LOS ANGELES-There is no denying the economic downturn has had its negative effects throughout the nation, however, it has had a particularly hard-hitting impact on California. With high unemployment, stagnant job growth and corporate consolidations, the real estate industry has been experiencing more than its share of the downturn. That’s why it’s more important than ever to have a powerful voice at the local, state and federal levels of government.

As the California Business Properties Association has stated, “While our state continues to suffer through a serious economic downturn and over one out of 10 Californians are without a job, it is important our state leaders seek out ways to encourage economic development, not stifle the few opportunities available.”

To best understand the immense need and value of working proactively to protect the real estate industry, consider the successes realized at the close of the California 2011 Legislative Session. When it officially concluded, Gov. Brown signed 745 bills out of 870 bills—vetoing just 14% of the bills sent for consideration.

The NAIOP SoCal Legislative Committee, along with other pro-California business organizations and advocates, are largely responsible for some major victories that defended the real estate industry’s ability to work effectively and provide quality development projects throughout the state.

First, the Governor vetoed SB 469 (Vargas; D-San Diego), which was sponsored by labor unions and would have required cities and counties to prepare a new separate economic impact report regarding buildings over 90,000 square feet before the project could be approved. Although aimed at big-box retail projects, it would have had a negative impact on all types of development.

Below is a major portion of the Governor's veto message dated October 10, 2011:

“I am returning Senate Bill 469 without my signature.

This measure would require cities and counties to prepare an economic-impact report when evaluating plans to develop certain big-box stores. While I recognize that the merits of large-scale projects need to be carefully considered, plenty of laws are already on the books that enable and in some cases require cities and counties to carefully assess whether these projects are in a community’s best interest. This bill would add yet another layer of review to an already cumbersome process.”

Consider the last few lines of the message where the Governor acknowledges there are numerous laws on the books that require projects to be fully studied. The NAIOP SoCal Legislative Committee’s initiative is in agreement with that statement as the organization continues its efforts to prevent further burdensome bills and regulations that unfortunately are proposed in droves year after year.

In another substantial win for the real estate industry and the state’s economic viability, AB 350 (Solorio; D-Santa Ana), a bill again sponsored by some very powerful employee unions, was defeated in the Senate by an extraordinary grass roots effort. NAIOP SoCal members joined with other business organization members in flooding State Senators with letters and phone calls urging defeat of the bill. Dubbed the “Displaced Property Service Employee Opportunity Act,” AB 350 would have mandated the employers with a new contract for property services (building maintenance, licensed security, window cleaners, landscaping, and food cafeteria services, etc.) to hire all of the prior contractor’s employees. So, if a building owner fires its building maintenance contractor for negligence, or any other reason, under AB 350, all the same workers under the last building maintenance contract would remain on the job for at least 90 days or longer unless the new contractor can prove that they aren’t doing the job as required.

If passed, these two bills would have undermined the already existing challenges facing the real estate industry. These defeats prove just how valuable it is to work together in fighting bad bills. Even in these times where the State Government, SCAQMD, and other agencies are certainly not business friendly, NAIOP can work to achieve important results.

NAIOP SoCal recognizes that the strength of our industry unequivocally equates to economic stability. Of course, this effort hinges on a persistence that we—and every state—should exercise, both in educating legislators on the value of a healthy business environment and in reminding the business community that real estate is more than a big box. It is a workplace and a creative space that provides jobs. It gives birth to new trends, supports distribution and promotes commerce. In short, it generates jobs and revenue. That is what lies at the heart of sustainable economic strength.

James Camp is NAIOP SoCal Board Member, Legislative Affairs Chair, PAC Member and NAIOP State Council Chair. The views expressed here are the authors’ own. If you want more information about NAIOP SoCal’s Legislative work, go to www.naiopsocal.org.

Instant Insights /

Staying Engaged: Protecting the Future of Real Estate

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