2020 – A Look at BOMA/GLA’s Past Advocacy Efforts, And What’s to Come
The past year has been a challenging one. To be sure, the COVID-19 pandemic has ushered in an unprecedented moment in history, with many economies hit hard by government restrictions. During these times, property owners and businesses have also been thrown into the unknown.
Fortunately, our Government and Public Affairs department at BOMA/GLA has adapted to the situation, with much of our efforts focused on fighting legislation that would hurt businesses and property owners in the Greater Los Angeles area and California.
From massive grassroots campaigns to outreach, and meeting with government officials, BOMA/GLA has played a key role in the broader commercial real estate and the business community. At our organization, we ultimately strive to ensure California remains receptive to the needs of families and businesses.
As such, we'd like to take the time to highlight some of our past work and what our future efforts look like.
Past successful initiatives - SB 939 and Vacancy Taxes
This past summer, SB 939 became one of our organization's main priorities. In all likelihood, our win against SB 939 will be one of the most important legislative victories of this decade.
When SB 939 became authored, it presented itself as an immediate threat to commercial landlords in the Los Angeles area. This is because the state-wide bill would:
- have allowed commercial tenants to abrogate the terms of their lease - without repercussion,
- and provided commercial tenants 12 months to repay any unpaid rent that accrued during the statewide shelter-in-place order.
Fortunately, we were able to convince our state legislators that this commercial specific moratorium would be dangerous to our property owners and businesses.
Moreover, on the local level, our organization saw a huge victory at the Los Angeles City Council. Amid calls from Councilmembers to implement a vacancy tax on vacant commercial properties, BOMA/GLA rallied against the policy.
We understood the tax to be an unfair punishment on property owners, which would harm the real estate market and add significant burdens on commercial landlords.
Fortunately, our Councilmembers agreed that a vacancy tax would fare poorly if implemented now - though, there is a possibility that the Council will revisit this issue sometime in 2021. Certainly, BOMA/GLA will be ready to fight this issue once more should it resurface.
Recent legislative focus - AB 1436 and AB 3088
As property owners may know, the eviction moratorium on commercial properties has become a new and complex issue. While a vast majority of property owners are supporting tenants during this uncertain period, the moratorium allows unprecedented levels of government interference into private leases.
One such endeavor was AB 1436, which would have allowed tenants to defer paying any unpaid rent for 15 months. Additionally, the bill would have also allowed tenants to not pay rent for up to 90 days upon the conclusion of the pandemic.
Quickly, BOMA/GLA and other business groups such as the California Apartment Association and CA Business Roundtable mobilized in opposition to this bill. Ultimately, AB 3088 became our compromise.
Here are some of the major provisions in AB 3088:
- Extends notice period from 3 to 15 days (not including weekends or holidays) to provide tenant additional time to either pay or provide a declaration of hardship in response to the landlord’s notice to pay rent or quit.
- A tenant cannot be evicted for nonpayment due to a COVID-19 related hardship for rent due between March 1 – August 31, 2020, if the tenant returns a declaration of hardship under penalty of perjury within a 15-day notice period.
- A tenant cannot be evicted for nonpayment due to a COVID-19 related hardship for rent due between September 1, 2020 – January 31, 2021, if the tenant returns a declaration of hardship under penalty of perjury within a 15-day notice period and pays 25% of the missed rent payments for that period by January 31, 2021.
- Tenants can be evicted beginning October 5, 2020, if they fail to return COVID-19 related hardship declaration to the landlord.
Earlier this week, Governor Newsom signed AB 3088 into law - effective immediately.
Ballot initiatives - Proposition 15 and Proposition
During the November 3rd General Election, BOMA/GLA focused on two statewide ballot initiatives: Proposition 15 and Proposition 21.
Similar to SB 939, Proposition 15 was another critical issue for the commercial real estate industry. If approved, Proposition would have taxed commercial property owners $11.5 billion per year. Especially during the COVID-19 pandemic, Proposition 15 would have hurt businesses while raising California's expensive cost of living.
Throwing our whole weight against Proposition 15 through a concerted campaign effort, Proposition 15 was defeated by voters with a substantial margin.
Another ballot initiative, Proposition 21, would have allowed local jurisdictions to implement rent control measures. In reality, Proposition 21 restrictive provisions would have contributed to housing unaffordability by deterring investors and developers.
Fortunately, with Proposition 21's defeat, we believe that local governments should instead attempt to aggressively increase housing supply to reduce costs. To this end, BOMA/GLA strongly supports greater affordable housing development, especially for homeless residents.
Future policy concerns
Although BOMA/GLA has launched many successful advocacy initiatives in 2020, there are still many challenges ahead of us during 2021.
With COVID-19 creating many long-term impacts on businesses and industries, the commercial real estate industry must continue to maintain dialogue with our local representatives.
For example, state and local commercial eviction moratoriums have unfairly placed a burden on property owners, who still have employees and establishments to run.
Moreover, restrictive approaches to COVID-19 have shuttered countless businesses and cost thousands of jobs. Many small businesses have been forced to cease operations, with no foreseeable end in sight.
Once the New Year sets in, BOMA/GLA will be sure to tackle these new challenges without delay. Until then, we encourage all of our members to get some rest and be ready for 2021.