Bill to Tax Vacant Storefronts Rewritten Following Pushback, Passes Committee
A bill that originally sought to tax landlords for vacant storefronts in California passed its first hearing within the state's Senate Committee on Revenue and Tax on April 23, following a complete rewrite of the proposal earlier in the week.
People who fail or refuse to file the paperwork would face a civil penalty of a currently unspecified dollar amount.
'This was an ambitious bill,' Menjivar said at the April 23
SB 789 previously sought to implement a tax of $5 per square foot on vacant buildings in commercial properties. The tax collected would have been deposited into the state's California Dream for All Fund, a program that offers loans to first-time, first-generation homebuyers.
This earlier version of the bill faced heavy criticism from commercial property owner associations, building owners, taxpayer advocates, mortgage bankers, housing associations, chambers of commerce throughout the state, and many others.
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On April 21, Menjivar revised SB 789 following the opposition by completely rewriting the bill to instead focus on collecting information on vacant properties.
The San Fernando Valley senator said multiple business corridors in her district have sat empty for decades without new shops investing and opening new storefronts. Many of these buildings are now used by squatters, burned, vandalized, or falling apart as a result of being vacant.
'I want investment in my communities,' she said. 'I'm looking to find out—why are they empty?'
Menjivar said she just wants to 'collect the data' and understand the underlying causes leading to prolonged vacant commercial buildings so the state can seek solutions to incentivize businesses to open in California.
'Is it a problem with us? Our regulations? Is it a permitting issue? Is it because they are just holding onto that building for the best offer possible?' she asked.
A better understanding would allow the state to streamline permit approvals or develop new 'carrot-and-stick' approaches to encourage commercial property owners to rent out their buildings, according to Menjivar.
At the committee hearing, union organization SEIU California expressed its support for the recent revisions to SB 789.
However, the bill continued to receive opposition from various property owners' associations and retailers.
'It's just repackaged in a bureaucratic, burdensome form, and now poses a sweeping statewide reporting mandate on every commercial property owner in California,' Skyler Wonnacott, a legislative strategist for the California Business Properties Association, said during the April 23 hearing. 'While the $5 square foot vacancy tax has been removed, the bill remains equally harmful.'
He raised concerns about the possibility of SB 789 becoming a 'Trojan horse' for future vacancy taxes, which he said would impact small business owners and mom-and-pop shopping centers the most.
Cities
He said reforms to the state's current permit process and new tenant incentives would benefit property owners and encourage new businesses to rent the currently vacant commercial buildings.
'We should be trying to remove barriers to encourage investment in this state,' said Oracio Gonzalez, a representative for the California Business Roundtable.
He said that potential financial costs to meet the administrative requirements of SB 789 and cover compliance advisers would likely be passed on to tenants looking to rent.
Following the April 23 vote, the Senate Committee on Revenue and Tax asked Menjivar to revise SB 789 again before sending it to the Appropriations Committee for a review of its fiscal impact.
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Epoch Times
24-04-2025
- Epoch Times
Bill to Tax Vacant Storefronts Rewritten Following Pushback, Passes Committee
A bill that originally sought to tax landlords for vacant storefronts in California passed its first hearing within the state's Senate Committee on Revenue and Tax on April 23, following a complete rewrite of the proposal earlier in the week. People who fail or refuse to file the paperwork would face a civil penalty of a currently unspecified dollar amount. 'This was an ambitious bill,' Menjivar said at the April 23 SB 789 previously sought to implement a tax of $5 per square foot on vacant buildings in commercial properties. The tax collected would have been deposited into the state's California Dream for All Fund, a program that offers loans to first-time, first-generation homebuyers. This earlier version of the bill faced heavy criticism from commercial property owner associations, building owners, taxpayer advocates, mortgage bankers, housing associations, chambers of commerce throughout the state, and many others. Related Stories 4/22/2025 11/15/2024 On April 21, Menjivar revised SB 789 following the opposition by completely rewriting the bill to instead focus on collecting information on vacant properties. The San Fernando Valley senator said multiple business corridors in her district have sat empty for decades without new shops investing and opening new storefronts. Many of these buildings are now used by squatters, burned, vandalized, or falling apart as a result of being vacant. 'I want investment in my communities,' she said. 'I'm looking to find out—why are they empty?' Menjivar said she just wants to 'collect the data' and understand the underlying causes leading to prolonged vacant commercial buildings so the state can seek solutions to incentivize businesses to open in California. 'Is it a problem with us? Our regulations? Is it a permitting issue? Is it because they are just holding onto that building for the best offer possible?' she asked. A better understanding would allow the state to streamline permit approvals or develop new 'carrot-and-stick' approaches to encourage commercial property owners to rent out their buildings, according to Menjivar. At the committee hearing, union organization SEIU California expressed its support for the recent revisions to SB 789. However, the bill continued to receive opposition from various property owners' associations and retailers. 'It's just repackaged in a bureaucratic, burdensome form, and now poses a sweeping statewide reporting mandate on every commercial property owner in California,' Skyler Wonnacott, a legislative strategist for the California Business Properties Association, said during the April 23 hearing. 'While the $5 square foot vacancy tax has been removed, the bill remains equally harmful.' He raised concerns about the possibility of SB 789 becoming a 'Trojan horse' for future vacancy taxes, which he said would impact small business owners and mom-and-pop shopping centers the most. Cities He said reforms to the state's current permit process and new tenant incentives would benefit property owners and encourage new businesses to rent the currently vacant commercial buildings. 'We should be trying to remove barriers to encourage investment in this state,' said Oracio Gonzalez, a representative for the California Business Roundtable. He said that potential financial costs to meet the administrative requirements of SB 789 and cover compliance advisers would likely be passed on to tenants looking to rent. Following the April 23 vote, the Senate Committee on Revenue and Tax asked Menjivar to revise SB 789 again before sending it to the Appropriations Committee for a review of its fiscal impact.
Epoch Times
23-04-2025
- Epoch Times
California Lawmakers to Consider Vacancy Tax on Commercial Property
A California state senator is proposing a tax on vacant commercial properties, saying empty buildings and storefronts reduce business vitality, lower tax revenue, and create public nuisances. Democratic state Sen. Caroline Menjivar of San Fernando Valley authored Menjivar sees the measure as a way to spur economic activity. 'Vacant commercial property represents a missed opportunity for community enrichment,' Menjivar said, according to a legislative analysis of the bill. 'Other times they contribute to the neighborhood's blight and can be areas of nuisance and public safety concerns. These underutilized spaces hold potential as storefronts for local entrepreneurs, innovative workspaces for growing businesses, or mixed-use projects combining housing with commercial amenities.' The measure requires all owners of commercial property in the state to register with the California Department of Tax and Fee Administration (CDTFA) each year, providing detailed information about their properties, including giving a reason why if a property is vacant. Anyone who doesn't file would be required to pay a penalty, according to the bill. Related Stories 4/22/2025 3/20/2025 Menjivar claims that without state oversight, the empty parcels can stay vacant for years and sometimes decades. 'In order to encourage development or penalize blighted vacant buildings, we need data to systematically track commercial vacancies, including their underlying causes like renovation delays, regulatory hurdles, or speculative holding patterns,' she said. The senator says the state would be able to streamline permit approvals if clusters of vacancies were caused by slow permitting, or consider a vacancy tax to incentivize productive use. The bill would also require that the state post on its public website detailed information about each commercial property, including the percentage of commercial properties that were vacant in a calendar year and the reason for the vacancy if the property was vacant for more than 182 days in a year. The state would have to post what percentage of commercial properties are located in a blighted area, among other information. The city and county of San Francisco approved a similar tax with Measure M in November 2022, but the ordinance was ruled unconstitutional. The measure imposed an annual tax of $2,500 to $5,000 per vacant unit, depending on the unit's size. The tax was allowed to increase annually to a maximum of $20,000 if the same owner keeps the unit vacant for multiple consecutive years. However, the San Francisco County Superior Court issued an order Nov. 26, 2024, in favor of taxpayers, finding that the tax violated the Takings Clause of the Fifth Amendment of the U.S. Constitution. The court also found the tax violated property-owners' constitutional right to privacy under the California Constitution by compelling owners to share their property via application of the tax. The court also held that Measure M violated the California Ellis Act, which prohibits public entities from compelling residential property owners to rent or lease. Other cities have instituted similar vacancy taxes in recent years. Berkeley, east of San Francisco, imposes an empty homes tax on residential units that are vacant for more than 182 days per year. Empty residential units in duplexes, condos, single-family homes, and townhouses are charged $3,000 the first year and $6,000 for each subsequent year. All other empty residential properties pay $6,000 in the first year and $12,000 each year after that. Stacked shipping containers begin to surround People's Park in Berkeley, Calif. on Thursday, Jan. 4, 2024. Brontë Wittpenn/San Francisco Chronicle via AP Oakland also charges an annual tax of $6,000 for residential, nonresidential, and undeveloped properties, and $3,000 a year for condos, duplexes, and townhomes. The tax applies to privately owned properties not occupied more than 50 days per year and has several exemptions. Menjivar's legislation faces tremendous opposition from commercial property owner associations, building owners and managers groups, taxpayer advocates, hotel and lodging associations, mortgage bankers and housing associations, retailers, and multiple chambers of commerce throughout the state. The California Business Properties Association 'Vacancy is largely driven by market forces—not neglect—especially as sectors like retail, office, and industrial continue to recover from the pandemic,' the association wrote in an opposition statement. 'This tax would penalize property owners during economic uncertainty and risk further destabilizing struggling markets. SB 789 would also undermine local property tax revenues, reducing property values and triggering reassessments under Prop. 8—resulting in permanent funding losses for schools, cities, and essential services.' The bill also imposes costly administrative burdens, the association says.
Yahoo
08-04-2025
- Yahoo
California lawmakers to propose legislation giving ride-hailing drivers right to unionize
California lawmakers are pursuing legislation that could give drivers for apps like Uber and Lyft the ability to form unions, while still being classified as independent contractors. Assemblymembers Buffy Wicks (D-Oakland) and Marc Berman (D-Menlo Park) plan to introduce Assembly Bill 1340, also titled the Transportation Network Company Drivers Labor Relations Act, on Tuesday. The legislation would allow drivers to negotiate pay as well as other terms of their agreements with app-based companies, exempting them from state and federal antitrust laws that would prohibit such activity, according to a draft reviewed by the Times. "Fundamentally what this bill seeks to do is empower rideshare drivers to advocate for better working conditions," Wicks said in an interview. The proposal does not include food delivery drivers. The exact process of how collective bargaining would be overseen by the state is not outlined in the proposal. Wicks and Berman said that they expect those details to be hashed out during the legislative process, with conversations from all stakeholders, including drivers, ride-hailing companies and Service Employees International Union California, which is backing the bill. Typically, antitrust laws would prevent collective action by independent contractors. For example, Seattle faced litigation when it attempted to establish a driver bargaining model through a local ordinance in 2015. The U.S. Chamber of Commerce and an Uber subsidiary successfully challenged the law, arguing that bargaining by independent-contractor drivers amounted to illegal concerted action and price fixing. The U.S. Court of Appeals for the 9th Circuit disagreed with the city's position that it had created a state-supervised regulatory program, finding that it was not exempt from antitrust law. Drivers for Uber and Lyft are considered independent contractors under a voter-approved state law — Proposition 22 — that went into effect in late 2020. The law originally had barred collective bargaining over drivers' compensation, benefits and working conditions, but an appeals court struck down the provision, arguing it inappropriately limited the California Legislature's authority. The state Supreme Court in a ruling last year largely upheld Proposition 22 but did not address the collective bargaining provision. SEIU California contends that the Legislature has the authority to allow drivers to collectively bargain, based on the appeals court ruling. However, if the bill is ultimately approved by lawmakers, it's possible ride-hailing companies might challenge it. 'A union is the only pathway for 600,000 rideshare drivers to improve their pay and working conditions under Prop 22," said Tia Orr, executive director of SEIU California, in an emailed statement. Uber and Lyft representatives said the companies opposed the proposal, arguing it would make rides more costly for consumers and go against the will of voters who approved Proposition 22. "At a time when families' budgets in California are stretched to the max, this proposal would make trips even more expensive," said Uber spokesperson Zahid Arab in an email. Lyft spokesperson Shadawn Reddick-Smith said Proposition 22 is drivers "preferred way to structure benefits and protections." The California proposal is similar to a ballot initiative approved by Massachusetts voters in the fall that was also backed by the Service Employees International Union — as well as the International Assn. of Machinists and Aerospace Workers. Uber and Lyft did not oppose the Massachusetts initiative. Minnesota lawmakers proposed a similar bill in February, and unions in Illinois have begun a campaign to unionize drivers in the state, with Uber agreeing to refrain from interfering with the effort. "This isn't coming out of left field, " Berman said. "It aligns with our values in California to make sure drivers get the rights they deserve." Sign up for our Wide Shot newsletter to get the latest entertainment business news, analysis and insights. This story originally appeared in Los Angeles Times.
