NEWS

Super Tuesday’s Ballot Box Lands Squarely on Commercial Real Estate

This past week leading up to California’s 2020 Super Tuesday election has been especially heavy, and that’s on top of what feels like a lifetime of overwhelming news headlines we locals are left to process. BUT. Don’t let that distract you from the important details found further down many of the ballots across Northern California’s regional elections. 

There are multiple policy measures aimed directly at commercial real estate investors, and we’ve isolated some to look out for below. Note that routine bond measures and parcel taxes have been omitted, and what’s listed here is intended to be of specific interest to CRE investors but not suggest any for or against endorsement. 

In San Francisco

Proposition D: The “Vacancy Tax” aims to penalize retail property owners who maintain empty storefronts. This measure was initiated by Supervisor Aaron Peskin who’s North Beach district has historically carried the mantle of SF’s heart and soul, yet is currently 20% shuttered and at risk of losing its attraction of local and tourist foot traffic. 

So Prop D would charge owners of chronically empty SF storefronts $250 per linear foot for the first year of remaining vacant, $500 in year two, and $1,000 every year after the unit remains empty. Fees collected would go into the city’s new small business fund, and wouldn’t kick in until 2021. This measure requires two-thirds of the vote in order to pass.

Proposition E: This is a conditional moratorium on the creation of new office space. The theory here is that the number of jobs being created in the City is outpacing the amount of housing available for all those new hires to live, thereby creating an imbalance that raises the demand for and cost of housing, exacerbating a housing crisis. Prop E will prohibit new office space from coming online until comparable housing has been created. 

In the Peninsula & South Bay

Mountain View Measure D: The primary effect of this measure would be to adjust local rent control restrictions, allowing annual increases of up to four percent. In addition, it exempts mobile home properties from rent control, and erodes some independence of the local rent control authority while giving more control to the city council. 

Morgan HIll Measure A: Allows for more hotel construction around the Madrone Village Shopping Center.

San Jose Measure E: Increases the transfer tax on properties over $2m. 

In the East Bay

Livermore Measure P: Approves a hotel development associated with the Bankhead project. 

In the North Bay

Healdsburg Measure H: This piggy-backs on 2018’s Measure P that allowed an average of 50 units of income-restricted multi-family rental housing to be built per year. Measure H would allow those units to also be offered for sale, not just rental, so some of these units could be included in new for-sale developments. These units must be affordable to families earning below 160% of Sonoma county’s average median income.

Ryan Kelly,
Director of Marketing, NAI NorCal