Legislative Update
Friday, October 4, 2024
by: Craig Benedetto and Marshall Anderson, California Strategies

Section: Government Affairs




Legislative Update 

September 2024

By Craig Benedetto & Marshall Anderson, Legislative Advocates 

 

NATIONAL UPDATE

 

U.S. TREASURY DEPARTMENT PROPOSES NEW EV CHARGING TAX CREDITS

The U.S. Treasury Department this month issued a Notice of Proposed Rulemaking that would make tax credits available for individuals and businesses, worth up to $1,000-$100,000 per electric vehicle charging station. The plan attempts to support President Biden’s goal of installing 500,000 EV chargers by 2030. Public comments on the proposal are open until mid-November. There is no timeline for when the rule may be finalized, but these kinds of incentives have typically been supported by BOMA and its members. To learn more, please click HERE.

 

STATE UPDATE

 

BOMA CALIFORNIA OPPOSING KEY BILLS OF CONCERN

BOMA California and its business and real estate partners have made three key bills of concern a priority as they’ve progressed through the legislature. AB 98 (Carrillo and Reyes), AB 1103 (Menjivar), and AB 2364 (Rivas) have gone to hearings and were passed along on a partisan votes.  Since the authors are all Democrats, much deference is being given by their Democrat colleagues, and as both CA state senate and assembly are dominated by Democrats, slowing or stopping these measures has always been viewed as a challenge. Now, all eyes turn to the Governor, as industry partners advocate for veto. 

 

Bills Pending (Governor has until September 30th to sign into law):

 

AB 98 (CLICK HERE for bill language) is a “gut and amend” which is a procedure sometimes used in the legislature to completely change the subject and content of a bill late in the session as a means to try and get something through without the usual scrutiny it might receive during the full course of a normal session.  As amended, it now mandates that local governments must apply a new set of construction and setback/buffer standards for warehouse and logistics facilities, as well as other potential operational changes.  There is a grandfathering date of September 30, 2024 for existing and in process logistics uses, although that language is still a bit unclear. In addition to that, the new buffer and set back requirements, alone, could make siting a logistics use very difficult.  The new construction standards, including labor union requirements and wiring and installation for EV vehicles (both passenger and truck), are also incredibly onerous.  Unfortunately, numerous environmental and workers justice groups, including organized labor, have jumped on board in support and the bill continues to make progress.  In addition to commercial real estate, local government groups, like the League of Cities, are opposed to this measure, which usurps local control.  BOMA California is advocating for the Governor to veto the bill.

 

AB 1103 (CLICK HERE for bill language) would add new requirements to commercial leases in an effort to purportedly protect certain tenants (based on size of tenancy).  The bill was put forward supposedly on behalf of two retail tenants who claimed they had been negatively impacted by CAM charges in the Senator’s district.  It’s modeled after residential tenant protections, and much of the supporting arguments mirror what residential tenant advocates purport.  BOMA has been working to stop this bill, explaining the nature of commercial leases and how common area and expense charges are derived and passed along, noting that they are all stipulated in the leases with tenants.  Similar to the other bills, BOMA CAL is requesting a veto. To read the California Business Properties Association, which includes BOMA, issues sheet on AB 1103, CLICK HERE.

 

Bills Signed

 

AB 2364 (CLICK HERE for bill language) was heavily opposed, along with a companion measure that was ultimately killed at the end of session.  Due to BOMA’s opposition, AB 2364 was downgraded to a study bill, which would evaluate safety and employment protections in the janitorial industry. Although amended, BOMA remained opposed due to the risk that the study could be used to build a case for future mandates upon conclusion. The bill is also redundant in that numerous industry practices already exist. Unfortunately, the Governor has signed this bill into law.  

 

STATE LIFTS DROUGHT RESTRICTIONS FOR 19 COUNTIES, INCLUDING SAN DIEGO

Governor Newsom has rolled back the drought emergency declaration in 19 counties, including San Diego, following two successive winters that replenished state water supplies in many areas. The order lifts prohibitions on decorative fountains, sidewalk washing, and other forms of water use.  Despite improved conditions, state officials warned that extreme weather patterns may lead to a return of drought restrictions and urged continued voluntary conservation measures. In fact, numerous portions of the state, mainly to the north, are already drifting back into drought.  To learn more, please click HERE.

 

NEW BUILDING CODE UPDATES SET EFFICIENCY STANDARDS FOR NEW HOME CONSTRUCTION, OPENS DOOR FOR LOCAL REQUIREMENTS

California's new building code updates include more stringent efficiency standards for new home and commercial construction. While the update was scaled back from an original proposal that would have required the replacement of air conditioning units in existing builds, the new regulations will mandate higher efficiency standards like improved insulation and the use of electric heat pumps for heating and cooling. While the change does not ban gas appliances, the new rule could prompt local municipalities to bring forward additional requirements like heat pump replacement mandates in existing buildings. Opponents have argued that the new rules could increase consumer energy costs and potentially violate federal energy law, a key argument made in the defeat of Berkeley’s building electrification reach code. In terms of other issues, building energy efficiency budgets would be required, as well as new more stringent requirements for cooling and heating equipment.  Unless otherwise challenged and repealed, the new state building code would take effect on January 1, 2026. Local jurisdictions can adopt those codes, or amend them.  BOMA will report back on other significant changes and local actions related to the new codes.  To learn more, please click HERE.

 

CITY OF SAN DIEGO

 

LAND DEVELOPMENT CODE UPDATE TO TAKE EFFECT OCTOBER 5

The City’s recently adopted Land Development Code Update (LDC), which BOMA supported, will go into effect on October 5th of this year. Amendments include streamlining the approval process for behavior health facilities, implementing new State laws to promote affordable home development, improving onsite public infrastructure on Complete Communities sites and expanding incentives for new child care facilities. The 2024 LDC Update will not become effective in the Coastal Overlay Zone until it is certified by the California Coastal Commission. To review the full LDC, please click HERE.

 

MEASURE C (CONVENTION CENTER EXPANSION) UPHELD BY COURT AS A CITIZENS INITIATIVE

In a significant win for finally ending the battle over funding the much needed convention center expansion, the Superior Court ruled late last week that Measure C, a 2020 ballot measure to raise TOT and fund a Convention Center expansion, road repairs, and homelessness services, was indeed a bona fide “citizen’s initiative” and could, therefore, be approved under a 50% majority.  Recall that the measure narrowly failed to meet a two-thirds affirmative vote when it went to the voters. Subsequent court decisions on other measures indicated that this measure could indeed pass on a simple majority vote.  The decisions to move forward under that legal premise have led to this longstanding court battle.  Despite the ruling, opponents have indicated they intend to file an appeal that could delay certainty around the measure for as long as a year or more. To learn more about Measure C, click HERE.

 

PLANNING DEPARTMENT RELEASES FY 2025 WORK PROGRAM

The City of San Diego’s Planning Department Fiscal Year 2025 Work Program, which details all major planning initiatives along with estimated completion dates and status updates, is now available online. BOMA San Diego’s Government Affairs Committee received a presentation from the City’s Planning Director going over the plan.  She thanked the members for their support of past measures.  You can view the Work Program HERE.

 

BUILDING PERMIT APPLICATION EXTENSION PROGRAM NOW LIVE

The City of San Diego’s building permit application extension program is now LIVE. The City now allows for approximately 3 years worth of extensions, with another 6 months to pay for the final permit.  An information bulletin has been created and posted to provide guidance to those seeking to extend their application timeframe.  It should be noted that for the LAST 180 days, the Chief Building Official may require some additional “health and life safety” updates, including, for now, garage sprinklers and shear walls.  Additional requirements to allow for that last tranche of 180 days could be added based upon review of the new California Building Code. The additional extension timeframe is retroactive to June 1st.  More information, including how to process a request, can be found in the info bullet.  To review the information bulletin, please CLICK HERE.

 

CITY ISSUES RFI FOR HOMELESS SHELTER SITES, COUNCILMEMBERS OFFER POTENTIAL LOCATIONS

The City of San Diego is asking for help from private property owners in its efforts to provide shelter for the homeless.  According to the City, this is being done “with the goal of increasing long-term capacity in the City’s shelter system and replacing beds in temporary shelters set to close in the coming years, the City of San Diego issued a formal solicitation calling on property owners and managers to offer up potential locations that could be used as future shelter sites through a Request for Information. The move comes as the City works to create more short-, medium- and long-term options for those experiencing homelessness through the updated Comprehensive Shelter Strategy (CLICK HERE to read).”  The City further says, “The RFI appeals to property owners and managers to submit sites available for purchase or lease that – after further evaluation – could become a homelessness shelter.  There is no ideal size for such a facility, and the City currently employs a mix of smaller non-congregate buildings ranging to larger non-congregate sites such as hotels, to larger congregate-style shelter facilities.”  To read the RFI, please CLICK HERE to access. 

 

In line with the RFI, the Mayor’s Office also issued a call for potential shelter sites to each council office. Several councilmembers have since offered memoranda to the Mayor, detailing potential sites to explore:

  • District 1: Motel San Diego (4780 Mission Bay Drive), a building at 4433 Mission Bay Drive, parking lot at 4471 Mission Bay Drive, former car dealership at 2923 Bunker Hill Street, and the former manufactured home park in De Anza Cove. 
  • District 3: Old Central Library (Downtown)
  • District 5: Councilmember von Wilpert noted that she wishes to discuss locations in person.
  • District 7: Warehouses located at 7650 Mission Valley Road and 5260 Anna Avenue.
  • District 9: Balboa Park Activity Center (former gym) and safe parking lot at Central Elementary School. It is worth noting that Council President Elo-Rivera, in his memo, stated that he doesn’t believe it is the city council’s job to find suitable sites. 
 

The City’s Independent Budget Analyst also provided a list of lodging facilities and warehouses, including Hotel Metro (4017 42nd st.), C Street Inn (636 C St.), and Hotel Gigi (547 9th Ave.), 7520 Mission Valley Rd., 3939 Market St., 789 Gateway Center Way, and 9606 Aero Dr. The Mayor’s office has indicated they are reviewing the council-offered sites.

 

CITY COUNCIL APPROVES LEASE AGREEMENT FOR DOWNTOWN DSD RELOCATION

The San Diego City Council approved a lease agreement for two floors at 550 West C St. to relocate a portion of the Development Services Department from the City Operations Building. The lease is expected to span five years and seven months with a move planned in December.  The lease space will accommodate those DSD staffers, including their executive team, who need to be close to city hall.  A separate lease for office space in Mission Valley, which was previously approved, will house the balance of DSD staff.  The Mission Valley space will also be the customer serving space for in person services.  Both spaces are undergoing tenant improvements and are expected to be occupied soon.

 

COUNTY OF SAN DIEGO AND OTHER REGIONAL AGENCIES

 

CHULA VISTA AND NATIONAL CITY PASS ENCAMPMENT BANS

Following a regional trend, the cities of Chula Vista and National City each passed ordinances banning homeless encampments, regardless of shelter availability. Both city councils approved the measures unanimously, with National City’s ordinance taking effect in October. Chula Vista’s ordinance will require a second, mostly perfunctory vote. Like the City of San Diego’s ban on encampments, both cities will prohibit encampments near schools, parks, transit hubs, and other public spaces. It is rumored that the City of Oceanside is exploring its own encampment ban as the recent Grants Pass v Johnson ruling has cleared the way for cities to take action. This all comes as the Governor is asking local jurisdictions to do more, or risk the state holding back homeless housing funds.  BOMA has been supportive of both more shelter and services, as well as more attention from local and state government on the condition of our streets and its impacts to our members and their tenants and guests.

 

COUNTY BOARD OF SUPERVISORS APPROVE NEW CLIMATE ACTION PLAN

The San Diego County Board of Supervisors approved a new Climate Action Plan, including new growth management and vehicle miles traveled methodology to help address a lawsuit that was filed against the County by the Sierra Club.  

 

Many jurisdictions who adopted their plans in the last 10 years are now revisiting those plans and adding requirements for existing and new development to help accelerate GHG emission reductions.  Adding “REACH” code items to go beyond their own, as well as state requirements is perceived, by many decision makers, as a productive public relations exercise, notwithstanding the impacts to jobs creation, homeownership and cost of living.  Like those proposed in Carlsbad, many of these recommendations are unreasonable, unnecessary and problematic.  Some may even be legally questionable given recent lawsuits that have stopped jurisdictions from banning natural gas use in buildings. 

 

BOMA worked with its coalition partners to review, submit comments and make comments during the hearing on the County plan, which includes many of these problematic issues.  The County plan would only apply to the unincorporated area, but can also be precedent setting to other jurisdictions.  To read more about the County’s plan, please CLICK HERE.  To review the Board agenda item, please CLICK HERE and scroll to agenda item #6.

 

MTS BOARD OF DIRECTORS CUT SERVICE IMPROVEMENTS

The Metropolitan Transit System (MTS) Board of Directors voted this month to roll back plans for several service upgrades. $126 million will be spent to close budget deficits, which were previously anticipated for increasing bus and Blue Line trolley frequency, as well as the addition of new bus routes. The enhancements are now expected in 2025 and 2026, respectively. Bus stop improvements like new benches and upgrading lighting were also shelved. Two line items that escaped cuts were $15 million to hire additional security personnel and $2 million for the Nighttime Border Express between Downtown and San Ysidro. To learn more, click HERE.

 

CARLSBAD PLANNING COMMISSION HEARS DRAFT CLIMATE ACTION PLAN PROPOSAL

The Carlsbad City Planning Commission, earlier this month, heard an informational presentation from City staff on their proposed Climate Action Plan (CAP) update.  The City is pursuing an update to the original plan, approved in 2015, to further refine and expand actions to achieve greenhouse gas emission reductions.  The hearing, which featured several speakers from various business groups centered on the cost and impact of the mandates on private property owners and the need for a cost-benefit analysis. 

 

BOMA is part of a coalition of concerned and potentially impacted stakeholders who have been meeting regularly with staff to discuss our concerns.  They include the potential indirect mandate for electrification through a building energy “budget”.  Other concerns include requirements to minimize employee vehicular travel, installation of electrical vehicle chargers and other means of reducing energy consumption in both new and existing residential and commercial buildings. 

 

The Planning Commission hearing is the latest step in the process to update the 2015 CAP.  Commissioners noted and unanimously echoed the concerns of the business community representatives attending the hearing.  They asked staff to consider these comments when they return on October 2nd for an action item on the subject.

 

To review the Planning Commission hearing materials, please CLICK HERE.  If you are a Carlsbad property owner, resident or have interest in the city, please contact Craig Benedetto at BOMA San Diego to get more involved.  He can be reached at craigb@calstrat.com or by phone at (619) 980-8032

 

DEL MAR ACCEPTING APPLICATIONS TO FILL VACANT CITY COUNCIL SEAT

Del Mar is now accepting applications for the city council seat that will soon be vacated by Dwight Worden. Worden is resigning due to health concerns after 10 years on the city council.  The deadline for applications is September 27, at which point the city council will interview candidates and vote on an appointee by October 7th of this year. The selected individual will serve the remainder of Worden’s two-year term. To learn more about the application process, please click HERE

 

ELECTION UPDATE

 

KEY ELECTION DATES TO KNOW

Ahead of the 2024 General Election on November 5th, the San Diego County Registrar of Voters has published a list of key dates to help inform voters:

  • September 26: Voter information booklets begin arriving
  • October 5: During this week, all San Diego County registered voters will receive a mail in ballot
  • October 7: Early voting begins at the Registrar of Voters office 8:00am to 5:00pm, Monday-Friday
  • October 8: Ballot drop-off starts at official drop boxes
  • October 26: Select voting centers open daily 
  • November 2: All voting centers open daily 
  • November 5: Election Day – voting centers and drop boxes open 7:00am to 8:00pm. Mail in ballots must be postmarked by this date or dropped off 
 

BOMA will be issuing communications with endorsed candidates for member consideration in the days ahead. To learn more or if you have questions about registering to vote or need to track your ballot, please visit the Registrar of Voters’ website, HERE

 

REMINDER: BOMA CAL ISSUES STATEWIDE BALLOT POSITIONS

BOMA California has reviewed and issued the following positions on some of the measures that will be on the November 2024 statewide ballot. There are several other items on the ballot, and for those not identified below, BOMA CAL has not taken a position on them.

 
  • Prop 2 - School Facilities Bond - SUPPORT - This $10 billion bond measure is aimed at funding repairs and upgrades for thousands of K-12 school and community college buildings across CA. This measure would encourage much needed development and enhance our state's economic competitiveness.
  • Prop 5 - Vote Thresholds - OPPOSE - Currently, most local bond proposals require a two-thirds public vote for approval. If voters pass Proposition 5, this threshold will be lowered to 55% for bonds supporting low-income housing, road and transit expansions, parks, wildfire resilience, and other public infrastructure projects. This measure aims to erode taxpayer protections against government spending established with Proposition 13 and will result in higher taxes.
  • Prop 32 - $18/hr Minimum Wage - OPPOSE - This measure would raise the state minimum wage from $16 to $18. The minimum wage has rapidly increased over the last several years, and higher minimum wages have been established for fast food and health care workers. Another increase would further threaten the economic competitiveness of our state and drive businesses out.
  • Prop 33 - Rent Control - OPPOSE - This measure would permit local governments to enforce rent controls. It would repeal the Costa-Hawkins Rental Housing Act that generally prohibits cities and counties from imposing rent limits on properties occupied after February 1, 1995. Prop 33 would have an adverse impact on property values and the economic competitiveness of CA.
  • Prop 34 - Restricts Spending by AIDS Healthcare Foundation - SUPPORT - This measure would mandate that specific healthcare providers allocate almost all funds from a federal prescription drug program towards patient care. It would forbid the AIDS Healthcare Foundation from using the organization’s coffers to advance a political agenda through the ballot, and ensure public tax dollars meant for patients are spent on patients.
  • Prop 36 - Retail Theft/Prop 47 Reform - SUPPORT - Prop 36, the Homelessness, Drug Addiction, and Theft Reduction Act, would partially roll back Prop 47, increasing penalties for theft and drug trafficking. Prop 36 would address the drastic increase in retail theft and organized retail crime by reclassifying retail theft with 2+ prior convictions as a felony. Retail theft is a key issue impacting not just our industry, but the economic health of our state.