Legislative Update

August 2022

By Craig Benedetto & Marshall Anderson, Legislative Advocates

COVID-19 UPDATES 

CDC Loosens COVID Guidelines: The U.S. Centers for Disease Control and Prevention (CDC) relaxed COVID-19 guidelines, noting that the virus is “here to stay.” Schools and businesses no longer need to ask unvaccinated individuals exposed to COVID to quarantine. Additionally, the CDC no longer recommends that people stay six feet away from others, nor is the CDC drawing a distinction between people who are up-to-date on their vaccinations and those who are not. According to the new recommendations, people who have been exposed to the virus no longer need to quarantine at home, regardless of vaccination status. Instead, they should wear a mask for 10 days and get tested for the virus on day 5. Masking recommendations have not been altered and the CDC still advises wearing them indoors in locations with high community COVID-19 levels. Those who test positive should still isolate for at least five days. The new guidelines mark a shift in what has been described as taking a pragmatic approach to living with the virus long-term. Still, the pandemic has not ended, and we may see more safeguards in the event of subsequent surges or new variants. The updated CDC guidance can be found HERE. 

San Diego Unified will not enforce masks: When the new school year begins next week, San Diego Unified will no longer enforce the COVID-19 regulations that the district put in place July. Instead, masks may now be required at individual San Diego Unified schools if a school gets at least three COVID outbreaks within a 14-day period, and if more than 5% of students and staff are infected at that time. If triggered, masks would be required for at least 14 days. You can learn more HERE.

New subvariants have officials nervous: Two new subvariants, BA.4.6 and BA.2.75, are being intensively monitored by California public health experts as they spread to concerning levels abroad. The most prevalent coronavirus strain now present in California is still BA.5. The CDC calculated that it accounted for 88% of all COVID-19 cases for the week ending August 13. It is estimated that 5.6% of cases can be attributed to BA.4.6; though, it has outpaced BA.5 elsewhere. 

Updated boosters expected after Labor Day: The Biden administration intends to provide updated coronavirus booster shots specifically updated to address Omicron variants to Americans aged 12 and older in order to head off the anticipated winter surge. The Food and Drug Administration, which is still reviewing the updated formulas, has said they are close to approving the revised dosages; though, specific timing is not yet known. 

BOMA-OPPOSED MEASURE TO CREATE A NEW SAN DIEGO TAXING AUTHORITY IS DEAD

Senate Bill 1105 by local state senator Ben Hueso, which would have created a new housing agency with broad authority to impose tax increases, was held on suspense and will not move forward this year. Given its broad implications and potential for huge new tax increases ranging from property-based parcel taxes to county-wide commercial linkage fees, a broad coalition of local and state stakeholders mobilized to oppose the measure. SB 1105 would have created a “San Diego Regional Equitable and Environmentally Friendly Affordable Housing Agency (Agency),” a new body with the authority to place new tax measures on the ballot and impose county wide fees on commercial construction, as well as mandate project labor agreements (PLAs) on those benefitting from the revenue. As proposed, the Agency would have been governed by a six-member board composed of primary or alternate SANDAG members and would have been charged with increasing the supply of “environmentally friendly” housing in San Diego County through the provision of funding and technical assistance. Leading the charge in opposition were the California Business Property Association, California Business Roundtable, NAIOP California, BOMA California and the California Building Industry Association.  Locally, a number of stakeholders ranging from rental housing interests to general business groups to affordable housing providers expressed concerns.  To learn more, click HERE.

SAN DIEGO CITY COUNCIL APPROVES CLIMATE ACTION PLAN 2.0, SETTING THE STAGE FOR BUILDING DECARBONIZATION MEASURES

San Diego’s new Climate Action Plan (CAP) seeks to aggressively cut emissions to net-zero by 2035, essentially doubling the goal in half the time of the previous CAP. While Council’s action approves the plan in broad strokes, implementing measures to achieve these goals remain to be seen. A potential code amendment that seeks to ban fossil fuels in new construction and existing buildings is expected in early 2023. BOMA San Diego expressed concern with the feasibility and high costs of implementation and will stay engaged as the city commences work on CAP implementing measures. To learn more, click HERE.

GOVERNOR’S CLIMATE PACKAGE DRAWS CONCERNS FROM CALIFORNIA BUSINESS PROPERTIES ASSOCATION, AMONG OTHERS

The Governor has proposed a late-session package of bills to advance his climate change package, drawing concerns from a coalition of pro-business groups, including the California Business Property Association (CBPA), of which BOMA CAL is a member. CBPA maintains that the newly introduced bills threaten to impact development and buildings management, goods movement, and the ability to attract and retain tenants. To summarize, the package would:

1. Codify statewide carbon neutrality goal to dramatically reduce climate pollution

• Establishes a clear, legally binding, and achievable goal for California to achieve statewide carbon neutrality as soon as possible, and no later than 2045.

2. Ramping up 2030 climate ambition

• Adopts a more aggressive 2030 greenhouse gas emissions reduction target – going from 40% to 55% below the 1990 level.

3. Protecting communities from the harmful impacts of the oil industry

• Establishes a setback distance of 3,200 feet between any new oil well and homes, schools, or parks.
• Ensures comprehensive pollution controls for existing oil wells within 3,200 feet of these facilities.

4. Establishing pathway toward state’s clean energy future

• Creates clean electricity targets of 90% by 2035 and 95% by 2040 with the intent of advancing the state’s trajectory to the existing 100% clean electricity retail sales by 2045 goal.

5. Advancing natural and engineered technologies to remove carbon pollution

• Establishes a clear regulatory framework for carbon removal and carbon capture, utilization and sequestration.
• Requires the state to develop an achievable carbon removal target for natural and working lands.

A coalition of business groups, including CBPA and Cal-Chamber, issued a letter of concern, noting that each of the five forementioned proposals, which are being rushed through the legislature, should receive more extensive deliberation and analysis. In addition to the late slate of bills, the update of the AB 32 Scoping Plan, which is supposed to assess progress and create a path toward carbon neutrality by 2045, contains especially concerning language embedded within the appendix: “there are no laws currently protecting tenants from being evicted for having rent increases post retrofit; regulatory protection could help to shield tenants from rent increases after energy upgrades are performed.” In short, the AB 32 scoping plan is recommending rent-control. You can find the Scoping Plan HERE. To learn more about the governor’s climate goals, click HERE. BOMA San Diego will continue working with BOMA CAL and CBPA on efforts to address industry concerns.

CITY CONTRACTOR TRANSPARENCY ORDINANCE APPROVED

Despite testimony from a coalition of business groups expressing concern over the impacts and unintended consequences of this new bureaucratic requirement, the San Diego City Council approved the Mayor’s Contractor Transparency Ordinance.  The ordinance, which comes under the guise of ensuring safety and compliance, economic justice, and worker’s rights, will require developers to list all project contractors and subcontractors, including their worker’s comp insurance information, policy number, state contractor license number, city business license number, state and federal tax ID numbers, and whether the contractor or subcontractor has any pending or prior enforcement actions or labor violations, when pulling permits with the city. This would apply for building permits, electrical, plumbing, demolition, grading, fire, and public right of way permits for residential and mixed-use developments consisting of 20 or more dwelling units, or any commercial or industrial development that proposes 20,000 square feet or more of tenant improvements or 20,000 square feet of additional gross floor area.  The City did indicate that it would not use Stop Work Orders as an enforcement mechanism for violations. BOMA will continue to argue for a practical administration of the ordinance that limits unintended and unnecessary consequences. To learn more, click HERE.

CALIFORNIA PLACES BAN ON NEW GAS-POWERED VEHICLES BY 2035

A series of annual goals that would prevent the purchase of new passenger cars and trucks with internal combustion engines by 2035 were approved by the California Air Resources Board (CARB). The mandate, which codifies and adds details to an executive order issued by Governor Newsom in the fall of 2020, states that a minimum of 35% of model year cars and trucks sold in CA must be electric, plug-in hybrid, or hydrogen fuel cell vehicles. Every year, the percentage increases, reaching 68% in 2030 and 100% in 2035. CARB’s regulations also note that all-electric and hydrogen fuel cell vehicles must have a minimum range of 150 miles, plug-in hybrids must have an all-electric range of at least 50 miles, and a cap will be imposed on the number of plug-in hybrids sold, with no more than 20% of total sales permitted annually. California accounts for nearly 10% of all new car sales nationwide, so it is expected that this mandate would have impacts beyond our state’s border. It is not yet clear how the rules apply to certain commercial vehicles. To learn more, click HERE.

COUNTY STILL HAS MILLIONS IN AVAILABLE COVID AID

Millions of dollars are still available in the County of San Diego’s grant program intended to aid small companies and charity organizations impacted by COVID-19. 2020 saw the launch of the Small Business Stimulus Grant program, which provided free money to qualified candidates that required assistance recovering from the pandemic. These county handouts are distinct from the Paycheck Protection Program in that they do not need to be paid back. Businesses and nonprofits impacted by COVID-19 can check their eligibility for the program on the county website, HERE.

BUILD BETTER SAN DIEGO APPROVED, SHIFTING HOW DEVELOPER IMPACT FEES ARE COLLECTED AND SPENT

The Mayor’s Build Better San Diego proposal was approved by an 8-1 vote of the City Council.  Build Better fundamentally alters how the city obtains fees from private developers that construct residential, commercial, and industrial, creating a new citywide funding pool. The new fund will be distributed to the areas of greatest need instead of the current practice, which keeps developer fees in the neighborhood where they were collected. Additionally, the proposal establishes a standard fee amount for the entire city, replacing current rates, which differ greatly depending on neighborhood. The new fee will be based on the number of units instead of the square footage of the project. To learn more, click HERE. 

NATIONAL CITY PUTS PARCEL TAX MEASURE ON HOLD

A proposal to impose an annual parcel tax on property owners will be delayed until at least 2024, following a 3-2 City Council vote directing staff to further analyze the measure. Any analysis would not return before the Registrar of Voters’ August 12 deadline to submit initiatives for the November ballot. The proposal was originally expected to raise $1.7 million for critical infrastructure and parks upgrades.

MAYOR GLORIA TO PROPOSE SERIES OF AFFORDABLE-HOUSING REFORMS

Mayor Gloria unveiled what he called his Housing Action Package 2.0, which in broad strokes is a package of initiatives aimed at creating incentives for student housing, single-room occupancy motels, and residential projects on commercial properties. While specific details remain unknown, the Mayor is expected to bring more comprehensive ideas to the Planning Commission in spring, 2023. The plans are expected to expand on his more recent reforms such as granting rights to construct housing developments alongside new fire stations and libraries on public property. The new measures will also likely include incentives for single-room occupancy hotels, dormitory-style accommodations close to colleges, and incentives for developers to construct subsidized housing on underutilized or unoccupied retail, office, and shopping center properties. The Mayor also wants to create incentives that would phase out industrial business adjacent to housing. City staff will seek input and further craft the proposal in the coming months. BOMA San Diego will be involved in these discussions. You can learn more HERE.

GOVERNOR PROPOSES WATER STRATEGY TO AUGMENT STATEWIDE SUPPLY

Governor Newsom has unveiled a new statewide strategy to bolster long-term water supply.  Describing it as better using “nature’s bounty,” the plan would provide $8 billion to new storage and water creation projects, like desalination and repurification.  It would also provide for a new underground piping system to address Sacramento River Delta issues.  The 16-page document entitled: “Adapting to a hotter, drier future” will help the state address climate change caused water shortages.  The environmental community immediately panned the plan, saying more conservation was needed, not new water resources.  To read the plan, please click HERE. 

DEVELOPMENT SERVICES DEPARTMENT USER FEE INCREASE KICKS IN, SEPTEMBER 13, 2022

All Development Services Department user fees will rise by 4.99% starting on September 13, 2022, as a result of the City Council-approved general and special salary increases for employees. The department is also citing a rise in operational costs linked to the growth of the consumer price index as a reason for the increase. All new projects deemed complete on or after September 13, 2022, will be subject to the fee hike. The new cost schedules will be included in DSD informational bulletins, online. To learn more, click HERE.