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Government Relations & Public Policy

State Legislative Trends

August 31, 2023

For most state lawmakers, the summer months offer a chance to break from busy legislative sessions and reconnect with peers in other states facing similar policy challenges. State policymaker groups, such as the National Conference of State Legislatures (NCSL), the American Legislative Exchange Council (ALEC) and the Council of State Governments (CSG), hold large gatherings to discuss emerging policy trends. Below are five with implications for the commercial real estate industry.

Trend #1: Organized Retail Crime (ORC)

Recently, state lawmakers and law enforcement officials have been united in efforts to stop organized criminals from terrorizing stores and communities. The issue has become a key priority for the Attorney General Alliance (AGA), which created a separate ORC Working Group solely devoted to bringing Attorneys General, their staff, and private sector members, such as ICSC, to the table to share best practices and solutions. The ORC Working Group had a robust discussion on the topic at their annual meeting in June and the working group is scheduled to next meet in early October in Boston. The agenda for that meeting is still being developed and ICSC, as a member of the AGA, is involved in those discussions. Our focus is to ensure that law enforcement officials have the information they need to prosecute criminal activity and the policy tools necessary to deter future crime.  

Trend #2: Electric Vehicles & Electrification

Electric vehicles remain a popular topic among state lawmakers following the passage of the federal Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA). With billions of dollars of new EV and carbon reduction spending coming to states, lawmakers are eager to explore ways that their communities could come out ahead in the transition to an all-electric future.

CSG East held multiple panel discussions on the implications of EVs on regional infrastructure as well as how states are managing the impact of EVs on tax revenues. The issue of EV user fees as a way to replace the gas tax for transportation funding has also emerged as a main topic of discussion for NCSL’s Alternative Transportation User Fee Foundation.

In July, conservative lawmakers expressed their hesitation to transition to electric vehicles at ALEC’s annual meeting. ALEC’s Energy and Environment Task Force had a number of draft models designed to push back against EVs and renewables. Members of the task force approved a model policy that prohibits states from contracting with companies that use forced labor in EV-supply chains, a policy directed at foreign-produced EVs.

Trend #3: Restricting Chinese Land Ownership

In response to growing concerns over the amount of influence that the Chinese government has over companies in the U.S., state lawmakers are now embracing legislation that limits Chinese-owned entities from buying large amounts of property near military sites. Conservative lawmakers passed a model policy at ALEC that prohibits foreign adversaries (i.e., China) from owning agricultural land in the US. Meanwhile, the more bipartisan NCSL’s panel discussion “The Latest on Foreign Ownership of U.S. Land” unpacked the data and varying requirements around foreign land ownership in the U.S. and the risk posed to the nation’s food supply and security.

The big question for state policy observers heading into 2024 is whether these discussions over limiting Chinese ownership of farmland carry over to commercial property. Some states, such as Iowa (IA HF 542), have even introduced legislation that would broadly limit property ownership from any entity affiliated with the Chinese government or China.

Trend #4: Affordable Housing

The rising cost of homes and rent in the U.S. has encouraged state lawmakers to consider ways to improve housing affordability. The National Lieutenant Governors Association (NLGA) convened a session at its annual meeting on “Ambitious Plans in Housing and Apparel” and approved a resolution recognizing the importance of access to attainable housing. ALEC, meanwhile, approved a model policy preempting local authority from prohibiting homeowners from building accessory dwellings units (ADUs).

 In higher density areas, such as the Bay Area in California, affordable housing advocates have lobbied local officials to end single-family zoned districts and limit commercial parking lot sizes as a way to encourage more residential construction. The broader discussion on affordable housing, and by extension zoning policies, could directly impact the commercial property market and the design and planning of communities across the countries.

Trend #5: Artificial Intelligence (AI)

Since the AI-powered chatbot ChatGPT launched in November 2022, over 150 pieces of legislation have been introduced in states focused on the use or regulation of Artificial Intelligence (AI). The topic appeared on nearly every group meeting agenda this summer, with NCSL and ALEC hosting more than five AI panels alone, most of which were standing room only. For the moment, the scope of this issue is immensely broad with questions on how to regulate AI applications and technologies consuming the bulk of lawmakers’ attention. Only a handful of states and cities have focused on limiting the use of facial recognition technology or scrutinizing the implementation of AI in hiring decisions. However, as state governments explore the uses of AI and where its applications may have the biggest impact, expect the conservation to expand beyond the makers of AI technology and move towards industries that could benefit from its use.