Friday, August 19, 2016

What does it take to pass the Smarter Smart Growth Law?

More evidence Californians are overpaying for housing: Add special interest pandering to the list.

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Transit Talking Points by: Nicholas Ventrone, Community Engagement Director

Pandering lawmakers failed to pass a simple supply-demand bill proposed by Governor Jerry Brown that would better allow developers to address the housing supply shortage, urban sprawl, gentrification, a car-centric culture, and resulting runaway growth of expensive rentals and purchase prices. That's despite the fact that Brown allowed $400 million in affordable housing subsidies to be allocated for the spend-happy legislature as part of the legislation.

This law would have lowered the cost of living by allowing developers to have projects approved without the layers-upon-layers of red tape. The proposed regulatory reform would have allowed the industry to better profit, compete and address the supply-demand imbalance. It would have expanded transit-oriented infill development with some units set aside for those making less money, especially in areas near public transportation. Our transit agencies that are looking to get people out of their cars and grow their bus and train ridership numbers and farebox recovery ratios would have greatly benefited with the residential developments just footsteps away from the stations and stops.

Despite the smart growth initiative as a counter to urban sprawl and to build affordable non-subsidized workforce housing near transit routes as taught in Environmental Science 101, the influential environmental lobby opposed and the legislature was too cowardly to stand up for We the People and come up with a workable solution. They simply pandered to the special interests and said "no" without passing any variation of the proposal. To be fair, some lawmakers were courageous enough to back the bill, but some variation of it should have made it through to the Governor's desk.

The powerful labor union lobby also objected to the Smarter Smart Growth Law that influenced the vote. The unions are demanding prevailing wages on the private development sector for projects approved under the proposed law. That would be something unprecedented and destructive to the marketplace because such projects would not receive any government funds but still be bound to special prevailing salary rules beyond the existing minimum wage and overtime labor laws. Again, how the labor unions and environmental lobby are able to have a direct influence over lawmaking decisions is a disgrace to the democratic republic.
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That's despite the fact that the Smarter Smart Growth Law would stimulate the construction job market and put countless unemployed people back to work. That will grow the middle class and give them an opportunity to thrive, a historical key purpose of unions and collective bargaining. Remember: As the number of total jobs increase in the marketplace regardless of they are union or not, so does pay and good benefits because developers and their supporting businesses have to pay more to retain quality employees. That's to prevent them from applying for higher-paid work at their competitors. The developers that pay their workers the lower wages will end up facing higher costly turnover. Also, since buildings have to be built to code, developers that underpay their workers may also face steeper quality assurance costs as better paid workers can deliver better quality product the first time around.

You may know that workers at the local Wal-Mart or McDonald's for example know that if they perform well and bring value to their corporations but their employer fails to give them better decent pay as both have historically demonstrated, they can apply to a competitor, and the under-paying corporations lose out on quality labor. That leads to costly turnover and a decline in customer service quality. And businesses know that both of these factors can be controlled by better paying their staff. When was the last time you went to a McDonald's or Wal-Mart and noticed or had something go wrong with your purchase?

However lawmakers would not even consider this Economics-101 argument as part of the debate, and the Smarter Smart Growth law stalled. From my point of view, that is a pure greed of power from the labor union lobby; I don't think they're looking out for the working class.

Growing up, I have personally been affected by these price hikes, gentrification and urban sprawl disaster, having twice been displaced from growing costs that grew much further than working salaries. Despite me having a decent-paying skilled-based job, I cannot afford to live anywhere near the economic job hubs in West LA, Orange County or San Diego. The rents and purchase prices are just too high, even for single room rentals. Housing inventories are just too short.

If the people we elect cannot debate and pass a straightforward simple solution that addresses a grave cost of living and urban growth problem that is not in line with the rest of the market economy, we need to show the state who is in charge of governing the land: We the People, not the special interests.

The political gridlock has gotten so bad that many of us have lost trust in the government and left the state. Countless Californians are way overpaying to just have a roof over their heads. We should be spending at most 30% of our household incomes toward housing payments or rents, but most of us are paying twice that amount. Many that do find a home somewhere decent and affordable must commute from far-off areas that strains the transportation infrastructure and pollutes the environment. I first learned about long-distance commuting and the environment back when I was in elementary school. And the state legislature does nothing when it could.

Moving forward, Governor Brown must not give up on the Smarter Smart Growth Law. He must not, nor should We the People. The tools are there to convince the majority of hardworking California population that action must be taken at the state level. Workers must be able to have an option to live near their jobs with plenty of resources to spare without any form of financial help from the government.

How can all working Californians have the option to live close to work without government subsidies and purpose at least 70% of their income to other areas? The state legislature needs to address that. Meanwhile, the blog series that "More Evidence that Californians are Overpaying for Housing" will continue.

Wednesday, August 10, 2016

CA Housing Crisis: Influential Power Groups in the State Capitol

The special interests have had their day in Sacramento influencing lawmakers on smart growth policy. But who exactly is in charge of governing state law?

Transit Talking Points by: Nicholas Ventrone, Community Engagement Director

As a California citizen, I am furious about how the state legislature is handling Governor Jerry Brown's proposal to address California's housing shortage problem.

Here's the deal: Anybody living anywhere near a major job hub anywhere within the state knows the truth. They know that renters and prospective home buyers, more often than not, are either paying way too much or are priced out of a decent place to live. Rentals and unit prices have risen out of control in many areas, well beyond the growth of income and working salaries. That's because developers have to go through layers upon layers of government rules and regulations to build any kind of dwelling in developed areas. Critical mass has been reached as these rate hikes have made their way into the Inland Empire.

In order for the home building industry to profit under current law, they generally have to resort to the outskirts of town and develop on cheaper land. Or they can wait until the prices are so high that they can drive up their GM percents by selling or renting premium luxury units that even medical technicians and school teachers can't afford for themselves let alone their families. The former results in urban sprawl and spread-out, car-centric infrastructure with disgraceful traffic conditions on the freeways; the latter in social class division. Plus, there is a possibility that this crisis has had a direct impact on the growth of transient encampments in wildlife corridors all over the state.

Non-partisan environmentalists will tell you that all of these after effects are bad for the planet. That comes from my Environmental Science 101 textbook.

Governor Jerry Brown has proposed legislation that would finally control this by allowing developers expedited and streamlined approvals if their proposals meets local general land use policies, is in-fill, and  multi-family. With the reduction in the red tape in the process, construction costs drop significantly for the industry which in turn sparks investments and better competition in areas with high housing demands and low supply. That in turn would help better balance the supply-demand scale and get prices at least closer to where they need to be.

I call this law the "Smarter Smart Growth Law" because it has non-government, market-rate transit-oriented development written all over it. Other states in the nation have long adopted similar policies to streamline development, which is a driving factor to why workers can generally afford to live near their jobs.

In addition, Brown attempted to lure the legislature into accepting the proposal with a $400 million deal for additional subsidized affordable housing if they were to pass the Smarter Smart Growth Law or some variation of it. The current proposal also requires that a percentage of market-rate homes built under this policy be purposed for subsidies with the percentage dropping for units built near major public transit lines. With nearly a half a billion dollars set aside for government spending--something this ideological legislature generally backs because it funds public sector jobs--why on Earth would it object to the Smarter Smart Growth Law?

I'll tell you why. Yesterday, the Los Angeles Times and other news agencies reported that special interests which include labor, environmental and tenant coalitions "have walked away from negotiations over Gov. Jerry Brown’s plan." The reports show that organizations like the State Building and Construction Trades Council, Sierra Club and Tenants Together, oppose the governor’s housing proposal which puts the proposal in jeopardy of not passing this year. The troubling part is that this statement implies that these special interest groups somehow have the power to directly influence state law.

Under the U.S. Constitution, they are free to oppose the proposed law and voice opinion to the legislature. I have no problem with that. Yes, they will have a hard time defending their positions in the court of public opinion. The groups are generally saying that the Smarter Smart Growth Law or similar versions of it may put the local communities and the environment at risk with under-paid construction workers. But that is ideological spin and lawmakers should know better.

Both the Southern California economy and the environment are already at risk with the resulting urban sprawl, super-commuting, illegal encampments in natural habitats and expensive homes near jobs. By blocking this law, developers will hire fewer workers because fewer projects will be approved. A reduction in construction jobs causes more workers to compete for fewer positions which gives employers little incentive to pay them better.

But what is absolutely disgraceful about this story is the continued special interest pandering in the state government. The organizations mentioned  reportedly have an influential power grasp in the state Capitol and the legislature has been siding with them without taking into consideration the truth of the matter from the supporting party that affects each and every one of us.

Again, to be fair, it is okay and our duty to write to lawmakers to voice opinion. That's a patriotic duty we have as American citizens. The Transit Coalition writes letters. But no one power, nor a group of powers should have the power to directly collude or influence lawmakers in the deciding process. That power belongs to We the People.

Americans have the right to be represented. We live in a Democratic Republic. And state lawmakers should not cave on an important piece of legislation that addresses a grave economic and environmental situation just because their political donors oppose it. Somebody in the Capitol must take courage and write up the Smarter Smart Growth Law that will address this housing problem, grow the economy so workers can be better paid, and allow these people to live closer to their jobs which will protect the environment from gridlock and urban sprawl.

What is happening in the State Capitol should never happen on American soil. But it is happening. And holding the power structure to account in solving this grave housing crisis will be the way to show that We the People, who have to put up with these grossly immoral housing prices and long car-centric commutes, are in charge of bringing about economic and environmental justice to the state.

Freedom of the people to govern the state will reign.

Thursday, August 4, 2016

Labor Unions Obstruct CA Affordable Housing Law

Big labor appears to side with the greed of power, not the California working class in addressing the home inventory supply shortage and expensive prices.

Transit Talking Points by: Nicholas Ventrone, Community Engagement Director

If you live anywhere in Southern California and currently rent or looking to buy, you know the story. We overpay to have a roof over our heads by substantial margins. That is a direct cause of long distance commuting and spread-out development which has clogged our transportation systems.

Rental rates continue grow much faster than the growth of working salaries in general, and reports are showing that this has contributed to a growth in transients. I have seen that first-hand as panhandling and encampments have grown out of control in some areas. Because of that, hotel and motel room rates have skyrocketed too as more people are priced out, even from single rooms for rent.

Governor Jerry Brown announced a proposal earlier in the summer that would address the root cause of this problem by streamlining approvals for infill developments statewide, especially those near frequent public transit routes. Under the proposed law, urban smart growth housing projects that meet general local zoning requirements and reserve some portion of the units for lower-income residents would be exempted from any additional environmental or local government review.

That would give developers the green light to better address the high demands for housing within the state without the fear of facing trivial NIMBYism or expensive frivolous CEQA lawsuits. That in turn would allow the marketplace to better compete, grow the supply of housing to meet demands which would get prices in check while expanding construction jobs. With the red tape out of the way combined with a conservative means to put more people to work, you would think that the governor's proposal or some variation of it to stimulate housing development would pass seamlessly.

Yet, the legislature would not pass the affordable housing law.

The greed of power within the state's labor union lobby combined with lawmakers on the political-left tied to their special interests blocked Brown's proposed affordable housing law. They are demanding that developers pay their workers union wages if the proposed housing developments are to be exempt from the expensive red-tape process, even though such projects will not receive a single dime from the state government.

Brown has initially indicated that he will oppose a prevailing wage requirement and he is right to do so because such a mandate would allow the government to further control non-subsidized wages in the private sector beyond the current minimum wage and overtime labor laws. Plus the mandated higher wages would stall the initiative for developers to invest because of the increased costs. In addition, a prior deal to pass the affordable housing law had already included a $400 million grant for subsidized housing; that should have been good enough to convince the legislature to pass the affordable housing law. But the labor unions are demanding even more power and the lawmakers that pander to them are siding with this greed and not for affordable housing for California workers. 

The whole point of this campaign is to get the government red tape out of the way and costs down so that the marketplace can better build infill housing in developed areas which will lower rents and per-unit purchase prices and cut down on long distance commute times. That's it.

To be fair, there is a valid argument that cities would need to spend money in order to update their general plans in order to better comply with this law as outdated plans could lead to undesirable development in some areas. Same goes for ensuring that local infrastructure and resources like water, gas and electrical supplies can handle the development. Linking all these points together via predefined land use policies will cost the cities money. Perhaps allowing the localities to tap into a portion of the $400 million grant to update their master plans could offset this issue. Plus, I don't oppose including a grace period so that cities have time to prepare. Reports show that the state is taking in comments from the local governments.

But if we as a state cannot pass a workable means taught in high school economics to address this grave housing crisis and allow developers to address the housing shortage, then We the People need to better hold the power structure to account in solving this problem.

Even the liberal Los Angeles Times editorial board which has been known to side with the political-left on many matters has actually taken an honest position on this story and not sided with the unions. When a liberal mainstream newspaper deviates from political-left ideology in an editorial, you know the issue is serious.

The hardworking people renting homes within the state have been affected by these unjustified prices for way too long, and the legislature and labor unions are doing nothing to solve this problem in an intelligent fashion. They need to knock this off and pass a law that will streamline development because in the end, the greed of power and the worship of wealth will never prevail.