What is the Tom Steyer Prop 13 split roll?

It is a proposal to reassess California commercial property at market value rather than keeping older assessed bases. That could lift commercial property tax bills for many long held assets. The plan aims to increase revenue but may raise costs for owners and tenants, affecting NOI and investment decisions.

How would Tom Steyer Prop 13 affect triple net leases?

Triple net leases pass taxes to tenants. If reassessments raise bills, tenants would face higher occupancy costs quickly. Many small businesses run on thin margins, so they might raise prices, seek rent relief, or move. Landlords could see higher vacancy and slower leasing until pricing reflects the new expense load.

What does a California split roll mean for cap rates and values?

If investors expect higher and variable commercial property tax expenses, they typically demand higher cap rates. That lowers asset values even without rent changes. Price discovery can take time, which may slow sales and widen bid ask spreads. Tom Steyer Prop 13 adds a clear policy risk premium to California CRE.

How can investors prepare if a special election advances this plan?

Model higher property tax expenses, stress test debt coverage, and sort assets by reassessment risk. Review lease structures, renewal dates, and tenant capacity to absorb pass throughs. Maintain liquidity for opportunities and discuss covenants with lenders. Monitor credible reporting and official ballot steps to update probability and timing.

Law and Government

Tom Steyer March 3: Prop 13 split roll plan raises California tax risk

ByDanny Kontos March 3, 2026March 3, 2026

Tom Steyer Prop 13 plans would create a California split roll that reassesses commercial property at market value. That change could raise commercial property tax costs, push up operating expenses, compress net operating income, and pressure cap rates. Tenants on triple net leases would absorb higher bills, which may lift prices or cut jobs. Corporates weighing new sites could delay or move. If a special election advances this measure, investors in California real estate should model higher taxes, test debt coverage, and track tenant health to protect returns.