CAP & MAIN REPORT--For Sacramento, July is traditionally the calm before the storm — when state lawmakers and lobbyists desert the capital during the summer recess to brace for August’s legislative onslaught and its end-of-the-month deadline for bills headed to the governor’s desk. This year, however, the lights have remained on in both the offices of Governor Jerry Brown and the state’s powerful oil lobby. 

Earlier this month, Brown and Western States Petroleum Association (WSPA) president Catherine Reheis-Boyd confirmed reports of ongoing direct talks between the governor and oil industry groups over what a Brown spokesperson told Capital & Main in a carefully worded email statement was an extension of “the state’s cap-and-trade program and climate goals beyond 2020.” The statement said talks were taking place for the sake of “market certainty” and to “ensure ongoing funding for clean energy programs, especially in vulnerable communities.” 

A similarly vague message from Reheis-Boyd said only that the talks were aimed at “improving the state’s current programs and ensuring legislative oversight concerning the decisions that will determine California’s next course of action to combat climate change.” (Another oil group, the California Independent Oil Marketers Association, did not respond to a request for comment.) 

Though both sides declined to speak on the substance of the negotiations, the likely assumption is that the governor is seeking to cut a deal for Big Oil’s pledge to remain neutral on two of this year’s climate bills that are considered essential to the future of the state’s pioneering cap-and-trade program and long-term carbon-emission reduction targets. 

Cap-and-trade is California’s approach to driving reductions in greenhouse gas (GHG) emissions. The “cap” sets a gradually lowered limit on emissions; the “trade” creates a market for carbon allowances, incentivizing polluters to innovate in order to meet their allocated limit. The less they emit, the less they pay. The money raised through the auction sale of carbon credits is earmarked for projects that help the climate and the environment in general. 

Senate Bill 32 would extend and further raise California’s GHG reduction goals beyond 2020, the short-term target date set by 2006’s landmark Assembly Bill 32. Its companion bill, AB 197, which is still being refined, spells out the power of the Air Resources Board (ARB) to use market-based compliance mechanisms for reducing emissions from “stationary sources” and the transportation sector, while appeasing fossil fuel-friendly Democrats by requiring state officials to both prioritize and consider the cost effectiveness and technical feasibility of emission reduction efforts. 

But the very fact that Brown is resorting to what amounts to domestic shuttle diplomacy across L Street is already a tacit admission that the influence wielded by Big Oil and its allies among the caucus of “moderate Democrats” amounts to a stone wall when it comes to taking decisive action on averting the catastrophic consequences of climate change and ensuring Brown’s climate legacy beyond 2018, when he will leave office. 

“It’s no secret what the oil industry in California has been after for a long time,” said Natural Resources Defense Council attorney Alex Jackson, “and that’s to prevent California from showing an effective path forward on climate change that can serve as a model for others to emulate. They’ve invested in electoral politics and initiatives in the past that have now set them up with some leverage to try to thwart California’s next big steps after 2020, if their demands aren’t met.”  

The oil industry spent a record $22 million lobbying California legislators and officials last year (as of May, the total for the 2015-16 legislative session had topped $25 million), with much of it directed at resisting the legislature’s efforts to turn the ambitious climate goals laid out in Brown’s 2015 State of the State address into law. 

That muscle was dramatically flexed last September when the lower house’s mod Dems caucus, led by then-Fresno Assmbleymember Henry Perea, defied the governor and its own party leadership by successfully gutting SB 350 of its 50-percent-by-2030 gasoline reduction provision. Those cuts had been part of the effort authored by Senate President Pro Tem Kevin de León (D-Los Angeles) to codify Brown’s ambitious goal of achieving an 80 percent emissions reduction below 1990 levels by 2050. 

The mods also forced Senator Fran Pavley (D-Agoura Hills) to hold over to the current session its sister bill, SB 32, albeit pared back from its original goal of codifying Brown’s existing executive orders to reduce climate emissions to 40 percent below 1990 levels by 2030, and to 80 percent below 1990 levels by 2050. The version that will now need to get past the oil Democrats’ roadblock — and that must be passed in tandem with AB 197 to become law — contains only the 2030 target. 

Part of what’s at stake for the governor is the legal cloud over whether, under AB 32, cap-and-trade requires legislative reauthorization beyond 2020. State Republican leaders insist that without reauthorization, it must end at that date; Brown and California’s Air Resources Board (ARB), which oversees the program, argue that AB 32’s language explicitly empowers the state to continue the program — and set new emission standards — without the legislature’s approval. 

Those uncertainties have been complicated by an ongoing court challenge by WSPA’s business ally, the California Chamber of Commerce, that seeks to invalidate the entire cap-and-trade program on the grounds that the billions in auction proceeds constitute an illegal tax. 

Last week, Brown and ARB released a plan to proceed with new emissions caps and future auctions and the allocation of allowances after 2020. However, concerns over the state’s long-term commitment to emissions reductions by the carbon marketplace are believed to have played a part in May’s disappointing auction of pollution credits. 

Though the billions that have been generated in auction proceeds are a byproduct of the program — the focus of cap-and-trade is to lower caps on emissions — the revenues are considered essential for investing in clean-energy technologies and in the communities that have been most severely burdened by state climate policies.

“It is ultimately about putting a price on polluting,” said Susan Frank, director of the California Business Alliance for a Clean Economy. ”It’s about forcing emitters-slash-polluters to pay something so that over time that cost becomes too much for them. That in the end it becomes less expensive for them to be cleaner, to reduce their emissions, to innovate and invest and do better than it is to pay to pollute. We have to let this unfold. It is the uncertainty of the program that contributed to what happened in the May auction, and it may very well happen similarly with August and November. But ultimately, the business community that I represent needs the certainty of a post-2020 game plan.” 

The surest way of achieving that certainty is for the governor and legislative leaders to immunize the state’s climate initiatives from further legal challenges by “bulletproofing” this year’s two-bill omnibus with the supermajorities mandated by the fiscal straightjacket of 2010’s Proposition 26, which defined fees as in the same revenue class as taxes. 

But that means getting the oil industry to stomach California’s “clean-gasoline” mandate, AB 32’s Low-Carbon Fuel Standard (LCFS), which gradually lowers the cap on the amount of carbon generated from “well to wheel.” It aims to rid at least 10 percent of the carbon from California’s transportation fuels by 2020, which are currently capped at two percent. It forces companies that produce “dirty” fuels to either meet carbon-reduction targets directly or purchase credits from clean-fuel producers. 

LCFS is routinely hailed by environmentalists as a model of progressive and thorough fuel-regulation policy. It is also the feature of California’s regulatory landscape most feared and hated Big Oil. That’s because together with cap-and-trade, it strikes directly at gasoline and diesel profits by jumpstarting a market for alternative transportation fuels such as liquid biofuels, renewable natural gas, electricity or hydrogen. And the the world is watching. 

“We have other states and regions that are looking to join up,” Susan Frank noted. “California’s ability to succeed with a market-based program has implications regionally and nationally and globally. And while it is only one program on a larger slate of policies, all eyes are on California to see if this effort is going to be successful. And it’s been successful.”  

The oil industry has not been idle. It forcefully struck back with 2010’s failed Proposition 23, a ballot measure that sought to effectively suspend AB 32 altogether. Then, during in the months leading up to last year’s addition of transportation fuels to the cap-and-trade program, WSPA waged what’s been called a multistate, multi-million-dollar “AstroTurf campaign,” attacking LCFS not only in California, but also in Oregon and Washington State by claiming that the program would result in price spikes and fuel shortages. In fact, the standard resulted in a 36 percent increase in clean-fuel use in the state and $650 million invested in clean-fuel production. 

And the industry hasn’t let up even in the midst of its negotiations with the governor. The messaging being broadcast in its most recent round of attacks on SB 32 and LCFS, through groups with grassroots-redolent names like Californians for Affordable and Reliable Energy (CARE) or Californians Against Higher Taxes, continues to cast doubts about the viability of cap-and-trade while portraying the state’s investments in clean energy as a waste of public money. Or, like the current “Fed Up at the Pump” sticker campaign by the California Independent Oil Marketers Association, it implies that LCFS and cap-and-trade constitute an illegal tax. 

That kind of vehemence has raised speculation that the industry is less than sincere in its negotiations with the governor. 

“I think that certainly it is possible that there is a larger strategy here to negotiate in bad faith,” Environmental Defense Fund director of Oil and Gas Program Tim O’Connor told Capital & Main. “The oil industry … has been in opposition to these policies for years and certainly as alternative fuels have taken stronger hold, as emission reductions in California have started to become more and more evident at the refining level, they are not becoming more friendly to these policies.” 

But the window is closing on the available time during which climate scientists say nations can still act cost-effectively to keep global average temperature to “well below the 2°C above earth’s pre-industrial levels” agreed to in last year’s Paris climate accord. 

“Sea levels are rising now, albeit slowly,” said J.R. DeShazo, director of the Luskin Center for Innovation at the University of California, Los Angeles. “Habitats are slowly changing. The urgency arises from the fact that early preventive action has a much, much larger impact than a comparable action [taken] in 25 or 50 years.” 

It is estimated that for the Western United States alone, the price tag for disruptions in water supplies caused by global inaction could reach $270 billion by 2025 and balloon to nearly $2 trillion by the end of the century. Averting more floods, heat waves, droughts and rising sea levels requires good faith and bold leadership by all of California’s energy partners. It also means that any intentional delay for political advantage can only be seen as a kind of Strangelovean brinkmanship. 

If the clock is running on the planet, in Sacramento, time is ironically on Big Oil’s side. Even should cap-and-trade persevere in the courts, the oil industry has much to gain by stalling on cap-and-trade until 2017. By then, the industry will have two more “failed” pollution credit auctions to bolster a narrative that the program is already dead. It’ll also have the opportunity of November’s statewide elections to increase the ranks and the power of the mod Dems caucus. And 12 more months of inaction will paradoxically only increase pressure on the governor and Democratic leaders to accept the kind of watered-down emissions standards that today are unthinkable. 

“The tactic of delay is one that big polluters have used for decades,” said Tim O’Connor. “We think, as do many, many others, that 2016 is the year for California to move forward, to push ahead on long-term climate targets. … Governor Brown in his negotiations wants to see California step up and lead, and I just don’t know whether we’re going to see a unicorn appear this year. It’s likely and probable that there are going to be some actions that focus on a simple majority vote, which is much easier than negotiating with the oil industry.“

(Bill Raden is a freelance writer in Los Angeles. This report originated at Capital and Main.)

TRANSPORTATION POLITICS--Silly me!  To think that my desire to have more transportation options, create more affordable and family-friendly housing, and establish more open space in an elegant manner that helps the Economy, Environment and Quality of Life of Angelenos was enough.  

I should have known better!  And you, Friend Reader, well YOU should have known better, too! You've taxed yourselves aplenty for transportation, schools, the environment, police/fire, parks, etc. But perhaps my recent CityWatch article about taxpayers being attacked and brow-beaten was all wrong. 

Because after seeing a presentation of a now "by-right" project proposed for 12444 Venice Blvd., taller than anything on that boulevard for miles, and a self-righteous presentation of the developer who had NO CHOICE to make it that big, I've come to the conclusion that … 

... maybe we're just not being taxed enough ... or impacted enough ... or overdeveloped enough.  Fortunately, we've got some first-rate developers, patrician-citizens, and elected leaders to help us find our moral compass and think straight. 

Here are FIVE great ways that developers can convince us we need overdevelopment--while our electeds find more ways to tax us and raise our utility bills to MAKE US PAY AND GIVE OUR FAIR SHARE!!! 

1) Decry our lack of affordable housing--yes, the City of Los Angeles could have emulated other cities by not transforming neighborhoods and allowing some reasonable height/density compromise, but...darn it all, there should be NO limit to height and density! 

(... and that lack of true affordable housing that comes out with the details of what the rent/cost really is, and the relatively small number of units for affordable housing...let's keep THAT on the down low, shall we?) 

2) Decry our lack of transit-oriented development--yes the City of Los Angeles could have emulated other cities by establishing a more realistic radius and definition of bus/rail stations...but what we REALLY wanted when we voted to spend $2.4 billion tax dollars on the Expo Line was to overdevelop the begeezus out of the Mid-City and Westside! 

(... and the impact of this overdevelopment on us spending more taxes for transportation--particularly mass transit--this November...naw, that overdevelopment couldn't POSSIBLY affect our interest in funding more mass transit) 

3) Decry our lack of Westside housing, Valley housing, etc.--yes, we've got a shortage of new developments in South L.A. (whose residents, by the way, want their neighborhoods IMPROVED, not TRANSFORMED FOR THE WORSE, too!), and very little new development south of the I-10 freeway, but don't let that get in the way of new megaprojects in overpopulated areas. 

4) Decry the lack of taxes or money that rich homeowners pay for their easy, lazy lifestyles--yes, both property taxes and utility bills are going up, but I guess we have to admit that L.A. homeowners are just lazy and selfish.  And those seniors and others on fixed incomes...well, nuts to them because others deserve to, and have to, live anywhere they want. 

That whole supply and demand thing?  That whole environmental sustainability thing?  Well, clearly that's for the rich and selfish--and fortunately, our developers are anything BUT rich or selfish. 

(Except, of course, for those developers who--and you DO exist--know how to keep a project modest, reasonable in its variances and height and parking and density, and free of acrimony from the residents and community leaders) 

5) Decry our car-based lifestyle--yes, Angelenos and others are spending and compromising aplenty to allow for pedestrian, bus, bicycle, and train-based commuting, but cars are going to be a thing of the past, doncha know! 

Because EVERYONE wants to use car-sharing, Uber, Lyft, etc., and even the Millennials (when they start having kids) will want nothing to do with owning their own car, or owning a second car, to accommodate a two-parent family with small children. 

So SCREW the whole parking requirement thing, and SCREW the neighbors concerned about how a new development will cause spillover parking on their property...because they're selfish...and evil...and living in the past that was probably based on cruelty, racism, elitism, and fascism 

... and ... there ya have it.  I could probably throw out a few other ideas, but you get the picture.  No, a seven-story development in a three-story neighborhood, with very little affordable housing, woefully-inadequate parking couldn't possibly be bad. 

The developer just had NO CHOICE but to make it that tall, that big, that dense, and with that little parking.  And seeing the sun again with that height ... probably over-rated, too. 

So thank you, Sacramento and Downtown Los Angeles, for coming up with policies that to my Neanderthal way of thinking will destroy the Environment, Economy, and Quality of Life for current and future generations of Angelenos. 

Thank you for allowing a 7-story monstrosity on a currently-open boulevard at 12444 Venice Blvd.  My community's hopes of mitigation, compromise, REAL affordable and transit-oriented housing and development have been turned around. 

We all now know better.  It's not the developer and her enabling political leaders who are the problem. 

WE'RE the problem.  And we're ready to pay a whole lotta taxes on transportation, parks, schools, the homeless, etc. this November...and maybe, some day, we can start thinking about how to pay for our sidewalks to be fixed in 7-10 years (instead of 30 years) after we get through embracing this new wave of taxes and development!

(Ken Alpern is a Westside Village Zone Director and Board member of the Mar Vista Community Council (MVCC), previously co-chaired its Planning and Outreach Committees, and currently is Co-Chair of its MVCC Transportation/Infrastructure Committee. He is co-chair of the CD11Transportation Advisory Committee and chairs the nonprofit Transit Coalition, and can be reached at  [email protected]. He also co-chairs the grassroots Friends of the Green Line at www.fogl.us. The views expressed in this article are solely those of Mr. Alpern.)

-cw

VOX POP … VOICE OF THE PEOPLE--Since 2000, billionaire developer Alan Casden and his representatives have spent a whopping $1,396,660 to curry favor from LA politicians, according city Ethics Commission records. Casden is considered a powerhouse developer in Los Angeles -- at one point, he was looking to buy the Dodgers. Just like other shrewd developers, he knew that a key to success would be spreading around lots of cash at City Hall. 

Casden, founder of Beverly Hills-based Casden Properties, and his team have shelled out $55,150 in campaign contributions to LA political candidates, according to the Ethics Commission. Also, since 2000, Casden and crew have spent $1,341,510 on politically connected City Hall lobbyists, who then seek favors from LA politicians and bureaucrats. That’s an eye-popping total of $1,396,660. 

One of Casden’s most recent projects is Casden West LA, a controversial mega-project located at Pico and Sepulveda boulevards, where gridlock traffic is infamous. Casden came under intense pressure from community groups to downscale the project, which he ultimately did. But the developer still wanted to build more than 595 residential units on the site, and he needed the L.A. City Council to sign off. 

In addition, Casden West LA sits next to the 405 Freeway. USC and UCLA researchers have found that housing within 500 feet of a busy freeway can cause a number of serious health problems for children, pregnant women, senior citizens and the infirm. Such freeway-adjacent housing has come to be known as “Black Lung Lofts.”  

Regardless of the traffic gridlock and health hazards, LA politicians approved Casden West LA in 2013, though the development has not yet been built. 

That’s how things work in LA City Hall’s broken planning and land-use system. Shell out big cash in campaign contributions and lobbying fees to win over city politicians and bureaucrats, and then expect very profitable favors in return. Since 2000, the real estate industry has contributed at least $6 million to the campaign war chests of LA politicians. 

Enough is enough. We need to reform LA’s broken planning and land-use system, which is what the Neighborhood Integrity Initiative will do. 

In fact, the Los Angeles Times, the LA City Council, Mayor Eric Garcetti and numerous neighborhood groups all agree that reform is desperately needed.  

Developers and their politician pals will do anything to defeat our reform movement and continue their wrong-headed policies. But together, we, the citizens, can create the change that LA needs!

(Patrick Range McDonald writes for the Coalition to Preserve LA.) Edited for CityWatch by Linda Abrams.

EASTSIDER-My ears always perk up when I hear CalPERS and private equity mentioned in the same breath. Our story starts a couple of years ago, when these words came to the attention of a financial blog, Naked Capitalism, which noticed that CalPERS representations about the wonderful returns on their private equity fund bets simply made no sense. 

This is important because, like most pension funds, CalPERS wasn’t able to make the 7.5% returns on investment they had adopted in calculating what they needed to keep the Plan afloat and healthy. Private equity investments are important to the Plan since they are key to their strategy of trying to get high yields on their investments. 

And you and I should care about this, ‘cause guess who has to pony up more money if CalPERS guesses wrong? Yup. Members of the plan and taxpayers. 

Anyhow, there was much controversy over CalPERS’ refusal to provide public information about their private equity holdings and the actual returns on them. At the time, I wrote about the blatant misrepresentations by CalPERS staff as they tried to pretend that they were actually making a ton of money from investing in Private Equity deals 

Ultimately, the mess got so bad that respected national figures were all questioning the real returns of private equity partnerships, after all the hidden fees were taken into consideration. Thirteen public officials from all over the United States even wrote a letter to the Securities & Exchange Commission. Finally, the California State Treasurer, John Chiang, weighed in and initiated legislation to curb the abuses. I got so excited that I wrote a piece called “John Chiang Steps Up.”  The Bill is AB 2833, and was actually authored by Assembly person Cooley. 

Silly me. 

Imagine my reaction when a recent LA Times article wrote a very unflattering piece over CalPERS, private equity, and by implication, John Chiang his own self.

Even though the Times article gets a bit mixed up trying to balance things by quoting an alleged law professor from UCLA, whose credentials are suspect, the point is clear: this is the old ‘bait and switch’ kind of legislation that the California Legislature is (in)famous for. 

Which brings me to a point about politics. Here’s how it played out: As Treasurer of the State of California, John Chiang automatically has a seat on the 13-member CalPERS Board. Late last year, he actually intervened in the private equity mess by getting AB 2833 (Cooler) introduced. Since Chaing was busy Treasurer, he sent a representative, Grant Boyken. 

So why would his representative at the CalPERS May Board meeting, basically lie through his teeth to the Board about negotiations between the Treasurer’s Office and the Bill’s author over proposed amendments to AB 2833? 

These amendments, it turns out, gutted the bill once Boyken got the Board to support it “if amended” -- but without specifying what those amendments would be. And they were amendments that Boyken clearly knew about when he made his representations to the CalPERS Board. Heck, one of the Bill’s original drafters and supporters even testified to that effect. Here’s the link to a detailed article detailing how Grant Boyken Duped CalPERS Board.  

Not only did the Treasurer’s Office mislead the CalPERS Board, their representative doubled down with his mealy-mouthed responses to the LA Times questions.   

There is only one logical explanation for all of this intrigue. Last year, John Chiang was simply the State Treasurer. This year, John Chiang is a candidate for Governor of the State of California. Do the math. As his deputy, who, by his own admission, is deeply involved in the negotiations between the Treasurer and the author of AB 2833, there is simply no way that Grant Boyken was unaware of these pending amendments when he misled the CalPERS Board. 

The shame about CalPERS support of AB 2833 is twofold. First, it shows that there is not a lot of due diligence done by either staff or the Board itself on the subject of private equity funds, and that is scary. Remember, as the Orange County Register recently reported, CalPERS annual return on investment for this year is going to be essentially zero (0) percent -- even as the Board is looking for a 7.5% return to make their books balance. 

Secondly, it’s a real disappointment to see the political machinations of a man I viewed as the only “grown up” in the field of candidates for Governor -- John Chiang. Think about it. My reasoning starts with Jerry Brown who has been the only counterbalance to the tax and spend democratic super majority for his entire term of office. Even the Howard Jarvis folks have as much as admitted it. 

So who exactly is going to step up and fill that gap when Brown leaves? Gavin Newsom? Antonio Villaraigosa? Eric Garcetti? Give me a break. Chiang is a very smart and savvy politician who comes out of the financial side of politics and actually knows how to count. What a concept. And nobody that I know of except Chiang has the chops to successfully stand up to the Democrats when Brown terms out. The sudden bait and switch on AB 2833 shows the money power of the private equity crowd and their lobbyists, politicians and camp followers. Yuck! 

By the time you read this article, CalPERS will have had their July meeting, and we will see how their brand new shiny Executive Director, Marcie Frost, and their seemingly inept investment staff, as well at the problematic Board of Directors, handle this problem. Or if they do at all.

(Tony Butka is an Eastside community activist, who has served on a neighborhood council, has a background in government and is a contributor to CityWatch.) Edited for CityWatch by Linda Abrams.

HERE’S WHAT I KNOW--Affordable housing is a big issue in LA. November’s jam-packed ballot will include an affordable housing measure, Build Better LA, backed by labor unions and community groups. If passed, the measure would place affordable housing requirements on developers who seek approval for projects larger than city rules allow. 

The measure is opposed by business groups like the Los Angeles Chamber of Commerce who believe the proposal would impede needed development, increasing construction costs, especially vis a vis requirements that would favor union labor. 

A surprising new group is rallying against the measure, tenant activists. The LA Tenants Union argues that the restrictions placed by Build Better LA would encourage construction of luxury housing instead of affordable apartments. Should the measure pass, activists fear renters would face eviction from buildings that would be demolished to pave the way for new construction. 

Per an analysis by City Atty. Mike Feuer, some developments seeking zoning changes or amendments to the city general plan could either build affordable housing or pay a fee to bypass the requirement. 

Certain projects would be required to follow wage and hiring guidelines and the city would be limited in its ability to restrict general plan amendments. The general plan is a blueprint to ensure development meets certain guidelines for affordable housing, access to public transportation, and labor. 

If existing affordable housing is razed to make room for costly developments, tenants would not have a guaranteed right to return, according to the Tenants Union, a right that only exists now under certain circumstances. Several renters groups support the measure. 

A second measure, which bakers hope to get on the March ballot, the Neighborhood Integrity Initiative, would limit spot zoning to bypass planning rules for individual development projects. 

As developers continue the race to build luxury and mixed use projects to gentrify neighborhoods, the affordable housing crisis will not be abated. We need affordable housing close to public transportation and employment for our city to survive and thrive. 

Forcing Angelenos further from centers of employment isn’t prudent for the economics of the city or for the environment. We need limits to development to serve both Angelenos and the business community, which also benefits from workers who can live closer to jobs. We need to ensure city office holders adhere to the city’s general plan instead of making decisions to favor the deep pockets of developers who will choose to pay a “fee” to bypass affordable housing requirements.

(Beth Cone Kramer is a Los Angeles writer and a columnist for CityWatch.)

-cw

GUEST WORDS--When looking at the City of Los Angeles’ proposed $1.2 billion bond for homeless housing, residents should look past the obvious question of whether this will really get the 27,000 people living on our sidewalks into housing. Instead they should focus on more fundamental questions: 

Is this the City’s responsibility? 

Is a new tax really needed? 

Will the tax burden be spread fairly? 

Is an adequate process in place to avoid mismanagement and corruption? 

The answer to all four questions is: No. 

Counties* in California - not cities - are the government entities responsible for taking care of mentally incompetent, poor, indigent and incapacitated persons. Yet the County of Los Angeles only provides $221 per month in general relief (which jumps to a grant of $877 from Social Security if a person is totally disabled). As an old saying goes, the only problem with poor people is that they don’t have any money. If the County had regularly indexed the $221 figure to account for decades of inflation, a significant number of the homeless would be able to afford to live in shared apartments and houses. 

In the face of the County shirking its duty, the goodhearted folks at City Hall have volunteered to help – as long as someone else pays for it. 

Before residents let the City Hall again put its hand into their pocket they might consider that the City Administrative Officer projects that the budget will grow from $5.55 billion to $6.20 billion in just the next four years, about $650 million in new revenues each year by 2020. If the City simply committed 10% of the budget increase over the next twenty years it could easily pay off the $63 million needed each year to service the bond without a tax increase. 

If it is adopted in November, the bond’s tax burden will fall unevenly, with most of the cost being covered by those who have more recently purchased property, whether houses and condos, apartments, or commercial and industrial buildings. This is due to the operation of Proposition 13 which reassesses properties to market value upon sale (or new construction). Renters – including those who are quite wealthy - will pay nothing, and those who have owned their property since 1978, when Proposition 13 passed, will pay very little. 

While City officials say the average yearly increase would be $44.31 per year for a home assessed at $327,900, the current median in Los Angeles, the tax on the Westside and elsewhere with more expensive real estate will be far higher. 

My duplex, purchased in 1989, is assessed at about $800,000. So, I would pay an average over the expected 28 year life of the bond of about $106 a year (on top of the $1,470 I already pay each year to retire school and community college construction bonds.) However, a new buyer of my property, at about a $3.5 million sales price, would pay an average of $473 per year, with a spike in the 11^th year to about $800 when all the bonds will have been sold. 

These effects play out much differently between apartments and commercial property. The City’s rent control ordinance does not allow apartment owners to pass on property tax increases to renters, so apartment owners will have to absorb all the increase. But commercial property is frequently under a triple net lease, which requires the lessee to pay the property taxes, so lots of mom-and-pop businesses will have to pick up the bill. 

With more than a billion dollars at play, the potential is high for mismanagement, favoritism and corruption. However, the oversight committee designed by the City Council has the foxes guarding the hen house. Four are appointed by the Mayor, three by the City Council and there are no qualifications required - such as 10 years or more of multi-million dollar construction management experience or being a certified public accountant. There also is no funding for the committee to hire independent staff or retain experts. Nothing in the bond ordinance prevents the appointment of political cronies or individuals from the affordable housing industry who have a financial interest in which projects are funded.

This all suggests the County, with funding from Sacramento, should finally step up and assume its legal requirement to take care of the homeless. If the City still feels it wants to help, it can fund a housing bond from future revenues. Even without a new tax, strengthening the independence and qualifications of the oversight committee would be prudent. 

*WELFARE AND INSTITUTIONS CODE SECTION 17000

 Every county and every city and county (i.e.; San Francisco) shall relieve and support all incompetent, poor, indigent persons, and those incapacitated by age, disease, or accident, lawfully resident therein, when such persons are not supported and relieved by their relatives or friends, by their own means, or by state hospitals or other state or private institutions. 

(Mark Ryavec is the former Chief Deputy Assessor for Los Angeles County and now serves as president of the non-profit Venice Stakeholders Association.)

-cw