Enough blame for everyone with Oakland housing crisis

Good morning! The governor gives his State of the State address today and it’s a pretty good bet he’ll discuss housing and the shortage of affordable options.  

From the Mexican border to the Bay Area, local governments along the California coast fret about short-term rental operations such as Airbnb eating up already limited housing stock.

In response, homeowners who use such rentals to deal with the high cost of living fire back with claims that they’re being scapegoated for local officials’ ineffective response to the Golden State’s affordable housing crisis.

In Oakland, these arguments keep growing more intense as tech workers keep moving in. Uber’s plan to build a new headquarters in the city by 2018 only adds to city leaders’ concerns about housing costs.

But recent reports and surveys leave little doubt that in Oakland, both short-term renters and local officials bear responsibility for severe housing headaches.

CalWatchdog has more.

In other news:

• Agriculture: “Agriculture leaders expressed disappointment over President Donald Trump’s decision Monday to pull out of a 12-country trade deal that would have boosted exports from San Joaquin Valley farmers,” reports The Fresno Bee. 

• Regulation: “Under legislation passed in 2011, environmental lawsuits against mega-projects would face significant restrictions, forcing any litigation to take no longer than nine months. Instead, the Warriors’ case lasted nearly a year. Overhauling the environmental law, the California Environmental Quality Act, is a perennial issue at the Capitol, and the measure benefiting the Warriors arena was one of the most high-profile CEQA reforms in recent years. But the failure of the 2011 legislation to meet its stated goals reveals the difficulty lawmakers have had in making meaningful changes to the law.” The Los Angeles Times has more. 

• Politics: “Orange County could hold the key to Republican success nationwide with the fastest growing slice of the electorate, Asian American voters.” The Orange County Register has more.

• Poverty: California has the highest real poverty rate in the country, reports PolitiFact California.

Legislature:

• At the State of the State festivities.

Gov. Brown:

• Swearing in ceremony for state attorney general and State of the State address at 10 a.m. in the Capital.

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @SD_TaxFighters

The water contamination scandal in Flint, Michigan, triggered national outrage and prompted Congress last month to pass a bill rushing

The local regulators who knew about the severity of lead contamination and protected themselves but not the community are facing criminal charges. That’s because a high presence of lead in the blood is associated with low IQs and cognitive problems and can be devastating for infants and children.

Now a massive study by Reuters — based on federal health data from 21 states and broken down by ZIP code — points to at least 13 areas in California with problems as bad or worse than what is now seen in Flint, where 5 percent of tested children have elevated levels of lead in their blood. The national norm is 2.5 percent.

Oakland neighborhood has worst problem

The problem appears worst in the Oakland community of Fruitvale (ZIP code 94601), where 7.57 percent of children had high levels of lead.

Next is the Seaside-Sand City area (ZIP 93955) east of Monterey, where the rate was 7.44 percent.

Nine ZIP codes were in the Fresno area, which has already had a lead scare this year, as CalWatchdog reported in August. The results were worst in Selma, 15 miles southeast of Fresno (ZIP 93662), where 6.62 percent of children had high levels of lead in the their blood.

The last two California communities with lead contamination problems worse than Flint were in Los Angeles County.

In south-central Los Angeles (ZIP 90011) in an area east of the 110 Freeway and south of the 10 Freeway, the rate of children with elevated lead in their blood was 5.28 percent.

In the Rosemead-South San Gabriel area (ZIP 91770), the rate was 5.17 percent.

The federal health statistics are mostly based on blood samples from at least 500 children in each ZIP code for five- or 10-year increments ending in 2015. California did much better that most of the 20 other states whose data was studied. In total, 278 ZIP codes had much worse lead problems than Flint, with the biggest concentration in industrial centers in the Midwest and in areas with a history of heavy mining.

Flint fits that profile. But its problems were at the least exacerbated by city officials’ 2014 decision to stop bringing in water from the Detroit system in favor of a switch to cheaper local sources, including the heavily polluted Flint River.

When lead contamination problems are found in the United States, the problem is usually exposure to lead-based paint, especially in older housing, and from old water pipes.

Official misconduct in Fresno endangered residents

Such pipes caused the lead scare in Fresno earlier this year, but official misconduct was part of the problem. In January, after many reports of discolored water, Fresno officials began reviewing how the city water agency dealt with complaints. They discovered that a water official named Robert Moorhead had failed to pass along as many as 1,400 complaints from 2005 to 2011 about problems with water from the treatment plant in northeast Fresno that he managed. Moorhead, who was fired for undisclosed reasons in 2011, has denied wrongdoing.

But a subsequent city probe found evidence of excessive lead in pipes in 51 of the first 280 homes it inspected, or 18 percent. Eventually, city officials warned residents of the 93710, 93720 and 93730 ZIP codes that they could have pipe problems and thus potential exposure to excessive lead.

But the Reuters study should offer some relief to residents of those ZIP codes. None were found to have Flint-level contamination rates.

New laws going in effect

Good morning. Happy Hump Day. Your Morning Read author just flew back from D.C. last night from a holiday visit. But we’re back online, with the new year, and new laws, rapidly approaching.  

Gov. Jerry Brown signed 898 bills into law last year. Most start on Jan. 1, but others are going into effect in coming years. The majority of new laws deal with minutiae that’s unlikely to affect most residents, but a number of them will have real-world consequences for broad numbers of people – on issues ranging from new driving rules to patients’ access to experimental medications.

CalWatchdog has a sampling of some of the significant new laws from last session, which range from legalized lane splitting, to registering ammo purchases, to higher minimum wages and unpaid leave. 

In other news:

• Speaking of stricter gun and ammo laws: “(S)ales of semi-automatic rifles have more than doubled in California over last year,” reports the The San Jose Mercury News/AP. 

• Pensions: “The California Public Employees’ Retirement System has not had a good 2016. Its investment returns were microscopic, it faced sharp criticism from a prominent financial website for alleged unethical behavior and Gov. Jerry Brown had to intervene to prevent the nation’s largest pension fund from continuing to enable late-career pension spiking by public employees. But year’s end brought good news of a morbid nature to CalPERS, the California State Teachers’ Retirement System and all agencies with actuarial responsibilities: It appears that U.S. life expectancy has plateaued.” CalWatchdog has more. 

• Ghost Ship Fire: “A review of public inspection records, city emails and interviews shows that the city of Oakland for more than a decade often failed to conduct safety inspections on illegally converted warehouses, even those that were well known. Without the inspections, the city could not require owners to bring the building up to code or force the residents out.” The Los Angeles Times has more.  

• Water: “The Sierra Nevada snowpack remains almost 30 percent below average for this time of year despite a boost from the weekend storm, state water officials reported Tuesday, as agencies begin snow surveys by hand throughout the mountain range.” The San Jose Mercury News has more. 

Legislature:

• Gone till January. 

Gov. Brown:

• No public events announced. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @JakeSaltzman1

State’s largest pension fund down since last year

Good morning!

Lots of ethics and campaign finance stuff to get to today, but first:

“The California Public Employees Retirement System – the nation’s largest – lost about 2 percent of its market value in the fiscal year that just ended, according to unofficial numbers published last week on the CalPERS website. This came despite doubled-down efforts to beef up its bottom line,” writes The Orange County Register.

In other news:

• “San Diego Rep. Scott Peters and his family have been involved in a series of donation exchanges with the families of other congressional candidates, apparently legal trade-offs that allowed more money to flow to each campaign than might be allowed under contribution limits,” writes The San Diego Union-Tribune.
• “State Controller Betty T. Yee, the chief fiscal officer of California, has agreed to $2,082 in fines to be paid to the state political watchdog agency to settle seven charges that her campaign committee was late in reporting contributions before the 2014 election,” writes the Los Angeles Times.
• “An Oakland company is facing $114,400 in state and city fines for laundering campaign contributions to several former mayoral and City Council candidates, including Councilwomen Rebecca Kaplan and Desley Brooks, officials said Monday,” writes SF Gate.
• “The money is piling up on behalf of campaigns for 17 statewide ballot measures — the most since March 2000. And when it comes to big backers, Big Pharma is far and away the towering force,” writes The San Jose Mercury News. 

Legislature:

• Gone ’til August.

Gov. Brown:

• On vacation.

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New followers: @AngeRosie @PacMediaGuild

Soda Tax just more revenue?

Good morning! Happy Monday.

What is being billed as a “common sense” ballot initiative to tax sodas one cent per ounce in Oakland has no hard requirement for how the money should be used. 

While advocates say it’ll fund programs fighting obesity-related public health problems, the lack of specificity in how the money will be spent raises questions about the city’s decades-long financial troubles. 

CalWatchdog has more. 

In other news: 

• The choice of Madeleine Albright — who served as the first female U.S. secretary of state — as a commencement speaker has caused a backlash at the all-woman Scripps College in Claremont, reports the Los Angeles Times. Some students have denounced her as a “war criminal,” while others oppose her position that “there’s a special place in hell” for women who don’t support Democratic presidential candidate Hillary Clinton.  
• While Republican legislative leaders have yet to endorse presumptive GOP presidential candidate Donald Trump, San Diego Mayor Kevin Faulconer is holding out as well. According to The San Diego Union-Tribune, Faulconer doesn’t support the business tycoon’s “divisive rhetoric.”
• With CA Attorney General Kamala Harris looking increasingly likely to be the top vote getter in the primary for U.S. Senate, the real battle is for second place, reports Capitol Weekly. 
• More digging from The San Diego Union-Tribune into Rep. Duncan Hunter’s campaign finance disclosures show purchases of groceries and gas. While these are not entirely uncommon in campaign finance disclosures, they do raise red flags after the Alpine Republican purchased “video games, oral surgery, private school tuition, a garage door and unspecified items at a Coronado surf shop” with campaign funds. 

Assembly:

– In at 1 p.m. Packed Revenue and Taxation Committee hearing at 2:30 p.m. 

Senate:

– In at 2 p.m. Packed Appropriations Committee hearing at 10 a.m. 

Gov. Brown: 

– No public events scheduled. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New followers: @FreeVoterBlog @MattShupePR

The Chargers were given a one-year option to move — an option that seemed far more like an unserious public-relations ploy to suggest that they hadn’t made their minds up than a sign they actually might not leave. Team owner Dean Spanos and his stadium point man, Mark Fabiani, have an awful relationship with the San Diego establishment, starting with Mayor Kevin Faulconer. If the Chargers choose not to leave San Diego, the Oakland Raiders would then have a one-year option to move.

This followed a wild day at the NFL owners’ meeting in Houston. The NFL relocation committee initially voted 5-1 to support the Chargers’ and the Raiders’ plan to build a stadium in Carson, move their teams and lay claim to the Los Angeles market. That was followed by subsequent votes of all 32 owners in which 20 backed requiring the Chargers to abandon their partnership with the Raiders and share a stadium in Inglewood with the St. Louis Rams, and 12 backed the Carson plan.

As the day wore on, support emerged for a third option: clearing the Rams to move to Inglewood and build a stadium there, while allowing the Chargers to join the Rams in a year or two after reviving talks with San Diego officials on how to fund and build a billion-dollar-plus NFL stadium. That morphed into the decision to give the Chargers an option to stay in San Diego with a one-year window to join the Rams in Inglewood.

Here’s more from the Los Angeles Times:

Until the stadium is complete, the Rams are expected to play temporarily at the L.A. Memorial Coliseum. If the Chargers join them, it’s unclear where they will play, though the NFL sees Angel Stadium, Dodger Stadium and even the Rose Bowl, which declined last year to bid on hosting a team, as potential options. …

 

The maneuvering between the projects included Disney Chairman and Chief Executive Robert Iger joining the Carson project pending its approval. In the weeks leading up to the vote, he vigorously lobbied for Carson, making phone calls to NFL owners, as did Carolina Panthers owner Jerry Richardson, who orchestrated Iger’s involvement. Iger presented Carson’s plan to owners Tuesday, along with Davis and Spanos.

Chargers assured they’ll share in Inglewood bonanza

According to many reports, the key to the NFL owners’ landslide vote was assuring the Chargers that they wouldn’t be in a completely subordinate position in sharing the Inglewood facilities with the Rams. Moving to Los Angeles would be much less of a bonanza for the Spanos family if it had to pay heavy rent and was shut out of many of the ancillary ways that stadiums and big mixed-use development projects make money. The Times put it this way:

In the last several days, fellow owners worked behind the scenes to bring Kroenke and Spanos together in an accord that allows them to be equitable partners in the Inglewood stadium. The only shared stadium in the NFL is in East Rutherford, N.J., which is home to the New York Giants and Jets.

So what’s next for the Raiders?

In an odd interview Tuesday night, owner Mark Davis suggested he might take his team to Great Britain or some other locale far from the western division of the American Football Conference; his team’s lease is up at what used to be known as the Oakland Coliseum.

But coverage in the Bay Area has focused on the likelihood of the NFL pressuring the Raiders to play in Santa Clara at the 49ers’ gleaming 2-year-old Levi’s Stadium — with the sort of subservient relationship to the 49ers that the Chargers hope to avoid in Inglewood.

Some see a plan in which San Diego does much better than the cities which have hosted other NFL teams seeking new stadiums. In a commentary by David E. Watson, a San Diegan involved in the effort to build Petco Park, the Padres’ downtown baseball stadium, he says it’s unusual for “a professional sports team and league to pay for more than 60 percent of a new modern sports facility.”

Some see a plan that is vaguer and much costlier than it lets on. This is from Voice of San Diego:

Taxpayers could end up investing nearly $1 billion in the new Chargers stadium under the plan released this week by the mayor’s stadium task force, a Voice of San Diego analysis of the plan shows.

 

The analysis includes all the public money the task force said would need to go toward the stadium, plus the money to prepare the Mission Valley site for development and some costs the task force neglected. Most notably, the task force did not factor in the price tag to operate and maintain the facility every year – something that costs the city about $11 million a year at the current site.

Some see the proposal as a clever ploy to undercut the claims the Chargers will make to other NFL teams to win their support — 24 of the 32 teams must give their blessing if a franchise wants to relocate, and they don’t want the bad blood seen when the Colts fled Baltimore in the middle of the night in 1983. This is from Union-Tribune columnist Nick Canepa:

… if the franchise turns this down, it simply will mean it doesn’t want to stay here. Because there is enough for them to remain — maybe not L.A. money, but enough. After all, haven’t they always said their objective is to remain “competitive” with the rest of the teams in the NFL, not to make billions?

More of the same from San Diego political insider Peter Q. Davis:

Remember, the NFL and Chargers have claimed that their preference is for the team to remain in San Diego, provided our city puts forward a plan that meets or exceeds the competitive city.

The plan proposed this week does this, overwhelmingly.

But one way or the other, one thing is clear: Whatever the problems with its plan, San Diego has a serious proposal. In Oakland, there’s a $500 million gap in financing a stadium that officials can’t seem to finesse.  San Francisco Chronicle columnists Matier and Ross say they hear the Raiders’ plan is “gurgling blood.” Really.

Meanwhile, San Diegans who want to keep their team have an unlikely supporter: one of the most famous dropouts of the London School of Economics. Yes, it’s Mick Jagger. “We are having such a great time in San Diego. It’s so beautiful here. Why would anyone want to leave? Especially the Chargers,” Jagger said at a Sunday night Rolling Stones concert at Petco.

Seattle’s new $15 minimum wage starts to be phased in on April 1. That’s up from the $9.32 state minimum wage, which already is the highest (for a state) in the nation.

Seattle Magazine reported, “Small employers have seven years to pay all employees at least $15 hourly; large employers (with 500 or more employees) have three.”

The reason for the higher wage was explained on Mayor Ed Murray’s website:

A growing number of cities, including Seattle, are examining the costs and benefits of implementing citywide minimum wage laws. Citywide minimum wage laws offer local governments a powerful tool for helping low-income workers and families in their communities. Such measures also have significant impact on businesses and how they operate.

According to a Seattle publication, SHIFT:

Restaurants across the city are making the financial decision to close shop. The Washington Policy Center writes that “closings have occurred across the city, from Grub in the upscale Queen Anne Hill neighborhood, to Little Uncle in gritty Pioneer Square, to the Boat Street Cafe on Western Avenue near the waterfront.”

Of course, restaurants close for a variety of reasons. But, according to Seattle Magazine, the “impending minimum wage hike to $15 per hour” is playing a “major factor.” That’s not surprising, considering “about 36 percent of restaurant earnings go to paying labor costs.”

Washington Restaurant Association’s Anthony Anton puts it this way: “It’s not a political problem; it’s a math problem.”

San Francisco and Oakland

Last November, San Francisco voters passed a similar minimum-wage hike. CNN Money reported:

Under the new law, wages will rise to $11.05 on Jan. 1, then $12.25 in May before increasing every year until they reach $15 in 2018. After that, increases will be tied to inflation in the Bay Area.

At the same time, 82 percent of Oakland voters backed increasing the city minimum wage to $12.25 per hour.

The results so far have not been as dramatic as in Seattle. But the San Francisco Chronicle reported:

The 36 percent uptick that lifted Oakland’s minimum wage to $12.25 an hour this week is already transforming the city’s booming restaurant scene — but not in the way that politicians, activists and restaurateurs anticipated.

The wage increase puts more money in the pockets of most restaurant workers, but to keep pace with higher costs, some restaurants have upped menu prices by as much as 20 percent. Others have tacked on a mandatory service charge to the bill and eliminated tips for servers, potentially reducing the amount they earn.

Some wonder whether the higher prices and surcharges will turn off customers and blunt Oakland’s growing reputation as a foodie haven where 300 bars, cafes and restaurants opened last year.

Meanwhile, for the state as a whole, California’s minimum wage was raised to $9 from $8 last year, and will jump again to $10 on July 1, 2016.

“The City Council passed a law this month that requires private developers to set aside 1 percent of their project costs for public art. With dozens of developments in the works, the law could make Oakland one of the most arts-centric cities in the state, advocates said.”

According to Zillow.com, Oakland’s median house price is about $500,000. New developments would charge somewhat more than that.

So the new tax effectively increases the costs of these new houses by at least $5,000. And costs there ripple throughout the city. For that much, you could put a poor person in a small apartment for a year.

As to being “arts-centric,” why can’t artists fund their own works? And if not, then why doesn’t Oakland fund writers? We could use some tax subsidies, too. We could write poems to Oakland, such as:

Roses are red,
Violets are blue,
I had Oakland’s taxes,
How about you?

On the heels of a recently approved $15 minimum wage in Seattle, advocates for dramatically increased hourly wages sensed an opportunity to select a fresh target. That’s where L.A. comes in. Organizations including the Los Angeles Workers Assembly and Peoples Power Assemblies have begun drafting a measure that would put a $15 wage on November’s city ballot.

Activists’ experience in Seattle suggests that once a city votes in a mandatory wage boost, reversing the policy can be an extreme challenge. That even appears to be true during the time before increased wages are implemented. A business-led effort to repeal that city’s wage ordinance called Forward Seattle has run aground, failing to collect enough signatures to put a repeal plan before voters. That marks an end to organized opposition to the increase in wages, which takes effect gradually until topping out in 2017.

Hotel politics — and union gamesmanship?

Activists in L.A. had already singled out hotel workers for a planned hike in wages, almost doubling the rate to $15.37 an hour. Industry and business organizations reacted predictably. Lynn Mohrfeld, president and CEO of the California Hotel Association, observed that the scheme would only affect non-union hotels — stoking speculation that unions hoped businesses would encourage unionization to avoid the sudden leap in costs.

Mayor Eric Garcetti, who had been cagey about singling out hotels when his primary opponent Wendy Greuel called it a “living wage,” now supports the idea. Garcetti has said he would sign an ordinance bringing large hotels’ minimum wages to $15.37, but is only “reviewing” the current, broader proposal for a blanket $15 wage, according to a spokesman.

One reason activists looked to Los Angeles after Seattle is simple: California has already been successfully targeted for blanket minimum wage hikes. On July 1, Assembly Bill 10 went into effect, raising the state minimum wage to $9 an hour. On the first of the year in 2016, that figure will rise again to $10. Gov. Jerry Brown signed the bill last fall, giving activists a substantial amount of lead time in planning their next move.

L.A. isn’t the only city where minimum wage increases are on the march. Just this month, San Diego skipped over voters entirely and opted to raise wages through its City Council. Todd Gloria, the council president, initially wanted to put the matter on the ballot, but ended up deciding to impose it directly on a 6-3 partisan vote, with all Democratic members voting yes and all Republican members voting no. San Diego will hike the minimum wage to $9.75 on the first of the new year, to $10.50 at the start of 2016, and to $11.50 as 2017 rings in. Starting two years later, the minimum wage will rise along with inflation.

Powerful coalition builds in S.F.

Meanwhile, in San Francisco an overwhelming coalition of labor, interest and some business groups succeeded in placing on their city ballot a gradual wage increase to $15 by 2018. Although even San Francisco’s Chamber of Commerce has lent its symbolic approval to the measure, restaurateurs and hospitality industry leaders expect the hikes will hit them hard.

Finally, East Bay mayors have recently hatched a plan to coordinate their minimum wage increases. A wage proposal on Oakland’s upcoming ballot is poised to trigger a round of hikes that would end up reaching from Richmond to Berkeley to Emeryville and beyond.

Liberals, union leaders and labor activists were disappointed when Congress opposed a national minimum wage hike — a marquee initiative drummed up by high-ranking Democrats to shift attention away from Obamacare’s then-humiliating struggles. But the subsequent shift to state and local activism has demonstrated the effectiveness of politics practiced closer to the ground.

With momentum behind them, L.A. organizers have settled on an accelerated timetable for phasing in the hikes. Small businesses and nonprofits would get less than two years to prepare for the increase, while large businesses would be hit immediately.