Legislative Update
BOMA San Diego
Legislative Update
STATEWIDE VACANCY TAX MEASURE DEFEATED
SB 789 (Menjivar), a proposed statewide vacancy tax measure was defeated in the California Senate Appropriations Committee and will not advance further this year. BOMA CAL, along with several other partners, including CalTax, was vehemently opposed and worked as a coalition with CBPA, NAIOP CAL and others to defeat the bill. The bill was previously amended to remove the actual tax, but remained a “study bill” that would have required onerous reporting requirement and significant penalties for non compliance. As such, BOMA CAL remained strongly opposed, as did the other coalition partners. Ultimately, that opposition and the concerns raised helped doom the bill’s advance. For more information, please click HERE.
COUNTY OF SAN DIEGO RELEASES FY26 RECOMMENDED BUDGET, TWO SUPERVISORS PROPOSAL TO CHANGE RESERVE POLICY FAILS ON 2-2 VOTE
The County of San Diego has released its proposed $8.6 billion budget, an increase of $85.8 million from last year’s adopted budget. While more funding is being proposed for law enforcement, health and human services, and capital improvements, the land use and environmental group is receiving a $45 million cut. The County will receive public input through June 12. To learn more about how you can provide input, click HERE. The full recommended Operational Plan may be found HERE.
A proposal put forward by Supervisor Terra Lawson-Remer, which would change how the County calculates its emergency reserves to allow for more of it to be used during this current budget cycle, failed on a 2-2 vote. The plan aimed to release over $380 million in reserves by redefining what counts toward those funds and basing reserve levels on day-to-day operational costs rather than total spending. According to Lawson-Remer, her proposal was prompted by potential federal budget cuts under President Trump’s draft budget. The measure was framed as a way to offset the potential loss of funding. It’s also worth noting that during her “State of the County” address, Supervisor Lawson-Remer proposed at least two new tax measures for the 2026 ballot, a property transfer tax and sales tax increase, to address the County’s fiscal situation. Supervisors Desmond and Anderson were critical of the reserve recalculation proposal, with Desmond arguing reserves are needed to prevent insolvency and should not be used for ongoing costs, as was implied by the other two Supervisors. Supervisor Anderson was concerned about bringing this proposal forward at the last minute. The vote reflects the board’s current 2-2 partisan split and underscores the importance of the July 1 special election between John McCann and Paloma Aguirre to fill the District 1 seat, which was vacated by Nora Vargas. To learn more, click HERE.
WATER AUTHORITY OFFICIALS ATTEMPT TO REDUCE SCHEDULED RATE HIKE
San Diego County Water Authority Officials are attempting to reduce a proposed water rate hike from an initial estimate of 18% down to 10.4% due in large part to budget cuts and higher projected water sales. The Water Authority is expected to vote on a final rate increase on June 26, which would take effect January 1 if approved. Some board members still expressed concerns that the double digit hike is still far too high, particularly when compared to previous rate hikes. To learn more about rates and charges, please click HERE.
MAYOR RELEASES REVISED BUDGET PROPOSAL, KEY SDPD FUNDING RESTORED
The Mayor issued a revised budget proposal for FY ’26 earlier this month. The updated proposal restores funding for SDPD, including the Northwestern Division, which was previously cut. Other notable restorations include $1M to fund roof repairs at city-owned facilities. Most other cuts remain, including a reduction in library and recreation center hours, restroom closures, and cuts totaling roughly $1.5M in arts funding. The City Council will convene on June 10 to take a final vote. Several council members have articulated concerns about cuts to services in their districts, with some articulating that “richer” areas of the city be cut more to restore services to underserved communities they represent. To learn more, please click HERE.
DOWNTOWN CIVIC CENTER REVITALIZATION VISION ANNOUNCED
A new vision for redeveloping the six blocks of San Diego’s Civic Center in the heart of Downtown was announced this month. The vision, championed by the Prebys Foundation and the Downtown San Diego Partnership, proposes transforming underutilized city-owned land into a civic and cultural district featuring a new performing arts center, public plaza, residential towers, educational institutions, retail, and a potential new hotel. Though current budget constraints have stalled past redevelopment efforts, the vision aims to inspire long-term political and financial commitments through a phased redevelopment approach starting with the City Operations Building and Golden Hall. The plan will be presented to City Council in July alongside a Notice of Availability for the City Operations Building under the Surplus Lands Act. To learn more, click HERE.
HOMELESSNESS UPDATE:
HOUSE PASSES “ONE, BIG, BEAUTIFUL BILL” INCLUDING KEY COMMERCIAL REAL ESTATE PROVISIONS
Earlier this month, the House of Representatives, despite narrow margins and dissension on both sides of the aisle, passed the long-awaited budget reconciliation bill – nicknamed the "One, Big, Beautiful Bill". Here’s the summary:
A compromise on the individual SALT cap is also included, raising it to $40,000 for certain income levels, which was important to several high tax states like California. The bill offsets costs by repealing many clean energy tax credits, setting the stage for likely Senate negotiations.
LA JOLLA SECESSION EFFORT MOVES FORWARD
The movement to incorporate La Jolla from the City of San Diego is advancing despite questions and a potential legal challenge from the City of San Diego. The controversy arose after it was deemed that proponents failed to collect enough petition signatures, and the Local Agency Formation Commission (LAFCO) allowed the Association for the City of La Jolla to gather additional names. LAFCO officials also over-ruled the Registrar of Voters in determining whether signatures were valid which allowed secessionists to exceed the threshold of 6,772 to qualify for economic review. The City of San Diego contends that the additional signatures should not have been validated. While the legality of the process remains murky, LAFCO intends to conduct a fiscal analysis, the next step in a long process before the question of independent cityhood is placed before voters. To learn about the LAFCO proposal, click HERE. To view the Mayor’s challenge, click HERE.
CARLSBAD APPROVES WATER AND SEWER RATE INCREASES
The Carlsbad City Council has approved a plan to increase residential water and sewer rates by 20%, starting July 1, increasing to 49% over the next three years. Commercial customers will also see their rates increase, although the percentage depends on multiple factors, such as usage and the size of the connection. Rates for recycled water, used primarily for irrigation, will increase about 5% annually. According to staff, the rate increases are necessary to offset a 14% rise in the cost of water purchased from the San Diego County Water Authority, and due to increased labor and capital costs. By 2027, the estimated water and sewer bill for a single family home is expected to increase from $61.75 to $187.40 per month. You can learn more, HERE.
CHULA VISTA PROPOSED BUDGET ANTICIPATES HISTORIC SPENDING
The City of Chula Vista has put forward a $305.6 million spending plan, the highest in city history, if approved. The increase, totaling $31.5 million, is largely due to new labor agreements, pension and health insurance costs, as well as the city’s portion of the Gaylord Pacific’s financing. Revenues are also expected to increase, including property taxes, TOT from the newly opened Gaylord Pacific, and the successful half-cent sales tax measure (Measure P) approved last year. To view the proposed budget, please click HERE.
HOMEOWNERS ATTEMPT TO BLOCK TRASH PICKUP FEE
A group of homeowners have filed a lawsuit aiming to block the City’s proposed trash pickup fee for single-family homes. The challenge is based on the argument that it violates California’s Proposition 218, which prohibits government agencies from charging more than the actual cost of providing a service. The challenge comes ahead of a final City Council vote on June 9th. To learn more about the proposed fee, please click HERE.
Legislative Update
STATEWIDE VACANCY TAX MEASURE DEFEATED
SB 789 (Menjivar), a proposed statewide vacancy tax measure was defeated in the California Senate Appropriations Committee and will not advance further this year. BOMA CAL, along with several other partners, including CalTax, was vehemently opposed and worked as a coalition with CBPA, NAIOP CAL and others to defeat the bill. The bill was previously amended to remove the actual tax, but remained a “study bill” that would have required onerous reporting requirement and significant penalties for non compliance. As such, BOMA CAL remained strongly opposed, as did the other coalition partners. Ultimately, that opposition and the concerns raised helped doom the bill’s advance. For more information, please click HERE.
COUNTY OF SAN DIEGO RELEASES FY26 RECOMMENDED BUDGET, TWO SUPERVISORS PROPOSAL TO CHANGE RESERVE POLICY FAILS ON 2-2 VOTE
The County of San Diego has released its proposed $8.6 billion budget, an increase of $85.8 million from last year’s adopted budget. While more funding is being proposed for law enforcement, health and human services, and capital improvements, the land use and environmental group is receiving a $45 million cut. The County will receive public input through June 12. To learn more about how you can provide input, click HERE. The full recommended Operational Plan may be found HERE.
A proposal put forward by Supervisor Terra Lawson-Remer, which would change how the County calculates its emergency reserves to allow for more of it to be used during this current budget cycle, failed on a 2-2 vote. The plan aimed to release over $380 million in reserves by redefining what counts toward those funds and basing reserve levels on day-to-day operational costs rather than total spending. According to Lawson-Remer, her proposal was prompted by potential federal budget cuts under President Trump’s draft budget. The measure was framed as a way to offset the potential loss of funding. It’s also worth noting that during her “State of the County” address, Supervisor Lawson-Remer proposed at least two new tax measures for the 2026 ballot, a property transfer tax and sales tax increase, to address the County’s fiscal situation. Supervisors Desmond and Anderson were critical of the reserve recalculation proposal, with Desmond arguing reserves are needed to prevent insolvency and should not be used for ongoing costs, as was implied by the other two Supervisors. Supervisor Anderson was concerned about bringing this proposal forward at the last minute. The vote reflects the board’s current 2-2 partisan split and underscores the importance of the July 1 special election between John McCann and Paloma Aguirre to fill the District 1 seat, which was vacated by Nora Vargas. To learn more, click HERE.
WATER AUTHORITY OFFICIALS ATTEMPT TO REDUCE SCHEDULED RATE HIKE
San Diego County Water Authority Officials are attempting to reduce a proposed water rate hike from an initial estimate of 18% down to 10.4% due in large part to budget cuts and higher projected water sales. The Water Authority is expected to vote on a final rate increase on June 26, which would take effect January 1 if approved. Some board members still expressed concerns that the double digit hike is still far too high, particularly when compared to previous rate hikes. To learn more about rates and charges, please click HERE.
MAYOR RELEASES REVISED BUDGET PROPOSAL, KEY SDPD FUNDING RESTORED
The Mayor issued a revised budget proposal for FY ’26 earlier this month. The updated proposal restores funding for SDPD, including the Northwestern Division, which was previously cut. Other notable restorations include $1M to fund roof repairs at city-owned facilities. Most other cuts remain, including a reduction in library and recreation center hours, restroom closures, and cuts totaling roughly $1.5M in arts funding. The City Council will convene on June 10 to take a final vote. Several council members have articulated concerns about cuts to services in their districts, with some articulating that “richer” areas of the city be cut more to restore services to underserved communities they represent. To learn more, please click HERE.
DOWNTOWN CIVIC CENTER REVITALIZATION VISION ANNOUNCED
A new vision for redeveloping the six blocks of San Diego’s Civic Center in the heart of Downtown was announced this month. The vision, championed by the Prebys Foundation and the Downtown San Diego Partnership, proposes transforming underutilized city-owned land into a civic and cultural district featuring a new performing arts center, public plaza, residential towers, educational institutions, retail, and a potential new hotel. Though current budget constraints have stalled past redevelopment efforts, the vision aims to inspire long-term political and financial commitments through a phased redevelopment approach starting with the City Operations Building and Golden Hall. The plan will be presented to City Council in July alongside a Notice of Availability for the City Operations Building under the Surplus Lands Act. To learn more, click HERE.
HOMELESSNESS UPDATE:
- CBPA SPONSORED BILL ON HOMELESS ENCAMPMENT CLEAN UP COSTS HELD UNDER SUBMISSION: AB 1435 (Nguyen; D-Elk Grove), which was sponsored by the California Business Properties Association of which BOMA CAL is a member, was held under submission earlier this month, meaning no motion has been made to forward the bill. While not technically dead, it is unclear if the bill will be reconsidered this legislative session. The bill, entitled the Business Clean-up Relief Act of 2025, offers targeted tax relief for property owners and small businesses who have expended money to clean up unauthorized homeless encampments. To learn more, please click HERE.
- REGIONAL HOMELESSNESS NUMBERS ARE DOWN: According to the 2025 ‘Point-in-Time’ count, an annual homeless census conducted in January, San Diego County saw a modest reduction in the number of homeless individuals. The count marks the first decline in regional homelessness since 2020. El Cajon was the only city to see an increase in the number of homeless individuals. The overall decrease is believed to be largely due to recent encampment bans and the provision of additional shelter beds. To view the report, please click HERE.
- GOVERNOR CALLS FOR UNIFORM ENCAMPMENT BAN: Governor Gavin Newsom is calling on all California cities and counties to adopt a uniform ban on homeless encampments under a model similar to that which was recently adopted in San Diego. The model would require 48-hour notice before an encampment could be cleared (unless deemed an emergency), mandate personal item storage, and emphasize that shelter be available before clearing an encampment. Newsom’s announcement also referenced the clearing of state-owned land. This comes as SB 569 (Blakespear), which was introduced to streamline CalTrans abatements, appears stalled in the legislature. To learn more, click HERE.
HOUSE PASSES “ONE, BIG, BEAUTIFUL BILL” INCLUDING KEY COMMERCIAL REAL ESTATE PROVISIONS
Earlier this month, the House of Representatives, despite narrow margins and dissension on both sides of the aisle, passed the long-awaited budget reconciliation bill – nicknamed the "One, Big, Beautiful Bill". Here’s the summary:
- Business SALT deduction preserved — no changes to property tax deductibility.
- Carried interests remain taxed at capital gains rates.
- Section 1031 exchanges and ordinary income tax rates remain unchanged.
- 100% bonus depreciation extended through 2029.
- Pass-through deduction (Section 199A) increased to 23% and made permanent.
- Interest expense limitation adjusted in favor of taxpayers (2025–2029).
- Opportunity Zones extended through 2033, with rural focus.
- Low-income housing tax credit allocation increased 12.5% through 2029.
- Estate tax exemption raised to $15 million per individual.
A compromise on the individual SALT cap is also included, raising it to $40,000 for certain income levels, which was important to several high tax states like California. The bill offsets costs by repealing many clean energy tax credits, setting the stage for likely Senate negotiations.
LA JOLLA SECESSION EFFORT MOVES FORWARD
The movement to incorporate La Jolla from the City of San Diego is advancing despite questions and a potential legal challenge from the City of San Diego. The controversy arose after it was deemed that proponents failed to collect enough petition signatures, and the Local Agency Formation Commission (LAFCO) allowed the Association for the City of La Jolla to gather additional names. LAFCO officials also over-ruled the Registrar of Voters in determining whether signatures were valid which allowed secessionists to exceed the threshold of 6,772 to qualify for economic review. The City of San Diego contends that the additional signatures should not have been validated. While the legality of the process remains murky, LAFCO intends to conduct a fiscal analysis, the next step in a long process before the question of independent cityhood is placed before voters. To learn about the LAFCO proposal, click HERE. To view the Mayor’s challenge, click HERE.
CARLSBAD APPROVES WATER AND SEWER RATE INCREASES
The Carlsbad City Council has approved a plan to increase residential water and sewer rates by 20%, starting July 1, increasing to 49% over the next three years. Commercial customers will also see their rates increase, although the percentage depends on multiple factors, such as usage and the size of the connection. Rates for recycled water, used primarily for irrigation, will increase about 5% annually. According to staff, the rate increases are necessary to offset a 14% rise in the cost of water purchased from the San Diego County Water Authority, and due to increased labor and capital costs. By 2027, the estimated water and sewer bill for a single family home is expected to increase from $61.75 to $187.40 per month. You can learn more, HERE.
CHULA VISTA PROPOSED BUDGET ANTICIPATES HISTORIC SPENDING
The City of Chula Vista has put forward a $305.6 million spending plan, the highest in city history, if approved. The increase, totaling $31.5 million, is largely due to new labor agreements, pension and health insurance costs, as well as the city’s portion of the Gaylord Pacific’s financing. Revenues are also expected to increase, including property taxes, TOT from the newly opened Gaylord Pacific, and the successful half-cent sales tax measure (Measure P) approved last year. To view the proposed budget, please click HERE.
HOMEOWNERS ATTEMPT TO BLOCK TRASH PICKUP FEE
A group of homeowners have filed a lawsuit aiming to block the City’s proposed trash pickup fee for single-family homes. The challenge is based on the argument that it violates California’s Proposition 218, which prohibits government agencies from charging more than the actual cost of providing a service. The challenge comes ahead of a final City Council vote on June 9th. To learn more about the proposed fee, please click HERE.