low-income housing – CalWatchdog.com

Housing lawsuits pit the state vs. Huntington Beach

Chris Reed — Thu, 31 Jan 2019 20:52:48 +0000

The city of Huntington Beach and the state government are suing each other over the state’s attempts to require that local governments step up housing construction. Besides affecting the housing crisis that Gov. Gavin Newsom calls an “existential” threat to California, the litigation could break ground in establishing how far charter cities – which have their own de facto constitutions – can go in rejecting state edicts.

The state’s lawsuit – filed in Orange County Superior Court by Attorney General Xavier Becerra on Jan. 25 at Newsom’s behest – is the first to be filed under a 2017 law that allows the state to pursue legal action against local governments that don’t comply with their housing requirements.

The state wants to compel Huntington Beach to build 533 low-income housing units by Dec. 31, 2021, to meet its state quota. The city has only approved about 100 such units, according to the Southern California News Group.

City attorney sees H.B. singled out for its politics

Huntington Beach City Attorney Michael Gates maintains that as a charter city, his city should be able to set its own housing policies. He also hinted that there were political motives driving the actions of Democrats Newsom and Becerra. “It is noteworthy that Sacramento is suing only the city of Huntington Beach, while over 50 other cities in California have not yet met” their targets, he wrote in a statement. Huntington Beach has been a Republican redoubt for decades.

But state officials said they were motivated by Huntington Beach’s bad faith. Not only did the city refuse to provide a housing plan in compliance with state rules, in 2015, the City Council revised zoning rules to reduce by 2,400 the number of homes allowed in a neighborhood on the eastern edge of the city near Interstate 405.

While the state’s suit got far more attention, Huntington Beach’s suit – filed Jan. 17 in Orange County Superior Court – also involves high stakes. The city is targeting Senate Bill 35, the high-profile 2017 state law crafted by state Sen. Scott Wiener, D-San Francisco, that limits the ability of local governments to block housing projects that meet certain conditions, such as using union labor and including a portion of affordable units.

“It’s one thing to have more basic housing laws come out of Sacramento; it’s another to have Sacramento try to micromanage cities’ zoning and attempt to approve development projects in spite of the city,” Gates told the San Francisco Chronicle. “It’s really nothing more than the city trying to maintain its local control.”

Can charter cities defy state’s housing edicts?

Wiener blasted Huntington Beach in a statement given to his hometown paper. “Huntington Beach’s dismissive approach to housing – claiming there is no problem and that the state should just mind its own business – is Exhibit A for why we have a crisis in this state.”

When SB35 was discussed in 2017, there is no indication from a Nexis news search that Wiener or any lawmaker saw charter cities as being exempt from the bill’s requirements.

But lawyers for the League of California Cities have used language similar to that in Huntington Beach’s lawsuit to assert that there are limits to state power over charter cities. “The benefit of becoming a charter city is that charter cities have supreme authority over ‘municipal affairs,’” states the league’s legal primer on the topic. “In other words, a charter city’s law concerning a municipal affair will trump a state law governing the same topic.”

About one-quarter of California’s 478 cities have charter status. If Huntington Beach wins its challenge to SB35, general law cities that want to regain greater control over local planning could craft proposed charters and ask their voters to approve them under a process laid out in the state Constitution.

Sacramento growth plan: more low-income housing

CalWatchdog Staff — Tue, 19 Mar 2013 16:42:59 +0000

March 19, 2013

By Katy Grimes

When the going gets tough, the tough go shopping. But not in downtown Sacramento. There isn’t anyplace to shop in Sacramento’s downtown any more, other than the one remaining Macy’s in the wilting Downtown Plaza shopping mall. But even that store is on the chopping block, should Mayor Kevin Johnson’s vision of a “world-class city” with a downtown arena, actually come to fruition.

But now, there is yet another new plan to “save” downtown and the K Street Mall.

The historic K Street Mall

K Street, along with J Street, was Sacramento’s original main street, chosen because it was the most direct route to Sutter’s Fort from the river.

During the gold rush, K Street became the main business street. Dry goods stores and hotels appeared along K Street to sell goods to new arrivals and miners. Many of Sacramento’s first fortunes were made selling goods to the miners, not out in the gold fields, according to the Sacramento County Historical Society.

“In its heyday, K Street was also the home of numerous drugstores, tailor shops, tobacco shops, book- stores, restaurants and professional offices,” SCHS said. “Conveniently located at the center of town, thousands of people could walk to K Street from their neighborhood or ride the streetcars from Oak Park, Colonial Heights, East Sacramento, Curtis Park, Land Park or even across the rivers from North Sacramento or West Sacramento. As automobiles grew popular, K Street faced trouble from busy traffic and limited parking.”

Now, thousands of people come into Sacramento daily to work for county, city, state and federal government agencies. And then they go home at the end of the day, leaving downtown.

Downtown slums

The City of Sacramento is the largest slumlord in the downtown area. Thanks to years of redevelopment botches, the Sacramento Housing and Redevelopment Agency scooped up building after building along K Street, consigning the structures and streets to eventual blight. The city has chased away more business than it has saved, through greed and ineptitude.

Plan number 437…

“The Sacramento City Council earlier this week approved a key piece of funding for a residential complex on the block,” the Sacramento Bee reported. “A new, five-story building with 122 apartments would rise behind the row of historic storefronts, which would hold a live music venue, boutiques and rooftop terraces with views of the Capitol and downtown skyline. Another 15 housing units built over the existing storefronts would face K Street. It would be the first significant infusion of housing on K Street.”

But in true idiotic Sacramento fashion, 60 percent of the apartments will be low-income housing. “People living downtown is what brings the area vibrancy,” City Councilman Steve Hansen said in the Bee story. “When you live in a place, you’re less likely to tolerate the trash not being picked up or other issues. It’s a place that people want to take ownership of.”

Au contraire Mr. Councilman. The best way to kill retail is to surround it with low income residential housing. While Sacramento has claimed for years it wants to create a local market with more residential units in downtown, the low-income component kills this concept. People spend money where they live. But if all of the residents are low income and have no money, what’s the real goal?

People living downtown on government assistance or in public flop houses are not spending money at the restaurants, or shopping. And the “mixed-use” apartment projects the city has been pushing for several years located over bars and restaurants have been a total failure.

And that is because the city should not be in the development business.

“The city has been working for decades to redevelop this bleak stretch of downtown’s historic shopping thoroughfare,” the Bee said. “But the plans today are farther along, and more specific, than they have been before.”

Promises, promises. The question really is, which developer will reap the benefits from rebuilding along K Street, in business and in bed with the city?

The answer is: “D&S Development and CFY Development were granted control of the properties nearly three years ago by the city, which had spent tens of millions of dollars acquiring them,” the Bee reported. “After wrangling with multiple financing plans and the persistent economic downturn, the development team devised a workable project.”

The City Council’s social and political policies to artificially mandate subsidized housing and discourage market rate housing has actually made housing in the central city much more expensive than it should be, and completely unrealistic for buyers. Sacramento’s neighbors, Placer County, El Dorado County and West Sacramento are doing so well compared to floundering Sacramento because these jurisdictions don’t have to finance 80 percent of a development project just to get something started.

Sacramento’s downtown has matured substantially in the past two decades with restaurants and entertainment on nearly every block. However, the blighted K Street has floundered under every mayor, as has any riverfront development.

About Sacramento

With 450,000 residents in the city of Sacramento, and 1.7 million residents in Sacramento County, Sacramento is a good-sized city, but not a metropolis. The obsession by city officials to turn Sacramento into a world-class city is now costing taxpayers greatly. But who really wants Sacramento to become a sizable, “big” city — politicians or residents?

Seattle has a municipal population of 602,000 and a metropolitan area population of 3.3 million, which makes it the 25th most populous city in the United States. Phoenix has 1.5 million residents, and the Phoenix metropolitan area is the 12th largest metro area by population in the United States with 4.2 million residents.

Rarely do I hear a Sacramento resident state a desire for Sacramento to become bigger and more populated. It’s always a politician expressing interest in making Sacramento bigger. And almost always, it’s from a politician with grand aspirations for higher office, using Sacramento as a starting-off point.

Sacramento has had its share of big industry but mostly thrives on small businesses, entrepreneurs and government employees. With more than 100 neighborhood associations in Sacramento, each of our neighborhoods has more of a town feeling. And in truth, our City Council representation reflects more of a town council.

World-class

The best definition I have found of a “world-class city” comes from Seattle journalist Bill Virgin,who tracks business and economic trends. “World-class business cities are those where strategic and tactical decisions are made on everything from new plant investment to developing new markets and products,” Virgin explained. “They’re the cities others watch and react to. World-class business cities are not guaranteed exclusivity in producing the next wave of influential products, technologies and companies – but they’re a more likely incubator for them. And those products, technologies and companies are where new jobs come from.”

Sacramento is not strategically, tactically or decisively developing new markets or products, or putting in new plants for any industry.

In fact, Sacramento is doing the opposite. World-class cities are not driven by how many restaurants you have downtown or how big your sports arena is. The big cities with the Fortune 500 businesses and companies are business friendly and defined as “world class.”

But, Sacramento’s downtown already has an unusually large low-income apartment component, as well as adult group homes. There are panhandlers, drunks and druggies, nuts and mentally-ill, louts, hustlers, career loiterers, and teenage moms all over downtown, just hanging out on the streets. Most live downtown in government subsidized apartments and others use their government subsidized light rail pass to get downtown.

Last week I was followed to my car by one of these crazies. The week before I was followed to the Capitol by another nut. This happens to me frequently. My office is located next door to a scuzzy bar and subsidized housing apartment.

Perhaps Councilman Hansen can explain how more 60 percent subsidized housing will be good for Sacramento, or how this fits anyone’s view of “world-class.”

(photos from Sacramento Press and Hi-Lo blog, because the link to the Sacramento Public Library for historic photos no longer works)

Redevelopment fallout: Lawmakers impose big new taxes

CalWatchdog Staff — Tue, 05 Mar 2013 17:19:29 +0000

March 5, 2013

By Katy Grimes

SACRAMENTO — SB 391 is the California Stamp Act.

The original Stamp Act was imposed in 1765 and helped spark the American Revolution against British tyranny. According to History.org, “The new tax was imposed on all American colonists and required them to pay a tax on every piece of printed paper they used.”

British King George III is long gone. But state Sen. Mark DeSaulnier, D-Contra Costa, author of SB 391, seems to be following in his footsteps. DeSaulnier says his new bill will create a permanent funding source for affordable housing.

SB 391, titled the California Homes and Jobs Act of 2013, is legislation “that will create jobs while building affordable places for Californians to live,” DeSaulnier’s website said. “Senate Bill 391 will get California building again to create 29,000 jobs annually and help businesses attract and retain the talent that fuels California’s economy.”

According to DeSaulnier, SB 391 would:

* Put a small ($75) recordation fee on real estate transactions, excluding home sales. This fee will generate an estimated $500 million in state seed money each year without creating new debt. It would be used to leverage an additional $2.78 billion in federal and local funding and bank loans annually.

* Deploy these dollars in California communities through a successful private/public partnership model.

* Build safe and affordable single-family homes and apartments for Californians in need, including families, seniors, veterans and people with disabilities.

* Reduce homelessness, resulting in significant savings to taxpayers and reducing strain on our health and criminal justice systems.

Tax royalists

SB 391 is a re-do of last year’s SB 1220, authored by DeSaulnier and Sen. President Pro Tem Darrell Steinberg, D-Sacramento. SB 1220 failed to get enough votes in the Senate.

SB 391 would impose a $75 “fee” — really a tax — on every document recorded, unless it is recorded in connection with a sale. According to the County Recorder Association’s opposition last year to SB 1220, the $75 tax would mean more than 300 document types would be subject to the tax, including mining claims, homestead declarations, refinance mortgages, reconveyance documents for paying off a loan, powers of attorney, lien releases, affidavits and a host of other documents requiring legal recording with the state.

The similarity to the 1765 Stamp Act is clear.

The tax royalists in the Legislature also expect to enjoy spending a large new revenue stream. “It is estimated that this bill will generate an average of $525 million per year for the [Housing Opportunity and Market Stabilization] Trust Fund, ranging from $300 million per year in low-volume years to $750 million per year in high-volume years,” the bill analysis for SB 1220 said.

“The author calls this the ‘Homes and Jobs Act.’ Unfortunately, SB 391 will provide little of either,” said David Wolfe, legislative director for the Howard Jarvis Taxpayers Association. “A $75 recording fee on a multitude of real estate documents to provide affordable housing is nothing more than wealth redistribution. It is a clear and inappropriate tax increase to target existing property owners with new fees when the real estate market is just emerging out of the depths of recession. If affordable housing is an important priority to the Legislature, we suggest it be funded out of our record $102 billion General Fund.”

The redevelopment connection

The analysis for SB 1220 explained: “Until 2011, the Community Redevelopment Law required redevelopment agencies to set aside 20 percent of all tax increment revenue to increase, improve, and preserve the community’s supply of low and moderate income housing available at an affordable housing cost. In fiscal year 2009/10, redevelopment agencies deposited $1.075 billion of property tax increment revenues into their Low and Moderate-Income Housing Funds. With the elimination of redevelopment agencies, this source of funding for affordable housing is no longer available.”

Wasn’t the plan behind the elimination of redevelopment agencies to cut state spending to help balance the state budget?

For a deeper understanding of what was involved in “increasing, improving and preserving the community’s supply of affordable low and moderate income housing,” the SB 1220 analysis tells where and how redevelopment money was spent:

“Current law establishes a number of programs at the Department of Housing and Community Development (HCD) and the California Housing Finance Agency (CalHFA) to make housing more affordable to California families and individuals, including the following mainline programs:

“Multifamily Housing Program, which funds the new construction, rehabilitation, and preservation of permanent and transitional rental homes for lower income households through loans to local governments, non-profit developers, and for-profit developers.

“Joe Serna, Jr. Farmworker Housing Program, which funds the development of ownership or rental homes for agricultural workers through grants to local governments and non-profit organizations.

“Emergency Housing Assistance Program, which funds emergency shelters and transitional homes for homeless individuals and families through grants to counties and non-profit entities for rehabilitation, renovation, expansion, site acquisition, and equipment.

“CalHome Program, which funds downpayment assistance, home rehabilitation, counseling, self-help mortgage assistance programs, and technical assistance for self-help and shared housing through grants and loans.

“California Homebuyer Downpayment Assistance Program, which aids first-time homebuyers with down payment and/or closing costs.”

But it’s also worth remembering that redevelopment commonly used eminent domain to seize the property of middle-class homeowners and businesses, then give that property to wealthy developers. Jose’s Muffler Shop was bulldozed, Jose given a fraction of what his property was worth, to build a Big Box store.

Gov. Jerry Brown’s decision in February 2011 to kill redevelopment in California was met with significant resistance from redevelopment agencies and California lawmakers. But it’s like a whack-a-mole game. Every time something is cut from the budget, it pops up under a new name, with a new funding source.

County Recorders oppose tax increase

The County Recorders Association of California Legislative Committee is opposing this bill, just as it opposed SB 1220. According to the County Recorders, the current recording fees vary by county.

“Purchasing a home is often one of the biggest financial decisions people will make in their lifetimes,” said Kammi Foot, Inyo County Recorder. “For the average Californian, there are several documents that may need to be recorded after they purchase their home. Imposing a $75.00 fee on each document would add to the already substantial expense. The Legislature should carefully weigh the significant financial burden that that this fee would place on ordinary Californians.”

SB 391 would weaken the integrity of the land records system, the cornerstone of our free enterprise system, Foote said. “Any impediment or disincentive to record documents would diminish the public’s ability to prove certainty of title.”

Foote explained mining claims are a great example of how this bill would negatively affect the public. “To hold a claim for mineral rights located on public land, the claimant is required to record certain notices annually. If a person cannot afford to record this document every year, they lose their claim. An increase of the fee from $14.00 to $89.00 is an increase of over 600 percent.

“SB 391 requires County Recorders to collect fees for a function their office does not perform,” Foote added. “If a Californian cannot afford to pay a recording fee, they may lose the ability to prove ownership to their own property, one of the mainstays of our free enterprise system.”

Is it a jobs bill? Where did DeSaulnier get 29,000 jobs?

DeSaulnier’s website claimed, “California business and housing advocates join forces to get California building again.” And, “Sen. Mark DeSaulnier’s SB 391 [would] create 29,000 jobs annually and build affordable homes for Californians.”

SB 391, Section 1, (i) of the bill reads, “Many economists agree that the state’s higher than average unemployment rate is due in large part to massive shrinkage in the construction industry from 2005 to 2009, including losses of nearly 700,000 construction-related jobs, a 60-percent decline in construction spending, and an 83-percent reduction in residential permits. Restoration of a healthy construction sector will significantly reduce the state’s unemployment rate.”

SB 391 “will create jobs while building affordable places for Californians to live, and get California building again to create 29,000 jobs annually and help businesses attract and retain the talent that fuels Californias economy,” DeSaulnier claims on his website.

But it was just such artificial inflation of the housing market by federal, state and local programs that produced the mid-2000s bubble, which burst and damaged much of the California economy.

There is no formal legislative analysis of SB 391 yet. But one Senate staffer, who asked to remain anonymous, told me the 29,000 jobs apparently are a “loose assumption” and “not scientific,” and was provided by the California Department of Housing and Community Development.

The bill language requires that “the fees, after deduction of any actual and necessary administrative costs incurred by the county recorder in carrying out this section, shall be sent quarterly to the Department of Housing and Community Development for deposit.”

Federal funding

Apparently another significant aspect of the motivation for SB 391 “is the billions in federal and private funding needed for affordable home construction,” said Gary Toebben, president and CEO of the Los Angeles Area Chamber of Commerce, on DeSaulnier’s website.

“Millions of Californians are caught in a perfect storm where mortgages remain out of reach, home financing is more restrictive than ever, and the foreclosure crisis has driven more people to the rental market, pushing rents to record levels,” said Shamus Roller, Executive Director of Housing California. “The California Homes and Jobs Act will build safe and affordable single-family homes and apartments for Californians in need, and provide stable living environments for families, seniors, veterans, people with disabilities and those experiencing homelessness.”

“There is an affordable homes shortage in our state, and we cannot turn our back on the millions of Californians without a stable living environment,” said DeSaulnier. “SB 391 will not only create jobs now, it will provide long-term benefits to our state.”

But at what cost? How many jobs will the fee-tax kill? Would another real-estate bubble be popped in a few years, repeating the folly of the mid-2000s? How are poor people helped if they take out mortgages they can’t afford, then a couple of years suffer through foreclosure?

SB 391 is co-authored by state Senators Lou Correa, Jerry Hill, Mark Leno, Ted Lieu and Fran Pavley; and by Assembly members Toni Atkins, Raul Bocanegra, Tom Ammiano, Richard Bloom, Susan Bonilla, Rich Gordon, Kevin Mullin, Sharon Quirk-Silva and Norma Torres.

The 1765 Stamp Act was so onerous that it was lasted only a year before it was repealed. If passed, the California Stamp Act, SB 391, might meet a similar fate.

Enviros Force Lucasfilm out of Marin

CalWatchdog Staff — Wed, 11 Apr 2012 13:58:34 +0000

April 10, 2012

By Katy Grimes

After 25 years of fighting with Marin County residents, film maker George Lucas and Lucasfilm, the brains and talent behind the Star Wars movies, took Marin County by surprise when his company announced that it has finally pulled the plug on plans to build a new filmmaking facility.

Environmentalists and some residents fought against the Lucasfilm plan to build a 269,000 square foot building, and apparently the hundreds of jobs the new moviemaking facility would generate.

However, there is some good news–Lucasfilm plans on selling the property to a developer for low-income housing.

Lucasfilm said they had other opportunities and still planned to build a new moviemaking plant and provide hundreds of jobs to another location… no word if the company is even staying in California.

Congratulations to Marin County for your progressive standards, and for standing up for property rights.