10.07.20

2020 Election: Know your Choices – How Interior Design Might Be Impacted

Proposition 15 – Increases Funding for Public Schools, Community Colleges, and Local Government Services by Changing Tax Assessment of Commercial and Industrial Property

You have likely already seen TV, print, or digital advertisements from both support and opposition groups on Proposition 15, the Schools and Communities First Initiative better known as the “Split-Roll” initiative. Prop 15 would raise new revenues for schools and local governments by changing the way most commercial and industrial property taxes are levied. Currently, all property tax increases are capped at 2% annually, and property values are only reassessed upon sale. Prop 15 would retain these caps on property tax increases for all residential property and some small businesses and farm property, so the initiative has no impact on property taxes on homes. By lifting the 2% cap on increases for larger commercial and industrial property, and allowing these properties to be reassessed at fair market value on average of every three years, Prop 15 is estimated to generate between $8.5 and $12 billion annually. Of this newly generated income, 60% would be allocated to local governments, while 40% would go to schools.

September PPIC Polling Among Likely Voters:

• 51% support

• 40% oppose

• 9% undecided

Supporters, including California Governor Gavin Newsom, Democratic Presidential Nominee Joe Biden, and Democratic Vice-Presidential Nominee Kamala Harris, can be found at the Schools and Communities First website.

Opposition, including the Howard Jarvis Taxpayers Association, California Building Industry Association, California Business Roundtable, National Association of Industrial and Office Properties – Commercial Real Estate Development Association, can be found at the No on Prop 15 website.

How does it affect Interior Design:

Developers’ and clients’ overall budget might be affected, because the potential change in property tax regulations. Commercial and Mixed Use Real-estate Construction budget and design fee might be affected due to change in tax.

Proposition 16 – Government Preferences

This measure would repeal Proposition 209 which was passed in 1996, banning affirmative action. Prop 16 was placed on the ballot legislatively through Assemblymember Shirley Weber’s Assembly Constitutional Amendment (ACA) 5. If Proposition 16 passes in November, it will permit the use of race, gender, and ethnic diversity as factors in college admissions, government hiring, and government contracting. Proponents of this measure advocate that its passage means equal opportunities for all Californians. Opponents claim this is a step backward and introduces a new form of discrimination.

The repeal of Prop 209 would permit the use of race and/or gender as a ‘plus’ factor in college admissions, public employment, and public contracting, but would not permit the use of quotas or policies that are broadly tailored or ignore the qualifications of the college applicant, job applicant, or contract bidder.

September PPIC Polling Among Likely Voters:

• 31% support

• 47% oppose

• 22% undecided

Supporter of Prop 16, including Governor Gavin Newsom, Democratic Vice-Presidential Nominee Kamala Harris, local governments, activist leaders, and other organizations, can be found at the Yes on 16 website.

Opposition to the measure can be found at the No on 16 website.

How does it affect Interior Design:

Minority or women owned businesses will be given a plus factor with government projects.

Minority or women applying to public colleges/universities will also be given a plus factor during application.

Proposition 21 – Expands Local Governments’ Authority to Enact Rent Control on Residential Property

This initiative would enable cities and counties to apply rent control to more housing units. Specifically, rent control would apply to all housing that is more than 15 years old, with the exception of single-family homes owned by landlords who own one or two properties. In addition, landlords could only increase rent by 15% during the first three years after a renter moves in. Supporters say some rent increases force people into homelessness, making this a needed protection. Opponents say rent control results in less available and less affordable housing.  A similar measure was rejected by voters in 2018.

Supporters, including the California Democratic Party, the ACLU, the Los Angeles Times, and several prominent elected officials, can be found on the Yes on 21 website.

Opposition, including the California Builders Alliance, the California Chamber of Commerce, and several local chambers, can be found on the No on 21 website.

How does it affect Interior Design:

Developers’ and clients’ overall budget might be affected, because the potential change in property income. Mixed Use and Residential Real-estate Construction budget and design fee might be affected due to change in rental income.

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