I wrote about this for the U-T San Diego:

The decision of a state appeals court vacating a November ruling by a lower court that enjoined the California High-Speed Rail Authority from spending billions in already-approved bonds was immediately hailed as a huge victory for Gov. Jerry Brown and other advocates of the state’s bullet-train project.

But in the very first paragraph of the 49-page decision, the three judges on the appeals court declared that the “scope of our decision is quite narrow.” Their ruling said Sacramento Superior Court Judge Michael Kenny had acted prematurely in invoking the protections included in Proposition 1A — the 2008 initiative providing $9.95 billion in bond seed money for the bullet train project — because his ruling was based on a preliminary business plan from the rail authority, not a finalized plan that can only take effect with the approval of the Legislature and other parties. …

Court affirms legal flaws of state’s plan

And what’s absolutely crucial about the appellate ruling is that it affirmed Kenny’s key findings.

The decision did not say Kenny was wrong to declare the rail authority had a financing plan that was deficient because it had failed to identify the $26 billion in funding it needed to complete the project’s 300-mile initial operating segment, as required by Proposition 1A. Instead, the judges agreed that voters ordered a “financial straitjacket” be put on the state to ensure the project’s “financial viability.” …

Nor did the decision say Kenny was wrong to declare the rail authority had inadequate environmental reviews for the 300-mile initial operating segment. Instead, it affirmed that the state must have “all the requisite environmental clearances before construction begins.” Once again, it only held that Kerry had acted prematurely by enjoining bond spending based on this requirement at this stage of the project.

If the state’s media hasn’t figured this out, it appears the rail authority has. It hardly went on a victory lap, contrary to authority board chair Dan Richard’s normal tendency to bluster and bully.

Associated Press: Two huge basic errors

I remain absolutely baffled by how the Associated Press’ Juliet Williams could get such basic facts wrong in her account.

SACRAMENTO, Calif. — A state appellate court on Thursday overturned two lower court rulings that had stalled funding for California’s $68 billion bullet train, handing a big win to the project and allowing the state to resume selling bonds to pay for it.

The court overturned rulings by Sacramento County Superior Court Judge Michael Kenny last year in which he said the high-speed rail project no longer complies with the promises made to voters when they approved selling nearly $10 billion in bonds for it in 2008.

The ruling didn’t say the state could “resume selling bonds” at all. Instead, the opinion said …

“… bond funds cannot be committed and spent until the second and final funding plan is approved by the authority and submitted to the director of the Department of Finance and the Chairperson of the Joint Legislative Budget Committee, and an independent financial consultant prepares a report. This latter report is particularly significant in that the independent consultant must certify that construction can be completed as proposed and is suitable for high-speed rail [and that] the planned passenger train service will not require an operating subsidy.”

Nor did the appeals court say Kenny was wrong to hold the “project no longer complies with the promises made to voters.”

As noted above, the appeals court didn’t challenge his finding of deficiencies at all.

These aren’t trivial errors. AP owes its readers and clients a correction. Or corrections.

Which brings us to the affordable-housing policies of the majority faction of the San Diego City Council.

I have lived in San Diego for more than eight years and believe that during that time, it has been a relatively well-run city in that it’s dealt with a fiscal crisis in a responsible manner; done a good job in keeping crime low; and avoided the ingrained hostility to business seen in so many coastal Califoria cities.

The most constructive politicians haven’t just been Republicans such as firebrand reformer Carl DeMaio and mainstream, businesslike former Mayor Jerry Sanders. They’ve also been City Council Democrats like former council leader Tony Young and Todd Gloria, presently the interim mayor.

That’s why I’m so stunned at the absolutely nutty approach Gloria and council Democrats are taking on the affordable housing front. The great majority of people who study economics with an empirical bent — including practical liberals like Slate economics writer Matt Yglesias — have concluded that the government command-and-control model of trying to dictate housing outcomes through regulations, impact fees and project conditions is an abject failure. Here is a sample of Yglesias’ thinking from last year after he had digested a report from the National Low Income Housing Coalition:

Here’s the book Yglesias wrote on the topic.

Sacramento housing policies failing ‘by any measure’

That’s how the Golden State’s housing policies look from the outside. Here’s how they look to Sacramento lawyer and community activist Craig Powell:

“A discussion of what the city should do to increase the availability of affordable housing all too often turns into an argument between builders and low-income housing advocates. It’s the kind of discussion that opens up a gulf of ideologies and yields little common ground. But there is common ground on one point: The city’s existing low-income housing policies are, by any measure, failing.

“Look to North Natomas. It is one of several designated ‘growth areas’ where the city requires builders to set aside 15 percent of all new houses and apartments for low-income residents under the city’s inclusionary housing ordinance (also known as the mixed-income housing ordinance). The ordinance’s goals were idealistic: 15 percent of all new houses and 15 percent of all new apartments in North Natomas would be built for the subsidized poor who would live happily side by side with their unsubsidized neighbors, who would pay the full market rate for their houses and apartments.

“The reality turned out to be dramatically different. It turns out that it’s exceedingly difficult to make subsidized low-income single-family homes work in the real world. It’s hard for such folks to get financing, even at subsidized home prices. It’s very expensive for builders who must incur the same cost to build a subsidized house as one they sell at market prices. Once a subsidized home is bought by an eligible buyer, it turns out they can’t sell it in the future for a profit: They have to turn any profit over to the government and the home must be sold to another qualifying low-income buyer. Such a limitation on resale lasts for 45 or 50 years. How would you like to buy a home, take on all the risks of a mortgage, but never be able to benefit from the appreciation of your property?

“So North Natomas builders of large subdivisions, being rational actors, decide to meet their 15 percent low-income housing mandates by building less expensive low-income units in apartment houses with 200 units or more, where 80 percent to 100 percent of the residents would end up being low-income tenants—exactly the sort of environment that created no end of social pathologies in large-scale public-housing projects in cities built throughout the country over the past 60-plus years. … the city’s inclusionary housing ordinance has, in practice, led to precisely the sort of housing that everyone acknowledges is a major mistake.”

$31 million project yields 96 beds!

None of this history has sunk in with Todd Gloria and San Diego City Council Democrats Marti Emerald, David Alvarez (the Dem mayoral candidate in Tuesday’s special election), Sherri Lightner and Myrtle Cole. They want to sock commercial developers with a huge fee increase to provide more funding for traditional government command-and-control housing-creation polices. They say that the fee now up for a raise was cut in half in 1996, and that’s a prime reason housing is so expensive.

Oh, come on! Even if the fee is increased by the massive amount council Democrats want, it will only provide about 100 homes a year — in a city with tens of thousands of families on a waiting list for affordable housing.

Then there’s this: the insane way the city of San Diego has used the money it did have for affordable housing, most notably $31 million on 96 beds. I repeat, $31 million for 96 beds.

“The new permanent homeless shelter downtown, former World Trade Center, is costing more than $450,000 per room, according to news reports. 

“Demanding brand-new affordable housing in redevelopment areas costing more than $337,000 per unit is akin to demanding Mercedes-Benz to sell 20 percent of its new cars to people who can’t afford them.”

That’s from an essay written by former San Diego Councilman Fred Schnaubelt, an expert on land-use issues who once was invited to testify before a presidential housing commission. Schnaubelt makes more sense on this issue than anyone in San Diego — and he’s not just a critic. He offers what for California is out-of-the-box thinking:

“In 2010, 18,228 ‘used’ or previously occupied apartments sold countywide at a median price of $110,664. Just one of many reasons so many Americans think the government is on the wrong track. What’s wrong with a used car or used house for people with limited education, limited work experience and limited income? It is a question needing an answer.

“In 30 years, not a single person has been able to explain why poor people, many without a high school diploma and who self-report to the census they can’t speak English, are entitled to enjoy the most expensive consumer product in society — a brand-new home or apartment. Or why housing for the poor should cost more than triple the housing occupied by most self-supporting renters.

“According to a University of Michigan study, ‘New Homes and Poor People,’ the construction of 1,000 new dwelling units, both homes and apartments, makes it possible for 3,545 households to move to better accommodations. Of the 3,545 moves surveyed, 1,290 were by low- and moderate-income families. This is the essence of upward mobility. Anyone who didn’t move to a brand-new house when they left their parents’ home or graduated from college knows how the housing market works. Used housing is ‘affordable housing.’”

Unfortunately, Schnaubelt hasn’t been on the San Diego City Council since 1981, and his smarts have no influence on San Diego’s present loony policy, namely (my words) the following:

“Let’s throw millions of dollars at a problem with an approach that has a history of meager results. And let’s raise the money to throw at the problem by socking it to commercial developers with a huge fee increase at a time when competition for their projects is intense.”

No wonder business interests are trying to get the fee hike overturned at the ballot box.

The boilerplate paragraph that’s never found

But what’s also unfortunate is how rare it is to see basic context in any story about government command-and-control housing policies.

I have whined for 25 years that any stories on Cuba that are more than 500 words should have a paragraph like this:

“Although Cuba is a socialist state associated with progressive values, in a key way it resembles pre-1995 South Africa. Black and part-black Cubans make up more than 60 percent of the population but are rarely found in key positions, which are held almost entirely by Cubans of Spanish descent.”

The Economist agrees with me about Cuba’s ruling “white gerontacracy.”

I have whined for nearly as long that stories on affordable housing in California that are more than 500 words should have content like this:

“Affordable-housing programs in California that use fees from developers and project conditions have a weak track record of actually decreasing rents and home prices.”

 Sure, that content could be made even more thorough:

“Affordable-housing programs in California that use fees from developers and project conditions have a weak track record of actually decreasing rents and home prices. But advocates for the poor say alternatives have not been offered by Republicans and contend many conservatives simply don’t care about making housing affordable for the less affluent and the underprivileged.”

If that second part were included, that would be fine by me — because at the very least, we’d have every story of more than 500 words making the point that existing policies aren’t working. Then maybe it would dawn on politicians in San Diego and elsewhere that failed public policies shouldn’t be continued ad infinitum.

Dumb de dumb dumb.

By Katy Grimes

The Associated Press found itself in an interesting juxtaposition yesterday when it had to report that the Obama Justice Department secretly obtained two months of AP’s own employees’ phone records.

In what can only be called strange, the Obama Justice Department has been secretly tapping the phone lines for 100 reporters and editors of the Associated Press, according to news reports just released yesterday.

This is a direct attack on the freedom of the press. Ironically however, this is the same press which has been in-the-bag for candidate, and now President Obama.

Also ironically, while the Patriot Act was being rammed through Congress, the press sat on their hands and did nothing. Now they are being spied on, ostensibly under the guise of the Patriot Act and national security.

According to the Associated Press, general phone lines for AP office numbers in New York, Washington and Hartford, Conn., and for the main number for the AP in the House of Representatives press gallery, were all tapped, according to attorneys for the AP.

The Justice Department, run by Attorney General Eric Holder, obtained two months of telephone records of reporters and editors for The Associated Press in what the news cooperative’s top executive called a “massive and unprecedented intrusion” into how news organizations gather the news.

“Chief Executive Officer Gary Pruitt said the government sought and obtained information far beyond anything that could be justified by any specific investigation,” the AP reported. “He demanded the return of the phone records and destruction of all copies.”

“There can be no possible justification for such an overbroad collection of the telephone communications of The Associated Press and its reporters. These records potentially reveal communications with confidential sources across all of the newsgathering activities undertaken by the AP during a two-month period, provide a road map to AP’s newsgathering operations and disclose information about AP’s activities and operations that the government has no conceivable right to know,” Pruitt said.

This is going to get interesting. The IRS has been targeting conservatives and pro-Israel groups, and no one has been fired. Now the same administration is attacking freedom of the press and spying on the AP. What Constitutional right will be violated next? And what are people willing to do about it?

On the Jewish blog, Boker tov, a reader left a thought-provoking comment: “The sheer stupidity of the Obama mob is beyond belief. This really is the gang that cannot shoot straight. Why in the world would they pull this caper on — of all the news agencies on the planet — the one news agency that has done probably more than any other to make Obama look like a Great American President? Whatever happened to such sage admonitions as “Don’t bite the hand that feeds you” and ‘Don’t kill the goose that lays golden eggs’? Will this be the straw that breaks the camel’s back? I wouldn’t bet on it; so far, the camel’s back has been as strong as Atlas’s. But if this is the straw that cripples the camel, Obama will have only his own and his henchmen’s stupidity to blame.”