Have you practiced doing things right & then got screwed? Have you had the regulatory book thrown at you for doing nothing wrong? And have you witnessed countless others ignore the rules and either never get caught or held accountable?
In our world of Commercial & Investment Real Estate, it’s all about Planning (General Plans, Specific Plans, Community Plans, etc.) Zoning, Zoning Ordinances, Codes, Rules & Regulations, ADA, Fire & Life Safety, Occupancy Requirements, Compliance and of course the supporting pages of violations with penalties & fines if you don’t follow the rules.
Now, I’ve been accused of being painfully honest, hard on government, argumentative, cynical, trusting and distrusting, but one thing is for sure, I know my business and most of what impacts the private property rights of all citizens.
Allegedly cities & counties design Codes for building & safety and then deploy their battalion of inspectors and code enforcement officers for compliance (fines & penalties) for the safety of its citizens. But really that’s only a very small part of the reason. The more compelling reason is for Fee’s, Penalties, & Expansion of the Tax Base. While most branches of government want us to remain safe and alive, they really could care less. They look down at us, like the unwanted & really don’t care. They’re only going through the motions, so we continue to pay their fees, penalties and taxes. But they always remind us that “They Are the Boss” It’s, their rules and their game.
Take Property Taxes; They’re based on assessed values and with more new laws that require permits, and more compliance measures, both are progressive and indexed so even as the asset ages, taxes continue to rise. So, think about it next time your city vomits up a menu of more measures for compliance; like seismic upgrades, electrical sub-panels, utility and power upgrades, retrofit ordinances like energy, windows, insulation, solar and dedicated plugs for that Electric Car. Oh & Hang on tight, just wait when they fully impose their agenda on “The Green New Deal” we all are being set-up & put into position for financial rape because it’s all about increased assessments for more property taxes, fees and penalties. It has very little to do with climate change or the environment. It’s like seizure and confiscation but more friendly.
Let me digress for a minute and tell you a conversation I had with a senior building official in a major Southern California city many years ago when I confronted him about his next round of arbitrary, capricious and unnecessary regulations he was authoring.
“Tony your problem is you’ve just been around too long and remember when we didn’t have these rules and business was easier…….the new citizens coming to town only know our new regulations and accept them for what they are…… Maybe it’s time you leave and move on”
Well, that person is retired, no doubt sucking the city’s retirement system for time served but we’re still fighting on the front lines for property rights. The real problem with our rules today is they’ve evolved into a library of “encyclopedias” with volumes and volumes of text that few understand and often results in selective enforcement, or targeted harassment of some citizens for compliance over others. Leadership (generally City Council) will hand down an order to the Director of Planning, City Attorney etc. to develop an ordinance to cover a certain issue, staff will either directly or through a 3rd party develop an ordinance with city policies and have this implemented. With very little direction, this new ordinance is often left to “Rank & File” to make their interpretations and begin enforcement……that ladies and gentlemen is when the problems really start. The counter personnel are rarely trained to apply the ordinance in the manner leadership intended. Or if you want to take the cynical point of view, they’re doing exactly what leadership intended.
These city/county policies and procedures have in many instances backfired and recently I had a meeting with a senior city official asking why so many tenants and property owners are dodging code, failing to pull permits or apply for occupancy permits. While I am grateful for the trust and confidence I’ve earned with local governments, and always wanting to contribute to make the process more equitable, I said to this person; “Have you ever applied for a permit for tenant improvements or a modification, addition, or an occupancy permit? Have you attempted to interpret the codes as written? Have you ever been put on the regulatory roller coaster for months and months with no resolution? Then I said, you & so many other cities all brag about the “Business Friendly” environment you’ve created, but that’s total bullshit. It does NOT exist. Yes, this could be true, very rarely IF a city really wants a certain tenant or corporate citizen, but for most property owners and tenants in this and surrounding cities we duck in fear of your process and wonder what new regulatory god we need to bow too.
Government intentionally overcomplicates EVERYTHING. They look for triggers that they can apply for more enforcement & compliance and put you through more city departments for often the simplest requests. There’s little relief from the book being shoved down your throat and to make matters worse, Government disrespects our time. Not a single city or county respects the time of private sector citizens going through the permitting process. Cities (Government) are only process driven with little or NO consideration of delivering a sensible and timely resolution or product. I reminded him that most property owners and tenants are not averse to paying permit fees but rather fear of being put into the revolving que for some random city staffer to get to it when it’s convenient. Sometimes we can wait 4 to 6 months for the most elementary decision involving a small commercial tenant of 1,000 to 5,000 square feet. This is when the counter person should have discretionary or administrative authority to approve and move forward. Construction projects depending on scope can be 6 months to 2+ years in the entitlement and permitting process. This is the reason people avoid the Permit Process.
As former Governor Jerry Brown once said “Not every human problem deserves a law”
In the private sector we have ALL the risks associated with opening & running a business from site selection to employees, employment law and vendor relationships to our banks, corporate, personal & employment taxes plus the personal investment of our dollars. Government SHOULD be a partner in this regard not an adversary. But often, government and their staff are paralyzed in making the most fundamental decisions for citizens all while throwing every regulatory obstacle in their path…. they’d rather show the leadership of the City that they’re enforcing the codes/rules and penalizing citizens. But they’re confused, because that’s oppression.
Ayn Rand, Russian born writer and philosopher said “When you notice that to produce you need to get permission from those who do not produce anything; when you check that money flows to those who do not deal in goods but with favors; when you realize that many become rich by the bribery and for influence more than by your work and the laws do not protect you against them, but on the contrary, they are the ones who are protected against you, when you discover that corruption is rewarded and honesty becomes self-sacrifice, then you can assert, without fear of being wrong, that your society is doomed.
I think we’re in a slow march to the abyss, maybe someone could please save me a seat. Because I’m not going down without a fight. Maybe next month we can talk about those “Citizens Advisory Committee’s” or “Council Appointed Boards” there’s a lot more to that process than you want to believe let alone know about.
by Tony Maniscalchi 3/23/2023