In a Law360.com article published on January 4th titled “California Real Estate Legislation and Regulation to Watch in 2016,” Andrew McIntyre of Law360 addresses the challenges facing the California real estate market in the new year.
Here are the items on the 2016 legislative agenda:
- Proposition 13
- Bay Area Housing
- Earthquake retrofitting
- San Francisco’s Proposition M
- Overall of CEQA (California Environmental Quality Act)
Simon Adams of the San Francisco office of Reed Smith commented on efforts to overhaul California’s Proposition 13 property tax law. The 1978 law reassesses properties for tax purposes upon sale, as opposed to annually, as is the case in most states. “Every real estate expert will remain focused upon movement in the debate over state Proposition 13 and the chilling effect that this has had over the long term in regard to revenues for the operations of local authorities.”
Developers are against changes to the law, in particular efforts for a so-called split tax roll that would lift Proposition 13 protection from commercial properties while keeping it in place for residential properties. Yet, changes are likely. Simon adds “Some adjustment to the restrictions around the taxing of real property seem inevitable where California continues to expand the population and concurrently increase government services.”
It will take legislative and executive courage to change a law that is considered a “third rail” of California politics.
The full text of the article can be found here.