Proponents say government control will lead to cheaper utility rates and faster adoption of renewable energy.

This month, more than 950,000 homes and businesses in Los Angeles and Ventura will shift to a community-choice program – the Clean Power Alliance. It will be the state’s 20th and largest community-choice provider, which will then provide power to nearly 3.6 million customers in the Golden State.

Those numbers could drastically grow in coming years. Both San Diego Mayor Kevin Faulconer and Dianne Jacob, chair of the San Diego County Board of Supervisors, have endorsed community-choice programs. Many other local governments are watching how the programs work in places that have already adopted them.

SDG&E says it welcomes infrastructure-only role

To the surprise of many industry watchers, one of the state’s three giant investor-owned utilities isn’t fighting this development.

After San Diego began taking steps toward a community-choice program last year, San Diego Gas & Electric made clear its interest in getting out of energy procurement. Earlier this month, Kendall Helm, SDG&E’s vice president of energy supply, told the Los Angeles Times that the decision was straightforward.

“We don’t think we should be signing big, long-term contracts for customers that have made a conscious choice to be served by a different” provider, Helm said. “We think our primary role and our primary value is in the safe and reliable delivery of that power.”

Pacific Gas & Electric and Southern California Edison continue to defend the status quo and to work with the California Public Utilities Commission and SDG&E on “exit fees” assessed to departing customers to make sure they help pay for maintaining energy infrastructure. But PG&E, now in bankruptcy and facing possible dissolution by the CPUC because of repeated scandals, has dropped its once-aggressive opposition to the very idea of community-choice energy, including sponsoring a failed state ballot measure on the issue in 2010.

CPUC president fears programs could fail, cause havoc

But California’s most prominent regulator worries that adoption of community-choice’s programs could have huge unintended consequences.

CPUC President Michael Picker told the San Francisco Chronicle last spring that he worries about things going haywire.

“You’re going to have some failures,” Picker said. “Electric markets can be brutal. So what happens to the customers, midyear, if the company or the program goes away? Where do those customers go?”

In a May op-ed in the Sacramento Bee, Picker urged local officials pursuing community-choice to act with care.

“The last time California deregulated electricity, it did so with a plan, however flawed. Now, electricity is being deregulated de facto, through dozens of decisions and legislative actions, without a clear or coordinated plan,” he wrote. “If California policymakers are not careful, we could drift slowly back into another predicament like the energy crisis of 2001.”

Picker warns that managing California’s power grid requires expertise and will become increasingly difficult as new clean-energy mandates kick in and as new technologies come to the fore.

But these warnings so far don’t seem to resonate with the statewide business community, which so far has not taken a strong, consistent stand on community-choice.

Some local groups have, however. The San Diego Regional Chamber of Commerce, for example, questions the assumptions that community-choice will lead to cheaper utility rates and increased use of clean energy.

A ruling this month by the 9th U.S. Circuit Court of Appeals which holds it is unconstitutional to ban homeless people from sleeping on the streets is likely to complicate the attempts to crack down on homelessness problems by local governments in California.

While the ruling involved a 2009 law adopted by Boise, Idaho, it is binding on California, which is one of the states under the 9th appellate court, which is based in San Francisco.

“[J]ust as the state may not criminalize the state of being ‘homeless in public places,’ the state may not ‘criminalize conduct that is an unavoidable consequence of being homeless — namely sitting, lying, or sleeping on the streets,’” Judge Marsha Berzon wrote for a three-judge panel.

The finding that the law is a cruel and unusual punishment under the Eighth Amendment was welcomed by activists who have long argued that such restrictions make being poor a crime.

Maria Foscarinis, executive director of the National Law Center on Homelessness & Poverty, told the Idaho Statesman that “criminally punishing homeless people for sleeping on the street when they have nowhere else to go is inhumane, and we applaud the court for holding that it is also unconstitutional.” Her group provided an attorney to the handful of Boise homeless men and women who sued over the city’s law.

If Boise does not appeal the ruling, the 9th Circuit will have expanded on the protections for the homeless that it created in 2007. The appellate panel ruled then that Los Angeles could not ban people from sleeping outside when shelters were full.

Legality of living in cars is next battleground

Meanwhile, the next fight over homeless rights in California has already emerged. It involves regulations in many cities that have the de facto effect of banning people from sleeping in their vehicles, even if the practice is not specifically singled out.

In Los Angeles, for example, a city ordinance that bans overnight parking in residential areas and a growing number of such restrictions in commercial areas have made it increasingly difficult for vehicle dwellers to find anywhere to sleep. This has made life difficult for the estimated 15,000 people who live in their cars, trucks or recreational vehicles in the city. The policy prompted sharp criticism from some quarters this spring over a perception that City Hall was insufficiently sympathetic to those without shelter.

City officials in San Diego and Santa Barbara are going in the opposite direction, starting trial programs in which car dwellers are allowed to use a handful of designated parking lots overnight – so long as they meet a handful of rules meant to preserve public safety and to minimize littering and public defecation and urination.

But San Diego may have to expand its program or develop other new policies as well. Last month, federal Judge Anthony Battaglia issued an injunction banning the city from ticketing people for living in their vehicles.

Unlike in the other high-profile federal cases involving city laws and homelessness, Battaglia’s argument wasn’t based on the idea that penalties which appeared to single out the homeless were cruel and unusual.

Instead, he concluded that “plaintiffs have shown a likelihood of success on the merits of their claim that the ordinance is vague because it fails to alert the public what behavior is lawful and what behavior is prohibited.” He noted that some people were given tickets merely for reading books in their cars.

The injunction is not permanent, but Battaglia indicated he is likely to make it so in coming months.

A

At issue was Proposition B, approved by San Diego voters in 2012 by a nearly 2-to-1 margin. The measure required that all city employees who began their jobs on or after Jan. 1, 2013 – except for police officers – get 401(k)-style retirement benefits instead of the defined benefit pensions that left San Diego finances in near ruins more than a decade ago because of City Council decisions to underfund them.

But San Diego employee unions and the California Public Employees Relations Board (PERB) argued even before the measure reached the ballot that it violated state collective bargaining laws because the campaign for the pension changes was led in 2011 and 2012 by then-San Diego Mayor Jerry Sanders. He claimed that his role in the Prop. B campaign was as a private citizen – not as mayor – and thus he faced no obligation to collectively bargain with public employee unions before touting the direct-democracy initiative.

Before reaching the state high court, a trial judge first disagreed with Sanders and San Diego, then an appellate court sided with the city. But all seven state justices joined in a ruling that found that city leaders had not met their requirement to first seek changes at the bargaining table before seeking to impose them through direct democracy.

“Allowing public officials to purposefully evade the meet-and-confer requirements of [state collective bargaining rules] by officially sponsoring a citizens’ initiative would seriously undermine the policies served by the statute: fostering full communication between public employers and employees, as well as improving personnel management and employer-employee relations,” the court held. It ordered the case be sent back to the appellate court to determine how San Diego should untangle its mess.

Elected leaders may be less likely to lead ballot fights

The decision seems likely to change the nature of direct democracy going forward – at least at the local level of California government.

Direct democracy, brought forward in California by Gov. Hiram Johnson in 1911, has greatly benefited from the active participation of elected officials. They are often more able to win public approval of sweeping reforms through the ballot box than they can through the Legislature or city or county governing boards, which are often allied with deep-pockets special interests.

For example, Earl Warren – the former U.S. Supreme Court chief justice and California governor – repeatedly led ballot campaigns as Alameda County district attorney that directly affected many areas of California life.

But similar efforts by a politician in 2018 would face a different kind of vetting than Warren faced. Going forward, any ballot proposal that affects public employees in any way is subject to a potential court veto if it can be established that it were led by elected officials who didn’t live up to their collective bargaining obligations.

The California PERB Blog’s analysis noted that justices “did leave open the possibility that government officials can separate their official actions from their private activities. However, the court did not provide any guidance on what a government official would have to do to make such a distinction clear.”

It’s just the latest piece of evidence on the state’s housing crisis, as residents confront a shrinking supply of homes and rising costs, leading many to wonder if they’d be better off elsewhere.

“When you then ask them where they would relocate, they’re often throwing up their hands,” poll director Mark DiCamillo said, according to the LA Weekly. “Millennials seem to be the most likely to say they’d consider leaving.”

The uneasiness about the market appears most dramatically in the Bay Area, where 65 percent of those polled said they’re facing an “extremely serious” housing affordability problem.

But even in Los Angeles and San Diego, 59 percent and 51 percent, respectively, have considered re-locating over housing affordability issues.

The IGS poll sampled 1,200 registered California voters from late August through early September.

In Los Angeles specifically, a recent analysis found that a person needs to earn over $109,000 per year to afford a two-bedroom apartment in the city, with the assumption that renters are spending 30 percent or less of their income on housing.

Across the entire state, the median rent for a one-bedroom apartment is $1,750 and a two-bedroom averages $2,110.

“These are very dramatic findings,” DiCamillo added, according to the Mercury News. “In every region of California, the rising cost of housing has crept into the consciousness of voters.”

The median price of a single-family home rose around 7 percent year-over-year to $565,330 in California this past August – and in Santa Clara County, the heart of Silicon Valley, the median price jumped a shocking 17.9 percent year-over-year to $1,150,000. 

The state Legislature is taking notice, passing 15 bills this month relating to housing affordability, seeking to increase the pace at which housing construction takes place.

For example, Senate Bill 2 and Senate Bill 3 provide new funding for low-income housing, while SB35 attempts to streamline the approval process for construction in municipalities that fall behind Sacramento’s housing goals.

While California boasts some of the highest earners, it also has the nation’s highest poverty rate when housing costs are factored in, resulting in a heightened sense of urgency in a state that has some of the biggest regulatory hurdles for new home building.

SACRAMENTO – Even Republicans admit the state GOP is something of a rudderless ship these days. The party doesn’t control any constitutional offices. Democrats have supermajorities in both houses of the Legislature. Assembly Republican Leader Chad Mayes of Yucca Valley, is the target of a grassroots effort to force him from his leadership post after he backed a Democratic bill to expand the cap-and-trade system for 10 years.

Meanwhile, the national Republican Party has become anathema to ethnically diverse California, especially after President Donald Trump doubled down on his initial comments about Saturday’s white-supremacist march in Charlottesville, Virginia. On Tuesday, the president assured the media that there were some “very fine people on both sides” at the protests. Yes, the California party’s predicament is dismal, especially from a recruitment standpoint.

Yet Tuesday night, one prominent GOP official detailed a positive direction for the party. San Diego Mayor Kevin Faulconer says he isn’t running for governor, but gave a major speech to the Commonwealth Club in San Francisco regarding the future of the California Republican Party. He wasn’t there “to offer suggestions about what we ought to do,” he said. “I’m here to tell Republicans what we’ve already done in San Diego.”

He described it as a call to action – an opportunity to rebuild the party centered on the theme of “fixing California.” Faulconer detailed five themes on which the party should unite as a way to win over new generations of voters. The first of them involves freedom. “Not only is individual liberty part of California’s heritage, it’s a classic conservative principle – one that Republicans have watered down to our own detriment,” he said. “People have stopped seeing the GOP as the party of freedom. They see it as the party of ‘no.’”

He even singled out a freedom theme that could be controversial in a socially conservative party: freedom of sexual orientation. But he contrasted his vision with that of the Democratic Party, “which has organized itself around the proposition that an individual’s most defining qualities are gender, sexuality and race.” He calls that a party based on differences, whereas he envisions a “New Republican Party” built around a set of common ideas.

“One of our biggest failures is that Republicans do not communicate our shared values to underrepresented communities,” Faulconer said. He pointed to his successful San Diego mayoral race: “Facing a Hispanic candidate in a city where just 25 percent of voters are registered Republican, I won more than 57 percent of the total vote – and close to 40 percent of the Latino vote. … Why? Because I campaigned in communities Republicans wrote off as lost – and Democrats took for granted.”

His second theme involved immigration. Faulconer said that Republicans are doing a poor job inviting new Americans to join the party of freedom and limited government. In fact, he said he wouldn’t even need to give such a speech if the GOP weren’t failing at that message. He called for welcoming immigrants, while acknowledging that the party can’t ignore the issue of illegal immigration. “We must push for efficient ports of entry and get smarter about border security,” the mayor said, while emphasizing the importance of treating nearby Mexico as “neighbors and economic partners.”

Faulconer’s third theme involved the environment, about engaging responsibly on conservation and climate-change issues with “plans that don’t plunder the middle class.” He again used his city as an example. “San Diego is now on a path to slash greenhouse gases in half and shift to 100 percent renewable energy – without a tax increase,” he said.

His fourth theme is for California leaders to focus on California issues, rather than “chasing the latest soundbite out of Washington, D.C.” He chided Sacramento Democrats, who he says “are suffering from what I like to call ‘outrage FOMO’ – a Fear Of Missing Out on the latest controversy that will allow them to score political points on social media and TV.” By contrast, Faulconer said the “New Republicans” need to focus on “the fundamentals of government service.”

That includes infrastructure. “The fact that 50 percent of California’s roadways are in poor condition is an absolute failure,” he said. “We have the nation’s second highest gas tax but some of the worst roads, with no guarantees that the taxes we pay at the pump will actually go toward fixing the problem.” But, for his fifth and final point, he focused on the overall need for “reform.” This theme involved the role of the state’s powerful unions in resisting reform.

“Too often Sacramento politicians are unwilling to say ‘no’ to entrenched special interests – at our expense,” he said. “California ranks in the bottom 20 percent of K-12 schools nationwide. Yet Democrats continue to side with unions against meaningful changes to improve student achievement.” He noted that “California falls dead-last in housing affordability in the continental United States” but “Democrats are blocking revisions to housing rules that were designed to protect the environment but that labor has hijacked for its own gain.”

He noted that California was “rated the worst state for business” because “lawmakers keep layering regulation on top of regulation until budding entrepreneurs are crushed, and only the biggest businesses survive.” He also pointed to the state’s massive pension debt and, again, used San Diego as an example, given that city’s successful voter-approved pension reform.

These reform themes echo talking points Republican leaders have traditionally made. And he was predictably pointed in his critique of Democrats, noting that their policies have resulted in “economic inequality; troubled schools; sky-high housing costs; failing infrastructure; and crippling pension debt.” Those problems have festered, he added, while Sacramento “pursues the kind of political fantasies that grip a party when it gains complete and total control.” But his approach signified a break from typical Republican efforts.

To break that one-party control, Mayor Faulconer’s blueprint focuses heavily on repackaging the party’s long-held ideas and reaching out to communities that the party hasn’t successfully appealed to in the past. He envisions a day “when San Francisco’s Republican mayor is standing before you, she isn’t talking about how California Republicans are endangered, but rather how we are ushering in a government that is uniting our people and looking out for the middle class.” It’s a bold challenge for a party that seems to be collapsing, but his ideas received a warm reception.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

Last week, a three-judge panel of the fourth state appellate court district unanimously rejected a 2015 PERB ruling that if upheld would have invalidated a successful 2012 San Diego ballot measure that gave newly hired city employees – except for police officers – 401(k)-style retirement benefits instead of defined-benefit pensions. The measure was meant to dig California’s second-biggest city out of a hole created by two City Council decisions to intentionally underfund the San Diego pension system, leading to a city fiscal crisis so severe that San Diego was dubbed “Enron-by-the-Sea” in 2004 by the New York Times.

PERB’s ruling was based on the view that any pension ballot measure that was promoted by elected city officials – in San Diego’s case, by then-Mayor Jerry Sanders and several City Council members – ran afoul of state requirements that local governments had to negotiate in the standard collective bargaining “meet and confer” process before they could change terms of employment.

This legal argument was tough to square with California’s history. Elected officials frequently have taken the lead in employing direct democracy to adopt new laws or modify existing ones – including those that affect terms of employment for public employees. In 2005, for example, Gov. Arnold Schwarzenegger sought to change teacher tenure rules in a special election. Schwarzenegger couldn’t sell the change to voters, but his attempt to do so was not seen as unlawful or unusual.

The appellate panel agreed with the city of San Diego’s argument that while elected officials helped lobby for the 2012 pension reform measure, it was crafted and placed on the ballot in keeping with standard practices for citizens’ initiatives, with petition committees, signature-gathering campaigns and other normal trappings of direct democracy. The ruling also noted that PERB had tried to use its official powers to block the ballot measure in early 2012 even before it reached the ballot, with the hint that appellate judges saw this decision as a sign of PERB abusing its authority.

PERB wanted collective bargaining to apply retroactively to older laws

PERB’s previous setback in asserting the sweeping powers of collective bargaining laws came in its response to a lawsuit filed in 2011. Parent activists sued the Los Angeles Unified School District for not considering student performance when formally evaluating teachers, as is required by the Stull Act, a far-reaching state education blueprint enacted in 1971.

PERB contended that before teachers were subject to such evaluations, the matter should be collectively bargained – even though the primary law establishing collective bargaining for teachers was approved in 1975, four years after the Stull Act took effect. The agency also held that it should have initial jurisdiction over the case – not state courts.

But Los Angeles Superior Court Judge James C. Chalfant’s 2012 decision categorically rejected PERB’s arguments, saying that LAUSD could not ignore the Stull Act’s requirements, that collective bargaining did not apply retroactively to older state laws and that parent activists were free to use the courts to challenge whether public schools were complying with state laws.

The Stull Act remains an area of contention for California public schools despite Chalfant’s ruling. In September, Contra County Superior Court Judge Barry P. Good rejected a lawsuit that said 13 Northern California school districts were breaking state law by refusing to consider student performance in evaluating teachers.

Good’s 40-page ruling held that the Stull Act’s requirements were not as “clear and unambiguous” as those who filed the lawsuit contended.

Brown defiant and conciliatory in State of the State

Good morning! Happy Hump Day. In case you missed it, Jerry Brown teetered between conciliatory and defiant in his annual State of the State address on Tuesday.  

The popular Democratic governor echoed other Democratic leaders in the state by taking shots at Republican President Donald Trump and congressional Republicans and their proposed, yet sometimes vague, agenda.

On the day Trump pushed through two controversial oil projects opposed by environmentalists, with a repeal of the Affordable Care Act slowly working through Congress and with federal action on immigration looming on the horizon, Brown pointed to the battle lines drawn between the state and the federal government.

“While no one knows what the new leaders will actually do, there are signs that are disturbing,” Brown said. “We have seen the bald assertion of ‘alternative facts.’ We have heard the blatant attacks on science. Familiar signposts of our democracy – truth, civility, working together – have been obscured or swept aside.”

CalWatchdog has more.

In other news:

• Cap and trade: “California’s marquee climate-change program faced tough scrutiny on Tuesday from a state appeals court judge who seemed skeptical that the $4.4 billion raised from the state’s cap-and-trade program complied with laws regulating taxes and fees,” reports The Sacramento Bee. 

• 2018: “Mayor Kevin Faulconer says he has ‘unwavering support’ for San Diego’s close binational ties with Mexico in the face of a pending border crackdown by President Donald Trump,” writes The San Diego Union-Tribune.

• Family law: “California lawmakers will weigh whether family courts should allow children as young as 10 to testify before judges regarding parent custody or visitation rights.” The Los Angeles Times has more. 

• Musical chairs: “Xavier Becerra, a longtime U.S. congressman, was confirmed Monday as California attorney general as the state braces for conflict with the Trump administration on policies ranging from health care to immigration and the environment.” Politico has more. 

Legislature:

• Gone till Thursday. 

Gov. Brown:

• No public events announced. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @ACCOC

Many CA House Democrats boycotting inauguration

Good morning! Happy Hump Day. Even though the inauguration is approaching, the campaign seems as though it’ll never end.

At least 15 of the 39 House Democrats from California are planning to boycott the presidential inauguration of Republican Donald Trump, according to multiple reports. 

The reasons range from district work, to disdain for Trump, to responding to Twitter polls. In all, more than 50 House Democrats are planning on skipping the event.

Minority Leader Nancy Pelosi will attend, however, out of a sense of “responsibility” and to honor the “peaceful transition of power.” The two remaining undecided Californians are: Senator Dianne Feinstein and Rep. Xavier Becerra of Los Angeles. Feinstein had a pacemaker installed last week, while Becerra is going through the confirmation process to become California’s next attorney general.

CalWatchdog has more. 

In other news:

• Pensions: “Over the past seven years, the city of San Diego has paid more than $14.7 million to bring retirees back to work part-time while they still collect a pension,” reports The San Diego Union-Tribune. 

• Marijuana: “California lawmakers want to make it easier for marijuana dispensaries to pay their taxes, saying many cash-only businesses are forced to drive long distances with thousands of dollars to make an in-person payment.” The San Francisco Chronicle has more. 

• No accountability: “On a summer day in 2015, 16 high-level managers at the Board of Equalization received special pay raises that the department still can’t explain.” The Sacramento Bee has more. 

• Water: “Despite drenching rains and heavy snowfall this winter, California moved Tuesday to keep in place its statewide water conservation rules — at least for another three months or so,” reports The San Jose Mercury News. 

Legislature:

• At 10 a.m., the Senate Rule Committee will consider the nomination of Congressman Xavier Becerra as the state’s attorney general.

Gov. Brown:

• No public events announced. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @bscrafford

Brown budget projects deficit

Good morning. Happy Hump Day! One word this morning: Budget. 

Gov. Jerry Brown preached prudence on Tuesday as he unveiled his 2017-18 state budget, proposing no new major spending programs while taking a wait-and-see approach to the incoming Trump administration, even as other prominent California Democrats brace for the unknown.

The budget showed a $2 billion deficit — modest by historical standards, but worthy of the lawmakers’ attention — caused by an increase in government programs over the last few years and lagging revenues.

Brown said he didn’t want to “repeat mistakes of the past,” recalling the days of the state’s budget crisis. The proposed budget showed approximately $8 billion in the Rainy Day Fund by the end of 2017-18, which is 63 percent of the constitutional target, which Brown said was bigger than it seemed as he called for greater savings now. 

Independent analysts, as well as Brown’s budget experts, have cautioned against the state’s over-dependence on the wealthiest residents to fund the government. Brown lauded the state’s “progressive” tax system, where people with the most pay the most. But he said it also requires prudence.

“It doesn’t make sense to pretend we have money when we really don’t,” Brown said. 

CalWatchdog has more.

In other news:

• Politics: “A new report tallying the costs of running against members of your own party revealed that Golden State Democrats spent big in 2016 on races without a Republican. This year, ‘Democrats raised or spent a total of $90.8 million on same-party races — a 67 percent increase from 2014 when Democrats spent $54.3 million,’ according to the study.” CalWatchdog has more. 

• Responsive Government: “San Diego is settling a lawsuit that accused the city of illegally limiting public comment at City Council meetings for at least 13 years.” The San Diego Union-Tribune has more. 

• Campaign Finance: “Now a handful of Los Angeles lawmakers are calling for a ban on such donations from real estate developers, saying they want to counter the perception that money drives those decisions.” The Los Angeles Times has more. 

• Tech: “Facebook CEO Mark Zuckerberg and his wife, Dr. Priscilla Chan, are strengthening their political connections, at least when it comes to philanthropy. On Tuesday, the couple announced that two well-known political figures among both Democrats and Republicans will lead policy and advocacy efforts at the Chan Zuckerberg Initiative, which they formed to fund philanthropic causes.” The San Jose Mercury News has more. 

Legislature:

• Gone till Friday at 9 a.m.

Gov. Brown:

• No public events announced. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @KesiAlexx

It’s such a widely used strategy that there’s a Nov. 8 statewide initiative (Proposition 54) which attempts to stop it. But while the state’s voters may quash this type of end-run around the hearing process in Sacramento, San Diego residents are watching something slightly different but equally controversial unfold Tuesday.

In her term as City Council president, Sherri Lightner has been unable to strictly limit short-term rental services like Airbnb and HomeAway, which have caused controversy in a number of beachfront San Diego neighborhoods. City officials and residents have been debating the issue for three years and a consensus is emerging to pass a set of rules that regulate STRs, but allow this emerging industry to continue to grow.

With only one month left in her term, Lightner scheduled a last-minute meeting this morning dealing solely with this issue. Instead of letting the compromise get vetted in the normal manner, she’s trying to quickly push through what the San Diego Union-Tribune calls a “simple definition change in the city municipal code.” But as the article’s headline points out, the modest re-wording is “sweeping” and would result in a “ban” on Airbnb and other similar services.

By reclassifying tourists and visitors as transients, the article explains, the new rule would forbid homeowners from renting out their properties for fewer than 30 days in single-family neighborhoods and require a seven-day minimum stay in multifamily zones. If five council members approve this change, then without much public debate, Lightner will have quickly achieved the goal she was unable to achieve in her years on council. That’s what’s reminiscent of the Capitol end-of-session process.

There are a variety of opinions about this new short-term rental industry, which uses web-based applications to connect tourists with homeowners who want to rent out empty rooms or their entire homes for vacation use. Officials in tourist cities across California have been fighting over the proper regulations for it. Because it’s such a new business model, aged municipal codes don’t clearly address STRs, which means they’ve largely been operating in gray areas.

Advocates for the industry say companies like Airbnb and HomeAway boost the tourist industry and help small business owners. They can also help homeowners, struggling to pay the bills in highly priced coastal real-estate markets, bring in income. It’s a property rights issue, according to some observers. Homeowners, they say, should be free to rent out their own properties, provided they follow some basic rules. And tourists enjoy this affordable alternative to the big hotel chains, which sometimes try to use their political clout to stamp out the competition.

Critics complain that these property owners in many cases (especially those who rent out their entire property) are essentially operating hotel businesses in residential neighborhoods and that those neighborhoods often are plagued by late-night partying and loud music. They say STRs harm the character of neighborhoods and reduce rental stock. As Lightner said at a community planning meeting recently, “Given that STR are a visitor accommodation, there clearly are areas where they are permitted and where they are not permitted. The Municipal Code already regulates that. Where STRs are permitted is determined by the zoning of your property. We are going to protect the sanctity of single-family neighborhoods where STRs are not allowed.”

According to published reports, Lightner said she isn’t trying to ban home-sharing (when people rent out a room or two while they are at home), but short-term rental advocates argue the change she is pushing could easily be interpreted by the city to do just that.

Defenders of these rental arrangements say their status is allowed and that critics are trying to ban them without proper legislative deliberation. Furthermore, they say the city should punish “externalities” – e.g., loud music or bad behavior – not largely ban a type of business. San Diego and other cities already deal with long-term renters and homeowners who misbehave on their properties. Proponents of STRs claim it’s wrong to single out property use, rather than, say, loud music or public drunkenness.

Some public-opinion surveys suggest that most San Diego voters want to regulate rather than shut down this innovative new business. The STR industry notes that California’s big coastal cities are on the cutting edge of technological innovation, which would make it out of character to shut down this business model in its infancy, rather than find creative solutions to legitimate problems.

Such bans can also simply drive short-term rentals underground. As long as San Diego neighborhoods are close to the ocean, there will be property owners who find a way to rent their homes to tourists for short stays, they add. Opponents say the answer to scofflaws is more enforcement and fines. If Lightner’s rule change goes into effect, property owners would face $2,500 fines for single infractions and with a maximum of $250,000 in fines per property.

Lightner’s Tuesday morning special council session may bring a new criticism to the process, with some observers arguing that such an important and contentious battle ought to be debated through the normal process, not fast-tracked in a way that short-circuits unfolding efforts to compromise. And they believe a hastily drafted effort to rewrite city code so dramatically is more reminiscent of the controversial dealings in Sacramento than the type of transparent government Lightner promoted throughout her City Hall career. Stay tuned for a contentious council meeting, one way or the other.

Steven Greenhut is Western region director for the R Street Institute. He is based in Sacramento. Write to him at sgreenhut@rstreet.org.