Races Real Estate Should Watch in California Primary

It’s primary election day. California voters are heading to the polls and dropping off their ballots for what feel like uncertain and unusually consequential races for Los Angeles mayor, California governor and more.

The Golden State real estate world has picked its preferred candidates, and the June 2 vote will tell if they’ve won outright by taking more than 50 percent of vote or made it through as one of the top two finishers bound for a runoff in November’s general election.

The Real Deal is tracking five races that have compelling interests among real estate pros: the battles for L.A. mayor, California governor, L.A. city controller, Rep. Nancy Pelosi’s congressional seat in San Francisco and California insurance commissioner.

Here’s what you need to know before results start rolling in.

California governor: Real estate backers edition

The very-crowded race to replace Gov. Gavin Newsom has lacked a clear frontrunner from the start. It wasn’t until recently that former Secretary of Health and Human Services Xavier Becerra led the polls. In most polling, Becerra is followed by ex-Fox News host Steve Hilton, who has some prominent real estate players behind him, and billionaire Tom Steyer. Then there’s San Jose Mayor Matt Mahan, the California real estate crew’s choice, who is polling in the single digits and probably won’t make it past the primary.

He was a late-entry and never really gained meaningful ground but counts mall magnate Rick Caruso as a billionaire benefactor. Caruso lost a run for L.A. mayor four years ago and chose not to make a bid for political office this year. He has donated more than $1.5 million to Mahan’s campaign directly and through an independent expenditure committee, publicly touted the mayor and even held a fundraiser in L.A. for him, co-hosted by star broker Jason Oppenheim, who donated thousands of dollars to Mahan.

Mahan’s other California real estate backers include: Related’s Bill Witte, Kilroy’s Angela Aman, Hudson Pacific’s Victor Coleman, Douglas Emmett’s Jordan Kaplan, Eastdil’s D. Michael Van Konynenburg, Marcus & Millichap’s George Marcus, the Sobrato Organization’s John Sobrato and more.

Hilton is the only other candidate that has significant California real estate money, with his coming via Dollinger Properties’ Dave Dollinger, Lyon Living’s Frank Suryan Jr., Craig Realty’s Steven Craig and Geoff Palmer, one of Los Angeles’ most prolific apartment developers.

If polling is any indication, it looks as though tomorrow will raise a new question: Who will these industry stalwarts back in the general election if Mahan fails to advance.

Los Angeles mayor: Can downtown be saved?

Mayor Karen Bass, her former further-to-the-left political ally Nithya Raman, an L.A. City Council member, and reality television star Spencer Pratt are in a tight and heated race. Most polls put Bass on top, and it’s too close to call whether she could face Raman or Pratt in a runoff.

Bass and Pratt appear to have more notable real estate donors than Raman. Bass counts the Wonderful Company’s Lynda and Stewart Resnick, Rexford’s Richard Ziman, luxury home developer Ardie Tavangarian, the California Apartment Association’s Political Action Committee, Coldwell Banker agents and more as backers. Pratt has Compass’ Tracy Tutor, Newmark’s Jay Luchs and Westside Estate Agency’s Kurt Rappaport on his side — plus, billionaire developer Palmer, hosted a reception for Pratt at his Beverly Hills home.

On Measure ULA, or the so-called mansion tax that goes beyond luxe homes — Bass has mostly glossed over the tax during her reelection campaign even though many in the real estate world blame the tax for making L.A. unattractive to investors and lenders. Rising Realty Partners’ Chris Rising once charged the tax for “a broken trust with Wall Street.” Cityview’s Sean Burton said it “redlined” the city.

Bass has suggested a rollback of the voter-approved measure for victims of the wildfires that ravaged Pacific Palisades who are rebuilding their homes and urged the city council to pass the exemption. That’s in line with Pratt, who jumped in the race because his home burned down, which he blames Bass for. Pratt said he would exempt anyone rebuilding their homes lost to the fire. Shortly before entering the race, Raman proposed a 15-year carveout from the tax on new commercial projects.

Downtown is another pressure point in the race. During a May debate a moderator asked, “can we afford to let [downtown] die?” Neither the mayor nor the council member denied it was dying. Raman’s answer was bringing some city workers back to their desks more than three days a week, keeping businesses from fleeing and making it clean and safe. Pratt called downtown unsafe, something he has done in vivid detail on the campaign trail via viral ads and his “zombie” rhetoric. Bass said we can’t afford to let downtown die and that her office has a strategy — collaborating with business associations to address public safety and an adaptive reuse ordinance to fast-track office conversions. Bass said the strategy is working.

Los Angeles city controller: Developer makes bid

Hackman Capital Partners executive Zach Sokoloff is running to unseat Kenneth Mejia from the city controller’s office, a potential political goldmine, with authority to range far and wide via financial audits. The industry wants Sokoloff — who is currently on leave from Hackman which has seen better days — to win. His industry donors include Ashkenazy Acquisition’s Ben Ashkenazy, multiple Hackman Capital people — including boss Michael Hackman — LA Realty Partners’ Gary Weiss, and Compass and Sotheby’s brokers.

“The controller’s office is the independent auditor and fiscal watchdog for the city of Los Angeles, and so there are countless programs that touch real estate where I think there has been no accountability and no oversight,” Sokoloff previously told TRD.

Pelosi’s seat in Congress: Housing policy wonk wants in

State Sen. Scott Wiener, San Francisco Supervisor Connie Chan, and former congressional staffer and tech centimillionaire Saikat Chakrabarti are the leading candidates in the race to take Pelosi’s long-held seat. Wiener is the legislative architect of YIMBY-ism — or yes, in my backyard — so it’s no surprise he is the real estate favorite. He has executives at Related California behind him, among others, and is leading in most polls.

California insurance commissioner: Wildfires ignite the stage

Last year’s Palisades and Eaton fires put the race for state insurance commission center stage. The leading candidates are state Sen. Ben Allen, who represents Westside neighborhoods including Pacific Palisades; Jane Kim, head of the California Working Families Party and former San Francisco supervisor; Silicon Valley financial analyst Patrick Wolff; Steven Bradford, who has formerly served in both the state senate and assembly; longtime insurance agent Stacy Korsgaden; and Merritt Farren, an attorney who has worked for Amazon and Disney who lost his home in the Palisades fire.

Farren, at a March forum in the Pacific Palisades, suggested ditching the need for FAIR Plan, the state’s last resort insurer, for a plan he called “Cal Reinsure.” Under his plan, a state-backed reinsurance authority would shoulder the weight of one specific risk factor, which would be required for every policy.

“If somebody’s house burns down… and they signed up for $1 million in coverage for their rebuild, they’ll get a check for $1 million, no questions asked,” he said. That intrigued even his rivals.