California Takes Steps to Speed Up Commercial Permitting
California commercial real estate received some positive news this week with the signing of several bills designed to streamline commercial permitting and make it easier for businesses to open, expand and occupy space.
On September 30, Governor Gavin Newsom signed a seven-bill small business package that includes several measures directly affecting commercial real estate. Among the most significant for BOMA Oakland/East Bay members are AB 2418, addressing nonresidential permitting, and AB 1693, focused specifically on retail tenant improvements.
For property managers and owners who have experienced lengthy plan reviews that delay tenant improvements, occupancy and business openings, these measures are intended to create a more predictable and efficient permitting process.
AB 2418: Addressing Delays in Commercial Plan Review
AB 2418, authored by Assemblymember Mark González, focuses on nonresidential building permits and plan review.
The legislation is designed to address situations in which commercial projects experience excessive delays during local government plan review. For qualifying small-business tenant improvement projects, local governments will be required to provide applicants with a plan-check timeline. When reviews are excessively delayed, qualifying projects may be able to use approved third-party plan checkers to review building plans.
For commercial property owners and managers, this is important because permitting delays can affect much more than a construction schedule. Delays can postpone tenant move-ins, extend periods of vacancy, increase project costs and prevent businesses from beginning operations.
Creating greater predictability in the process could help owners, managers, contractors and tenants plan projects more effectively.
AB 2418 was co-sponsored by California Business Properties Association (CBPA), BOMA Greater Los Angeles and CREDA SoCal and represents a multi-year effort by the commercial real estate industry to address delays in commercial plan review.
AB 1693: Streamlining Retail Tenant Improvements authored by Assemblymember Rick Chavez Zbur, focuses specifically on retail tenant improvements. The measure creates another pathway for qualifying retail projects by allowing qualified architects or engineers to review and certify that certain building plans comply with applicable life-safety, health and building-code requirements. The goal is straightforward: help retailers complete qualifying improvements and open their doors more quickly while maintaining required building and safety standards.
AB 1693 and AB 2418 are complementary measures. Together, they address different aspects of the commercial permitting process and provide additional tools for qualifying projects when traditional plan review becomes a bottleneck.
Other Measures Affecting Commercial Properties and Tenants
Two other bills in the package may also be of interest to BOMA OEB members.
AB 1679, also authored by Assemblymember González, requires cities to establish a permit process allowing qualifying temporary pop-up businesses to operate in vacant storefronts for up to 120 days. For commercial properties, this could provide another option for activating vacant retail spaces, generating foot traffic and introducing potential long-term tenants to a location.
AB 2663, authored by Assemblymember Chris Rogers, allows restaurants and bars to continue offering cocktails to-go. While this measure is primarily directed at hospitality businesses, it gives restaurant tenants another operational tool that may help support their businesses.
What Does This Mean for BOMA OEB Members?
The practical impact will depend on the type of project and how the new requirements are implemented by individual jurisdictions. Not every commercial project or tenant improvement will qualify for the new processes.
However, these laws address a challenge familiar to many commercial property professionals: a tenant may be ready to invest in a space, the owner may be ready to make improvements, and the lease may be signed, but the project can still be held up waiting for permits and plan review.
For BOMA OEB members, more predictable commercial permitting has the potential to:
- Reduce delays for qualifying tenant improvement projects.
- Help tenants open and begin operating sooner.
- Reduce some of the carrying costs associated with extended vacancies and construction delays.
- Give qualifying projects alternatives when government plan review becomes excessively delayed.
- Make it easier to activate vacant retail storefronts.
- Provide owners and property managers with greater predictability when coordinating tenant improvements, contractors and move-in schedules.
The Governor's office described the package as an effort to reduce red tape and help businesses open and expand more quickly.
Commercial Real Estate Advocacy in Action
These bills also demonstrate the importance of coordinated commercial real estate advocacy. AB 2418 was the industry's second attempt to advance this permitting reform and grew out of a multi-year effort involving commercial real estate organizations throughout California. CBPA, BOMA Greater Los Angeles and CREDA SoCal co-sponsored the measure, while the California Retailers Association sponsored AB 1693.
The organizations worked together throughout the legislative process to ensure the two measures complemented rather than conflicted with one another.
For BOMA Oakland/East Bay, this is a good example of why our participation in a broader statewide advocacy network matters. Issues affecting an individual building or tenant at the local level often require solutions at the state level. Working together gives the commercial real estate industry a stronger voice in developing practical solutions.
BOMA Oakland/East Bay will continue to monitor implementation of these new laws and share information with members about how the permitting changes may affect commercial properties and tenant improvement projects in Alameda, Contra Costa and Southern Solano counties.