Industry-sponsored AB 2904 (Quirk-Silva; D-Fullerton) has been signed into law by Governor Newsom. This legislation will change the current law by requiring a longer notice period of 60 days to be given to property owners before a public hearing is held on a proposed zoning ordinance or amendment. BOMA California advocated for this bill in partnership with CBPA and NAIOP SoCal. It is a big win for the industry, and we thank our partners at NAIOP SoCal for their hard work on this bill.
Assembly Bill 98 Signed into Law Putting Severe Limitations on Warehouse Development
Governor Newsom signed AB 98 (Carrillo; D-Palmdale and Reyes; D-San Bernardino) into law, which puts severe limitations on warehouse development. AB 98 was a gut-and-amend bill introduced at the extreme last minute, with no consensus or consultation with impacted companies or local government, and our members have expressed great concern about its impacts on individual projects, jobs, and the supply chain as a whole.
Assembly Bill 98 imposes statewide mandates on warehouse locations and operations, overriding local control. It requires buffer zones, truck route restrictions, and zero-emission vehicle standards, severely limiting land for logistics use and likely driving more businesses out of California. This could lead to significant job losses, hinder economic growth, and worsen environmental outcomes due to increased transportation needs. The bill's rigid requirements and lack of flexibility, such as no sunset clause and burdensome affordable housing provisions, will stifle industrial development and harm local economies.
Costly Commercial Lease Mandates Signed into Law: Key Wins for CRE Secured
Governor Newsom has signed SB 1103 (Menjivar; D-Van Nuys) into law, introducing costly commercial lease mandates that will take effect on January 1, 2025. The bill applies new requirements for rent increases, operating costs, and lease termination notices for certain qualified commercial tenants (CCTs), including microenterprises, small restaurants, and small nonprofits.
Despite strong opposition from a coalition of over 25 business groups, we successfully fought to limit the bill’s scope and reduce its impact on the commercial real estate (CRE) industry.
Key Wins Secured by our Industry:
Commercial Rent Control Removed: Rent control provisions were eliminated, preserving landlords' ability to set market-based rents.
Flexibility on Operating Costs: Landlords can pass through operating costs with reasonable flexibility, as long as proportional documentation is provided.
Treble Damages Replaced: Liability was limited to actual damages, reducing financial risk for landlords.
No Limitations on Security Deposits: The cap on security deposits was removed, allowing appropriate deposit amounts.
Qualified Commercial Tenant (CCT) Definition Narrowed: Only microenterprises (5 or fewer employees), small restaurants, and nonprofits (fewer than 20 employees) qualify, limiting the scope of tenants covered by the bill.
BOMA California will continue to work with our members to ensure compliance with these costly commercial lease mandates and monitor future legislative developments.
Opposed Janitorial Bills Meet Different Fates
AB 2364 (Rivas; D-Los Angeles), a flawed janitorial study bill, was signed into law by the governor. The bill poses serious threats by advocating a flawed approach to janitorial workloads, potentially leading to skyrocketing costs across the state. While it is a problematic bill, we scored a victory by having the initial bill amended down to a study bill.
AB 2374 (Haney; D-San Francisco) would have transformed the Displaced Janitor Opportunity Act into a joint liability statute under which any size company becomes liable for the failure of a contractor to comply with the Act. This would be burdensome and result in higher operating costs. Our industry scored a big win by stopping this bill from proceeding through the legislative process.
Retail Theft Bill Package Signed Into Law
BOMA California has advocated in support of the package of 10 bills introduced by legislative leaders and signed into law by the Governor Newsom in August as it will help protect businesses, enhance public safety, and promote a thriving commercial sector. The package includes new laws that crack down on shoplifting, theft from a vehicle, organized theft, and online marketplaces where these stolen goods are sometimes resold. While the passage of this legislative package marks significant progress, it doesn't fix the problem created with Proposition 47, thus the need to also pass Proposition 36 on the November 2024 ballot. However, we applaud the Governor and Legislature for their efforts to address this critical problem impacting our state.
Governor Vetoes AB 3129: A Win for Commercial Real Estate
Governor Newsom’s veto of AB 3129 (Wood; D-Ukiah) represents a significant win for commercial real estate and private equity investments. AB 3129 would have imposed burdensome regulations on private equity groups (PEGs) and hedge funds, requiring them to obtain the Attorney General’s approval before any changes in control or acquisitions involving health care facilities. This bill threatened to disrupt vital private investment in the health care sector, which many struggling providers rely on.
BOMA California, representing several REITs, joined a broader coalition in opposing the bill, highlighting that AB 3129 would have added significant costs, delayed transactions, and ultimately harmed both health care providers and investors. The Governor acknowledged these concerns, noting that oversight is already handled by the Office of Health Care Affordability, making the additional regulations unnecessary.
This veto is a clear win for commercial real estate, ensuring that critical investments can continue without undue regulatory hurdles.
Priority Support Legislation SB 768 Signed
A bill our industry heavily advocated for was signed into law by Governor Newsom. SB 768 (Caballero; D-Fresno) is crucial for the commercial real estate industry as it mandates a study by the California State Transportation Agency (CalSTA) on how Vehicle Miles Traveled (VMT) is used as a metric for measuring transportation impacts under the California Environmental Quality Act (CEQA). This bill aims to provide a balanced analysis of VMT's impact on the cost of housing and development, shedding light on the financial burden imposed on California drivers. The study will help bring accountability and transparency to the practice of leveraging CEQA to promote a reduced driving agenda, which often increases hidden housing costs.
BOMA California Helps Secure Passage of AB 2243 to Boost Mixed-Use Affordable Housing
Governor Gavin Newsom recently signed AB 2243 (Wicks; D-Oakland) into law. BOMA California was a strong supporter of the bill, playing an instrumental role in its drafting and passage. BOMA California’s advocacy efforts were crucial in securing the bill’s approval and signature into law. AB 2243 builds upon the Affordable Housing and High Road Jobs Act (AB 2011, 2022), aimed at accelerating the development of affordable and mixed-income housing in transit-friendly commercial corridors.
Governor Vetoes Key Adaptive Reuse Bills Supported by BOMA California
Despite BOMA California’s strong advocacy for adaptive reuse as a vital solution to repurposing underutilized commercial spaces, Governor Newsom vetoed two major bills—AB 2910 and AB 3068—that aimed to convert vacant commercial properties into housing and mixed-use developments.
AB 2910 (Santiago; D-Los Angeles): This bill would have allowed the City of Los Angeles to adopt alternative building regulations, facilitating the conversion of commercial buildings into residential use. The Governor’s veto cited concerns about duplicating existing efforts under AB 529 and the lack of resources to manage the required regulatory reviews. Governor's veto message.
AB 3068 (Haney; D-San Francisco): Aimed at creating a streamlined approval process and financial incentives for adaptive reuse projects, this bill was vetoed due to concerns over labor compliance mechanisms that could cause project delays and increase costs, ultimately undermining housing production. Governor's veto message.
BOMA California remains committed to advocating for adaptive reuse as a solution that benefits the housing market, local economies, and environmental sustainability. We will continue our efforts to promote legislation that addresses these critical challenges.
BOMA California Secures Victory with Governor's Signature on SB 937, Easing Development Costs
Governor Gavin Newsom has signed SB 937 (Wiener; D-San Francisco) into law, marking a significant win for development in California. The bill defers the payment of development fees for residential projects until the issuance of a certificate of occupancy or final inspection, providing crucial financial relief for developers.
Although SB 937 is primarily aimed at residential projects, BOMA California strongly supported and lobbied for this bill, understanding its broader potential to stimulate development activity, which could indirectly benefit the commercial real estate sector.
Governor Signs AB 2453: Streamlining EV Charger Reactivation After Maintenance
Governor Newsom has signed AB 2453 (Villapudua; D-Stockton) a bill supported by BOMA California that expedites the process of putting EV chargers back into service following routine maintenance. The bill, effective until January 1, 2028, eliminates the need for retesting or reapproval by a service agency or sealer for electric vehicle supply equipment (EVSE) that has already been approved and is simply undergoing maintenance. This streamlining saves property owners significant time and money, ensuring quicker reactivation of EV chargers and reducing operational disruptions for properties with electric vehicle infrastructure. BOMA California supports this measure as it directly improves efficiency and cost savings for commercial real estate.
Governor Signs AB 2488: Boosting Downtown Revitalization Through Office-to-Housing Conversions
Governor Newsom has signed AB 2488 (Ting; D-San Francisco), a bill supported by BOMA California that encourages the conversion of underutilized office buildings into housing in downtown San Francisco. BOMA California supports the measure as it helps revitalize commercial real estate, offering property owners a 30-year tax increment financing mechanism to support debt service, making conversions more financially viable. By addressing the gap between the value of vacant offices and new residential developments, the bill provides a crucial tool for economic recovery while incentivizing property owners to repurpose their buildings.
Governor Signs AB 2579: Extending Balcony Inspection Deadlines
Governor Newsom has signed AB 2579 (Quirk-Silva; D-Fullerton), a bill supported by BOMA California as part of a coalition led by the California Apartment Association (CAA). AB 2579 extends the timeline for required balcony and elevated structure inspections, providing property owners more time to comply with inspection requirements. This extension addresses delays caused by the COVID-19 pandemic, ensuring property owners are not penalized for circumstances beyond their control while maintaining safety standards for tenants.
Governor Signs SB 1243: Easing Restrictions on Campaign Contributions for Local Elected Officials
Governor Newsom has signed SB 1243 (Dodd; D-Napa), addressing confusion caused by SB 1439 (Glazer) from 2022, which restricted local businesses' ability to participate in the political process. BOMA California, as part of a coalition led by CBIA, supported this bill, which raises the contribution limit from $250 to $500, eliminates the aggregation of contributions from applicants and their agents, and exempts housing projects consistent with local housing element laws from these restrictions. SB 1243 restores fairness to local campaigns, allowing broader participation without triggering automatic recusal of officials or pushing political activity into dark money campaigns.
Governor Newsom has signed SB 1420 (Archuleta; D-Norwalk), a win for BOMA California and the coalition supporting easier permitting for hydrogen fueling at industrial properties. The bill streamlines the permitting process for hydrogen production facilities, especially benefiting warehouses and logistics centers. This will help accelerate the adoption of clean energy infrastructure across California, aligning with the state's decarbonization goals.
BOMA California Helps Defeat AB 3192: Protecting Coastal Resorts from Union-Backed Overreach
BOMA California, in partnership with the California Hotel and Lodging Association and others, successfully defeated AB 3192 (Muratsuchi; D-Torrance), a bill sponsored by Unite Here, which unfairly targeted resorts like Terranea—proven environmental stewards—with excessive regulations. The bill, halted in the Assembly Environmental and Toxic Materials Committee, aimed to impose unnecessary and duplicative environmental compliance on coastal resorts already leading in sustainability efforts. This victory protects the hospitality industry from overreach, ensuring that resorts can continue their operations without burdensome regulations that would have hindered both environmental and economic progress.
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