SB 9 ENDED R-1 ZONING, BUT IT’S NOT MEETING GOALS

 

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, MARCH 10, 2023, OR THEREAFTER

BY THOMAS D. ELIAS

     “SB 9 ENDED R-1 ZONING, BUT IT’S NOT MEETING GOALS”

 

        More than a year after it took effect, the landmark housing density law known as SB 9 has drawn many derogatory labels: a usurper of local powers, a neighborhood wrecker, a destroyer of dreams, and more. But the most accurate epithet for it today is something much simpler. So far, it’s a flop.

 

        SB 9, sponsored by San Diego’s Democratic state Sen. Toni Atkins, was intended to help solve the California housing shortage by encouraging owners of current single-family homes to divide their lots in two, with each half eligible for a duplex and an additional dwelling unit, often known as an ADU.

 

        So six housing units are now authorized almost automatically on most single-family properties in this state. The SB 9 sponsors believed when it passed in the fall of 2020 that this would create enormous financial incentives for current homeowners to sell to developers.

  

       

After all, a new cottage industry had arisen since permitting of ADUs, also known as “granny units,” became virtually automatic in January 2020, with almost all new homes featuring them and many existing homeowners buying and renting out prefabricated units.

 

But enthusiasm for the kind of density SB 9 intended to create has not come close to matching the homeowner and developer interest in building ADUs. A report early this year from UC Berkeley’s consistently pro-density Terner Center for Housing Innovation described the law’s impact so far as “limited or nonexistent.”

 

        The failure so far of this law may comfort some homeowners interested in maintaining their roomy lifestyles and the character of their neighborhoods, but the conditions causing it may not be permanent.

 

        For one thing, nothing in SB 9 compels anyone to build as much as a single affordable unit, or any units designated for low-income residents.

 

        With both median home prices and the cost of building a single one-bedroom unit in California both hovering above $800,000, it’s difficult to see how creating bunches of duplexes will be much help to families who currently don’t own homes and thus have not built up many tens of thousands of dollars in equity.

 

        The contrast with building large apartment or condominium complexes is sharp: They must include at least some affordable units. They also can get a “density bonus” allowing them to create more units if they provide more than the required percentage of affordable or low-income ones.

 

        So the market for new duplexes is not hot today, especially in a time of dropping population. Then there’s the matter of financing: Interest on home and construction loans is higher today than almost any time in the last 20 years, as the Federal Reserve Board keeps upping interest rates to stem inflation.

 

        That depresses both home prices and sales everywhere in the nation, including California, and makes it difficult for developers to fund new projects.

 

        There’s also a shortage of construction workers, similar to the dearth of workers that has seen “help wanted” signs appear in thousands of restaurant and store windows.   

 

        All these conditions might be temporary, possibly changing considerably as inflation slows.

 

        But there’s also the matter of reluctance by current homeowners to carve up their properties or sell out and move elsewhere.

 

        The steady rise of California property values over the 14 years since the Great Recession – until it halted or slowed in mid-2021 – has left huge numbers of longtime homeowners flush with equity, sometimes mounting into the millions of dollars.

 

        If they access some of that resource via refinancing or reverse mortgages, a lot of the financial incentive for creating six homes out of one can disappear.

 

        All of which means SB 9 does not figure to become a major housing factor anytime soon.

 

        This has caused its onetime enthusiastic backers to deny they ever saw it as a major part of the solution. One example is Atkins, the state Senate’s president then and now. She told a reporter SB 9 “was never intended to be an overnight fix to our housing shortage…it was intended to increase the housing supply over time.”

 

        It still may do that someday, but reality right now is that SB 9 has not amounted to much.

 

   -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

CALIFORNIA CARRYING THE NATIONAL ECONOMY

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, MARCH 10, 2020, OR THEREAFTER


BY THOMAS D. ELIAS
     “CALIFORNIA CARRYING THE NATIONAL ECONOMY”

          Upon hearing about his impeachment and the allegations that President Trump has told more than 15,000 documentable lies during his almost 1,100 days in office, his supporters generally have one major rejoinder: The economy is doing great.

          That’s been true for most of the Trump presidency. At the same time, Trump and his more ardent backers consistently claim the liberal Democrats who control California politics are destroying the “California Dream” and wrecking this state.

But now figures from the federal Bureau of Economic Analysis (BEA) in the U.S. Department of Commerce debunk all that.

          It turns out California is carrying the national economy. Gov. Gavin Newsom in his state of the state speech the other day called California “the envy of the nation.” Maybe that’s one reason so many non-Californians enjoy taking cheap shots at the still-Golden State.

If the country is doing well, that’s mostly because this state is doing far better than most of the rest of America. Never mind that real estate and energy cost more here than anywhere else. Despite its admitted problems, California still produces far more than its fair share of goods and services and is largely responsible for keeping the U.S. economy tops in the world.

          You can see this better than anywhere in the BEA’s new list of U.S. counties with more than $100 billion in gross domestic product (GDP) – the combined total of all goods and services produced in any one nation, state or locale. The BEA’s figures were published as 2019 ended, while congressional hearings on Trump’s impeachment were in full swing. Perhaps he didn’t know they were coming, or he might have ordered them held up or altered, as he has other government reports unfavorable to his pet causes.

          Two of the five most productive counties in America are in California, plus seven of the 23 counties with more than $100 billion in GDP. Together, Los Angeles and Santa Clara counties alone produce more than one-fifth of the economic activity of the 23 healthiest counties in all of America.

          What’s more, of those 23 counties, only seven are in states Trump carried in 2016, including two Texas counties – Harris (Houston) and Travis (Austin) that are Democratic islands in the Texas Republican red sea.

          Which makes the contrast between places with the best economic performance and those with the most political power in the national capital a clear-cut example of the tail wagging the dog.

          Los Angeles County, for example, produced $711 billion in GDP in 2018, more than the combined total in Dallas County, TX, Maricopa County, AZ (Phoenix), Fulton County, GA (Atlanta) and Philadelphia County, PA. Half of those counties (Fulton and Philadelphia) went strongly against Trump.

          Equally significant are the BEA’s comparisons of California county GDPs and those of other nations. Los Angeles County’s productivity, for example, is comparable to Switzerland’s. Santa Clara County, home of Silicon Valley, produces more than the entire nation of Pakistan, which has about 100 times as many residents. Orange County, third in California, has comparable output to Portugal and San Diego County as much as Greece. Alameda County produces as much as Ukraine and San Francisco about as much as Kazakhstan.

          Clearly, a large population and workforce is only part of the story. Productive workforces like those at leading companies in Los Angeles and Santa Clara counties, like Google and Sony Studios and Snapchat and Hewlett Packard and Hulu, spin off huge amounts of economic activity not directly related to the work of those companies.

          This takes the form of restaurants, car dealers, tire shops, gourmet groceries and even farmers’ markets, which purvey abundant fruits and vegetables in both counties.

          For Trump to take credit for any of this is plainly absurd, since the very folks who voted against him now provide his principal claim to success.

          But that won’t stop the president. Unless the organizations that track his many lies and half-truths are completely wrong, it is not the least bit unusual for him to claim credit for things he didn’t do or that he had little or nothing to do with.

                  

-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

WILL TRUMP MAKE CALEXIT A SERIOUS QUESTION?

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, MARCH 10, 2017, OR THEREAFTER


BY THOMAS D. ELIAS
     “WILL TRUMP MAKE CALEXIT A SERIOUS QUESTION?”

          As recently as last July, just 22 percent of Californians favored the idea of California risking a new civil war by declaring its independence from the rest of America. But barely six months later, a Reuters/Ipsos poll found support for California exiting the Union peacefully had moved above 40 percent.

          That’s not a majority, by a long shot. But it is almost a doubling of support, and the reason consists of one name: President Trump.

          Several of the record-number executive orders Trump issued during his first weeks in office implied he has it in for the Golden State which voted very strongly against him. So did testimony in several Senate confirmation hearings for his cabinet appointees and other Trump threats.

          That is spurring a reaction. Right now, many Californians are incensed at seeing Trump fulfill campaign promises on immigration, the environment and other issues that were essentially voted down by about 3 million votes nationally; by more than 4 million in California.

          It’s not exactly taxation without representation, but to a lot of Californians, it feels similar.

Trump, for example, said he’ll order an investigation of voting fraud despite an utter lack of evidence it happened. He named two states as the biggest alleged offenders: California and New York, the two states that voted most strongly against him. One possible goal of such an investigation by an administration which invented the notion of “alternative facts” might be to suppress minority votes in California as Republicans have done in states like North Carolina and Florida.

Trump’s immigration orders could have more impact in California than anywhere else. His appointee to head the Environmental Protection Agency said he will “review” all waivers allowing California to have tougher pollution standards than the rest of America. The target-California list is long.

          The latest poll on secession indicates that with each such Trump  action or stated intent, the separation idea grows more palatable to more Californians.

          The sentiment has grown to a point where there’s now competition to lead the “Calexit” movement: The Yes California group that began under a different name in 2014 vs. a newer outfit organized in 2015 calling itself the California National Party (CNP).

          Yes California, whose leader Louis Marinelli currently teaches English in Russia, is circulating a proposed secession initiative, aiming for the November 2018 ballot. This measure would erase from the state constitution a statement that California is an inseparable part of the United States. It asks California voters to decide in a 2019 special election whether the state should secede. Passage would require participation in that election by at least 50 percent of registered voters and a 55 percent yes vote.

          The CNP, acting like a rival rather than an ally of Yes California, takes no position on this. “Our path to independence is through building a movement and CNP voter registration…Our model is based on strategies that have put independence within arm’s reach in both Scotland and Catalonia, (the Spanish state that includes Barcelona),” said Theo Slater, the CNP’s “national chairperson.”

          The CNP also claims Yes California has ties to Russian President Vladimir Putin, who would enjoy splintering America.

          Meanwhile, Yes California’s in-state leader, Marcus Ruiz Evans of Fresno, wrote the only recent book on California independence, and notes that in a primary election run for a San Diego seat in the state Assembly last year, Marinelli became the first modern candidate to back California independence. Yes California, then, is the only outfit that has actually made moves toward secession.

          There is, of course, no legal process for any state to leave the Union and none has tried since the Civil War. In 1776, there was also no such process for leaving the British empire.

          Secession skeptics note that California uses large federal grants for everything from roads to health care. But the state gets back just 78 cents for every dollar its citizens pay in federal taxes. All federal grants could easily be made up for if those taxes were paid instead to Sacramento, should it remain the California capital.

          This all is no more than talk today, but for Trump there’s a serious question to ponder: Does he want to risk a new civil war by driving America’s largest and most inventive state into an attempt to leave the Union? 

                  
     -30-       
     Elias is author of the current book “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It,” now available in an updated third edition. His email address is tdelias@aol.com 

TIME TO EXAMINE CONSPIRACY IN PEEVEY-PUC SCANDAL

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, MARCH 10, 2015, OR THEREAFTER

BY THOMAS D. ELIAS

    “TIME TO EXAMINE CONSPIRACY IN PEEVEY-PUC SCANDAL”

          California attorney general's agents wasted no time after this column in late January called for a criminal investigation of the former state Public Utilities Commission President Michael Peevey. Less than five days later, investigators executed a search warrant at Peevey’s primary home in La Canada Flintridge.

          But the scope of the investigation might not be broad enough.

          Egregious as his alleged acts have been, Peevey could not have acted alone in securing sweetheart deals for California’s largest regulated utilities, Pacific Gas & Electric Co., Southern California Edison Co. and the San Diego Gas & Electric Co. Utility executives discussed arrangements with him, and one of the state’s leading consumer advocacy groups often played along with whatever he did. Plus, fellow commissioners never voted him down.

          It all stems from the longstanding PUC “kabuki dance,” an elaborate routine conducted by the commission, the utilities and the consumer advocate group TURN – The Utility Reform Network.

          In this exercise, whenever each utility files for possible rate increases, it seeks far more than is justified. The commission cuts the request down, taking credit for “holding the line,” and TURN boasts of saving the public hundreds of millions.

          Demonstrating the phony quality of all this, TURN’s former chief lawyer, Michael Florio, a PUC member since 2011, is currently under investigation for allegedly helping PG&E, his onetime “adversary,” find a sympathetic administrative law judge to hear a rate case.

          In reality, everyone knows the general outlines of the outcome before any rate-case exercise begins. So this is performance art, not the prudent regulation called for by California law. It now sees Californians paying the third highest power rates in the lower 48 states (http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_6_a).

          Yes, extraordinary examples of apparent corruption became clear during the 12-year Peevey era, predictable the moment ex-Gov. Gray Davis named the former Edison president and husband of Democratic state Sen. Carol Liu commission president. This classic case of putting the fox in charge of the henhouse was reinforced when Peevey got a second six-year term from Davis’ successor, Arnold Schwarzenegger.

          Just how connected Peevey has been was clear at an early February gala honoring him in San Francisco just after investigators searched his home. Sponsors of the $250-a-plate dinner included his successor Michael Picker, Energy Commission chairman Robert Weisenmiller, former Democratic gubernatorial candidate Kathleen Brown (sister of the current governor and a board member of SDG&E’s parent company), former Assembly Speaker Fabian Nunez and several ex members of Congress.

          Most egregious of Peevey’s actions may have been his manipulations to let PG&E off easy after its negligence (the term used by federal investigators) led to the 2010 San Bruno gas pipeline explosion that cost eight lives.

          For one thing, Peevey and fellow commissioners who fell meekly in line behind him still have not tracked the billions of dollars paid by utility customers since the 1950s for gas pipeline maintenance that was done only on a spotty basis.

          It has also emerged that Peevey personally signed off on an exemption allowing his old pals at Edison to replace steam generators in their San Onofre Nuclear Generating Station without a formal review of the $680 million cost, which consumers began paying long before the generators were installed and then failed, causing the plant to be retired. Other emails earlier showed Edison executives knew the generators were flawed before the installation.

          Peevey couldn't do much of this alone; almost all of it required cooperation or at least acceptance by other commissioners, the utilities and TURN, the consumer advocate group that helped “negotiate” last year’s settlement that will see customers pay more than $3.3 billion out of about $5 billion in San Onofre closure costs. Of course, the fault for that failure lies with Edison and its supplier; no one has yet explained why consumers should pay anything.

          Because so many parties have been involved in so many shady dealings, along with the kabuki dance common to all rate cases handled by the PUC, it’s clear the long-term theft of billions of consumer dollars involves far more persons and companies than just Peevey. The attorney general’s office won’t say whether its investigation might broaden to include a potential conspiracy.

          But legislative hearings to be chaired in mid-March by Democratic Assemblyman Anthony Rendon of Lakewood just might explore this, Rendon said.

    For sure all aspects of this investigation should consider whether a wide conspiracy went far beyond one man’s possible criminal actions.

              -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