Don’t Tread on California

Yesterday I popped a tire on The 110.

I found a nail, pulled into a local tire shop, and about twenty minutes later I was back on the road.

They plugged the tire and got me moving again.

A small business doing exactly what small businesses do: solving a customer’s problem quickly.

Then I started thinking about what California’s new replacement-tire rules could mean for businesses like that one.

Because the policy debate sounds abstract until you walk into the shop that actually has to deal with it.

The tire rule isn’t controversial because of the goal.

It’s controversial because the public still doesn’t have a clear answer on what it will actually cost.

Commissioner Nancy Skinner, a termed-out state senator appointed to the CEC by Governor Newsom last year, defended the rule by comparing tires to appliances the commission already regulates.

That’s a comparison—not a publicly disclosed cost analysis.

And now the manufacturers are weighing in.

Dunlop and Falken have urged policymakers to carefully assess the long-term effects on consumer safety, choice, affordability, competition, vehicle use and California’s automotive aftermarket.

They also say manufacturers need realistic timelines to develop and validate compliant products, and that the tire’s full economic and environmental lifecycle needs to be considered alongside rolling resistance.

That’s significant.

These aren’t critics sitting on the sidelines.

They’re major tire manufacturers telling policymakers that the broader consequences need to be evaluated.

That’s exactly the kind of uncertainty a small business has to price.

Meanwhile, the CEC’s communications director spent yesterday afternoon trying to get a reporter to soften her framing of the story after the story had already been published.

That’s worth noting.

But the bigger question is what happens to businesses like the tire shop I visited yesterday.

If you own a tire shop—or a building leased to one—you’re not underwriting 2033.

You’re underwriting today.

And today is August 2026.

2027 is roughly five months away.

The first major requirements arrive in 2029.

So what does a tire shop owner do?

Keep ordering the inventory customers need today, betting the rule gets delayed, modified or watered down?

Or start transitioning early, potentially paying more for compliant products years before the deadline?

What happens to existing inventory?

What happens to tires already sitting in warehouses, distribution channels and tire shops?

Who absorbs the additional cost?

The manufacturer?

The distributor?

The tire shop?

Or ultimately the consumer?

There’s no easy answer.

And that’s the problem.

A tire business needs to know what it can buy, what it will cost, what manufacturers will actually have available and when the state intends to enforce the new requirements.

A landlord needs to know the same thing.

Because eventually, the tenant’s economics become the landlord’s economics.

If inventory costs rise, margins get squeezed, customers push back against higher prices, or the business needs significant capital to adapt, that can affect rent coverage, lease renewals and ultimately the value of the real estate.

That’s not a political talking point.

That’s an underwriting issue.

Here’s another question that deserves an answer.

What happens to the tires already in the system?

Millions of tires are already on California vehicles, in warehouses, at distributors and on tire-shop shelves.

The new requirements don’t make those tires disappear.

Eventually, they’re going to be replaced.

And California already manages more than 60 million reusable and waste tires every year.

So if we’re talking about the environmental benefits of the new standard, shouldn’t we also look at the entire lifecycle?

Manufacturing.

Transportation.

Existing inventory.

Replacement cycles.

Disposal.

Recycling.

Those are lifecycle questions.

And they’re exactly the kinds of questions the manufacturers are asking policymakers to consider.

There’s an interesting irony here.

I pulled into that shop yesterday with a nail in my tire.

They plugged it.

I was back on the road in twenty minutes.

Then I started looking into California’s rules governing tire repairs and discovered that tire repairs aren’t nearly as simple as they appear.

California has specific standards governing tire repairs and the installation of used tires, including requirements that can apply depending on the location and size of a puncture and how the repair is performed.

In other words, even the ordinary act of fixing a tire can involve a regulatory framework most consumers never think about.

And that’s the point.

Every regulation eventually lands on a real business, a real employee and a real customer.

The CEC communications director contacting a reporter after publication to push for a different framing isn’t, by itself, evidence of some grand conspiracy.

Government agencies communicate with reporters. That happens under administrations of both parties.

But this instance is worth paying attention to because the interaction left a paper trail—and the reporter made it public.

The question isn’t whether an agency should communicate with the press.

The question is whether those communications are being used to clarify the facts or influence how the public perceives a controversial policy.

That’s something worth watching.

Yesterday, I needed a tire repaired.

That shop had the equipment, the inventory and the employee who could solve the problem.

I paid them.

They kept their business moving.

That’s the part of regulation that can get lost in Sacramento.

Every rule eventually reaches a real business.

A real owner.

Real employees.

Real inventory.

Real customers.

And, in my world, sometimes a real commercial property.

If you own or lease a tire shop, auto parts business, repair facility or another business with a significant inventory cycle, this isn’t simply a political debate.

It’s an underwriting variable.

Manufacturer readiness.

Inventory availability.

Cost increases.

Ability to pass those costs through.

Customer demand.

Enforcement timing.

Capital expenditures.

Existing inventory.

Environmental compliance.

Lease renewals.

All of it matters when you’re buying, selling, financing or leasing commercial real estate.

That uncertainty is the risk.

Not 2033.
Today.

And that raises the question:
Could this uncertainty create an opportunity for the right buyer?

Need to discuss how this could affect your property or tenant? Call 818-430-8497.

Gary Mittin Commercial Real Estate Broker | CA DRE #01177574 GaryMittin.com glmittin@gmail.com

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This is not investment, legal, or tax advice. Consult the appropriate professional before making real estate or business decisions.