California Legislature Adjourns 2025 Session with Big Wins for Marketplaces Industry

California lawmakers wrapped up their legislative session on September 13 after putting the finishing touches on hundreds of bills related to energy, housing, taxation and commercial real estate. The California Business Property Association (CBPA) — ICSC’s Sacramento-based advocate for the commercial real estate industry — monitored more than 400 bills this year and directly engaged on at least 200 that impacted the industry. CBPA and ICSC successfully killed or amended over 50 bills and helped move several to the Governor’s desk. Below is an overview of key victories for the Marketplaces Industry.

Commercial provisions included in building code reform – and a code cycle pause

This year brought the most significant CEQA reforms in decades—important wins for both residential and commercial real estate. CBPA, ICSC and industry partners were able to help ensure commercial provisions were included in the reforms, despite a legislature reluctant to provide benefits to landlords. Assembly Bill 130 included full CEQA exemptions for large categories of mixed-use infill projects, cutting timelines by up to two years and requiring 30-day decisions. AB 130 also contains a new three-year commercial code cycle pause that will save owners 3 to 6% in compliance costs immediately and provide more predictability and protections from major jumps in code compliance. Senate Bill 131 limits CEQA review for “near miss” projects to the specific issue at hand, cutting litigation risk. Together, AB 130 and SB 131 are projected to reduce compliance costs by 10–20% and create 50,000+ new jobs by 2030.

Secured budget funding to fight organized retail theft 

In November 2024, voters approved a ballot measure (Proposition 36) that increased penalties for thieves who steal below the $950 felony threshold and allows prosecutors to aggregate thefts across multiple jurisdictions. This year, lawmakers included $100 million in the state budget to implement Proposition 36.

Bipartisan support for streamlining legal review of commercial property cases 

ICSC and CBPA lobbied for the passage of Assembly Bill 1384, which streamlines court procedures in unlawful detainer cases by ensuring that commercial cases move forward without unnecessary delays. Specifically, the bill clarifies the unlawful detainer law, so that “good cause” delays only apply to residential cases, keeping commercial cases on a timely 5-to-7-day track. Governor Gavin Newsom has until October 12 to sign or veto the bill. 

Legislation capping commercial rent increases during declared emergencies dies in committee

A proposal (Assembly Bill 380) that would have made sweeping changes to California’s emergency price gouging laws by capping commercial rent increases during declared emergencies is dead this year. More than 25 business groups urged lawmakers to consider the severe disruptions that could impact commercial property owners if AB 380 was enacted. On August 29, the Legislature advanced hundreds of bills with new spending attached, but over a quarter of the 686 measures in the appropriations committees’ suspense files were rejected or delayed. AB 380 was one of the bills that was rejected. 

Commercial property owners exempted from statewide vacancy tax legislation

Lawmakers considered a bill (Senate Bill 789) that would create a statewide vacancy tax on commercial real estate. The bill initially proposed a $5 per square foot tax on properties deemed "vacant." After significant pushback from industry, SB 789 was substantially amended to remove the proposed vacancy tax and instead requires non-residential property owners to annually report vacancy details. Ultimately, though, SB 789 was left in committee at the end of the session.

Progress made on fixing the 2024 warehouse design law

At the end of the 2024 session, lawmakers enacted a bill (Assembly Bill 98) that established prescriptive statewide regulations regarding where warehouses can be located and designed. AB 98 also includes requirements for monitoring air pollution from trucks and limits truck traffic to commercial roads. This year, CBPA advocated on behalf of two cleanup bills — AB 735 and SB 415 – that would give localities more flexibility in implementing some of the requirements. While AB 735 did not make it out of committee, SB 417 has advanced to the Governor’s desk. Even with these improvements, however, AB 98 remains overly prescriptive, creates litigation risks and makes warehouse development—and the jobs and economic growth it supports—more difficult. ICSC and CBPA will be active in reform efforts to AB 98 in 2026 and beyond.

For more information contact ICSC at gpp@icsc.com.