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Dear California Downtown Association Member:

California is in the midst of an unprecedented economic crisis, and yet another threat is on the horizon. Proposition 15 on the November 2020 ballot could be the largest property tax increase in state history at $11.5 billion per year.

Unless defeated by voters, the measure shreds long-standing Prop 13 protections that have kept property taxes affordable and provided every taxpayer that buys a home or operates a business with certainty that they can afford their property tax bills in the future. Prop 15 repeals these protections for a business property by requiring reassessment at the current market value at least every three years. Prop15 will create an unprecedented restructuring of tax policy in California, creating a two-tiered taxing structure that will create bureaucratic challenges and significantly increase costs of implementation—estimated at over $1 billion in just the first three years. More specifically, Prop 15 would:

Everyone should be concerned. Prop 15’s higher property taxes will cause rents to skyrocket for small businesses and the cost of living to increase for all Californians. Prop 15 is particularly a threat to urban centers that have already been decimated by the economic impacts of the COVID-19 pandemic. That’s why the California Downtown Association has joined small businesses, farmers, and tax advocates across California to oppose Prop 15.

Learn more about the campaign to stop the largest tax increase in California history at NoOnProp15.org.

As the Legislature takes action on several hundred pieces of legislation leading up to adjournment of the 2020 Legislative Session on August 31, CDA is ramping up advocacy efforts around a handful of critical bills that would have an impact in our downtowns.

The bill further implements “Laura’s Law” on a statewide basis and would allow a county or group of counties to implement an Assisted Outpatient Treatment (AOT) program under Laura’s Law and would allow counties to opt-out, if desired.

To date, Assisted Outpatient Treatment has been implemented by 24 counties and is designed to assist individuals who as a result of a severe mental illness, unable to access community mental health services voluntarily. Under current law, the AOT program is an “opt-in” program which requires an unnecessary step that has reduced participation. Easing and expanding AOT implementation will ensure that those at the highest risk for hospitalization can obtain the necessary treatment services to keep that person supported.

Laura’s Law is designed to provide participating counties with tools for early intervention. It allows for family members, relatives, cohabitants, treatment providers, or peace officers to initiate the AOT process with a petition to the county behavioral health director or designee. The health director must then determine how to proceed. If the individual is found to meet the AOT eligibility requirements, an individual preliminary care plan is developed to meet that person’s needs.

The legislation will accelerate the construction of new transportation projects including, pedestrian safety projects, bike lanes, new bus lines, rapid transit and light rail.  SB 288 gives more certainty to these projects, reducing costs and potential construction delays.

This legislation comes at a time when our urban areas need economic stimulus as our members continue to experience the severe impact COVID-19 has had on our downtowns. As people begin to go back to work, visit restaurants, cafes and take advantage of the cultural opportunities California’s urban centers provide, we need a transportation infrastructure that can meet the demands of our residents and visitors.

CDA believes the policy contained in SB 288 will increase the availability of a verity of transit options for those who live, work and visit in our urban centers. The California Downtown Association represents thousands of diversified businesses throughout California within its network of downtown associations, cities and business districts.

Recognizing that we are in unprecedented times, we understand that tenants who have been truly affected by the COVID-19 virus – and the government response to it – need protections. In fact, they have already been granted extensive protections under federal law, state executive orders, judicial rules, and local laws, not to mention the countless number of owners who have deferred and reduced rent to help their tenants without a legal requirement to do so. The bill does not provide for – nor is it tied to – any funding to help tenants and landlords with the unpaid rent. There is no way many rental property owners will be able to keep their buildings from foreclosure if AB 1436 were to become law. Here’s why:

Under AB 1436, rental property owners will go for an extended period of time with no rent payments – because AB 1436 is linked to the state proclamation, a rental property owner will likely receive no rent for more than 1 year. With no rent payments to cover the mortgage and other expenses at the property, including employee salaries, there is no question that rental property owners will lose their single-family rentals and multifamily buildings to foreclosure – notwithstanding the forbearance language. In many cases, the rent payments are an owner’s only source of income. Without a source of funding to help tenants and landlords, it is highly unlikely that tenants will be able to pay the back rent that is owed.

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