Political Perspective
By Nancy Ahlswede

Voters will face two real estate-oriented propositions on the June 8th primary ballot – Prop. 13 and Prop. 15. Rental property owners will be affected by the outcome of each.

Yes on Prop. 13

Currently, seismic retrofits trigger property tax reassessments. Proposition 13 will ensure that property owners who provide seismic retrofitting to their property, whether it is single, multifamily residential, mixed-use or commercial, are afforded the same protections as everyone else under the 1978 Proposition 13 tax protection laws.

In some areas of California, municipal codes mandate specific types of seismic retrofitting that are outside of the state’s definition of what is currently exempt from tax reassessment. In those circumstances, property owners are required to retrofit their buildings, and then pay increased property taxes as a result of having to comply with retrofitting codes. This is the unfair tax on property owners that Prop. 13 seeks to address.

An additional benefit of Prop. 13 is that it provides exemptions from tax reassessment for additional new construction, when conducted concurrently with seismic retrofitting. Under present law, if one conducts other construction concurrent to seismic retrofitting (the seismic retrofitting that is currently exempt from triggering a tax reassessment), this new construction will still trigger a tax reassessment. Under Prop. 13, this automatic trigger would be removed.

No on Prop. 15

Today’s news about the enormous state budget deficit underscores the urgent need to defeat Prop. 15 on the June 8th ballot. Should this issue pass, the California Secretary of State future elections will be publicly financed. If voters think the state can charge a fee to lobbyists to pay for a harmless pilot program that might clean up Sacramento politics, Prop. 15 could pass. If they learn what Prop. 15 would really do, it will fail.

Prop. 15 permanently repeals the ban on public financing of political campaigns – from city council to Governor. With a simple majority vote, legislators can relieve themselves of the burden to raise money and bill taxpayers for their campaigns. If the courts uphold the lobbyist tax, that means our lobbyist Ron Kingston and property owners will pay the bill. If the courts throw out the tax, Prop. 15 gives legislators the authority to raid the General Fund, raise taxes, or both to finance campaigns.

It is the intent of Prop. 15 backers to silence the voice of business interests.

To qualify for public campaign financing, candidates must collect 7,500 contributions of $5. And just like four years ago when they put Prop. 89 on the ballot, they wrote Prop. 15 to give the Legislature authority to impose new taxes and fees on businesses to pay for campaigns.

Courts in three states have ruled similar lobbyist taxes unconstitutional, which leaves the General Fund as the source of revenue for public campaign financing. Any public program that depends on General Fund support will be in competition for funding with an entirely new group – legislators. Think it won’t happen? Ask any legislator what he/she likes least about the job and they will all tell you that they feel like they are always running for office or trying to raise campaign money.

Legislative News

State Senator Rod Wright has agreed to carry AACSC’s second bill: SB 1483 which will extend the sunset to the voluntary creation of a multifamily improvement district.

The MID will be extended for 10 more years (until 2022) to allow rental property owners to join together for shared resources (like hiring a security patrol for the neighborhood). It has been used several times with the most notable example being Andy Street in Long Beach. The MID concept is another tool that landlords can use (voluntarily).