real Estate Development Association (NAIOP), the National Federation of Independent Business (NFIB) and the Retail Industry Leaders Association (RILA) are co-hosting one of the premier biannual policy gatherings, 2017 Strategic Issues Conference.

The Strategic Issues Conference offers a unique opportunity, in an intimate setting, to enjoy significant exposure to key decision-makers and policymakers from both the public and private sectors.  The goal of the Strategic Issues Conference is to increase public policy and political awareness of state and national issues, and to foster collaborative efforts among business leaders from all sectors of the California economy.  Your sponsorship will contribute in achieving this goal, and will signal your strong support for the commercial, industrial, and retail real estate industry.

Click here for more information!

TWO WEEKS TO GO!

Posted: September 5, 2017 | Posted by Crystal Whitfield | No Comments

 

The Legislature met today in an unusual Friday floor session due to the Monday holiday.  Additionally, both Appropriations Committees met today to take care of the “Suspense Files.”  So, busy day for the Legislature.  When they return on Tuesday there will be less than two weeks of the 2017 session left.  This means lots of activity and potential for last minute shenanigans.  So, on your behalf, we will be following the proceedings closely!

AFFORDABLE HOUSING BILLS – NO ACTION TODAY

Posted: September 5, 2017 | Posted by Crystal Whitfield | No Comments

 

All week there has been a build-up to the potential that the Legislature was going to take up the so-called “Affordable Housing” package on Friday.  That package has been rumored to be as many as 17 bills, but no one has really known for sure what was “in” and what wasn’t.

Regardless, three bills have been the focus of the package:

 SB 2 (Atkins) Real Estate Document Tax: Imposes a tax of at least $75 on all recorded real estate documents which is re-directed to public affordable housing programs, emergency shelters, and transitional housing.

 SB 3 (Beall) Affordable Housing Bond Act of 2018:  A $3-$5 billion general obligation bond to fund public affordable housing programs and infill infrastructure projects including.

 SB 35 (Weiner) Affordable Housing Regulation Streamlining: Seeks to streamline multi-family housing project approvals by streamlining the approval process in exchange for agreeing to project-labor agreements (PLAs) which will trigger prevailing wage on private projects.

While the actual package of bills that will be included in the housing deal has yet to be formally announced, the Governor and leaders have insisted that new money for affordable housing will only be available if it is paired with streamlined regulations at the local level and new sources of revenue (bonded indebtedness and new taxes).

We are working with our membership to determine how to move forward on the total package of bills, our industry, however, remains opposed to SB 2 (see below).

REAL ESTATE DOCUMENT TAX REMAINS CONTROVERSIAL

Posted: September 5, 2017 | Posted by Crystal Whitfield | No Comments

 

Of the three bills mentioned above, SB 2 remains extremely controversial and is the subject of the most speculation about whether or not it can garner the needed two-thirds vote to pass; at one point this week the L.A. times even ran a story with the screaming headline, “Democrats lack votes to pass key California Housing Bill.”

SB 2 is a regressive tax on all recorded real estate documents, except those related to an actual sale of a home or a building.  In other words, the largest transactions where the tax would be least felt, are not subject to the up to $250 per transaction tax that it authorizes, but every small day-to-day type of transaction is.  Currently to file your lot line adjustment you pay around $36.  Under SB 2 that jumps over seven times to $261 – a outrageous tax increase.

Concern is strong with many in the Legislature about SB 2, and not just the fact that it is a regressive tax.  But the numbers being presented by the author underscore the fact that this will produce a paltry amount of money that goes to affordable housing, and even less comes back to local communities, while layering on a big tax on families and small businesses.

For example, under SB 2, in Orange County alone, it is estimated that over 390,000 documents would be subjected to the tax, generating about $20 million in tax revenue.  But according to advocates for the measure, the formula in the bill would return less than $6M back to Orange County to spend on affordable housing and homeless programs.

This is not a good return on investment and many policymakers recognize that, even in the face of a concerted effort to convince them otherwise.  Because of the directives in the bill and the fact that only 70% of the tax revenue is distributed back to locals, we are worried that this scenario could be common in many counties.

However, our industry remains opposed to the new taxes contained in SB 2 as the bill is a regressive measure that inserts a convoluted tax into the middle of day-to-day real estate business and does very little to directly produce affordable housing.

We think if the Legislature just folded this program into the budget it would easily pass, remove the complicated taxation scheme, and garner lots of support.

SUBCONTRACTOR LIABILITY BILL STRONGLY OPPOSED

Posted: September 5, 2017 | Posted by Crystal Whitfield | No Comments

One bill that continues to move forward that we continue to strongly oppose is AB 1701 (Thurmond; D-Richmond). This bill creates a new private right of action against general contractors for liabilities they did not cause and without providing any notice or ability to prevent the harm.

We believe that every worker should be paid promptly. However, under current law, subcontractors are prohibited from providing employee identification without the employee’s permission or a court order. Moreover, the general contractor does not hire subcontractors to another subcontractor and may not be aware of their presence on the job.

Rather than creating an ability to avoid the harm of unpaid workers, AB 1701 would make the worker go through a lengthy process of litigation – beginning one year after the work is complete, delaying payment for years. If general contractors could obtain information about the status of worker compensation prior to making a progress payment to the subcontractor, they could ensure that workers are promptly paid.

Additionally, AB 1701 will have the unintended consequence of increasing the likelihood that subcontractor employees will not be paid by adding Labor Code section 218.7(a)(3): “A direct contractor or any other person shall not evade, or commit any act that negates, the requirements of this section.”

This would prevent general contractors from including indemnification provisions in their agreements with subcontractors. Contractual indemnity provisions put the subcontractor on notice that they will not escape liability if they fail to pay their employees. Without a contractual right of indemnification, AB 1701 creates a moral hazard.

We strongly oppose this bill that will further make housing and construction in the state of California more expensive.

LOCAL INITIATIVE TAX MEASURE DECISION FIX SOUGHT

Posted: September 5, 2017 | Posted by Crystal Whitfield | No Comments

 

This week the California Supreme court ruled that local ballot initiatives imposing new taxes for specific purposes only need a simple majority of voters to pass.  This decision has rocked many in the state as it shakes the foundation of Proposition 13 and created a gigantic loophole for pro-tax officials to game the system by running a “grassroots” initiative in order to make it easier to pass taxes.

Click here for a more in-depth story about the ruling and its potential ramifications.

In response, Assembly Republicans have already introduced a measure to “fix” the newly created loophole, however, not many Capitol Watchers are confident the proposal will be embraced by the needed 2/3s to pass a constitutional amendment.

This ruling will make it easier for non-governmental groups to pass local tax measures and we implore all of our members to become more active at the local level to ensure you are not caught by surprise when measures start coming forth.

PREVAILING WAGE MANDATES INCREASE CONSTRUCTION COST BY 37%

Posted: September 5, 2017 | Posted by Crystal Whitfield | No Comments


The Coalition for Affordable, Reliable and Equitable Housing issued the following statement after a new study revealed that prevailing wage mandates in private residential housing would result in $84,000 in higher housing costs:

“In a time of unprecedented crisis – as communities of color and all Californians are struggling to regain their footing from the housing crash – we cannot afford any more expensive mandates that will starve people of being able to put a roof over their head. Prevailing wage mandates, perhaps will help some members of a politically powerful special interest, but that is only achieved at the expense of every other Californian currently struggling with higher housing costs. The bottom-line is prevailing wage will lead to higher poverty, higher housing costs and make our state’s housing crisis even worse,” said John Gamboa, Cofounder and President of California Community Builders and Vice Chair of the Two Hundred Project.

The report, Impacts of a Prevailing Wage Requirement for Market Rate Housing in California, was funded by the California Homebuilding Foundation and conducted by Matthew Newman, former Executive Director for the California Institute for County Government and former Policy Analyst for the Legislative Analyst’s Office.

The full report can be found here.

STRATEGIC ISSUES CONFERENCE- DECEMBER 7-8 , NAPA, CALIFORNIA

Posted: September 5, 2017 | Posted by Crystal Whitfield | No Comments

TEN major groups have come together to host an event you don’t want to miss!  California Business Properties Association (CBPA), the American Council for Engineering Companies (ACEC), the Building Owners and Managers of California (BOMA CAL), the California Alliance for Jobs (CAJ), the California Building Industry Association (CBIA), the California Business Roundtable (CBRT), the California Manufacturers & Technology Association (CMTA), the Commercial Real Estate Development Association (NAIOP), the National Federation of Independent Business (NFIB) and the Retail Industry Leaders Association (RILA) are co-hosting one of the premier biannual policy gatherings, 2017 Strategic Issues Conference.  

The Strategic Issues Conference offers a unique opportunity, in an intimate setting, to enjoy significant exposure to key decision-makers and policymakers from both the public and private sectors.  The goal of the Strategic Issues Conference is to increase public policy and political awareness of state and national issues, and to foster collaborative efforts among business leaders from all sectors of the California economy.  Your sponsorship will contribute in achieving this goal, and will signal your strong support for the commercial, industrial, and retail real estate industry.

Click here for more information!

“THEY’RE BAAAAACK!”

Posted: August 25, 2017 | Posted by Crystal Whitfield | No Comments

The California State Legislature is back from their Summer Recess, tan, rested, and ready, to finish out the final four weeks of the 2017 legislative year.  In addition to dealing with hundreds and hundreds of bills, Leadership has announced they are going to focus on a package of bills relating to affordable housing and are looking for ways to spend the windfall of cap-and-trade dollars.  As we push through to the final days of Session in mid-September it could be a wild ride.

AFFORDABLE HOUSING ISN’T AFFORDABLE ANYMORE

Posted: August 25, 2017 | Posted by Crystal Whitfield | No Comments

Doing something – anything – to appear to address the affordable housing crisis is at the top of Legislative Leaders minds.   Housing is an incredibly important issue to our association and the lack of supply, inability to keep up with demand, and the increase in prices that come along with that, must be addressed.

The median California home is now priced 2.5 times higher than the median national home.  Extremely high housing prices have caused home ownership in our state to tank – with just over half of California households owning their homes—the third lowest rate in the country. At the same times rents have soared.  Statewide, the median rental price for a two-bedroom apartment is $2,400, but the costs in urban areas can be more than double the statewide average.  Families are being priced out of certain market, are being forced to move further away from job-centers, and homelessness is increasing due to the lack of affordability.

The reasons why California has gotten into this situation are many.

The biggest driver for increases in housing costs is that the price of land, especially along the coast, had gone through the roof.  Regulations, lawsuits, labor shortages, increased material expense and labor costs, complicated land use laws, are all also pointed to by builders as reasons why supply has been choked off.

Many in the legislature acknowledge privately that these reasons are, indeed, retarding development.  However, disentangling this Gordian Knot of issues will take a lot of political courage, force difficult policy discussion and decisions, and will take a level of give and take with powerful interests, that is currently not happening.  At this point the Legislature is focusing on measures that will focus some public money to affordable housing programs and an attempt at reform that may actually make the cost of construction more expensive in trade for a small modicum of regulatory relief.

That is not to say we don’t support focusing funds on affordable housing programs, nor do we dislike incremental reforms to regulation, but we are concerned that there is not a more serious effort to address the core issues that have driven prices up so much.

The CALmatters website has taken a look into the issue and lays out some basic facts about the issue that should be more widely understood.  We highly recommend reading this article by clicking here.

AFFORDABLE HOUSING BILLS

Posted: August 25, 2017 | Posted by Crystal Whitfield | No Comments

Governor Jerry Brown and legislative leaders issued a statement on July 17 stating they were going to make affordable housing legislation a top priority for the final weeks of session.

While the actual package of bills that will be included in the housing deal has yet to be formally announced, the Governor and leaders have insisted that new money for affordable housing will only be available if it is paired with streamlined regulations at the local level.

There are three bills that have been mentioned the most as being part of this package:

 SB 2 (Atkins) Real Estate Document Tax: Imposes a tax of at least $75 on all recorded real estate documents which is re-directed to public affordable housing programs, emergency shelters, and transitional housing.

 SB 3 (Beall) Affordable Housing Bond Act of 2018:  A $3-$5 billion general obligation bond to fund public affordable housing programs and infill infrastructure projects including.

 SB 35 (Weiner) Affordable Housing Regulation Streamlining: Seeks to streamline multi-family housing project approvals by streamlining the approval process in exchange for agreeing to project-labor agreements (PLAs) which will trigger prevailing wage on private projects.

We are working with our membership to determine how to move forward on this package of bills.  However, our industry remains opposed to the new taxes contained in SB 2 as the bill is a regressive measure that inserts a convoluted tax into the middle of day-to-day real estate business.

PREVAILING WAGE MANDATES INCREASE CONSTRUCTION COST BY 37%

Posted: August 25, 2017 | Posted by Crystal Whitfield | No Comments

The Coalition for Affordable, Reliable and Equitable Housing issued the following statement after a new study revealed that prevailing wage mandates in private residential housing would result in $84,000 in higher housing costs:

“In a time of unprecedented crisis – as communities of color and all Californians are struggling to regain their footing from the housing crash – we cannot afford any more expensive mandates that will starve people of being able to put a roof over their head. Prevailing wage mandates, perhaps will help some members of a politically powerful special interest, but that is only achieved at the expense of every other Californian currently struggling with higher housing costs. The bottom-line is prevailing wage will lead to higher poverty, higher housing costs and make our state’s housing crisis even worse,” said John Gamboa, Cofounder and President of California Community Builders and Vice Chair of the Two Hundred Project.

The report, Impacts of a Prevailing Wage Requirement for Market Rate Housing in California, was funded by the California Homebuilding Foundation and conducted by Matthew Newman, former Executive Director for the California Institute for County Government and former Policy Analyst for the Legislative Analyst’s Office.

The full report can be found here.

SUMMER RECESS – A BIG SIGH OF RELEIF!

Posted: July 27, 2017 | Posted by Crystal Whitfield | No Comments

The California State Legislature met the Second House Policy Committee deadline, voted on hundreds of bills in a flurry of activity, and then…  adjourned for their monthlong Summer Recess.  And a sigh of relief could be heard throughout the land.

With Summer Recess, now is a good time to review the 2017 Legislative Session so far.  Since January, 2,904 legislative bills have been introduced, 968 from the Senate and 1,936 from the Assembly.  We read every one of them – and all of their amended versions.  Of those bills we have tracked a total of 416.  Of those, 217 are still “alive” in the process.  That is a lot of potential law still out there and needing input from our industry!

The bills we track are deemed to have some impact on the commercial, industrial, and retail real estate industry and before we oppose bills, we try to work with authors to fix language in order to remove concerns.

It’s a full-time legislature and tracking what they do takes a lot of time energy and effort. So we are grateful for this Summer Recess as a little break in the action allows us to catch up and get prepared for the Dog Days of August and September when the final sprint begins!

WEEKLY ON HIATUS

Posted: July 27, 2017 | Posted by Crystal Whitfield | No Comments

With all that, due to the Summer Recess, this Weekly eNewsletter will be on hiatus, returning on Friday, August 25.  But don’t worry; your Sacramento staff will be here keeping an eye on the Capitol and if anything exciting happens we will make sure you know about it.

ADA BILL SIGNED BY THE GOVERNOR

Posted: July 27, 2017 | Posted by Crystal Whitfield | No Comments

A bill our industry strongly supports that would continue the State’s reform of ADA laws in an effort to increase accessibility while decreasing frivolous lawsuits passed the Legislature on a bipartisan vote has been signed by Governor Brown.

AB 1148 (Steinorth; R-Rancho Cucamonga) passed its final vote in the Assembly 62-0 and went to the Governor two weeks ago. Click here to read the law.

The new law clarifies issues related to CASp inspection lease disclosures by defining the types of properties that must disclose. Basically, all properties are leased as a “public accommodation” must comply but certain properties that are not generally open to the public will be exempt.

We thank Governor Brown for signing this legislation as it will clear up an issue in law that was unclear and not working as it was intended.

NEWHALL RANCH RE-APPROVED BY STATE

Posted: July 27, 2017 | Posted by Crystal Whitfield | No Comments

After project proponents worked for decades to deal with myriad of environmental issues, the Newhall Ranch development in the Santa Clarita Valley in northeast Los Angeles, cleared its last major hurdle. L.A. County Supervisors certified a revised environmental analysis and approved two of Newhall’s five planned subdivisions.

“On the whole, this is a well thought-out project that will bring needed housing supply while ensuring that environmental resources are being protected,” said Supervisor Kathryn Barger, whose L.A. County supervisorial district includes Newhall Ranch, in the City of Valencia.
The project is bringing much needed housing and jobs to the area, but has been the target of a succession of complaints let by environmental groups that don’s want to see any type of development at all on much of this property.

According to the L.A. Times, 200 people showed up at Tuesday’s meeting to support the development, many wearing “Yes to Net-Zero Newhall” stickers.

Newhall Ranch was first proposed in 1994 and was supposed to break ground in 1998. Almost 19 years later, after many political and legal delays, and drastic changes in the project to make it extremely environmentally friendly, the project appears “a go.”

CBPA is proud to have FivePoint as a longstanding member and to have Greg McWilliams, FivePoint’s Regional President Southern California, as our Chair. They are helping lead the way with this project to show how environmentally friendly development on a large scale can be successful. Click here to read more about Net Zero Newhall.

Click here to read the full story about Newhall Ranch’s approval.

 

 

 

LA COUNTY PROPERTY TAXES ARE GOING UP AGAIN

Posted: July 27, 2017 | Posted by Crystal Whitfield | No Comments

Property taxes will rise again in Los Angeles County, thanks to a brisk real estate market and construction boom. The assessed value of all taxable property in the county jumped by 6.03 percent in 2017, which was slightly higher than last year, figures released Thursday show.  Thankfully, Proposition 13 is still in place and acting as a mitigating factor to double digit increases.  Click here to read a story in the Los Angeles Daily News with more detail.

CLIMATE-SAFE INFRASTRUCTURE WORKING GROUP

Posted: July 27, 2017 | Posted by Crystal Whitfield | No Comments

California Natural Resources Secretary John Laird today announced the appointment of 14 leaders in state climate science and infrastructure design to the Climate-Safe Infrastructure Working Group. The purpose for the group is to further the State’s continued efforts to address the effects of climate change on the built environment.

 “I am proud to announce the appointees of the Climate-Safe Infrastructure Working Group,” stated Secretary Laird in a press release from his office. “These dedicated professionals, with expertise in engineering, science, and policy will provide science-based recommendations to California decision-makers to enable the best infrastructural investment strategies for the state.  As changes to the environment continue to affect the public, the establishment of this Working Group reveals California’s ongoing leadership in climate adaptation.”

Through its deliberations, the working group will investigate: Current informational and institutional barriers to integrating projected climate change impacts into state infrastructure design; Critical information that engineers responsible for infrastructure design and construction need to address climate change impacts; How to select an appropriate engineering design for a range of future climate scenarios as related to infrastructure planning and investment.

Click here for more information and a list of the academics and state agency personnel serving on the workgroup.

BORDER-ADJUSTMENT TAX OPPOSED BY INDUSTRY

Posted: July 27, 2017 | Posted by Crystal Whitfield | No Comments

David Bahr, Communications Manager for R-Street has penned an op/ed explaining how the Border-Adjustment Tax would add nearly $2B to the cost of property insurance in California:

“As the nation’s most populous state, among the wealthiest states and a state that is vulnerable to the catastrophic effect of earthquakes, floods, wildfires and other natural catastrophes, California relies heavily on insurance to manage its significant risk. As Congress prepares to consider structural changes to the U.S. tax code, a new R Street Institute policy study warns that making it more difficult for insurers to buy international reinsurance will have adverse consequences on Californians’ ability to obtain coverage affordably.

“Applying a destination-based cash flow tax—better known as a “border-adjustment tax,” or BAT—to the import of reinsurance will, authors Lars Powell, Ian Adams and R.J. Lehmann note, cost California consumers an additional $1.91 billion in higher property-casualty insurance premiums over the next decade….”

Click here to read the rest of the story.

SACRAMENTO TOTALLY FOCUSED ON CAP AND TRADE

Posted: July 14, 2017 | Posted by Crystal Whitfield | No Comments

Governor Jerry Brown spent five hours in a committee testifying about his proposal to extend California’s Cap-and-Trade program to the year 2030.  This is unheard of and showed the Governor’s commitment to the issue as he had to sit through several hours of public testimony for and against the proposal.

Both bills, AB 617 by Assemblymembers Cristina Garcia (D-Bell Gardens), Eduardo Garcia (D-Coachella) and Miguel Santiago (D-Los Angeles) and AB 398 by Assemblymember Eduardo Garcia (D-Coachella), passed out of committee on a party line vote.

At the hearing, the Governor adamantly advocated for his GHG reduction plan, stating at one point, “We’re not going to pull back — the only question is how to go forward.  Are we going to do that by an extensive, massive, intrusive regulatory burden that will be three to five times more expensive? That is not the way to go.”

According to the Governor’s Office, the legislative package will “launch a landmark program to measure and combat air pollution at the neighborhood level, in communities most impacted, and extend and improve the state’s world-leading cap-and-trade program to ensure California continues to meet its ambitious climate change goals.”

Initially, a vote was scheduled for yesterday on the package, but strong opposition from the far-Left, led by environmental groups that do not want to see any market-based programs and by Environmental Justice groups that want to see more resources directed to certain neighborhoods, has stalled the vote.  Rumor is that amendments are being crafted to both bills now.

Additionally, it is being reported that some legislators are stating they will not vote for the Cap-and-Trade bills unless a package of bills addressing the Affordable Housing crisis in California is also put together (more on this to follow).

So, negotiations are still seemingly fluid and at this point not many people are willing to place a bet on what happens.

Here is a good news account about the craziness that’s happening on this topic right now. Click here to read the full article.

AIR QUALITY ISSUE MIXED UP IN CAP-AND-TRADE NEGOTIATIONS

Posted: July 14, 2017 | Posted by Crystal Whitfield | No Comments

After several weeks of working closely with our supply chain partners/members as part of the Goods Movement Coalition on cap-and-trade issues, we are happy to report that they have successfully been able to keep an issue out of the discussion.

AB 617, noted above, is the follow-on bill dealing with Air Quality issues above and beyond Cap-and-Trade reauthorization.  It is this bill that has made us the most nervous, as there have been some indications it potentially would carry language pertaining to a new Indirect Source Review (ISR) rule which could wreak havoc on the supply chain and regulate individual buildings as well as discrete neighborhood areas, in a manner that could stop building and/or growth of existing facilities.

After reviewing the final language in the measure, and receiving feedback from many of our members we believe the language is as good as it is going to get and has no specific ISR authorization.

Here is the official statement from the Goods Movement Coalition on AB 617 (C. Garcia, E. Garcia, Santiago):

For years, the goods movement industry has worked in partnership with the administration, the Air Resources Board, and local air districts on emission reduction measures that balance emission reductions, efficiency and jobs and will continue to do so. 

In recognition that Cap and Trade is such an important piece of the State’s GHG policy, we are neutral on Sec. 8 of the July 10th draft of AB 617 but would have concerns with any further amendments which tip the delicate balance between further emission reductions, efficiency and jobs. 

We remain vigilant and are watching closely to make sure the language does not get changed in a manner that backslides on our hard work.

REAL ESTATE DOCUMENT TAX A POISON BILL FOR AFFORDABLE HOUSING DEAL

Posted: July 14, 2017 | Posted by Crystal Whitfield | No Comments

As we reported last week, the SB 2 (Atkins; D-San Diego), a bill that will authorize a tax on almost every recorded real estate document, was brought up with no notice and passed with all Democrat Senators voting for the new tax, lobbing the bill over to the Assembly.  Less than a week later the bill was heard in the Housing Committee and passed on a party line vote.

Now, as tense negotiations are happening on reauthorization of California’s Cap-and-Trade program, it is reported that several progressive members of the Legislature are pushing to have this bill be on the table as part of any a final deal on Cap-and-Trade.

How taxing our documents has anything to do with greenhouse gas trading markets is a bit baffling, but hey, its Sacramento.

However, if the legislature does want to connect the two issues, we believe there is an easy path forward as there are a list of 10-15 bills that would make sense to consider and adopt – but SB 2 is not one of them.  And we believe that inclusion of SB 2 would be a poison bill that would make any such deal unsuccessful.

In order to move the bill forward, it has been amended to exempt building sales but keep every day document recording, which makes the bill an incredibly regressive tax.  Our position has long been, apply the tax to all transactions in a smaller amount, but the bill has actually been changed to move away from that.

According to the Senate Appropriations committee analysis, this bill will result in a $200 million to $300 million tax on commercial and residential property owners and tenants.  These funds will be redirected to a number of government programs at the Department of Housing and Community Development (HCD) and the California Housing Finance Agency (CalHFA) focusing on affordable housing.

While we are sympathetic to the need for more affordable housing, and support many policies that will actually produce rooftops by addressing the underlying issues that are real impediments to building housing.

We are asking that if SB 2 were to move forward, it be amended to focus on Governor Brown’s stated goals to address affordable housing of cutting red tape, delays, and unnecessary expenses to housing construction that would make housing more affordable to all Californians.  We also call on the legislature to address the thicket of environmental law known as CEQA which quashes many projects through cost and delays and unnecessary lawsuits, before a shovel is ever put in the ground.

If more funds are needed, our industry is willing to accept a new tax as long as it is applied evenly, fairly, and transparently across the board and is accompanied by some of the reforms supported by Governor Brown.

California needs more housing.  But simply creating a new tax and new government programs is not going to produce rooftops as it does not address the impediments to building more housing.

Hopefully a package of bills will move forward that addresses the affordable housing crisis.  This bill, however, should not be one of them.

BORDER-ADJUSTMENT TAX OPPOSED BY INDUSTRY

Posted: July 14, 2017 | Posted by Crystal Whitfield | No Comments

David Bahr, Communications Manager for R-Street has penned an op/ed explaining how the Border-Adjustment Tax would add nearly $2B to the cost of property insurance in California:

“As the nation’s most populous state, among the wealthiest states and a state that is vulnerable to the catastrophic effect of earthquakes, floods, wildfires and other natural catastrophes, California relies heavily on insurance to manage its significant risk. As Congress prepares to consider structural changes to the U.S. tax code, a new R Street Institute policy study warns that making it more difficult for insurers to buy international reinsurance will have adverse consequences on Californians’ ability to obtain coverage affordably”.

“Applying a destination-based cash flow tax—better known as a “border-adjustment tax,” or BAT—to the import of reinsurance will, authors Lars Powell, Ian Adams and R.J. Lehmann note, cost California consumers an additional $1.91 billion in higher property-casualty insurance premiums over the next decade….”

Click here to read the rest of the story.

****ALERT*** SENATE ABRUPTLY PASSES REAL ESTATE DOCUMENT TAX

Posted: July 7, 2017 | Posted by Crystal Whitfield | No Comments

After stalling a few weeks ago for lack of the needed two-thirds vote majority, a bill that will authorize a tax on almost every recorded real estate document, was brought up with no notice and passed with all Democrat Senators voting for the new tax.

SB 2 (Atkins; D-San Diego) authorizes a county to adopt an ordinance authorizing a fee for recording and indexing every instrument, paper, or notice required or permitted by law to be recorded.

According to the Senate Appropriations committee analysis, this bill will result in a $200 million to $300 million tax on commercial and residential property owners and tenants.  These funds will be redirected to a number of government programs at the Department of Housing and Community Development (HCD) and the California Housing Finance Agency (CalHFA) focusing on affordable housing.

Yes, upwards of a $300 million-dollar tax on real estate documents paid by you and your tenants.

While we are sympathetic to the need for more affordable housing, and support many policies that will actually produce rooftops, we disagree with the way this bill is written.

According to the County Recorders’ Association of California, this bill increases the minimum recording fee by 750% (i.e. from $10 to $75), which will impact small contractors recording mechanics liens or releases, customers releasing child support, tax or other liens to clear their credit; or a widow/widower recording an affidavit of their spouse’s death; building managers filing lease addendums, and many other recorded documents.

Further, this bill creates administrative challenges for County Recorders.  The Inyo County Board of Supervisors argue that by exempting sales documents, this bill singles out those facing foreclosure and miners who are required to file annual proof of labor forms to keep their claims, but exempts the purchase of multi-million dollar homes.

As an example, in order to address vocal opposition, this bill exempts certain transaction from the tax – if you buy a two million dollar home you don’t pay the tax; but if you record a simple lease addendum you do.

We are asking that SB 2 be amended to focus on Governor Brown’s stated goals to address affordable housing of cutting red tape, delays, and unnecessary expenses to housing construction that would make housing more affordable to all Californians.  We also call on the legislature to address the thicket of environmental law known as CEQA which quashes many projects through cost and delays and unnecessary lawsuits, before a shovel is ever put in the ground.

If more funds are needed, our industry is willing to accept a new tax as long as it is applied evenly, fairly, and transparently across the board and is accompanied by some of the reforms supported by Governor Brown.

California needs more housing.  But simply creating a new tax and new government programs is not going to produce rooftops as it does not address the impediments to building more housing.

This bill may be heard as early as Monday in the Assembly and we will keep you posted.

MAJOR LEGISLATIVE DEADLINE APPROACHES

Posted: July 7, 2017 | Posted by Crystal Whitfield | No Comments

Our friends at CapitolTrack remind us that the next legislative deadline falls on July 14th and it requires all policy committees to pass fiscal bills on to their Appropriations Committees. With the Budget already enacted, the legislature is on schedule to adjourn for summer recess on July 21st.

The next two weeks are going to be intense as many big issues including Cap-and-Trade and the Real Estate Document Tax may be taken up.

WATER BILL SAVINGS ACT

Posted: July 7, 2017 | Posted by Crystal Whitfield | No Comments

Our industry supports SB 564 (D-Healdsberg) a bill that allows local agencies to issue bonds to fund the purchase and distribution of drought tolerant landscapes, upgrades to hot water systems, gray water systems, high efficiency toilets, and high efficiency showerheads at private property within their jurisdictions.

SB 564 authorizes property owners and tenants to then repay the fixture upgrades over time through utility bills.  The ability to repay bonds with customer efficiency charges enables those who receive the benefit of reduced bills to pay for efficiency and create benefits to the water system at scale.

The Water Bill Savings Act is a voluntary program and will create another tool for local governments and property owners to respond to drought that is regionally efficient, financially sustainable, and available to all municipal utilities, large and small.

SB 564 will help people save money on water while reducing wasted water and provide a voluntary tool to meet state conservation mandate.

ADA BILL HEADS TO GOVERNOR

Posted: July 7, 2017 | Posted by Crystal Whitfield | No Comments

A bill our industry is strongly supporting that would continue the State’s reform of ADA laws in an effort to increase accessibility while decreasing frivolous lawsuits passed the Legislature on a bipartisan vote and is headed to the Governor’s Desk.

AB 1148 (Steinorth; R-Rancho Cucamonga) passed its final vote in the Assembly 62-0. AB 1148 would clarify issues related to CASp inspection lease disclosures by defining the types of properties that must disclose. Basically, all properties that will be leased as a public accommodation must comply but certain properties that are not open to the public will be exempt.

We will ask the Governor to sign the bill and will keep you posted.

© 2007-2012 Building Owners and Managers Association of California (BOMA Cal)