Assembly Bill 87, introduced in California on March 18, 2025, aims to provide significant relocation assistance to eligible commercial tenants affected by housing development projects. The bill addresses the growing concern over the displacement of small businesses as urban areas evolve to accommodate new housing developments.

The key provisions of Assembly Bill 87 outline a structured relocation assistance program based on the duration of a commercial tenant's lease. Tenants operating for less than five years would receive six months' rent, while those with longer tenures could receive up to 18 months' rent for businesses established for 20 years or more. This tiered approach is designed to support small, independently owned businesses, particularly those with fewer than 20 employees and annual gross receipts under $1 million.

Eligibility for assistance hinges on specific criteria, including the expiration of the lease without renewal and the tenant's operational status at the time of lease expiration. Notably, tenants who entered leases after the housing development application was submitted would not qualify for assistance, aiming to prevent opportunistic claims.

The bill has sparked debates among lawmakers and stakeholders. Proponents argue that it is a necessary measure to protect small businesses from the adverse effects of urban development, while opponents raise concerns about the financial burden it may impose on developers. Additionally, there are discussions about the potential impact on housing supply, as some fear that stringent relocation requirements could deter new housing projects.

Economically, the bill could have significant implications for California's small business landscape, potentially stabilizing local economies by preventing the loss of long-standing businesses. Socially, it aims to foster a more equitable transition for commercial tenants during urban redevelopment, ensuring that small businesses are not left vulnerable in the face of rapid change.

As Assembly Bill 87 moves through the legislative process, its outcomes will be closely monitored by both business owners and housing advocates. The bill's success could set a precedent for how California manages the intersection of commercial interests and housing development in the future.