SB 9 has a direct impact on additional dwelling units (ADU) production of which the architect should be aware.  Property owners will now be faced with a primary decision: ADU or SB 9.

The final version of SB 9 does NOT allow splitting a residential lot AND for having an ADU on each lot.  Instead, SB 9 has an EITHER-OR provision.  A property owner can EITHER add an ADU for 2 units (ADU and JADU for 3 units), OR with SB 9 split the property resulting in 2 units that are not allowed an ADU or JADU.  The result is EITHER 2-3 units / OR 2 units total, NOT 6.

Most urban residential properties are too small for an SB 9 lot split, or are better suited for an ADU/JADU.  Approval for these is entirely ministerial allowing 4’ side and rear setbacks, a maximized floor area, height limited to one story at 19’, with no parking required, and more importantly, impact fees for 749 SF units are waived, and utility services feed off the main house, etc.  This makes for a variety of housing options in a range of low-end costs.

SB 9 lot splits are also ministerial, which could simply be approved with a single sheet plot plan, or with more details if required.  After that, the building design and construction is as for any undeveloped property.  As per SB 9, the lot must be able to accommodate at least an 800 SF unit and one parking space, and there is no setback required along the new internally created property line — meaning that the new house can be set against an existing building wall in a classic duplex fashion.  The new house otherwise needs to conform all other requirements including zoning, setbacks and height, and is subject to all planning and design review requirements, development fees, school and road charges, sprinklers, and all new utilities with buy-in and connection fees, etc.  These costs can be quite high, but they are not added into a Prop 13 protected assessment until the property is sold at market rate.

Lot splits were the classic way to make money, that was, until zoning, the subdivision act, EIRs, and public planning review arrived in California.  A property owner could simply parcel off a piece land and sell it.  SB 9 restores some of these original land rights.  The new lot could be held, developed, sold as-is, or sold with approved plans and shovel-ready.  The property could also be deed restricted to control its impact on the existing home.

Choosing either ADU or SB 9 leads to two very distinct paths, each with many considerations yet to be explored in comparison.  Architects are uniquely qualified to implement SB 9 for successful and satisfying results.  There is a varied set of options under SB 9 to consider for the optimum outcome, not just for our clients, but for our communities.

SB 10 allows a city or county to pass an ordinance to zone any parcel for up to 10 units of residential density, at a height specified by the local government in the ordinance, if the parcel is located in a transit-rich area or an urban infill site.

SB 10 is intended to allow greater density in housing construction due to the high cost of land in California.  The hope is greater density will make it easier to develop housing affordable to lower-income households.

SB 9 can be viewed here.

SB 10 can be viewed here.

Employee or Independent Contractor

A very significant new California law went into effect on January 1, 2020 regarding who can be an employee or an independent contractor.  It is now more difficult for a business to designate a worker as an independent contractor, but there is a different, easier standard if the worker is a licensed architect.

The law firm of Collins Collins Muir + Stewart prepared a paper to help explain the new law for architects and architectural firms.  You can find that paper here: https://aiacalifornia.org/employee-or-independent-contractor/

Written Contract Language

The information that is required to be included in contracts with your clients has changed.  The new law, effective January 1, 2020, requires the following information to be included in your contracts.

• The address of the project
• A description of the procedure that the architect and client will use to accommodate contract changes, including, but not limited to, changes in the description of the project, in the description of the services, or in the description of the compensation and method of payment
• A statement identifying the ownership and use of instruments of service prepared by the architect
• A statement in at least 12-point type that reads “Architects are licensed and regulated by the California Architects Board located at 2420 Del Paso Road, Suite 105, Sacramento, CA 95834.”

The new law also states that the above contract provisions, and the other requirements enumerated in Business and Professions Code Section 5536.22 do not apply to architect is providing services to a public agency when using that public agency’s written contract.

There Still is Time to Let the White House Know

The White House is considering designating “classical” architecture as the preferred style for federal buildings.  AIA has been working on this issue for a couple of months, and recently announced its strong opposition to this “top-down directive on architectural style” stating “all architectural styles have value and all communities have the right to weigh in on the government buildings meant to serve them.”

AIA is asking Members to send an email to President Donald Trump to support AIA’s position “that design decisions should be left to the designer and the community, not bureaucrats in Washington, DC.”  This is an opportunity for Members to let their voices be heard and will strengthen the effort of AIA on this important issue.  If you have not done so yet, there still is time.

Click here to email President Trump.

Don’t forget to tell us what you think! We are surveying the membership to help us develop our advocacy priorities for next year. Please take a few minutes to fill out this year’s survey. The results will help create our 2020 advocacy agenda.

Sales Tax on Services … it’s getting real.

The proponent for a sales tax on services, State Senator Robert Hertzberg (Van Nuys), is beginning to release some information on what he plans to do in 2020. From an article published earlier this week, Sen. Hertzberg indicates he is looking at a 2% sales tax on business-to-business services, and that he will try to put this before the voters on the November 2020 state ballot.

In the article linked above, Sen. Hertzberg was responding to the announcement of a business coalition formed to oppose any effort to impose a sales tax on services. That coalition, the California Tax & Budget Research Project, of which AIA California is a funding member, announced its website on Monday which includes research challenging the alleged benefits of a sales tax on services. You can view that website here.

Independent Contractor Rules

AB 5 proposes to codify the Dynamex ruling of the California Supreme Court, a ruling which made significant changes to the independent contractor test in California.  Importantly, AB 5 does modify the Dynamex ruling in limited circumstances, including a more flexible test for when an architectural firm contracts with a licensed architect for a service.  But AB 5 faces strong opposition from several groups, including truckers and peer-to-peer rideshare service providers.

Historic Preservation Tax Credit

SB 451, which AIA California is jointly sponsoring with the California Preservation Foundation, creates a California tax credit for work performed on certified historic buildings.  The tax credit is capped at $50 million, and would be available between 2021 and 2025.  SB 451 faces its biggest legislative challenge this Friday, when the Assembly Appropriations Committee votes on whether to move the bill to the Assembly Floor, and to hold it due to its cost to the General Fund.

School Facility Bonds

AB 48 would place two bond initiatives before the voters, in 2020 and 2022, for K-Community College facilities.  The 2020 ballot initiative would be for $13 billion dollars (the amount of the 2022 ballot initiative is not yet specified).  AB 48 must be approved by the Senate Appropriations Committee this Friday if it is to be sent to the Governor before the Legislature recesses for remainder of the year.

Sales Tax on Services Update

Senator Robert Hertzberg’s SB 522 (Sales Tax on Services) was not brought up for a vote this year, but we understand Sen. Hertzberg is planning to bring the bill up for a vote in January of next year. This means AIA CA and our coalition partners will begin our targeted grassroots lobbying activity against SB 522 this fall, so you might receive a call-to-action from AIA CA urging you to contact your State Senator urging a “No” vote.

Also, the coalition of professional service providers formed to oppose SB 522, of which AIA CA is a member, will officially launch next week. The launch will include the unveiling of the coalition website. Look for more information in late September.

The Legislature began its 1-month Summer Recess during the middle of July, and will return mid-August for the final four weeks of the 2019 session.

Several bills remain on the legislative calendar that interest the architectural profession, including legislation affecting the independent contractor test, bond measures,  and prevailing wages.

AB 5 – Independent Contractors

This bill changes the new independent contractor test, created by the California Supreme Court in the Dynamex decision, for a few professions, including architects.  If AB 5 is passed and signed into law by the governor, architectural firms that contract with a licensed architect would not have to meet the Dynamex ABC test and instead would have to meet a less stringent test as spelled out in AB 5.

Bond Measures

There are several bills still being considered that would place general obligation bonds before the voters.  AB 48 proposes to place a $13 Billion Kindergarten-Community College Facilities Bond on the 2020 primary election ballot, and another bond measure of a yet-to-be specified amount on the 2022 general election ballot.  AB 694 proposes to place a $600 Million Veterans Housing and Homeless Prevention Bond on the 2020 general election ballot.

Prevailing Wages

AB 1768 is intended to clarify labor that must be paid a prevailing wage.  AIA California is concerned this bill could be interpreted to affect services provided by architectural firms.  AB 1768 specifies that work performed during site assessment and feasibility studies must be paid a prevailing wage.  Arguably, this would apply only when the work is performed by an occupation that is covered by the prevailing wage orders, and thus have no effect when it is provided by an architectural firm.  AIA California is seeking clarifying language to ensure that an architectural firm does not have to comply with the prevailing wage laws and regulations when it prepares a site assessment or feasibility study for a public sector client.

Dear Colleagues,

As your voice, we are actively continuing our shared legislative and outreach efforts through components in our “Advocacy on the Road.”

We were pleased to participate with AIA-CA and AIA-SF and our fellow components and chapters in the caucuses and voting at the Conference on Architecture.  One major takeaway was the resounding floor resolution and vote on climate action.   Following that, the AIA-California Committee on the Environment (COTE) has met and will be moving forward with additional visionary and far-reaching proposals for assertive climate action:  in potential legislation; in outreach and in actions on the ground.

We all deeply appreciate Mark Christian’s exceptional energy, knowledge and talent reflecting AIA-California leadership and members’ voices on the many active legislative issues which affect our profession including housing; environmental issues; and practice.  His important work continues with the Legislature on active and potential bills and in outreach and communications with the Executive Branch.

Over the past month, I have had the benefit of an introductory meeting with the California State Architect to reaffirm our shared mission and priorities and look forward to upcoming meetings with architects who are executives and leaders in federal, state and local government. Many items were shared, such as lessons learned, best government practices, and how we can inspire support for our AIA-California issues and actions.

Thanks to the ongoing commitment of my talented and passionate predecessor Mary Follenweider, AIA, we are actively engaged in the outreach and advocacy effort with meetings among the chapters.  Mary is continuing with her meetings with chapters in Southern California through the summer and early fall.   I am in the process of scheduling personal or video meetings with 4 other chapters in Northern California and the Central Valley.  We look forward to reconvening soon with our Advocacy Advisory Liaisons.

I very much look forward to attending the AIA State Government Network conference in Providence, RI next month.  This should provide a great deal of substantive information for our reference within the advocacy and legislative work.

It has been great to hear from some of you this past month!  Please continue to contact me with ideas and sources of inspiration for our work as your Government Relations team.

Now on to the report!

Sales Tax on Services

The good news remains for this year: the legislation to enact a sales tax on services was not brought up for a vote this year.  However, it could become a real issue next year.  Governor Gavin Newsom recently told the San Francisco Chronicle that tax reform is needed to address tax revenue volatility, looking at a sales tax on services has the biggest area of agreement, except from those providing services, we may have to start taxing business-to-business services, but it will be difficult to enact because tax reform requires political will (starts around 7:40 mark of this SF Chronicle podcast).

As we mentioned in last month’s Advocacy Update, AIA CA is a member of a coalition of professional service providers opposing the effort to impose the sales tax on services, including architectural services.  One of the first efforts of that coalition was the release of a study challenging the alleged benefits of a sales tax on professional services.  You can read that study here.

Conflict of Interest Legislation

The legislation AIA California is sponsoring with ACEC California to change California’s conflict of interest laws has been put on hold.  AB 626 would have amended state law to allow design professionals to enter into follow-on contracts with public clients without violating the conflict of interest law.  Several contractor groups and their labor allies opposed our bill and, unfortunately, agreement of amendments could not be reached in time to keep AB 626 moving this year.  Additionally, some media became critical of AB 626, including the Bay Area News Group, which ran an editorial urging its defeat.

AIA California and ACEC California are looking at options on continuing this effort in 2020.

Historic Preservation Tax Credit

SB 451, which AIA California is jointly sponsoring with the California Preservation Foundation to create a California historic preservation tax credit, passed the State Senate on a 36-0 vote in late May, and will have its first hearing in the State Assembly next week. Technical aspects of the bill are still being worked on, but we anticipate SB 451 to receive favorable votes in the State Assembly.

A Message to our Members from your VP of Government Relations

Dear Colleagues,

I come to you as the AIA-California’s Vice President for Government Affairs 2019-2020 with a passion for service and advocacy to our members and our profession.   I have devoted my long career as an architect in government and industry and as a volunteer architect my community.  The issues of importance to all of us align with my own experience of public service.

Recently during “National Architecture Week,” the AIA’s public awareness drive, “Blueprint for Better,” reminded that our work to advocate and contribute locally, nationally and globally within the governance process is critical if our profession is to have a continuing role and a meaningful voice in decision-making, policy-making and actionable planning.

I am excited to work with you as a fellow Citizen Architect and unapologetic advocate for laws, regulations, policies and practices which represent out highest goals:  Design and construction of safe, beautiful, long-lasting architecture which serves society in every respect; Stewardship of the environment for us and future generations through the means and methods of building; Fair and equitable design, contracting, construction and related practices and requirements.

I look forward with my fellow Directors of AIA California, with Mark Christian, Hon. AIA CA, Melissa Barton and our Chapter Liaisons to taking our program into your offices and chapters over the next two years.  As your voice, we will continue outreach through a directly contract with every component in our upcoming feature titled “Advocacy on the Road.”   Please contact me with ideas and sources of inspiration.  Thank you!

Rona Rothenberg, FAIA

Dynamex

Legislation attempting to codify into state law the April, 2018 California Supreme Court decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles was amended last week with language favorable to licensed architects.  The Dynamex decision enacted a stricter test on who can be an independent contractor.  AB 5 proposes to codify that ruling into state law with some important changes.

On May 24^th AB 5 was amended to exempt licensed architects from the Dynamex test, meaning the Dynamex three-factor test will not apply to architectural firms that contract with licensed architects for services.  AB 5, if enacted, will allow a model used by many small architectural firms – contracting with licensed architects to help provide architectural services – will remain a legal model for the delivery of their services.

Public Works Registration

Did you know that you must be registered with the Department of Industrial Relations in order to compete to provide services on a public works project?  And that there could be a financial penalty if you are not registered?  Please see this document for more information.  And please know that AIA CA is trying to modify this registration requirement so that it is not applied to the profession so broadly.

Sales Tax on Services Updates

AIA CA is a member of a coalition of professional service providers opposing the effort to impose the sales tax on services, including architectural services.  One of the first efforts of that coalition was the release of a study challenging the alleged benefits of a sales tax on professional services.  You can read that study here.

Statewide Ambassador Program

AIA California’s Government Relations team believes that sharing and communicating the mission and advocacy efforts of the organization enhances stewardship – thus enabling staff and members to represent the organization and profession in the community and defend the professional issues that matter the most to you.

ArchitectsVoice, AIA CA’s advocacy website, intends to engage members in the legislative and regulatory process and bolster your familiarity with the political climate, and activities happening at the state level on behalf of the profession. There you will find monthly advocacy updates, current positions on bills that the AIA CA Board of Directors has adopted [to be updated next week], and other timely information that is reported from the legislature and relevant state agencies.

Chapter Advocacy Liaison Network

AIA government and political advocacy is about advancing the Institute’s core values through the engagement of local, state and national policymakers which cannot happen without participation by its members.

The AIA CA has developed a group of Chapter Advocacy Liaisons, who are comprised of one member from each chapter who take interest in local initiatives and issues in their jurisdiction. Chapter Advocacy Liaisons are effective by monitoring and reporting policy issues relevant to his/her chapter, receiving news and information from AIA CA and dispersing it to chapter members, helping to coordinate local advocacy initiatives, and providing feedback on how AIA CA can better serve chapters on advocacy issues.

Do you have local advocacy questions, challenges and/or successes? The AIA CA would like to highlight your wins, advocacy in the news, and partner you with a Chapter Advocacy Liaison who shares your advocacy challenges to share how they have overcome barriers and enhanced the built environment. Contact Melissa Barton with your tips.

Local Advocacy Guidebook

American Institute of Architects California has assembled a guidebook to help architects become more involved at different levels of their local and state government. Filled with case studies, testimonials, directories and step-by-step instruction on how to transition from an interested observer of local politics to an active participant in the decision-making process, this guidebook helps you bring your extensive experience, practical skills and powerful voice to the table so that, as the only architect in the room, you’re heard!

Please download a copy and share with others in your organization who might have an interest:

Historic Preservation Tax Credits

The bill jointly sponsored by the California Preservation Foundation and AIA California, SB 451 (Atkins), to create a new tax credit for work rehabilitating a certified historic structure passed its first hearing in the State Senate.  We are hopeful SB 451 will pass the Legislature and make it to Governor Gavin Newsom’s desk.  A similar bill, AB 1999 from 2014, passed the Legislature but was vetoed by Governor Jerry Brown.  Later this Summer AIA California will begin a grassroots campaign urging Members to contact Governor Newsom to encourage his signature on this important legislation.

Conflict of Interest

AB 626, the bill jointly sponsored by ACEC California and AIA California to allow design professionals to provide both pre-design and design services on public projects without violating California’s Conflict of Interest laws, passed its first hearing. AB 626 will be amended to address opposition from various contracting groups.  One likely amendment will clarify that AB 626 does not apply to public design-build projects.

School Construction

AIA California testified during the recent hearing of SB 297.  This bill will improve the efficiency in public school construction projects, mostly modernization projects, by allowing the awarding of construction contracts upon the submittal of plans to the Division of the State Architect (DSA).  Construction would not be allowed to commence until DSA issue the approved plans.

AIA California expressed its support for bringing efficiency to the process, but stated its concern that this new process could expose architects and contractors to greater financial risk if the approved plans has a higher cost of construction than the submitted plans.  AIA California testified that language is needed to ensure any additional cost must be assumed by the school district.

AIA California is working with the author and sponsor to develop this language.

California Architects Board

AIA California testified in support of SB 608, the bill to extend the sunset date on the California Architects Board (CAB), and to make changes to the California Architects Practice Act recommended by the CAB and the Legislative Sunset Review Committee.  The most notable changes include changes to the written contract requirement, creating a finger printing requirement for new applicants, and a requirement that the CAB adopt regulations establishing qualifications for accessibility continuing education courses and course providers.

Governor’s Appointments

AIA California is working closely with the Governor’s Appointments Office to find qualified AIA Members for a variety of appointed positions, including the State Architect, California Architects Board, California Building Standards Commission, and the Seismic Safety Commission.

The Governor’s Office usually asks for several candidates for each available position.  AIA California, upon approval of the AIA California Executive Committee, will submit those names with the official support of AIA California.

Rebuild Paradise Task Force

State Senator Jim Nielsen, who represents areas affected by the Campfire, convened the Rebuild Paradise Task Force for a second meeting.  This task force comprises a select group of stakeholders and advocacy organizations, including AIA California, to identify and remedy obstacles to rebuilding the areas damaged by the Campfire.

AIA California Government Relations staff Melissa Barton attend this meeting along with Rouben Mohiuddin, AIA and Robert Chase, AIA.

Click for audio.

The Government Relations team has been hard at work reviewing and analyzing over 2,700 bills introduced for the 2019-20 legislative session, including the introduction of two co-sponsored bills: AB 626 Conflicts of Interest and SB 451 Historic Preservation Tax Incentives, and one sponsored bill: AB 1367 Live/Work Units.

The respective AIA California Committees have begun the ongoing review of legislation and to make position recommendations for the AIA CA Board of Directors to consider at their May meeting. In the meantime, the legislature is beginning the process of hearing and voting on bills that the AIA CA Government Relations team will monitor for significant activity and respond accordingly and as appropriate.

California Architects Board Sunset Review Hearing

Melissa Barton, recently a registered legislative advocate for the AIA CA, testified before a joint Assembly and Senate Sunset Review Committee on March 5, 2019 in support of several issues within the California Architects Board (CAB) Sunset Review – a process that occurs every four years to ensure that government bodies are adequately performing. The sunset review process also provides an opportunity for the CAB, the Legislature, and interested parties and stakeholders to discuss the performance of the boards that the Committee reviews and make recommendations for improvements.

Citizen Architect Program

The Citizen Architect Program has seen a 37% increased interest since the last promotional effort, including more gender and geographic diversity. Tabulated results from the Citizen Architect self-identification survey demonstrate areas of outreach opportunity to acquire civically engaged individuals for the purposes of forming this network. AIA CA will be working with chapters to assist in outreach efforts for this program. If you have an interest in becoming more civically engaged or are a citizen architect, please let us know.

Please also distribute the Citizen Architect Flier at meetings and events that you attend.

Rebuilding Paradise Task Force

Senator Nielsen, representing the areas affected by the Campfire, called upon a select group of stakeholders and advocacy organizations to meet with him at his Capitol office on March 14 to identify the profession and community needs to assist his constituents to return home quickly.

AIA California Government Relations staff, Melissa Barton, attended this meeting and brought along AIA Central Valley member, Rouben Mohiuddin, AIA to provide a boots-on-the-ground perspective to assist the Senator with creating legislation that will “provide resolve and give hope that there is a comeback.” The Senator tasked each of the organizations to pool resources and be a united force in creating pathways and solutions for his constituents. The Senator has indicated that this is one of many discussions to be had of its kind with him and his staff. The next task force meeting will be held in early April.