California state lawmakers are grappling with what to do with the growing number of shopping malls and big box retail stores left empty by consumers shifting their purchases to the web. One possible answer is building housing on these sites, which already have ample parking and are close to existing neighborhoods but may not be zoned for residential uses. A bill that cleared the state Senate last week would let developers build housing on most commercial sites without changing the zoning and limit local governments’ ability to reject eligible projects. Another proposal would pay local governments to change the zoning to let developers build affordable housing.
Commercial real estate investors are no longer just interested in simple loan-to-value ratios and net operating incomes when attempting to spot underlying risks. They are now spending more time studying the potential impacts from environmental, social, and governance (ESG) criteria on buildings. This is being codified by rating agencies and data firms that are now looking at a building's net carbon emissions, healthy air components, long-term sustainability, and the ethical framework governing stakeholders tied to each and every building transaction before issuing a final rating for investors on commercial mortgage-backed securities deals or other commercial transactions. Banks and corporations are also requiring the inclusion of these ESG factors when conducting new deals.
San Francisco Supervisor Dean Preston introduced legislation last Tuesday that would excuse small businesses from paying rent if they were required to shut down under pandemic health orders. The legislation would if passed create a rebuttal presumption that an existing state law, which excuses a party from a contract because fulfilling it has become impossible, applies to rent during COVID-19 unless the lease specifically states otherwise. Small businesses that made equal to or less than $25 million in gross income in tax year 2019 could benefit. Companies with offices would not qualify except for certain registered nonprofits.
Board members of the San Diego Association of Governments (SANDAG) last Friday held their first open debate on the agency's freshly unveiled long-range transportation plan, with familiar fault lines emerging over freeway expansions and housing density. The plan envisions a massive boost in public transit in the coming decades, with faster and more frequent bus and trolley services and roughly 200 miles of new high-speed commuter rail. The transit expansion's success depends on cities across the region dropping their long-held opposition to high-density housing. And in stark contrast to previous plans from SANDAG, this one does not include traditional freeway widenings, generating pushback from more conservative SANDAG board members.
The City of Inglewood is moving closer to adopting new zoning rules which would permit the construction of new homes, offices, and retail near passenger rail stops on Metro's Crenshaw/LAX and C Lines. The Westchester/Veterans and Crenshaw/Imperial TOD Plans, which have been in development for roughly five years, could, if fully realized, result in the addition of over 8,000 new residential units and an increase of nearly three million square feet of new retail, office, hotel, and other commercial space. Implementation of the TOD plans will require multiple discretionary approvals, both by the City of Inglewood and other entities such as the City of Hawthorne and Caltrans. A draft environmental impact report is now being circulated for review.
Albertson’s, the second-largest grocery chain in the U.S., is testing two of Volvo’s VNR Electric trucks in Southern California. The trucks will make local deliveries and then return to a distribution center for charging, with a 150-mile range. A delivery to an Albertson’s in Irvine last week was the first to use an electric Class 8 truck—meaning it weighs more than 33,000 pounds—for grocery delivery in the U.S.