This Week:  No Residential TIDF; New Labor Restrictions Considered; New Historic Survey

MTA Drops Proposed Residential Transit Impact Fee

Residential builders and developers, you can breathe a sigh of relief.  As reported by the California Planning and Development Report, the MTA has decided not to pursue a proposal to expand the Transit Impact Development Fee to apply to new residential construction.  Currently, the fee only applies to new non-residential development.

The expanded fee would have applied a fee on new market rate residential development of between $4 to $5 a square foot and was expected to generate $2 to $5 million annually.  According to CP&DR, in addition to strong opposition from residential builders, the Pacific Law Foundation had also threatened a lawsuit over the fee.

No word yet on the proposed increase in the existing TIDF or the proposed new fee to fund bicycle and pedestrian improvements.  We’ll keep you posted.

Proposed Statute Would Require New Contractors to Retain Previous Employees

We came across an interesting statute that BOMA (Building Owners and Managers Association of San Francisco) reviewed in its recent “Action Alert.”  Upon the sale of commercial property, AB 350 (Solorio) would require certain contractors hired by the new building owner (janitorial, security, landscaping, building maintenance, and window cleaning) to retain any employees of the previous contractor for at least 90 days.  This is an expansion of existing law that requires such retention of only janitorial workers for 60 days.  The statute would also prohibit the new contractor from conducting any background checks or interviews to determine the qualifications of the employees.  BOMA opposes this proposed law because it (quoting from BOMA):

  • Unfairly forces employers to hire a predecessor’s employees;
  • Undermines the at-will employment presumption in California; and
  • Is designated to ensure union representation, despite any changes in employers.

It seems to us that if this statute were enacted, building owners would face uncertainty in selecting new contractors for services, and whether the employees would be of the quality that they expect.  There could be cost increases for complying with the new law, especially for contracts that have a set term.

The stated purpose of the bill is to assist workers who have lost their jobs.  BOMA asked the question – if that is the case, why does the statue single out the commercial real estate industry, rather than all jobs in the State of California?  BOMA also noted that the commercial real estate industry is struggling, so imposing this additional burden is not appropriate.

If you would like more information about AB 350, check out the fact sheet by clicking on, or contact Kevin Rose by email at

HPC to Consider Yet Another Historic Survey in Showplace Square/Northeast Mission:  25% of All Buildings Identified as Historic Resources

On June 1, the City’s Historic Preservation Commission is set to adopt yet another historic resource survey in the Eastern Neighborhoods – this time in the Showplace Square/Northeast Mission area.  With many underutilized industrial buildings, this is a prime area in the City for future growth.  For that reason, this historic survey could have a greater negative impact than those that have come before it.  New development on sites identified as historic in the survey must either meet the highly restrictive Secretary of the Interior standards or must go through a lengthy and expensive environmental review process before being approved.

At a glance, 525 buildings are located within the survey area – 24% of which are identified as historic.  The HPC will consider these findings en masse at its hearing on June 1.  This hearing will be important for property owners who feel their building has been incorrectly identified by the survey.  You can find the proposed survey at


The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient.  Readers should consult with legal counsel before relying on any of the information contained herein.  Reuben & Junius, LLP is a full service real estate law firm.  We specialize in land use, development and entitlement law.  We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.

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