February Legislative Update
Friday, February 23, 2024
by: Craig Benedetto and Marshall Anderson, California Strategies

Section: Government Affairs




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Legislative Update 

February 2024

By Craig Benedetto & Marshall Anderson, Legislative Advocates 

  

COUNCIL PRESIDENT ELO-RIVERA BRINGS FORWARD NEW STORM WATER PARCEL TAX, RULES COMMITTEE TAKES STEP TO ADVANCE MEASURE

In a potential match up of competing tax measures, San Diego City Council President Sean Elo-Rivera brought a new parcel tax to pay for stormwater and water quality related improvements before the City Council’s Rules Committee this week. In a MEMO to the City Clerk’s Office, Elo-Rivera cited the recent rain events as an impetus for the measure, stating that San Diego’s $1.6 billion stormwater infrastructure deficit leaves vulnerable communities in harm’s way. 

 

This will be potentially the second local tax measure on the ballot, including the recently qualified county-wide sales tax increase to pay for transportation improvements.  Mayor Gloria has also been talking about a city-wide, 1-cent general sales tax increase to address the city’s structural budget deficit, infrastructure needs, among many others.

 

Following a presentation from Elo-Rivera’s office, the committee unanimously supported an action to direct the City’s Independent Budget Analyst to conduct a fiscal impact study and return to the Rules Committee in the coming weeks. While no language is available and the taxable rate per square foot is “to be determined,” the measure is expected to be based on impermeable area, contain no escalator, and no sunset clause. Revenues would be placed in a dedicated, special fund, meaning that the ballot measure would require two-thirds approval to pass. Possible exemptions may include parcels that are exempt from ad valorem property taxes (like churches), low-income seniors, and low-income residents as determined by the California Department of Housing and Community Development. 

 

The measure looks to be based on Los Angeles’ Measure W, which passed in 2018, placing a 2.5 cents per square foot levy. Should the Rules Committee forward ballot language to City Council, a final council vote would be needed to place the measure on the November ballot. To learn more, click HERE.

 

TRANSFER TAX PUT ON ‘PAUSE’

A new real estate transfer tax, proposed by the San Diego Housing Federation, a trade group of affordable housing builders, has been placed on pause. While proponents originally planned to have it placed on the November 2024 ballot, they have now backed away for this election cycle citing City Council priorities related to the aforementioned storms.  The proposed tax on real estate transactions over $2.5 million was estimated by the Federation to raise $200 million per year for the construction and operation of affordable housing. The Federation, in its statement, has said they intend to bring the measure back in 2026.

 

BOMA San Diego has been party to a broad coalition in opposition to the tax.   The Coalition has been making presentations and raising money to campaign against it, given the extreme chilling effect such a tax would have on jobs creation, rents, and the economy.  In Los Angeles a similar measure has all but destroyed the real estate market. As a reminder, the Federation’s proposed transfer tax would levy assessments based on the sale of property at the following values:

  • $2.5 million up to $4 million - 2.5% tax

  • $4 million up to $6 million - 3.5% tax

  • $6 million up to $10 million tax - 4.5% tax

  • $10 up to $25 million - 5.5% tax

  • $25 million and over - 6.5% tax

 

Given the Federation’s stated intent of bringing this back, BOMA and the Coalition will continue its efforts to building the opposition to this ill-conceived idea, and educate community stakeholders and elected officials about the damage something like this could do.  As always, BOMA will continue to advocate for ways to reduce the cost of red tape and regulations to all kinds of housing and argue for broad-based, reasonable means of providing for subsidized affordable housing.

     

SAN DIEGO CITY COUNCIL APPROVES PLA FOR CITY PROJECTS

The San Diego City Council, earlier this month, approved a project labor agreement (PLA) standard that would apply to city projects valued over $1 million. The PLA sets wages, safety protocols, and regulations for contractors and subcontractors. Cost estimates for projects like fire stations, libraries, pipelines, and bridges are expected to rise as a result. Council’s action does not apply to private construction or the operation of private businesses in most circumstances, although some projects a private developer might be required to build that the city has approved under their CIP and advertised pursuant to the terms of the PLA may be covered. You can read more HERE. To read the City’s ordinance, click HERE.

 

HOMELESSNESS UPDATE:

  • Bill introduced to limit homeless encampments: A bipartisan group of state lawmakers have introduced a bill that would place stricter limits on homeless encampments. Similar to San Diego’s recently adopted Safe Sleeping Ordinance, Senate Bill 1011 (Jones) would ban camping near schools, transit stops, and open spaces, statewide, regardless of shelter availability. The bill would also ban tents on sidewalks if enough shelter beds are available. To learn more, click HERE and HERE.

  • County explores potential homeless shelter sites: The San Diego County Board of Supervisors voted unanimously to explore potential sites for temporary homeless shelters, allocating $90,000 for the assessment. The board is considering various options, including small cabins, large ‘sprung structure’ tents, and safe parking lots, with locations in the Cities of San Diego and Escondido, including: W. Beech Street/Kettner Avenue; 620 E. Valley Parkway; 6255 Mission Gorge Road; 73rd Street; and, 5202 University Avenue. To read the full Board Letter, click HERE.

 

NORA VARGAS DELIVERS STATE OF THE COUNTY

During her second State of the County address, Chair of the Board of Supervisors, Nora Vargas, spoke to homelessness, housing, and healthcare as top priorities heading into 2024. Vargas also recapped how the county along with volunteer groups responded to recent flooding events, and discussed efforts to improve air quality, address immigration funding shortfalls, and invest in transportation infrastructure. She also announced a new rental subsidy program for seniors, a professional youth development program, and initiatives to reduce emissions and transform the Tijuana River Valley Regional Park into a sports complex. To watch the full speech, click HERE.


EFFORTS UNDERWAY TO REFORM PROPOSITION 47

Following Mayor Gloria’s support of an effort to reform Proposition 47, which reclassified theft and drug-related crimes as misdemeanors, local mayors joined the District Attorney to support a petition aimed at toughening penalties for repeat offenders. Mayors from 13 of San Diego County’s 18 incorporated cities are backing the signature-gathering effort, entitled the “Homelessness, Drug Addiction, and Theft Reduction Act,” emphasizing the need for balance between accountability and rehabilitation. A bipartisan group of state leaders have also signaled their intent to reform Prop. 47 through the legislative process, a state measure that many blame for an uptick in retail theft and substance abuse. In its current state, the proposed reform act would provide a two-strike grace period where a third strike would require mandatory treatment for a drug-related crime. A fourth strike would result in a possible felony conviction. The California Business Properties Association, of which BOMA California is a member, is supporting all of these efforts to address the plague of retail theft.  To learn more about CBPA’s efforts, click HERE.  To learn more about the initiative, click HERE

 

CHULA VISTA COUNCILMEMBER RESIGNS AMID FRAUD, MONEY LAUNDERING CHARGES

Chula Vista Councilmember Andrea Cardenas has resigned from her position amid charges of fraud, grand theft, and money laundering. The decision was communicated via memo citing a need to focus on her mental health and that of her community. Both Andrea and her brother, Jesus Cardenas, who served as Councilmember Whitburn’s Chief of Staff, are accused of misusing COVID-19 relief funds. In addition to payments made to cannabis dispensary employees, the charges allege that money was used for personal and campaign-related expenses. Andrea Cardenas faces up to five years and eight months in state prison if convicted on all charges. The Chula Vista City Council has 45 days to fill the vacant District 4 seat, which they can do via appointment. Despite her resignation, Cardenas's name will still appear on the March primary ballot, alongside five other candidates vying for the seat.

 

COUNCIL ENVIRONMENT COMMITTEE DISCUSSES COST OF SERVICE STUDY FOR RESIDENTIAL TRASH PICKUP

The San Diego City Council’s Environment Committee voted 3-0 to recommend moving forward with a $4.5 million cost of service to study to determine how and what to charge for residential trash collection.  The moves comes after voters approved “Measure B” last election which changed the City Charter to allow the Council to charge for trash pickup from residents, which had been free from extra charge for dozens of years.  The process, if approved by the Council, would require public engagements, as well as consultant analysis of how to charge and what to charge, and will consider things like a “pay as you throw” regime that would charge based on how much trash you produce in an effort to reduce landfill waste.  The Council did express concern about the city’s internal billing issues, opining that outsourcing might be an option to help improve customer service.  Ultimately, the process will culminate in coming back to the Council in Summer 2025 with recommendations they can approve. To view staff’s presentation, click HERE.

  

BOMA PROVIDES INPUT ON LAND USE & HOUSING COMMITTEE PRIORITIES

Councilmember Kent Lee, the new Chair of the City of San Diego’s Land Use and Housing Committee (LU&H), has convened his committee to discuss their 2024 work plan.  As part of this, he has sought input from City stakeholders, including the business community and BOMA San Diego.  BOMA has provided some key priorities for the committee’s consideration, including improved processing times, addressing challenges related to the code, continuing efforts to update community plans, and the timely processing of land development code updates among other things.  One of the more impactful committees to issues BOMA tracks, LU&H is charged with reviewing development projects and analyzing code changes associated with real estate, land use, planning, and community and general plan amendments. While the deadline to provide input via comment link has passed, interested members are encouraged to contact legislative advocate, Craig Benedetto, with any additional input: craigb@calstrat.com

 

SAN DIEGO SHORT ON FUNDING FOR INFRASTRUCTURE PROJECTS

A new report revealed that San Diego faces a significant shortfall in funding for crucial infrastructure projects over the next five years. City officials estimate having only $1.5 billion to address $9.25 billion worth of projects, leaving substantial funding gaps in areas such as flood control, road paving, parks, streetlights, and firefighting facilities. The largest shortfall, $1.6 billion, is for flood control upgrades and stormwater projects, now an even bigger priority after recent flooding events. Other notable gaps include $989 million for road paving, $801 million for parks, $427 million for streetlights, and $235 million for firefighting facilities. The Council will be receiving an updated 5-year budget outlook on Monday to discuss these shortfalls.  To read the media report, click HERE.  To see the City’s update budget outlook, CLICK HERE.

 

LAO PROJECTS DIRE FINANCIAL SITUATION FOR STATE

The nonpartisan Legislative Analyst’s Office (LAO) is projecting a $73 billion budget deficit for California, $15 billion more than Governor Newsom's estimated $38 billion. Lawmakers will be tasked with finding new budget solutions as it approaches Fiscal Year 2024-25. This may include reducing spending or pulling from reserves. Newsom is expected to release an updated budget in May. To read the LAO’s report, click HERE.

 

OCEANSIDE CREATES POSITION TO OVERSEE CLIMATE ACTION PLAN IMPLEMENTATION

The Oceanside City Council voted to create a new full-time climate action plan coordinator position and took steps to initiate the hiring process. The position will be responsible for overseeing the city’s climate action plan, adopted in 2019, and could be charged with implementing additional updates in the future. BOMA continues to monitor all regional climate action plan updates, reach code developments, and implementation measures.