Here we go again. This week’s CRE news roundup is archetypically Californian: Tesla announces that they will relocate their headquarters to Austin, a new split-roll tax ballot initiative threatens to impact multifamily properties adversely, and stringent eviction restrictions persist despite California’s eviction moratorium ending. Read more below (yes, there’s some good news mixed in there too).

Commercial and Multifamily Mortgage Delinquencies Declined in September

Let’s start with something positive: delinquency rates for mortgages backed by multifamily and commercial properties declined in September, as cited by the Mortgage Bankers Association’s monthly CREF Loan Performance Survey. After eighteen months marked by consistent COVID-induced downturns, commercial and multifamily mortgage performance has significantly improved. (MBA)

Proposed: New Split-Roll Property Tax Ballot Initiative Could Adversely Impact Multifamily Properties

Now that I’ve primed you with the good, I’m going to have to bring you down with another property tax attack. Proponents of a new, split-roll property tax ballot initiative have submitted their proposal to the California Attorney General’s office. The inadequately named “Housing Affordability and Tax Cut Act of 2022” is a verified wealth transfer in disguise. The initiative would penalize property owners with full cash (assessed) values of $5 million or greater through a property tax surcharge of 1.2% or more. (CalRHA)

There is a Severe Shortage of Rental Housing at Every Price Point Now

The magnitude of the rental housing demand boom is even more than any optimist could have forecasted. Apartment vacancies hit a historic low in September, shrinking to 2.7% for four consecutive months of record-shattering lows. New lease demand also increased by 50.5%, with apartment resident retention surging to an all-time high of 58%. (GlobeSt)

Tesla To Relocate Headquarters to Austin, Texas, From California

California is doing what it does best: driving businesses out of town. The ubiquitous electric vehicle giant Tesla is officially moving its corporate headquarters from Palo Alto, California to Austin, Texas. Tesla is just the latest in a string of West Coast companies to pick a new base with no state income tax and a relatively low cost of doing business. Musk told shareholders what we all know: that there is “a limit to how big you can scale in the Bay Area.” Yeehaw. (CoStar)

Despite Eviction Moratorium Expiring, Rent Deferrals Persist in at Least Two Major Metros

In last week’s roundup, we fired a warning shot about this –– now it’s confirmed. Though California’s eviction moratorium may have ended, this news alone offers little comfort to rental property owners in the city of Los Angeles and Alameda County, who are still subject to the most stringent eviction restrictions. LA’s local moratorium allows renters with a COVID-19 related hardship to defer their payments for the duration of the local emergency –– which is in effect indefinitely. (CAA)