Monday, October 14, 2019

ARE WE REALLY STUCK WITH THE BIG PRIVATE UTILITIES?


CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, NOVEMBER 1, 2019 OR THEREAFTER


BY THOMAS D. ELIAS
       “ARE WE REALLY STUCK WITH THE BIG PRIVATE UTILITIES?”


          There is no public polling on this issue, but anyone who travels around California can sense that many, if not most, electric customers would like to be rid of big utility companies like Pacific Gas & Electric and Southern California Edison, yet they fear possible consequences if those firms disappear.


          Reader T.J. in Nevada County put it this way: “PG&E is far from perfect, but when you think of them gone, what have we got left?” The answer is: plenty. 


          T.J.’s letter demonstrates that he understands the perfidy of PG&E, his local utility. But like many others, T.J. fears the demise of big electric providers would automatically mean long blackouts and brownouts, not “mere” power shutdowns to keep the companies’ poorly maintained transmission lines from causing disasters.


          But it’s not necessarily so. The bankrupt PG&E, for one, has been declared both a felon and a probation violator that has caused massive loss of life and property. If it were a person, not a corporation, that person would be imprisoned right now. So much for the U.S. Supreme Court’s Citizens United decision, which held that corporations are like people. They’re not. Big corporations are much more privileged than people.


          They can cause wildfires putting thousands out of their homes and flee into bankruptcy to avoid paying the price of their negligence. They can follow up by asking the state to rescue them, and cow legislators into setting up a fund that will eventually amount to more than $20 billion. They can then follow up with a demand for a huge rate increase, as it if were deserved.


           Do we really need companies like this, aside from the fact they’ve donated well over $1 million to candidates including the governor, even while bankrupt? This includes Edison, which is not yet bankrupt, but also helped cause huge fires and has so far not paid for damages. Edison also apparently conspired illegally with since-departed regulators to dun customers billions of dollars for the costs of its blunder that shut down the San Onofre Nuclear Generating Station.


The formal state investigation of that possible crime has essentially disappeared, the state attorney general refusing to say what’s become of the probe started and then buried by his predecessor, current Democratic U.S. Sen. Kamala Harris.


           T.J. and others who fear the loss of familiar utilities should take comfort, however, in the fact that when a corporation disappears, its assets don’t necessarily vanish suddenly. If PG&E and Edison were gone, their hydroelectric dams would remain. Their staffers would not suddenly lose all their skills and knowledge. Power lines would stay up, too.


           So corporate disappearances would not be into thin air. Consumer attorney Mike Aguirre, a former elected city attorney of San Diego, the other day filed with the California Public Utilities Commission a proposed map dividing PG&E’s huge service area into eight distinct, geographically sensible parts, each of which a bankruptcy judge could order sold to the highest bidder. The money could pay off the losses of uninsured wildfire victims. New owners would decide whether to retain current employees.


          Meanwhile, the vast majority of cities and counties that have formed Community Choice Aggregations to municipalize power service are doing just fine, some even wanting to issue bonds they’d like to use for buying electric transmission lines from the big utilities. CCAs now pay to use those lines.


           In short, California could have many publicly owned utilities instead of three huge privately-owned ones and a few government-owned power outfits, like the Sacramento Municipal Utility District, the Los Angeles Department of Water & Power and smaller outfits like Burbank Water & Power, Riverside Public Utilities and the Redding Electric Utility.


          If they can bring cheaper power and other services to their communities without the “expertise” of the big utilities whose territory surrounds them, why couldn’t buyers of PG&E, Edison and their components?


           So take comfort T.J. and others: You have nothing to fear except freedom from corrupt, cheating corporations who survive only by paying off politicians (Gov. Gavin Newsom took $208,000 PG&E campaign dollars last year, for just one example) and gouging the customers they are supposed to serve.


    -30-
    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

GASOLINE GOUGING 9.0: SAME AS EARLIER VERSIONS


CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, OCTOBER 29, 2019 OR THEREAFTER


BY THOMAS D. ELIAS
          “GASOLINE GOUGING 9.0: SAME AS EARLIER VERSIONS”

          For the ninth time in the last five years, gasoline prices spiked this fall in California, with per-gallon pump charges briefly leaping above $5.15 at many stations around the state.


       The escalation of more than $1 per gallon of unleaded regular was largely masked by bigger headlines devoted to wildfires and massive blackouts staged or threatened by the state’s biggest utilities, but it was very real and still is far from fully receding.


          Meanwhile, there was some consumer protection for Californians when the electric companies cut them off in the interest of preventing fires sparked by power lines whose maintenance they neglected for many years. When a blackout, fire or earthquake strikes, state law prohibits sudden price gouging by merchants and service providers.


          No such law governs oil companies when they experience gasoline refinery outages, whether they are accidental or deliberately staged – and there is no one now authorized to determine the difference. There ought to be.


          For now, no one can formally prove the recent price increases meet legal definitions of gouging, which happens when retailers and suppliers respond to disasters with prices much higher than usual, sometimes rising to the level of being both unfair and unjustified.


          Things very likely met that definition this month when prices jumped about 20 percent after seven of the state’s 25 major oil refineries either had scheduled maintenance outages or experienced short-term operational troubles.


          No government authority has yet proven collusion between the five big refiners – led by Chevron, Tesoro and Phillips 66 – which control 90 percent of California’s gasoline market, and also own or franchise 80 percent of gas stations. But for them all to raise prices hugely at the same moment suggested some sort of cooperation. They can’t all be running up precisely identical costs at the very same moment.


          Consumers can’t help noticing that when the price rises at a Chevron station, it generally goes up the same amount at the Shell outlet across the street, which often pumps Tesoro fuel. That happened this fall and also in the prior price spikes, including one last spring. Gas station operators can’t be blamed very much – this fall, refiners raised the wholesale price stations pay by about 30 cents per gallon, a cost they pass through to customers.


          For sure, these sudden price increases increase oil company revenues. Yearly profit statements are not yet in for the big refiners, and only two of the top five break out California results separately from the rest of their worldwide operations.


          Still, the last time anyone closely analyzed oil company profits, the Consumer Watchdog advocacy group in 2016 thoroughly documented that record profits for the refiners coincided with record-high pump prices throughout this state.


          Some industry spokespeople have cited as one cause for the latest spike the brief drop in world gasoline supplies following the September drone and missile attack on Saudi Arabia’s largest refinery. Worldwide prices did jump sharply just after that, but quickly returned to near previous levels as the facility went back online sooner than expected.


          Through all this, California oil refiners have kept their inventories low for many years. The rest of the continental U.S., for example, normally has about 24 days’ supply of gasoline on hand at any moment, while California averages between 10 days’ and 13 days’ supply.


          “Because they keep inventories very low, prices rise immediately when anything happens because of concerns over possible shortages,” said Jamie Court, president of Consumer Watchdog. “If it’s illegal to gouge after a natural disaster, why not after refinery problems?”


          No one currently watches over any of this. Just after last spring’s gas price spike, Gov.Gavin Newsom asked for an analysis from the state Energy Commission, whose preliminary conclusion was that at least some “market manipulation” was involved. The full report was due out this month.


          What’s really needed is a state agency with authority to track oil company prices and profits and clamp down on them when needed. But so far, no state legislator has stepped up to propose anything like that.             


  -30-
    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

Monday, October 7, 2019

NEWSOM CLEANING UP SOME BROWN MESSES


CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, OCTOBER 25, 2019, OR THEREAFTER


BY THOMAS D. ELIAS
          “NEWSOM CLEANING UP SOME BROWN MESSES”


          Corruption and waste quietly abounded during the eight years of ex-Gov. Jerry Brown’s second go-‘round as governor of California, but there are signs current Gov. Gavin Newsom means to clean up at least some of those messes.


          This may be the meaning of two recent reports that should have come down from state authorities years ago, but never did – perhaps in part because of the Brown family’s longstanding ties to the oil industry and to big California utilities.


          One of those reports –  released by the often scandal-ridden state Public Utilities Commission – found that the longest and largest known release of methane gas in an urban area in U.S. history was caused by a corroded pipe casing and other safety failures by the Southern California Gas Co. The other, ordered up by Newsom from the state Energy Commission, found that “market manipulation” may have been one cause of the gasoline price spikes motorists had to endure during the spring and earlier periods of sharp price increases, with prices climbing far above $4 per gallon in many places.


          Neither of these conclusions came as a surprise to consumer advocates or the victims in both cases, and both likely could have been reached years earlier had Brown wanted. But Brown’s family has long had ties to the oil and natural gas industry. His father, ex-Gov. Pat Brown, represented Indonesian energy interests in California for years after leaving office and his sister, ex-state Treasurer Kathleen Brown Rice, still sits on the board of Sempra Energy, parent of SoCal Gas and the San Diego Gas & Electric Co.


          As for waste, Newsom quickly ended Brown’s pipe dream of twin tunnels to bring Northern California river water south through the Delta of the San Joaquin and Sacramento Rivers. Newsom advocates a single tunnel at most, still not satisfying environmentalists and fishermen who very effectively fought the Brown proposal for almost a decade.


But Newsom's action won’t bring back more than $30 million already wasted on planning the twin tunnels. A federal Interior Department report in 2016 – before President Trump took office – also accused Brown appointees of misappropriating half a $60 million grant intended to improve fish habitats in and near the Delta.


          Meanwhile, Brown’s administration again and again tried to let SoCal Gas – associated with Brown’s sister – off the hook for the four-month 2015-16 methane leak from the utility’s Aliso Canyon gas storage field, which caused years of illness among many residents of the San Fernando Valley section of Los Angeles, especially in the nearly adjacent Porter Ranch area.


          The new report from a private firm said the company should have been able to plug its leak much sooner than it did. Courts will determine how much liability that report may create for SoCal Gas.


          Meanwhile, consumer advocates had noted for years that gasoline prices during periodic spikes coinciding with refinery fires and other shutdowns were much higher than they should have been. These spikes often continue long after refinery repairs and maintenance are completed.


          For sure, oil company profits peaked at those same times, making it pretty clear what was happening, even if there was no proof at the time of industry collusion.


          Brown did not pursue either of these problems with any sense of urgency, paying them as little attention as he could get away with while gallivanting around the globe to push the worthy cause of stemming climate change.


          In interviews during his 2018 election campaign, Newsom firmly promised to go after corruption in state government. He singled out sweetheart contracts of various types as one area he would closely examine, but so far there has been no public effort to clean those up. Firefighters, for example, retain their single-source deal with the makers of PhosCheck fire retardants, while state authorities refuse to examine alternatives that might be more effective.


          Next on Newsom’s agenda ought to be a close look at the rate-making practices of utility regulators, whose tight relationships with electric and natural gas companies have cost consumers billions of dollars.


          But Newsom has at least made a start. That’s both a positive and far more than Brown ever did in his last eight years in office.       


       -30-      
     Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit 
www.californiafocus.net


TRUMP WALL-FUNDING GRAB PRETTY MUCH SPARES CALIFORNIA


CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, OCTOBER 22, 2019, OR THEREAFTER


BY THOMAS D. ELIAS
       “TRUMP WALL-FUNDING GRAB PRETTY MUCH SPARES CALIFORNIA”


       There are not many arenas where Donald Trump has failed to press his campaign against California and what Gov. Gavin Newsom calls its “essential values.”


       The Donald has tried to worsen California air quality by overturning its independent smog-fighting authority. He filed a formal complaint that San Francisco’s homeless pollute the surrounding waters. He is trying to undermine, if not eliminate, the Endangered Species Act and thus remake state water policy to favor big corporate farms that are among his major campaign donors. And much more, seemingly some new attack on this state every week or two.


       So it comes as a bit of a surprise that after Trump won a U.S. Supreme Court ruling allowing him to take money away from military projects to build the border wall that’s one of his central causes, he didn’t cut much from California.


       Of the $3.6 billion Trump earmarked to be snatched from the military and given to wall construction firms, just $8 million and one project involved California. This, of course, may have something to do with the fact there weren’t many California projects he could raid for money because -- like those of the three Presidents who preceded him -- every Trump budget has short-changed this state.


       Trump triggered his fund diversion by declaring a national state of emergency over illegal immigration after Congress refused to appropriate several billion dollars he sought for a barrier. That’s the same wall which he promised during his last campaign would be paid for by Mexico. Not precisely.


       In California, the $8 million Trump is plucking comes from funds previously earmarked for a flight simulator designed to train C-130 cargo plane pilots in fire fighting techniques. It was to be constructed at the Channel Islands Air National Guard base near Oxnard in Ventura County. The money will instead pay for about five miles of fencing near Otay Mesa in the San Diego area and at the Tecate Port of Entry from Mexico.


       But this money is peanuts compared to the $3.6 billion total he's taking. The bulk of that money ($2.5 billion) will come from Defense Department anti-drug activities, which Trump has said will be unnecessary once his wall is built. Never mind that drug smugglers have never been fazed by walls, always finding ways to skirt them by air or sea.


       Currently planned projects using the rerouted money include wall components in and near El Paso and Laredo, Texas; Yuma, Ariz. and El Centro.


       Among projects to be cancelled as a result are several structures at the U.S. Military Academy in West Point, NY, which that state’s Democratic U.S. Sen. Chuck Schumer immediately called “a slap in the face” to the U.S. Army. He added that it’s part of Trump’s eagerness to “cannibalize already allocated military funding to boost his own ego…”


       Predictably, California Democrat Dianne Feinstein, chair of the Senate Intelligence Committee, called diverting billions from the military “irresponsible.” She added that “Congress appropriated these funds for specific projects and that’s how the funds should be used.”


       But the U.S. Supreme Court over the summer ruled that in a national emergency, any President can divert funds to where they’re most needed for national security. No one can stop Presidents from declaring emergencies any time they like, even when – like this time – there’s no proof of danger to national security.


       But Congress did receive evidence before making its Channel Islands appropriation that C-130 pilots generally lack adequate wildfire training. So if the planes are mishandled over flaming areas in future midair crises, voters will know precisely where to place blame.


       The bet here is that if there were other major federal military projects under way or imminent in California, Trump would have dried up their funding, too, as this state is the first place he usually looks when he’s in punishment mode.


       The upshot is that California for the most part dodged a bullet this time, but only because Trump found few targets here eligible to suffer his ire.


      -30-       
     Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit 
www.californiafocus.net

Monday, September 30, 2019

SIGNS THAT NOTHING WILL CHANGE AT THE CORRUPT PUC


CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, OCTOBER 18, 2019 OR THEREAFTER


BY THOMAS D. ELIAS
     “SIGNS THAT NOTHING WILL CHANGE AT THE CORRUPT PUC”


       “Meet the new boss; same as the old boss,” went the refrain in the 1971 hit record “Won’t Get Fooled Again” by The Who. It’s also a pretty fair description of today’s situation at the California Public Utilities Commission, now staffed partly by new commissioners not present during most of the agency’s debacles of this decade.


       Things look very different on the surface in part because the five-member commission now has four female members for the first time since its founding more than 100 years ago.


       The trouble is, things really are not very different. This agency, which regulates prices and practices at most of the state’s electric, natural gas, water and some telephone operations, has been caught favoring and colluding with electric and gas companies repeatedly. Many see its rate-setting proceedings as charades akin to a Japanese kabuki dance that features lots of activity, but a predetermined outcome.


       The process in the commission’s first major proceeding with two freshly minted members appointed by new Gov. Gavin Newsom, including the agency president, appears pretty much like it’s been during decades of male domination.


       The PUC’s newest responsibility is to determine whether customers of California’s three big privately-owned electric companies should pay a monthly fee of about $1.50 each for the next 15 years to put $10.5 billion into the new state Wildfire Fund for payment of utility liabilities in future big fires. In effect, this would continue a charge consumers have paid since 2002 for electricity the state bought during the energy crunch early this century. That charge was supposed to disappear this year. Now it will continue.


Beneficiaries include Pacific Gas & Electric Co., the Southern California Edison Co. and San Diego Gas & Electric Co., all found responsible for starting massive wildfires in recent years.


       The legal rub here is that before customers can be dunned, state law requires the PUC to conduct a proceeding to decide whether any new charge is “just and reasonable.”


       Yet, the state went ahead and provided a loan of $2 billion to the new fund from money saved up by the California Earthquake Commission via quake insurance premiums paid by policy holders. How earthquake claims would be paid if a major temblor hits during the year or two before that money is repaid by utility customers is a great unknown, but the money nevertheless quickly came out of the state’s Surplus Money Investment Fund.


That transfer pretty much coincided with the PUC setting a date for its required proceeding, and long before any determination that the fee is just and reasonable. In fact, no evidence has even been collected so far aside from governor’s office reports on wildfire costs and liability, which are neither sworn testimony nor other legal evidence of the sort needed in a PUC proceeding.


Essentially, the commission decided before its required proceeding to let the Wildfire Fund have the money and then take it back from electric customers. But it did that without any evidence justifying the move.


   This amounts to legally premature “pre-decisional decision-making,” says consumer attorney Michael Aguirre, who recently won back more than $1 billion in consumer funds the PUC had awarded SoCal Edison to pay for decommissioning its defunct San Onofre Nuclear Generating Station.


The seemingly illegal move came after Commissioner Clifford Rechtschaffen, in charge of the required (but apparently greased) proceeding, determined there was no need for evidentiary hearings over the new 15-year charge to consumers.


Aguirre, a former elected San Diego city attorney, argued this demonstrated bias by Rechtschaffen and demanded he be disqualified from the ratemaking proceeding on the new charge. The other commissioners unanimously denied Aguirre’s motion and Rechtschaffen stays in charge of what now looks like the newest PUC kabuki dance.


Essentially, the commission held that because Rechtschaffen has no financial interest in any utility, he should stay. He may have no formal utility stake, but he has a long history of favoring the companies over their customers, including memos he authored on the San Onofre case while still an advisor to ex-Gov. Jerry Brown.


       It all adds up to business as usual at the scandal-ridden PUC, despite pledges to change its culture and clean up its act.


    -30-
    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

TRUMP’S ‘WAR’ ON CALIFORNIA: JUST FOR SHOW?


CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, OCTOBER 15, 2019, OR THEREAFTER


BY THOMAS D. ELIAS
     “TRUMP’S ‘WAR’ ON CALIFORNIA: JUST FOR SHOW?”


          It’s easy to find an obvious motive for President Trump’s well-documented and much-ballyhooed “war” on California. After all, this state in 2016 gave Hillary Clinton a margin of more than 3 million votes over Trump and he’s felt hurt and angry over it ever since.


          He’s taken action after action against this state’s best interests, one example his September attempt to eliminate California’s unique authority the early-1970s Clean Air Act to regulate its own air quality. Even though Trump and his handpicked chief of the federal Environmental Protection Agency moved the other day to revoke that ability, most legal authorities say he can’t actually do it because California’s right to fix its air was granted by Congress, not the President of that time, Republican Richard Nixon.


          Presidents have a lot of executive authority, those legal experts say, but they cannot unilaterally reverse acts of Congress.


          Showing its whimsical nature, Trump’s administration shortly after announced it would withhold highway funds from dozens of California areas because they don’t meet federal clean air standards – even though some of the affected areas do in fact meet those standards. So Trump wants to penalize California for having dirty air at the same time he seeks to take away its ability to clean up that same air. Go figure, or as Democratic U.S. Sen. Dianne Feinstein deadpanned, the combined moves “seem counterintuitive.”


Trump also threatens to withhold federal grants from police in California’s many “sanctuary cities.” He warned he would cut federal wildfire aid and penalize San Francisco because its homeless population allegedly dumps human waste and hypodermic needles into the Pacific Ocean and San Francisco Bay. Except they don’t do that.


          Time after time, Trump trumpets actions against California, with the state’s attorney general, Xavier Becerra, reacting with lawsuits like a Pavlovian laboratory dog.


          But does Trump really mean all this seriously, when he’s had so little success at it? Or is another agenda at work here?


          This question arises because the pre-presidency Trump was in effect a carnival barker, always aware of the legendary circus impresario P.T. Barnum’s observation that “There’s a sucker born every minute.” Trump the showman understood while running his reality television show that, as a New York Times television critic observed, “the only rule is that there are no rules.”


          He carried this sense over into his presidency, where a day rarely goes by without some crisis, be it a threat to bomb Iran or one to punish California. Trump also knows that California-bashing is a longtime, popular national pastime everywhere outside the Golden State.


          So when Trump blasts America’s longtime allies and cozies up to the most murderous of foreign dictators, it may all be for show, with the sense that as long as he keeps America entertained, he can get on with his real interest, which is making profits.


          It’s an approach completely unlike any previous President, and one whose ultimate consequences are unknown as an impeachment inquiry gets started. But it is fairly clear that Trump stands little chance of making good on most of the attacks he’s made against California.


          Top state officials say they are fairly certain of that, despite a Supreme Court that’s upheld some other unprecedented Trump actions, like his condoning the caging of small immigrant and refugee children.


          Said Gov. Gavin Newsom, who seems to enjoy sparring with Trump, and so is part of the President’s new show, “If Trump prevails, we will have more asthma in California…and other diseases. But that’s the state of things today in this country…We will fight back when he goes after our Dreamers and our health standards. And we will win in the courts.”


          Added Becerra, “If the arguments in the President’s tweets are the arguments they will use to propel (legal actions), then we’re looking pretty good and we will enjoy facing them in court.”


          The trick here is to see Trump’s real apparent motive: Less to hurt California or the potential victims of his actions than to keep the spotlight constantly on himself, impeachment investigation or not, and thereby help ensure another presidential term and even more personal profits while he steers government and foreign spending to his many properties.

         
          -30-
    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It" is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

Monday, September 23, 2019

CAN LAWMAKING REALLY FIX THE HOUSING PROBLEM?

CALIFORNIA FOCUS
FOR RELEASE:  FRIDAY, OCTOBER 11, 2019, OR THEREAFTER

BY THOMAS D. ELIAS

“CAN LAWMAKING REALLY FIX THE HOUSING PROBLEM?”




There were smiles all around and a lot of back-slapping the other day, when Gov. Gavin Newsom signed a package of bills he firmly believes will work quickly toward ending California’s undeniable housing problems of high prices and low availability.




The package imposes rent controls statewide, despite last year’s vote on Proposition 10 which saw the majority in 56 of 58 California counties oppose similar controls for fear they would discourage building of enough new apartments to seriously dent the availability shortage. There are also new limits on single-family zoning, designed to encourage building of backyard “grandma” units, and provisions that may encourage some companies to buy up existing homes, then install new partitions to create a dozen or more rental units in one house.




The new laws will also lower fees on low-income housing projects and forbid local moratoria on new housing.




But one underlying question remains unanswered: Can California legislate its way out of the housing crisis? It’s a query similar to what was asked during the 1960s, an era when the federal government passed myriad laws banning racial discrimination in voting, housing, employment, education and other parts of life. “You can’t legislate morality,” critics said then. But it’s turned out differently. America is far from free of discrimination, but official racial discrimination has been largely turned around, to the point where some cities and states now face lawsuits over alleged “reverse discrimination,” which claim minorities get hiring preference over whites who are equally or more qualified.




California realtors don’t phrase it the same way opponents of civil rights laws once did, but their argument is essentially the same: The state can create conditions it thinks should increase or enhance the building of new homes, be they apartments or condominiums or individual houses, but it can’t make anyone build or buy them.




Before developers turn their first shovel of dirt, they must be convinced they’ll make a profit. These days, they apparently don’t feel that way. As of early fall, just over 111,000 permits had been issued statewide for new houses this year, 12 percent less than a year ago, according to the California Association of Realtors. Apartment development, the realtors said, was down 52 percent.




At the same time every developer in the state knew the housing law package was sure to pass the Legislature and get Newsom’s signature. Which means the new laws may not spur even nearly the 500,000 new housing units the governor has said are needed each year for the next seven in order to solve the state’s problems.




       And yet…officials charged with fighting the parallel problem of homelessness report that for every 33 persons they can place in the transition quarters now going up in various parts of the state, 150 more persons will become homeless, largely because of high rent and other affordability problems.




       This poses an enormous conundrum: High rents have driven thousands to live in the streets, either in tents or vehicles, but without high rents, who’s going to build enough new apartments to resolve the shortage?




       If there’s a solution to this problem, it may be geographic. Why not build much of the new housing where land is cheap rather than forcing cities in the state’s most expensive, affluent ZIP codes to allow more construction? For in many areas, especially along the coast and in the Silicon Valley, land prices are the single largest expense in homebuilding and – along with demand – the foremost driver of high prices.




       Newsom has tried to be completely egalitarian about enforcing his policies, which dictate that all cities approve new housing permits in amounts proportional to their existing population. That has not worked. The inventory of unsold homes did not shrink in the last year, stymying new development that could resolve at least part of the problem.




       The new laws, wrote CAR president Jared Martin the other day, will “make it more difficult for hard-working Californians to find an affordable place to live.”




       So why not earmark some of the state’s current $21 billion budget surplus for building new housing where land is cheap, fees low and regulations minimal? That would be the Central Valley and some desert areas of Southern California.


             
    -30-      
     Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, go to
www.californiafocus.net