INSURANCE BLACKMAIL WINS AGAIN

 

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, OCTOBER 10, 2023 OR THEREAFTER

BY THOMAS D. ELIAS

        “INSURANCE BLACKMAIL WINS AGAIN”

 

        It would have taken a rare combination of courage and toughness to solve California’s three-month property insurance crisis fairly.

 

        Neither quality was displayed by either Gov. Gavin Newsom or Insurance Commissioner Ricardo Lara, and so blackmailing insurance companies won big against ordinary Californians for the second time in 27 years.

 

        How craven were these two officials? First, on a cool day in late September, Newsom issued a uniquely unspecific executive order essentially telling Lara to do something, almost anything, about the crisis spawned by the insurance industry, whose biggest companies had stopped writing new property policies anywhere in California for the preceding three months, claiming huge wildfire losses.

 

        Lara’s response was to capitulate to the companies, including State Farm, Allstate, USAA, Farmers and more. Exactly one week after the Legislature refused to give them carte blanche in setting new rates, Lara effectively did just that.

 

        Several leading insurers now have rate increase applications pending before Lara’s department for price hikes averaging about 34 percent starting sometime next year. Under a deal Lara struck mere hours after Newsom’s flailing order, they will almost certainly get the bulk of those increases. In return, all they must do is issue or restore homeowner policies in wildfire prone areas, charging pretty much whatever they want in the process.

 

        Property owners elsewhere might also see their rates increase to help subsidize the companies and thus keep them in the California market. For the first time, the industry will now use projections of future fire losses to justify rate increases, rather than only past performance, and never mind if their profit-motivated predictions never come to pass.

 

        All this, the companies say, because they’ve had big losses in California since wildfires became larger and more common starting in 2017.

 

        But how much have they really lost? Over the last two decades, these companies made far higher profits in California than nationally, even more if you include the $12.1 billion that utility companies were forced to pay them to refund insurance payouts after fires caused by the electricity providers.

 

        Between 1997 and 2021, insurance companies enjoyed an 8.8 percent return on spending in California, compared with 6.2 percent nationally, according to figures reported by the Consumer Watchdog advocacy group and not disputed by the industry. Add in the big money from the utilities, and profits here were even higher.

 

        Consumer Watchdog founder Harvey Rosenfield, author of the 1988 Proposition 103, which made the insurance commissioner elective and mandates setting rates based on past expenses, says his outfit – which often intervenes in insurance rate cases – will not meekly accept Lara’s capitulation to the insurance companies.

 

        “Insurance companies used their economic power to create shortages (and) pressure elected officials to change the (Proposition 103) rules that have kept insurance in California stable, affordable and available for decades,” Rosenfield said. “Consumer Watchdog will not allow Lara to derail the rights of consumers.” Translation: “We’ll see you in court, Mr. Lara.”

 

The fair way to end the insurance boycott would have been to tell the companies if they’re not going to sell all kinds of insurance here, they can’t sell any. Firms that boycott should lose their licenses to sell any new insurance here for several years, including extremely profitable coverage like life insurance.

 

But Lara took well over $100,000 in campaign dollars from the industry he regulates, despite earlier promises not to accept any insurance company donations. When the donations were revealed, Lara was forced to return most of the money.

 

Still, the industry’s apparent influence over him was clear in the deal he made. Lara acted much like 1990s-era Commissioner Chuck Quackenbush, who also accepted insurance company donations and then gave in to the industry’s previous boycott of California over a requirement that anyone selling homeowner coverage also had to sell earthquake insurance.

 

Quackenbush orchestrated a deal eliminating that rule and forming the California Earthquake Authority to replace policies long carried by the industry. In both that case and this fall’s, California was blackmailed and elected commissioners who had taken insurance company dollars capitulated.

 

That’s not how government is supposed to work, but it is reality when leaders lack the courage and toughness to fight off obvious extortion.

 

 

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    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

NEWSOM HAS IT RIGHT ABOUT POSSIBLE SENATORIAL CARETAKER

 

CALIFORNIA FOCUS

FOR RELEASE: FRIDAY, OCTOBER 6, 2023, OR THEREAFTER

 

BY THOMAS D. ELIAS
     “NEWSOM HAS IT RIGHT ABOUT  POSSIBLE SENATORIAL CARETAKER”

 

        Gov. Gavin Newsom pledged after appointing former California Secretary of State Alex Padilla to the Senate in 2021 that he would name a Black woman to the job if the seat long held by Democrat Dianne Feinstein became vacant on his watch.

 

        Democratic Congresswoman Barbara Lee of Oakland took that to mean her, plainly figuring she is entitled to that seat, chiefly because the slot Padilla got and later won on his own had been occupied previously by current Vice President Kamala Harris, the Senate’s only Black woman before she moved up.

 

        But the 90-year-old Feinstein has served almost three years beyond the date of Padilla’s appointment, persisting through a serious and painful case of shingles, some alleged dementia and other ailments, while getting around mostly via wheelchairs. Meanwhile, the 77-year-old Lee and much younger fellow Democratic Reps. Adam Schiff of Burbank and Katie Porter of Irvine are embroiled in a tight and spirited race to replace Feinstein, who insists she will serve out her full term until it ends in December 2024.

 

Fully aware of this, Newsom makes it clear that if Feinstein can’t persist, he will indeed appoint a Black woman to the job, but not one who is running for a full six-year term. Instead, he says he’ll name a temp.

 

So, no, Barbara Lee will not get to list herself as a

sitting senator on California primary election ballots next March.

 

        This infuriates her. Lee doesn’t quite admit to that much emotion, but said she is “troubled by the governor’s remarks” in announcing he would appoint a temporary senator if anything should happen to Feinstein.

 

        Lee added that “The idea that a Black woman should be appointed only as a caretaker is insulting to countless Black women across this country who have carried the Democratic Party to victory, election after election. If the governor intends to keep his promise and appoint a Black woman to the Senate, the people of California deserve the best possible person for that job…We need a seat at that table.”

 

        In other words, she’s essentially saying, “Appoint me (if there’s an opening) or risk losing your party’s most reliable voting bloc.”

 

        Newsom, to his credit, refuses so far to be bullied, sticking with his commitments both to appoint a caretaker and a Black female.

 

        He essentially ignored Lee’s fury and her implicit threat and stuck with both promises he’s now made, all the while insisting he hopes Feinstein serves out her term.

 

        One thing that’s clear from all this is that Newsom reads the polls. They show Schiff, Porter and Lee all running well ahead of several potential and declared Republican candidates, making a Democrat-on-Democrat runoff election next fall very likely.

 

        Newsom, hoping to remain a major figure in his party long after his second statehouse term expires in 2026, plainly does not want to alienate backers of Schiff and Porter by awarding the seat to Lee during the leadup to the March primary election.

 

        He knows that any incumbent, even one who’s served only a month or two, gains credibility and an automatic advantage over electoral rivals.

 

        And Lee, running a fairly distant third in every poll, needs any advantage she can get, one key – but unspoken – reason for her displeasure at Newsom’s latest promise.

 

        But Newsom didn’t worry about that. Nor did he say whether he agrees with Lee that she is the “best possible person for the job.”

 

        Instead, he completely avoided comment on the current candidates, saying only that “We have multiple names in mind.”

 

        His comment also served his own political purposes, inserting him into the Senate race without having either to endorse or directly alienate anyone.

 

        This preserves his position as a national party leader without committing himself to any particular appointee. Newsom thus manages to please almost everyone but Lee and her most ardent supporters.

 

        Plus, he’s right. With only a few months before the primary, and no wish to endorse any of the leading candidates, why should he elevate one hopeful at the expense of the others?

 

        The answer is that he should not, and he was both correct and adroit in managing to avoid promising to do so.

       

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    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 NEWSOM ALLOW LEGISLATORS TO ASSIST GAS GOUGERS?

 

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, OCTOBER 3, 2023, OR THEREAFTER

BY THOMAS D. ELIAS

        “WILL NEWSOM ALLOW LEGISLATORS TO ASSIST GAS GOUGERS?”

        It’s up to Gov. Gavin Newsom, but if he signs a last- minute bill just passed by the state Legislature, California will be sending conflicting messages to big oil companies about lying and gasoline price gouging.

 

        That’s because of two moves in Sacramento on consecutive days as the 2023 legislative session ended in mid-September.

 

        In one, state Attorney General Rob Bonta, who badly wants to succeed Newsom as governor, noisily filed a biggest-in-the-nation lawsuit accusing Big Oil of lying for more than half a century about the environmental danger of fossil fuels.

 

        In the other, the Legislature with zero fanfare and no public hearings passed a bill designed to make it harder for the state to act on its new law that supposedly aims to stop the oil companies from artificially and deliberately staging events that raise the pump price of gasoline.

 

        “California is delivering on our promise to hold Big Oil accountable (for price gouging),” Newsom said in June when he signed that new law.

 

        But if he also signs the just-passed bill numbered SB 842, sponsored by Democratic state Sen. Steven Bradford of southwestern Los Angeles County, home to several large oil refineries, he will be reneging on that promise.

 

        Bradford employed the Legislature’s often-abused last-minute gut-and-amend procedure to revive an unrelated, moribund bill and substitute in it language that would hamstring the state’s ability to prevent the unneeded, unscheduled refinery “maintenance” shutdowns that oil companies often use as excuses for sudden, large pump price increases.

 

        Most recently, such shutdowns were their excuse last February, when prices rose by more than $2 a gallon almost overnight in a move that produced record oil company profits, but was described by Newsom as “fleecing California families.”

 

        The June law has a new wing of the state Energy Commission forcing oil companies to report maintenance shutdowns in advance.

 

        The current bill now on Newsom's desk softens that by saying the agency must “consult with labor and industry stakeholders and aim to avoid any adverse impacts to the safety of employees and surrounding communities, labor and equipment availability, other market impacts, and cost.”

 

        That would make fast action against sudden gas price spikes almost impossible, especially since there is no list

of “stakeholders” to consult. Essentially, this sneak-attack bill would disable the state’s power to help consumers quickly. Again, there were no public hearings and thus no evidence anyone has been endangered by the June law or that the newer measure is needed. If Newsom signs it, he would counteract the aims he declared in June.

 

        Even as this legislative effort at cozying up to Big Oil proceeded, Bonta was readying his lawsuit against Exxon Mobil, Shell, Chevron, Conoco Phillips and British Petroleum.

 

        One difference is that the legislative effort proceeded essentially in secret, while Bonta’s ballyhooed lawsuit made headlines. But it’s obvious grandstanding.

 

        If the lawsuit really goes forward, it will be years before oil companies pay any penalty for what Bonta says is lying since the 1950s about the fact that “burning fossil fuels leads to climate change.” This lawsuit will cost the companies little to defend, since they routinely maintain platoons of lawyers. It’s also a transparent move to help set up Bonta’s run for governor, likely to begin in early 2025.

 

        So the so-called “progressive” Democrats who currently run Sacramento spoke from both sides of their mouths, accusing the oil companies of lying on climate change while simultaneously attempting to ease their longtime practice of lying about price gouging.

 

        Said Jamie Court, president of the Consumer Watchdog advocacy group, “With gasoline prices spiking in California right now, this is no time to weaken a price gouging law that has barely taken effect.” He added that Newsom should veto “this attack on his gasoline price gouging law.”

 

        Court is right, but the quiet effort to help Big Oil gouge passed the Legislature by wide, bi-partisan margins.

 

        Which leaves things up to Newsom. If he signs this bill, it will mean that despite loud voices like Bonta’s, there is actually no significant force in Sacramento willing to stand up against Big Oil and its frequent gouging tactics.

 

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    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 COPS HAVE A WINNING SUMMER

 

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, SEPTEMBER 29, 2023 OR THEREAFTER

BY THOMAS D. ELIAS

     “CALIFORNIA COPS HAVE A WINNING SUMMER”

 

        Things were looking negative for individual police officers and police forces in California earlier this year. Job vacancies piled up, state Attorney General Rob Bonta seemingly launched constant brutality investigations and there was copious negative publicity about so-called “capture-and-release” of shoplifters and other misdemeanor suspects.

 

        New rules also compelled most police to wear body cameras tracking almost every move they make.

 

        All this has been fallout from the police killing of the African-American George Floyd in Minneapolis in 2020.

 

        But late summer brought a fast turnabout for law officers in many places.

 

        Begin with recruiting bonuses and starting salaries. As vacancies stared them in the face and police response times climbed, many cities began offering large sums to new recruits who complete training and become sworn peace officers.

 

        San Francisco now hands out $5,000 signing bonuses and has raised entry-level pay to about $108,000. Richmond police won a labor contract giving them raises of 20 percent over the next two years. Los Angeles police are on the verge of a new pact that will increase starting pay by 13 percent.

         

        Incentives also include free gym memberships and dry cleaning for uniforms in many cities. But the richest benefits for rookie cops are coming in Alameda, whose force had vacancies in about one-third of its authorized positions just last spring. Money changed this quickly. Jobs are no longer going begging since the city council of the Oakland suburb authorized $75,000 enlistment bonuses and a base salary starting at $110,000 yearly, not including overtime.

       

        Then came the courts. Led by judicial appointees of ex-President George W. Bush and ex-Gov. Arnold Schwarzenegger, both federal and state courts have lately expanded police privilege.

 

        The recent decisions may eventually be reversed, but for now, they’ve handed police officers vast new license.

 

        First came the state’s Fresno-based 5^th District Court of Appeal, where a three-judge panel ruled early this fall that committing documented perjury as a sworn witness may not be enough to guarantee a cop’s firing.

 

        The 2-1 decision authored by Presiding Justice Charles Poochigian, a former Republican state senator named to the bench by Schwarznegger, held that when a Merced officer testified he had opened containers in a motel room accidentally, while in fact they could not have opened without being deliberately unzipped, it was not automatic grounds for dismissal.

 

        “Whether termination was an abuse of (police department discretion) should be (up to) the trial court,” Poochigian wrote. So the cop’s lying about how he came to open containers without a warrant, the judges ruled, was not necessarily grounds for dismissal.

 

        Mere days later, a panel of the federal Ninth Circuit Court of Appeals ruled that a policeman who shot a naked man allegedly trespassing in a gym locker room was not personally liable for killing the man, but was protected by “qualified immunity,” which shields police from personal responsibility when they do not violate “clearly established law.”

 

        The panel originally ruled last spring that circumstances of the shooting should leave the policeman liable to pay damages for the fatal shooting, but one of the original panel members resigned from the bench before that decision became final. When a George W. Bush appointee replaced that judge, the newly-shaped panel first voted to vacate the original ruling, then to reverse it.

 

        In both cases, dissenting judges were appointees of Democrats, and the majorities were named by Republicans.

 

        Both decisions stand a strong chance of being reversed on further appeals, the perjury result possibly by the state Supreme Court and the “qualified immunity” ruling by an 11-judge “en banc” panel of the Ninth District.

 

        In both cases, the political leanings of the judges involved – not the facts – appeared to be major factors. Republicans voted to give police more leeway and more protection from responsibility for their actions, while Democrats voted to be tougher on them.

 

At least for the moment, both decisions remain on the books, giving law enforcement more legal shielding than officers had lately appeared to possess.

 

        All of which has made the last few weeks the most relaxed time in several years for police in California.

         

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    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 ANTI-SEMITISM ISSUE KILL ETHNIC STUDIES REQUIREMENT?

 

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, SEPTEMBER 26, 2023, OR THEREAFTER

 

BY THOMAS D. ELIAS

     “WILL ANTI-SEMITISM ISSUE KILL ETHNIC STUDIES REQUIREMENT?”

 

        “Next year in Jerusalem!”

                 Final line of virtually all Passover Seders

 

     There suddenly appears to be a strong possibility that the ethnic studies course requirement state legislators and Gov. Gavin Newsom adopted two years ago as a California high school graduation requirement may never become reality in many places.

 

        If so, it will come as a relief to members of several ethnic groups who have felt targeted from the moment this requirement was proposed about five years ago. Two drafts of rules and suggested content for the required course were rejected by lawmakers and the state Board of Education before a plan was finally approved with “guardrails” supposedly preventing content that promotes “bias, bigotry and discrimination.”

 

        But some school districts have hired groups including authors of the rejected ethnic studies versions to write local plans, and some of those have allegedly amounted to end runs around the so-called guardrails.

 

        Among other things, the early versions of the model curriculum adopted by the state claimed that immigrant groups including Irish-, Polish- and Jewish-Americans arrived in this country with built-in “white privilege,” no matter how poverty-ridden and filled with discrimination their lives really were.

 

        The authors of the rejected versions also have at times tried to make a distinction between Jews and Zionists, usually defined as believers in the concept that the land occupied by the current state of Israel and the Palestinian territories in Gaza and on the West Bank of the Jordan River should be a Jewish homeland.

 

        But there is no real distinction, as that last line of the texts used at millions of Passover Seders over the centuries makes clear. Almost all Zionists are Jews and most Jews believe there needs to be an Israel if only to provide a refuge in case of future reruns of the Holocaust.

 

        The reason for this attempted distinction is clear: the ethnic studies authors – many dedicated to the cause of “liberated” or “critical” ethnic studies, do not want to be accused of anti-Semitism, even while they back largely unfounded claims that Israel is a racist “apartheid” state that persecutes Palestinians.

 

         These folks ignore history, including the five-nation 1948 Arab assault on Israel moments after it declared independence and they ignore the charters of some leading Palestinian groups that call for ethnic cleansing of Israel's Jews “from the (Jordan) river to the (Mediterranean) sea.”

 

        There is little doubt that if their version of Jewish and Jewish-American history were widely taught, it would promote anti-Semitism of the type that has led to synagogue shootings from Pittsburgh to Poway.

 

        But because the 2021 AB 101, the measure that established the upcoming new graduation requirement, allows school boards to devise their own curricula, and not use the state’s model, the authors of rejected ethnic studies versions remain active and continue making money off their prejudices.

 

        Some school districts – including Hayward Unified, Castro Valley Unified and Santa Ana Unified – have already hired University of California and California State University faculty who are members of the Critical Ethnic Studies Assn. to write their curricula.

 

        That’s why, as a letter to legislators from more than 1,000 Californians noted, “Jewish communities across our state have discovered discriminatory content in several school districts in which anti-Semitic and/or anti-Israel biases are being adopted in ethnic studies curricula.”

 

            The way to stop this, the letter suggests, is for the Legislature not to provide the estimated $275 million per year needed to fund the graduation requirement. An amendment to AB 101 stipulates that the bill “is operative only upon an appropriation of funds…for purposes of (funding ethnic studies).” 

          

            As of late summer, less than one-fifth of that money had been allocated, and the letter suggests not providing more until or unless the curriculum is cleaned up and discriminatory language or false and defamatory information in local curricula is also corrected.

          

             Without the money, most districts won’t implement the new graduation requirement, which might then fade away under terms of the funding amendment to AB 101.

          

             It just may be that precisely such a disappearance is the right disposition of this requirement, which has always been motivated in part by resentment rather than documentable  history.

         

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    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 INSURANCE BLACKMAIL WIN OUT AGAIN?

 

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, SEPTEMBER 22, 2023 OR THEREAFTER

BY THOMAS D. ELIAS

    “WILL INSURANCE BLACKMAIL WIN OUT AGAIN?”

 

        Historically, the only effective deterrent to blackmailers is to get tough on them, fighting back and not giving in to their demands.

 

        Historically, also, California has a history of doing the opposite when it comes to insurance, letting companies that have lost money during natural disasters blackmail the state to escape risks that traditionally come with selling insurance.

 

        It appears about to happen again now, in a development that looks similar in many ways to the last successful insurance company blackmail, which took place in the 1990s.

 

        Prior to the big urban-area earthquakes that struck California in 1989 and 1994, insurance companies selling property insurance here also had to offer earthquake insurance policies.

 

        But no more. Those big temblors caused so much damage and so much insurance company loss that the companies declared they would stop selling homeowner and other property policies here unless they could escape from writing quake policies. They did just that.

 

        The insurance commissioner at the time, Republican Chuck Quackenbush, had been elected largely with insurance company donations. He quickly caved to the insurance company blackmail and led the Legislature to create the California Earthquake Authority, which now sells policies through actual insurance companies, which are not themselves on the hook for earthquake damages.

 

        Now the same companies, State Farm, Allstate and Farmers, plus AmGuard and Falls Lake Insurance, are using a similar blackmail tactic by again stopping property policy sales in the state, this time demanding a surcharge on all California property insurance to help pay for their losses from wildfires, floods and other disasters at least partially caused by climate change.

 

        They also want to base future rates on climate change projections of more severe fires and storms, rather than getting reimbursed by rate increases after those events occur, if they ever do. Farmers took matters a step further, announcing 2,400 layoffs.

 

        “This is pure blackmail,” says consumer advocate Harvey Rosenfield, author of the 1988 Proposition 103, which has regulated insurance rates since then. “They’re saying, ‘Give us more money or we’ll pull out and even cancel existing policies.’”

 

        Here’s the likely state response, as predicted by Rosenfield and the Consumer Watchdog advocacy group he founded: A last-minute legislative bailout.

 

        But here’s the proper response: Current Insurance Commissioner Ricardo Lara and Gov. Gavin Newsom need to tell companies which won’t sell property insurance here they also won’t be selling car insurance in the world’s largest automotive market and also won’t be allowed to sell life insurance, their most lucrative current product.

 

        So far, there is no sign of that kind of toughness from either Lara or Newsom.

 

        Reality is that the insurance companies want to keep making big profits even in periods when they have to pay up on their policies. That is the big reason Farmers recently also pulled out of the Florida property insurance market, where it has taken losses from frequent and severe hurricanes.

 

        But risk is at the root of the insurance business. Proposition 103, which has saved consumers more than $13 billion over the last 35 years, allows insurance companies to raise rates when justified by the payouts they’ve made. The companies want more. They want license to raise rates to an almost unlimited extent and they want to charge low-risk customers who live outside wildfire areas for the risks they assume by insuring other people.

 

        So, in addition to telling the big companies that if they won’t sell one kind of insurance, they can’t sell others, California needs to require that companies price their policies higher in high-risk areas than other places.

 

Folks who choose to live in the safest areas should not have to subsidizing others who want to enjoy the beauty and adventure of forest living. Homeowners in wildfire areas know the risks before they move there.

 

        But the legislators who might this fall give in to the insurance company demands know they are politically safe, whatever they do, so long as they run under the Democratic Party label.

 

        Which means insurance company blackmail will likely  succeed again this time, just as it did in the 1990s.

 

    -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

RENTERS NOW GETTING SLAMMED, RIGHT ALONG WITH HOME BUYERS

 

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, SEPTEMBER 19, 2023, OR THEREAFTER

BY THOMAS D. ELIAS
     "RENTERS NOW GETTING SLAMMED, RIGHT ALONG WITH HOME BUYERS”

 

       A UC Berkeley study the other day concluded that home buyers in California now pay double each month what apartment dwellers shell out for rent.

 

       That’s right: It takes twice as much ready cash to live in this state as a new homeowner than as a renter, for a comparable property.

 

       That’s also the conclusion of a year-long study by Dwellsy, a Los Altos-based Internet platform that often assists renters in finding houses, townhomes, condominiums and apartments.

 

       Despite the high levels of today’s California rents, this is a new reality, spurred in part by the steadily

rising interest rates on today’s mortgages. It means that fewer folks than ever can afford to buy, and helps

explain the relatively new California reality which sees renters making up well over half the populace.

 

       But Dwellsy CEO Jonas Bordo believes that most folks can still afford fairly financially comfortable

living, even as both home prices and rents begin rising again after a pause – or for owner-occupied homes,     a bit of a slowdown over the last few months of uncertainly about the national debt ceiling.

 

 

     For sure, neither rents nor home prices have been major contributors to the severe inflation that has afflicted most of America, and especially California, this year. “The normal seasonal rent cycle typically has prices increasing from April through October, so the bump right now is not unexpected,” said Bordo. “When you take the long view, renters are coming out on top.” Since April 2022, asking rent for one-bedroom apartments has decreased 0.8 percent, or $11 per month nationally. And since January 2021, it has gone down 1.9 percent.

 

 

     Overall, rents for one-bedrooms were up just $14 in March and April, the most recent months measured by Dwellsy. Meanwhile, house payments skyrocketed in California, even as base prices are down a bit. Typical house payments for just-sold median-priced homes that in this state carry price tags around $800,000 include a $3,000 monthly interest component when buyers get loans in the 4.5 percent range.

 

     

     The interest alone is more than typical renters pay in California’s priciest markets for one-bedroom apartments. In the state’s most expensive metropolitan area, San Francisco-Oakland-Hayward, the typical one-bedroom now goes for $2,495 a month. In nearby San Jose-Santa Clara, the price is exactly $100 less. And in the Los Angeles-Long Beach-Santa Ana area, it’s “only” $2,070. That still means renters must have a monthly income topping $5,000 to be comfortable unless they are roommates sharing the expense. So without doubling or tripling up, things are still not affordable for most residents of this state’s urban areas.

 

      But a bunch less pricy than if they were new home buyers.

 

      This is rarely mentioned when realtors gripe that sales have been down this spring and summer, running about 45 percent below last year’s volume. But when new buyers must come up with more than $40,000 in yearly mortgage payments and then add taxes and insurance into the mix, who can be surprised when some look to other states as financial solutions? Especially since most employers remain comfortable with the remote work ethos imposed on many by the coronavirus pandemic.

 

      All this is good news for renters. For when current homeowners need to raise money to cover medical and other expenses, some are willing to consider becoming landlords and landladies rather than selling in a tight market.

 

      And the more homes become rental properties, the more acceptable that alternative will look to homeowners, especially if they are empty nesters who might be comfortable downsizing into an apartment of their own, or using rental income from houses to cover the cost of condos.

 

      What’s more, the new reality of renters paying far less for their quarters than owners with mortgages will likely not change much until or unless the Federal Reserve Board drops interest rates far below present levels.

 

      

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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