Understanding Assembly Bill 98 and Its Impact
In 2023, Governor Gavin Newsom signed Assembly Bill 98 (AB 98), a law aimed at regulating warehouse development across California. The bill sought to address growing concerns over the environmental and community impact of logistics facilities, particularly in the Inland Empire, where massive warehouses—some exceeding 1 million square feet—have proliferated.
AB 98 introduced strict regulations on where new warehouses could be built, mandating setbacks of at least 300 feet from residential areas and schools, with even stricter 500-foot requirements in areas where zoning changes were necessary. It also imposed restrictions on truck routes and other operational aspects, making compliance a significant challenge for industrial developers.
Proposed “Clean-Up” Legislation
Now, less than a year after AB 98 became law, its authors, State Senator Eloise Reyes (D-San Bernardino) and Assemblymember Juan Carrillo (D-Palmdale), are proposing amendments to “clean up” the bill. These revisions aim to clarify certain provisions and address concerns raised by industry stakeholders.
Reyes emphasized that AB 98 was designed to create a balance between economic growth and responsible development. However, she acknowledged that some aspects of the law require refinement to ensure smooth implementation.
Industry Pushback and Legislative Response
The commercial real estate sector, including major industry groups such as NAIOP of California, California Business Properties Association, BOMA California, and The International Council of Shopping Centers, has strongly opposed AB 98. Many developers argue that the bill stifles growth, limits investment in logistics infrastructure, and complicates the planning process for new industrial projects.
In response, industry representatives have outlined nine “pain points” they hope will be addressed in the proposed clean-up legislation. These include:
- The impact of truck route regulations on project feasibility
- Ambiguities in how the law is enforced across different jurisdictions
- The extent to which AB 98 applies to existing warehouse developments undergoing expansion or modification
Balancing Economic Growth with Community Concerns
Despite industry opposition, Reyes and Carrillo maintain that AB 98 is not intended to hinder logistics operations or disrupt the supply chain. Instead, they argue that it holds local governments accountable for making responsible planning decisions.
“Our goal is to ensure that our communities and business partners can grow together,” Carrillo stated, emphasizing that industrial development should not come at the expense of public health and environmental sustainability.
The Inland Empire has been at the center of this debate, as warehouse expansion in the region has led to increased air pollution, traffic congestion, and noise complaints. Advocates for stricter regulations argue that the current law is essential to mitigating these impacts and preserving the quality of life for local residents.
What Comes Next?
The proposed clean-up bills are currently in the early stages, with language subject to change as discussions continue. Reyes and Carrillo plan to hold stakeholder meetings over the coming months to refine the legislation and address industry concerns while maintaining the original intent of AB 98.
While it remains unclear how many of the industry’s demands will be met, one thing is certain: the debate over warehouse development in California is far from over. The outcome of these legislative revisions could shape the future of logistics infrastructure and urban planning in the state for years to come.
Conclusion
AB 98 represents a significant shift in California’s approach to industrial development, prioritizing environmental and community well-being over unchecked expansion. However, as with any major regulatory change, challenges arise in implementation. The proposed revisions reflect an ongoing effort to find a middle ground between economic interests and community protections.
As discussions unfold, all eyes will be on Sacramento to see how lawmakers navigate this complex issue, balancing California’s role as a logistics hub with the need for sustainable development.