• Established in 1972 · CBPA has over four decades of service to the commercial industrial retail real estate industry
  • WATERS OF THE STATE

    Posted: September 22, 2017 | Posted by Crystal Whitfield | No Comments

    The commercial real estate industry, along with a broad coalition of other groups, have submitted a comment letter on the State Wetland Definition and Procedures for Discharges of Dredged or Fill Materials to Waters of the State, formerly known as the Wetland and Riparian Area Protection Policy, as there are significant concerns with how the procedures are drafted.  If you are interested in infrastructure improvements and economic development these proposed rules could place significant hurdles to achieving those goals.

    As currently drafted, the Procedures will create unnecessary conflict by proposing a new wetland definition that differs from the definition that has been used by the U.S. Army Corps of Engineers (“Corps”) since 1977. This will result in features being classified as a wetland by the Water Board but as non-wetland waters by the Corps, leading to conflicting alternatives analysis determinations and mitigation requirements.

    The Procedures will also set new regulatory requirements that will affect projects across the state — from large infrastructure projects to smaller projects necessary for the operations of many medium and small business owners, who are now complying with a multiplicity of new and costly water quality regulations.

    Unless modified, the Procedures will slow to a crawl the U.S. Army Corps of Engineers’ streamlined Nationwide Permit (“NWP”) program. The thresholds under consideration are so low that, ironically, even small projects involving operations and maintenance improvements will be forced to prepare an alternatives analysis. We estimate that each year more than 200 projects that qualify for a Corps NWP will be subject to costly and time-consuming application requirements, forcing project sponsors to engage biologists, engineers, economists, and attorneys to identify, design, and evaluate a range of on- and offsite alternatives. Medium and small businesses and many local governments cannot afford these added costs. Improvements will not be undertaken, and good-paying jobs in disadvantaged rural areas lost.

    Our coalition is asking the State Board – if it even determines it needs to act – to move forward with the adoption of a program that fills the regulatory gap by protecting non-federal waters of the state as if they were regulated by the Corps’ current procedures, including adopting a wetlands definition and delineation techniques that are identical to the well-established definition used by the Corps.  Alternately, if the Board does decide to act, comments that would make the program work better have been submitted.  We will keep you posted.

    STRATEGIC ISSUES CONFERENCE- DECEMBER 7-8, NAPA, CALIFORNIA

    Posted: September 22, 2017 | Posted by Crystal Whitfield | No Comments

    TEN major groups have come together to host an event you don’t want to miss!  California Business Properties Association (CBPA), the American Council for Engineering Companies (ACEC), the Building Owners and Managers of California (BOMA CAL), the California Alliance for Jobs (CAJ), the California Building Industry Association (CBIA), the California Business Roundtable (CBRT), the California Manufacturers & Technology Association (CMTA), the Commercial Real Estate Development Association (NAIOP), the National Federation of Independent Business (NFIB) and the Retail Industry Leaders Association (RILA) are co-hosting one of the premier biannual policy gatherings, 2017 Strategic Issues Conference.

    The Strategic Issues Conference offers a unique opportunity, in an intimate setting, to enjoy significant exposure to key decision-makers and policymakers from both the public and private sectors.  The goal of the Strategic Issues Conference is to increase public policy and political awareness of state and national issues, and to foster collaborative efforts among business leaders from all sectors of the California economy.  Your sponsorship will contribute in achieving this goal, and will signal your strong support for the commercial, industrial, and retail real estate industry.

    Click here for more information!

    TWO WEEKS TO GO!

    Posted: September 5, 2017 | Posted by Crystal Whitfield | No Comments

    The Legislature met today in an unusual Friday floor session due to the Monday holiday.  Additionally, both Appropriations Committees met today to take care of the “Suspense Files.”  So, busy day for the Legislature.  When they return on Tuesday there will be less than two weeks of the 2017 session left.  This means lots of activity and potential for last minute shenanigans.  So, on your behalf, we will be following the proceedings closely!

    AFFORDABLE HOUSING BILLS – NO ACTION TODAY

    Posted: September 5, 2017 | Posted by Crystal Whitfield | No Comments

    All week there has been a build-up to the potential that the Legislature was going to take up the so-called “Affordable Housing” package on Friday.  That package has been rumored to be as many as 17 bills, but no one has really known for sure what was “in” and what wasn’t.

    Regardless, three bills have been the focus of the package:

     SB 2 (Atkins) Real Estate Document Tax: Imposes a tax of at least $75 on all recorded real estate documents which is re-directed to public affordable housing programs, emergency shelters, and transitional housing.

     SB 3 (Beall) Affordable Housing Bond Act of 2018:  A $3-$5 billion general obligation bond to fund public affordable housing programs and infill infrastructure projects including.

     SB 35 (Weiner) Affordable Housing Regulation Streamlining: Seeks to streamline multi-family housing project approvals by streamlining the approval process in exchange for agreeing to project-labor agreements (PLAs) which will trigger prevailing wage on private projects.

    While the actual package of bills that will be included in the housing deal has yet to be formally announced, the Governor and leaders have insisted that new money for affordable housing will only be available if it is paired with streamlined regulations at the local level and new sources of revenue (bonded indebtedness and new taxes).

    We are working with our membership to determine how to move forward on the total package of bills, our industry, however, remains opposed to SB 2 (see below).

    REAL ESTATE DOCUMENT TAX REMAINS CONTROVERSIAL

    Posted: September 5, 2017 | Posted by Crystal Whitfield | No Comments

    Of the three bills mentioned above, SB 2 remains extremely controversial and is the subject of the most speculation about whether or not it can garner the needed two-thirds vote to pass; at one point this week the L.A. times even ran a story with the screaming headline, “Democrats lack votes to pass key California Housing Bill.”

    SB 2 is a regressive tax on all recorded real estate documents, except those related to an actual sale of a home or a building.  In other words, the largest transactions where the tax would be least felt, are not subject to the up to $250 per transaction tax that it authorizes, but every small day-to-day type of transaction is.  Currently to file your lot line adjustment you pay around $36.  Under SB 2 that jumps over seven times to $261 – a outrageous tax increase.

    Concern is strong with many in the Legislature about SB 2, and not just the fact that it is a regressive tax.  But the numbers being presented by the author underscore the fact that this will produce a paltry amount of money that goes to affordable housing, and even less comes back to local communities, while layering on a big tax on families and small businesses.

    For example, under SB 2, in Orange County alone, it is estimated that over 390,000 documents would be subjected to the tax, generating about $20 million in tax revenue.  But according to advocates for the measure, the formula in the bill would return less than $6M back to Orange County to spend on affordable housing and homeless programs.

    This is not a good return on investment and many policymakers recognize that, even in the face of a concerted effort to convince them otherwise.  Because of the directives in the bill and the fact that only 70% of the tax revenue is distributed back to locals, we are worried that this scenario could be common in many counties.

    However, our industry remains opposed to the new taxes contained in SB 2 as the bill is a regressive measure that inserts a convoluted tax into the middle of day-to-day real estate business and does very little to directly produce affordable housing.

    We think if the Legislature just folded this program into the budget it would easily pass, remove the complicated taxation scheme, and garner lots of support.

    SUBCONTRACTOR LIABILITY BILL STRONGLY OPPOSED

    Posted: September 5, 2017 | Posted by Crystal Whitfield | No Comments

    One bill that continues to move forward that we continue to strongly oppose is AB 1701 (Thurmond; D-Richmond). This bill creates a new private right of action against general contractors for liabilities they did not cause and without providing any notice or ability to prevent the harm.

    We believe that every worker should be paid promptly. However, under current law, subcontractors are prohibited from providing employee identification without the employee’s permission or a court order. Moreover, the general contractor does not hire subcontractors to another subcontractor and may not be aware of their presence on the job.

    Rather than creating an ability to avoid the harm of unpaid workers, AB 1701 would make the worker go through a lengthy process of litigation – beginning one year after the work is complete, delaying payment for years. If general contractors could obtain information about the status of worker compensation prior to making a progress payment to the subcontractor, they could ensure that workers are promptly paid.

    Additionally, AB 1701 will have the unintended consequence of increasing the likelihood that subcontractor employees will not be paid by adding Labor Code section 218.7(a)(3): “A direct contractor or any other person shall not evade, or commit any act that negates, the requirements of this section.”

    This would prevent general contractors from including indemnification provisions in their agreements with subcontractors. Contractual indemnity provisions put the subcontractor on notice that they will not escape liability if they fail to pay their employees. Without a contractual right of indemnification, AB 1701 creates a moral hazard.

    We strongly oppose this bill that will further make housing and construction in the state of California more expensive.

    LOCAL INITIATIVE TAX MEASURE DECISION FIX SOUGHT

    Posted: September 5, 2017 | Posted by Crystal Whitfield | No Comments

    This week the California Supreme court ruled that local ballot initiatives imposing new taxes for specific purposes only need a simple majority of voters to pass.  This decision has rocked many in the state as it shakes the foundation of Proposition 13 and created a gigantic loophole for pro-tax officials to game the system by running a “grassroots” initiative in order to make it easier to pass taxes.

    Click here for a more in-depth story about the ruling and its potential ramifications.

    In response, Assembly Republicans have already introduced a measure to “fix” the newly created loophole, however, not many Capitol Watchers are confident the proposal will be embraced by the needed 2/3s to pass a constitutional amendment.

    This ruling will make it easier for non-governmental groups to pass local tax measures and we implore all of our members to become more active at the local level to ensure you are not caught by surprise when measures start coming forth.

    PREVAILING WAGE MANDATES INCREASE CONSTRUCTION COST BY 37%

    Posted: September 5, 2017 | Posted by Crystal Whitfield | No Comments

    The Coalition for Affordable, Reliable and Equitable Housing issued the following statement after a new study revealed that prevailing wage mandates in private residential housing would result in $84,000 in higher housing costs:

    “In a time of unprecedented crisis – as communities of color and all Californians are struggling to regain their footing from the housing crash – we cannot afford any more expensive mandates that will starve people of being able to put a roof over their head. Prevailing wage mandates, perhaps will help some members of a politically powerful special interest, but that is only achieved at the expense of every other Californian currently struggling with higher housing costs. The bottom-line is prevailing wage will lead to higher poverty, higher housing costs and make our state’s housing crisis even worse,” said John Gamboa, Cofounder and President of California Community Builders and Vice Chair of the Two Hundred Project.

    The report, Impacts of a Prevailing Wage Requirement for Market Rate Housing in California, was funded by the California Homebuilding Foundation and conducted by Matthew Newman, former Executive Director for the California Institute for County Government and former Policy Analyst for the Legislative Analyst’s Office.

    The full report can be found here.

    STRATEGIC ISSUES CONFERENCE- DECEMBER 7-8 , NAPA, CALIFORNIA

    Posted: September 5, 2017 | Posted by Crystal Whitfield | No Comments

    TEN major groups have come together to host an event you don’t want to miss!  California Business Properties Association (CBPA), the American Council for Engineering Companies (ACEC), the Building Owners and Managers of California (BOMA CAL), the California Alliance for Jobs (CAJ), the California Building Industry Association (CBIA), the California Business Roundtable (CBRT), the California Manufacturers & Technology Association (CMTA), the Commercial Real Estate Development Association (NAIOP), the National Federation of Independent Business (NFIB) and the Retail Industry Leaders Association (RILA) are co-hosting one of the premier biannual policy gatherings, 2017 Strategic Issues Conference.  

    The Strategic Issues Conference offers a unique opportunity, in an intimate setting, to enjoy significant exposure to key decision-makers and policymakers from both the public and private sectors.  The goal of the Strategic Issues Conference is to increase public policy and political awareness of state and national issues, and to foster collaborative efforts among business leaders from all sectors of the California economy.  Your sponsorship will contribute in achieving this goal, and will signal your strong support for the commercial, industrial, and retail real estate industry.

    Click here for more information!

    “THEY’RE BAAAAACK!”

    Posted: August 25, 2017 | Posted by Crystal Whitfield | No Comments

    The California State Legislature is back from their Summer Recess, tan, rested, and ready, to finish out the final four weeks of the 2017 legislative year.  In addition to dealing with hundreds and hundreds of bills, Leadership has announced they are going to focus on a package of bills relating to affordable housing and are looking for ways to spend the windfall of cap-and-trade dollars.  As we push through to the final days of Session in mid-September it could be a wild ride.

    AFFORDABLE HOUSING ISN’T AFFORDABLE ANYMORE

    Posted: August 25, 2017 | Posted by Crystal Whitfield | No Comments

    Doing something – anything – to appear to address the affordable housing crisis is at the top of Legislative Leaders minds.   Housing is an incredibly important issue to our association and the lack of supply, inability to keep up with demand, and the increase in prices that come along with that, must be addressed.

    The median California home is now priced 2.5 times higher than the median national home.  Extremely high housing prices have caused home ownership in our state to tank – with just over half of California households owning their homes—the third lowest rate in the country. At the same times rents have soared.  Statewide, the median rental price for a two-bedroom apartment is $2,400, but the costs in urban areas can be more than double the statewide average.  Families are being priced out of certain market, are being forced to move further away from job-centers, and homelessness is increasing due to the lack of affordability.

    The reasons why California has gotten into this situation are many.

    The biggest driver for increases in housing costs is that the price of land, especially along the coast, had gone through the roof.  Regulations, lawsuits, labor shortages, increased material expense and labor costs, complicated land use laws, are all also pointed to by builders as reasons why supply has been choked off.

    Many in the legislature acknowledge privately that these reasons are, indeed, retarding development.  However, disentangling this Gordian Knot of issues will take a lot of political courage, force difficult policy discussion and decisions, and will take a level of give and take with powerful interests, that is currently not happening.  At this point the Legislature is focusing on measures that will focus some public money to affordable housing programs and an attempt at reform that may actually make the cost of construction more expensive in trade for a small modicum of regulatory relief.

    That is not to say we don’t support focusing funds on affordable housing programs, nor do we dislike incremental reforms to regulation, but we are concerned that there is not a more serious effort to address the core issues that have driven prices up so much.

    The CALmatters website has taken a look into the issue and lays out some basic facts about the issue that should be more widely understood.  We highly recommend reading this article by clicking here.

    AFFORDABLE HOUSING BILLS

    Posted: August 25, 2017 | Posted by Crystal Whitfield | No Comments

    Governor Jerry Brown and legislative leaders issued a statement on July 17 stating they were going to make affordable housing legislation a top priority for the final weeks of session.

    While the actual package of bills that will be included in the housing deal has yet to be formally announced, the Governor and leaders have insisted that new money for affordable housing will only be available if it is paired with streamlined regulations at the local level.

    There are three bills that have been mentioned the most as being part of this package:

     SB 2 (Atkins) Real Estate Document Tax: Imposes a tax of at least $75 on all recorded real estate documents which is re-directed to public affordable housing programs, emergency shelters, and transitional housing.

     SB 3 (Beall) Affordable Housing Bond Act of 2018:  A $3-$5 billion general obligation bond to fund public affordable housing programs and infill infrastructure projects including.

     SB 35 (Weiner) Affordable Housing Regulation Streamlining: Seeks to streamline multi-family housing project approvals by streamlining the approval process in exchange for agreeing to project-labor agreements (PLAs) which will trigger prevailing wage on private projects.

    We are working with our membership to determine how to move forward on this package of bills.  However, our industry remains opposed to the new taxes contained in SB 2 as the bill is a regressive measure that inserts a convoluted tax into the middle of day-to-day real estate business.