Legislative Update 

April 2024

By Craig Benedetto & Marshall Anderson, Legislative Advocates 

SAN DIEGO RULES COMMITTEE ADVANCES NEW PARCEL TAX MEASURE

City Council President Sean Elo-Rivera’s proposed parcel tax to pay for stormwater and water quality-related improvements received unanimous support to move toward drafting from the City’s Rules Committee yesterday. The measure stems from recent rain events and flooding, made worse by San Diego’s $1.6 billion stormwater infrastructure deficit. Yesterday’s action directs the City Attorney’s Office to draft language and return to the Rules Committee in the coming weeks for approval. If approved at a subsequent Rules Committee hearing, the measure would go to the full City Council, which will be asked to place the measure on the ballot. 

BOMA provided testimony, cautioning against the impacts that this new tax would have on jobs creators and housing providers, as well as their tenants. While BOMA has been involved in conversations with the Council President and his office, the taxable rate per square foot is still unknown as are details about a proposed credit system to allow those who have invested in stormwater improvements on their property to credit for those expenditures against the tax. 

The proposed tax is modeled after Los Angeles’ Measure W, which passed in 2018 and placed a 2.5 cents per square foot levy on a parcel’s impermeable area (i.e. a roof, asphalt driveway, or other surface that does not allow for water drainage). This does not include the square footage within a building. It is worth noting that, in order to fully fund the City’s stormwater backlog, the Council President has said the City would need upwards of 25 cents per square foot. While there are no proposed escalators, yesterday’s discussion item contained no sunset clause or cap. Elo-Rivera did state that his office is working on potential credits that could reduce tax obligations up to 100% for properties that incorporate stormwater mitigation, onsite treatment, or other enhancements to the city’s stormwater system; however, specifics are not yet known. Low-income senior housing and properties that are exempt from property taxes would not be impacted by the proposal. 

Should the item receive both a subsequent Rules Committee approval and support at full City Council, the measure would need to meet a two-thirds voter threshold for final adoption. It should noted that another statewide initiative (ACA 1) could change the threshold to 55%. NAIOP will continue to provide feedback, which may include a maximum taxable rate, phase in, caps on the total amount assessed, and/or outright opposition once final language is available. To read the draft ballot language, please click HERE. A staff report can be found HERE. To provide input or learn how you may participate, please send a message to BOMA San Diego’s legislative advocate at: craigb@calstrat.com.

LAND USE & HOUSING COMMITTEE APPROVES PERMIT EXTENSION ITEM

The City of San Diego’s Land Use & Housing Committee unanimously approved a proposal by city staff to provide additional extensions for building permit applications.  BOMA, NAIOP and the BIA, along with other industry organizations, have been leading the charge to get the City of San Diego to adopt additional time allowance for permit applications, as well as existing building and development permits, which could come at a later date.  Noting the economy and challenges facing projects, like financing, BOMA argued in testimony at the hearing that this modest allowance would protect investments made in the processing of housing and commercial projects, and help facilitate their completion in a timely manner, versus those applications and permits expiring due to unforeseen challenges that are beyond the applicant’s control.  Mayor Gloria and staff have agreed and are developing a plan to allow for 2 additional 180 day extensions to be granted by the City’s Chief Building Official if certain conditions are met.  NAIOP continues to work with the Mayor and Development Services’ staff to ensure the proposed extensions are meaningful and feasible.  To read more, please click HERE and HERE.

LAND USE & HOUSING COMMITTEE APPROVES DSD FEE INCREASE

The City of San Diego’s Land Use & Housing Committee voted 3-1 in support of proposed Development Services Department (DSD) fee increases this week. DSD, which is operated out of an enterprise fund and almost fully user funded, embarked on a fee study that concluded the department is 88% cost-recoverable and must increase fees in order to keep up with employee salary adjustments and consumer demand. Commercial fees, in one example, are expected to jump as a result with the square foot increment rising to $1.04 vs. the current $0.31 fee. BOMA provided testimony reflecting concern over the timing and economic issues members are facing.  BOMA also expressed concern about processing times continuing to lag, as well as the desire to see offsets for these cost increases in improved processing times.  

In addition to the proposed increases, the draft contains no phase-in, fees are tied to consumer price index (not market conditions), and fees would be used to cover DSD’s move to new offices in Mission Valley and Downtown. These concerns were echoed by both Councilmembers Whitburn and LaCava with the latter voting no. The fee increase will now go to City Council for a vote. To view staff’s presentation on the fee study and sample fee comparisons, please click HERE. To view all backup materials, including the fee study, please click HERE and scroll down to the hyperlinked ITEM-4.  

CITY OF BERKELEY SETTLES GAS BAN LAWSUIT

The City of Berkeley has settled a lawsuit with the California Restaurant Association (CRA), agreeing to repeal its first-in-the-nation ban on gas hookups in new construction. Because many jurisdictions followed Berkeley’s example and adopted their own gas bans, this decision greatly impacts those decisions, as well as over a hundred similar proposals in California, including the City of San Diego, looking to do the same. The settlement follows a federal appeals court's refusal to rehear the case on Berkeley's ordinance, which was struck down last year for preempting federal energy laws. As part of the settlement, Berkeley will formally repeal the ordinance, and until then, it will not enforce the measure. The CRA is looking at those jurisdictions who have adopted ordinances in making sure they follow Berkeley’s action.  You can read more HERE. 

MAYOR PROPOSES NEW 1,000-BED HOMELESS SHELTER AT KETTNER AND VINE

Earlier this month, Mayor Todd Gloria announced the conversion of an empty warehouse located in San Diego’s Midtown neighborhood into a 65,000 square foot homeless shelter with room for up to 1,000 individuals. While the site’s 35-year lease was scheduled to come before the Land Use & Housing Committee this week, the item was pulled from the agenda following scrutiny from the Independent Budget Analyst’s Office and unnamed councilmembers. Instead, the city council will discuss the item in a closed session meeting in the coming days. While the Mayor aims to fund the shelter through existing revenue and potential donations, questions linger over its financial feasibility amid a structural budget deficit and proposed cuts to homelessness services. 

If approved, the site would become the City’s largest homeless shelter. The move marks a pivot from plans to erect large ‘sprung structures’ at the H Barracks site near Liberty Station and Harbor Island. Instead, the H Barracks site will be used as a parking lot for those who sleep in their vehicles; though, the coastal development permit will still include flexibility to erect a sprung structure in the future, potentially under emergency scenarios. The proposed Midtown shelter, located at 3570 Kettner Blvd. near Vine Street, envisions a 35-year lease with the possibility of two 5-year extensions. The provision of available shelter beds and car camping spaces would allow the city’s encampment ban and vehicle habitation ordinance to become fully enforceable. To learn more, please click HERE. 

CITY OF SAN DIEGO PROPOSED FY 2025 BUDGET RELEASED

Facing a $1B over the next five years ($136.8M in FY25), Mayor Todd Gloria has proposed a $5.65 billion budget that prioritizes infrastructure and public safety spending, while reducing some services like library funding. While the budget includes an increase of $26.6 million for homelessness initiatives, questions remain around where the money would come from as it projects an 11% annual decrease in homelessness program funding that the Housing Commission oversees. This leaves a $15M delta that the Housing Commission may need to fill. The Mayor’s budget proposes $104.6 million for street resurfacing, which should result in a 15 mile increase compared to the amount of streets resurfaced in the current fiscal year. Additionally, public safety funding is maintained amid activists calling for a reduction in SDPD spending. Several departments and programs will receive cuts, including the suspension of contributions to reserves and discretionary grant funding programs, the Office of Immigrant Affairs, the Cannabis Social Equity Program which is being eliminated entirely, and library hours. The budget will undergo several weeks of analysis and public input meetings before the Mayor releases a revised budget in May. The City Council will consider a final spending plan in mid-June for adoption. BOMA will be engaged throughout the budget process, including advocacy for sustained SDPD funding. To read the FY 2025 Proposed Budget, click HERE. 

SAN DIEGO LAND DEVELOPMENT CODE UPDATE COMING BEFORE PLANNING COMMISSION, APRIL 24

The City of San Diego’s proposed Land Development Code changes are scheduled to come before the Planning Commission on April 24 at 9:00am. The proposed update contains around 100 changes aimed at clarifying development regulations, ensuring compliance with new state laws, and corrections and reforms aimed at easing the development process. Notable changes include allowances for residential to be a primary use in EMX zones and the addition of Density Bonus incentives for commercial developments that contribute to the construction of affordable housing. To view the full Land Development Code Update, please click HERE. 

SAN DIEGO ENVIRONMENTAL JUSTICE ELEMENT TO COME BEFORE PLANNING COMMISSION, APRIL 24

The City of San Diego will be bringing its Draft Environmental Justice Element (EJE), an addition to the City’s General Plan, to the Planning Commission on April 24. The EJE is a new addition that would be applied citywide in an attempt to identify and reduce certain health risks, including pollution exposure, primarily in disadvantaged communities.  The EJE includes several goals that will be used to influence City decision-making, community plan development, city council policies, and infrastructure priorities. You can read the draft EJE HERE. 

HENRY FOSTER TAKES DISTRICT 4 COUNCIL SEAT

Henry Foster, San Diego's newest City Council member, was sworn into the fourth council district seat, which was left vacant following Monica Montgomery-Steppe’s election to the County Board of Supervisors. During his comments, Foster prioritized equity, public safety, and infrastructure repair, namely around stormwater improvements, by which recent flooding events greatly impacted his constituents. 

PROP. 47 REFORM MAY APPEAR ON NOVEMBER BALLOT

A proposed initiative, entitled "The Homelessness, Drug Addiction, and Theft Reduction Act," appears headed to November's ballot after proponents announced that gathering of over 900,000 signatures. The proposition aims to amend Proposition 47, which lowered several felony offenses to misdemeanors, including theft and drug possession. Backed by retailers like Walmart and Home Depot, the initiative has support from 14 of the region’s 18 Mayors. If passed, the measure would impose stronger penalties for drug trafficking and repeat offenders of retail theft while offering treatment opportunities for low-level offenders. You can continue reading, HERE. 

CPUC PROPOSING FIXED ELECTRIC RATE CHARGES

The California Public Utilities Commission (CPUC) has proposed changes in electricity rates, which would include SDG&E’s coverage area. For most customers, the proposal would introduce a fixed charge of $24.15 per month. Those who are enrolled in low-income assistance programs or who live in deed-restricted affordable housing would pay less, between $6 and $12. To offset the new charge, rates would fall between 8% and 9.8% during peak hours. The proposal aims to aid lower-income customers struggling with high utility bills and promote electrification measures. For example, those who own electric cars would save around $25 per month, while those with fully electrified appliances would save about $19 per month. Other customers would likely see an increase. The proposal has prompted some backlash, with a group of democrats introducing legislation that would cap the fixed charge at $10 for most customers and $5 for those with lower incomes. The CPUC’s proposal is a response to Assembly Bill 205, passed in 2022, which mandated the implementation of a fixed monthly charge on utility bills, based on household income. If approved, the new rule could take effect in 2025. Please click HERE to learn more. 

STATEWIDE HOMELESS ENCAMPMENT BILL FAILS TO ADVANCE

A bipartisan statewide bill aimed at prohibiting sitting, lying, sleeping, or camping on streets or sidewalks within 500 feet of schools, parks, or major transit stops was struck down by the Senate Public Safety Committee this week. Senate Bill 1011, co-authored by Senators Brian Jones (R) and Catherine Blakespear (D), failed to garner support as critics claimed the bill criminalized homelessness. While some cities throughout the region, like the City of San Diego, have their own camping ban in place, the bill would have expanded the city’s provisions throughout California. To learn more, please click HERE. 

SANDAG RELEASES PROPOSED BUDGET

The San Diego Association of Governments (SANDAG) has released its draft $1.3 billion budget for the 2025 fiscal year. The budget proposes roughly 200 transportation and infrastructure projects across the region, including planning for a new trolley line, express trolley service on existing lines, and the design of a new Otay Mesa East Port of Entry. The budget relies heavily on state and federal funding, as well as revenue from the region's half-cent sales tax. It’s worth noting that a countywide November ballot measure aims to increase the region’s sales tax to further fund these and other transportation initiatives. Other projects included in the proposed budget include the creation of a downtown mobility hub, including an airport transit connection, efforts to stabilize the Del Mar bluffs and reroute coastal rail lines, and the expansion of commuter rail services. Additionally, significant funding is allocated to resolving tolling system deficiencies and addressing a class-action lawsuit related to the South Bay Expressway. The final budget will go before the SANDAG Board of Directors on May 10. For more information, click HERE.  

PREBYS FOUNDATION, DOWNTOWN SAN DIEGO PARTNERSHIP COLLABORATE FOR CIVIC CENTER STUDY

The Prebys Foundation and the Downtown San Diego Partnership have collaborated to secure a $303,000 grant, which will be used to hire a consulting firm, U3 Advisors, to develop a vision for the City of San Diego's Civic Center parcels. The move seeks to attract developer interest in revitalizing the six downtown blocks, which contain city hall, the Civic Theatre, Evan V. Jones Parkade, and other city-owned facilities. While previous solicitation efforts failed to garner significant interest, the hope is that a renewed vision may attract additional bids and identify options for regulatory reprieve in order create a vibrant hub of activity, housing, and public spaces in Downtown’s Core. The study is expected to begin in May of this year. To learn more, please click HERE.

SANTEE GROUP EVALUATING SALES TAX INCREASE

Adding to a growing number of regional tax proposals, a citizen’s initiative in the City of Santee is advocating for a ballot measure that aims to increase funding for the Santee Fire Department via a half-cent sales tax. The Santee Fire Department says it has an urgent need for new stations and additional staffing due to the city's growing population. If approved, the tax would last for 15 years. While the citizen’s initiative is independent of the city, Santee City Council members have signaled support for the measure, highlighting the importance of adequate fire services. 4,000 signatures must be gathered in order to place the measure on the November ballot. The cities of San Diego, El Cajon, Escondido, and Oceanside are also exploring the possibility of sales tax increases. A half-cent sales tax has already qualified for the countywide ballot to fund SANDAG transportation projects. The City of San Diego is also exploring a potential parcel tax while the City of Encinitas evaluates a TOT increase in addition to its own sales tax increase.

CHULA VISTA FILLS VACANT COUNCIL SEAT, CITY ATTORNEY SWORN IN

Rachel Morineau has been appointed to the Chula Vista City Council as a temporary replacement for former Councilmember Andrea Cardenas, who resigned due to felony fraud and money laundering charges. Morineau was unanimously appointed by the City Council who credited her for working with historically underserved communities by way of the nonprofit South Bay Community Services. Morineau will occupy the seat until December. In November, District 4 residents will elect a permanent representative. Another new face joined Chula Vista’s elected body as Marco Verdugo was sworn into the position of City Attorney. During his comments, Verdugo emphasized his commitment to upholding the law and restoring trust in local governance, particularly in light of the recent corruption scandals. His victory follows the untimely passing of the previously elected city attorney. To learn more, you can click HERE and HERE.

ENCINITAS COUNCILMEMBER WILL NOT RUN FOR RE-ELECTION

Encinitas City Councilmember Kellie Hinze, who represents District 2, announced she will not seek re-election in November. Hinze was appointed to the city council in 2019 and has since prioritized housing and homelessness. While Hinze will complete the rest of her term, she cited personal challenges as the reason for dropping out.