NAIOP State Advocacy Influences Legislative Outcomes for CRE

July 6, 2022
Toby Burke

Several state legislatures this year have debated legislation that would change the rules and policies impacting commercial real estate. In California and North Carolina, effective advocacy by the NAIOP chapters has protected and advanced the interests of the industry at the state levels. Through the chapters’ engagement in the legislative process, state lawmakers have come to understand the significance for commercial real estate in advancing legislation within their respective state capitols.

In California, there was legislation moving through the California Assembly that would have devastated goods movement, killed jobs and stopped warehouse and industrial development within the Inland Empire region and throughout the state. Assembly Bill 2840, sponsored by Majority Leader Eloise Gómez Reyes (D-San Bernardino), would effectively have stopped warehouse development in Riverside and San Bernadino counties and disrupted the supply chain by prohibiting the development or expansion of warehouses within 1,000 feet of “sensitive receptors.” Projects not banned by proximity to one of these entities or structures would then also be required to have a planned labor agreement that includes a percentage of jobs going to local residents before the issuance of development permits. Passage of AB 2840 may also have unintentionally encouraged sprawl and increased greenhouse gas emissions by creating more distance between distribution hubs and the consumer.

NAIOP of California recognized these issues and took action as part of a diverse coalition, organized and led by the California Business Properties Association (CBPA), to defeat this essential ban on new industrial development within the two counties. Diverse members of the coalition included the California Chamber of Commerce and many of its local chambers, Agricultural Council of California, and Western Propane Gas Association. Allies in the effort also included the Laborers’ International Union of North America.

In coordination with CBPA, NAIOP of California – in particular, the Inland Empire and SoCal chapters – educated lawmakers during every step of the legislative process on the detrimental impact of bill in the Inland Empire and across the state. Their advocacy included building grassroots opposition for the bill with local elected officials and other community leaders in the Inland Empire region. These efforts proved successful with the bill not making it out of the Senate’s Governance and Finance Committee before the July 1 deadline for policy committees to report bills out.

NAIOP of North Carolina also experienced a legislative success this year with the advancement of permit reform legislation. Based on Georgia’s reform legislation, House Bill 291 would have reduced inefficiencies and brought more consistency, accountability and transparency to local permitting processes. Elements of the bill included:

A local permitting entity has 21 days in which review the plans.
During the 21 days, the local entity shall resolve issues associated with the application and may seek additional information from the applicant.
If additional information is needed or the application must be resubmitted, the permitting entity has 15 days from receipt of the additional information to issue a permit.
If the local permitting entity is unable to meet the time parameters, the applicant or inspections department may seek approval from a certified third-party (engineer) or the Department of Insurance.

Having passed the state House last year on a bipartisan vote, NAIOP members from the three chapters focused on advancing HB 291 through the Senate during their legislative advocacy day in the state capitol on June 8. The meetings with Senate and committee leadership proved beneficial as the legislation was scheduled the following day for a June 14 hearing before the insurance committee, where it had remained dormant since March.

Prior to the hearing, NAIOP of North Carolina engaged other organizations in support of the bill. These efforts resulted in the Carolina Association of General Contractors and the North Carolina Realtors joining NAIOP in issuing a joint statement of support that was circulated to committee members prior to voting it out of committee without dissent. The bill was then referred to the Senate Judiciary Committee where it became stalled as the legislative session drew to a close.

The advancement of HB 291 through House and nearly through the Senate is a legislative success. With few exceptions, passage and enactment of reforms, such HB 291, often require sustained education of lawmakers over multiple sessions. NAIOP of North Carolina will be back next year to continue their advocacy as Representative Jeff Zenger, the primary sponsor, has vowed to re-introduce the bill next year.

The NAIOP chapters in California and North Carolina played a key role in the legislative outcome on policies of importance to commercial real estate within their respective states. Their advocacy made a difference. These successes are to be celebrated with the recognition that more work is needed as both issues in California and North Carolina are expected to return next year.