Tag Archives: California

Bay Area IPO’s Coming to Raise Your Rent

The San Francisco Bay Area seems to be on a housing treadmill. Just as housing inventory started to grow and prices responded accordingly in some areas, tech companies are planning to go public. Airbnb, Lyft, Pintrest, Slack Technologies, and Uber are expected to issue initial public offerings in 2019. This will mean an infusion of cash into the pockets of the many tech workers who own their company’s stock. The logical thing to expect these workers to do is to use the cash to purchase a home. No more growing housing inventory and possible growing housing prices.

IPOs and Housing Prices

Doubt the correlation between IPOs and housing prices? Market Watch has a good article on the subject.

Zillow examined the link between Facebook’s IPO in 2012 and rising home prices across the Bay Area and found that home values rose more quickly in neighborhoods with higher concentrations of Facebook employees after the social network became a publicly-traded company.

Specifically, every 10 Facebook employees living in a given U.S. Census tract at the time of the IPO were associated with an extra 1.6-percentage-points increase in home values over the following year, the report said.

In dollar figures, the median value home in a neighborhood with a high concentration of Facebook workers rose by an extra $20,800 between May 2012 and May 2013.

Business Clusters 

In the Bay Area, companies highly valued by market standards, as well as startups hoping to join the value crowd at some point, are concentrated in close proximity to one another.  They comprise the world-famous Silicon Valley hub. This concentration affords the most return on investment for the companies, for their host government jurisdiction, and for homeowners in the community.

Clusters and cluster strategies cannot be seen as the answer to every economic challenge faced by a community or region. However, they do represent a valuable tool that economic development stakeholders should have at their disposal. A cluster approach may be most useful in helping officials and practitioners to see a community’s economy in a new way—not as a collection of individual firms, but as a system in which interventions can assist companies, industries, and the entire community.  Cluster-Based Economic Development Strategies, International City/County Management Association, March 29, 2012

Business clusters are the in thing, and the Bay Area has jumped on the bandwagon with two feet. But, when cluster advocates say clusters benefit “the entire community,” are they including those folks in the community’s lower and middle-income brackets who rent their homes? Those community residents might be employed by fast-food restaurant, or might be the people educating your kids in neighborhood schools or caring for your toddlers. Chances are they will never get their hands on IPOs, do not own a home, and never will own a home in the Bay Area.  But as prices increase due to the IPO infusion of cash, their rents will go up.  And forget about rent control, since everybody pays for that by way of taxes or prices.

Is There a Line of Defense?

The Bay Area has chosen to engage in an endless tug of war between developers and slow-growth advocates, high-income workers and lower-income workers, landlords and renters, YIMBYs and NYMBYs.  Meanwhile, housing costs are transforming the Bay Area into a poster child for unaffordability.  Maybe it is time for all sectors to give in a little by balancing housing and business spaces in every community.

Jeff Adachi – A True Believer

San Francisco lost a true believer on February 22, Jeff Adachi. The City’s Public Defender died unexpectedly at 59. His professional life was dedicated to defending whoever needed defending, no matter what. To that end, he did not observe political niceties, and preferred instead to go after the likes of powerful unions and their potentially unsustainable public pensions, City officials that did not hold police accountable for unwarranted shootings, and Board of Supervisor members who wavered on funding to defend the undocumented when necessary.

Perhaps a less publicized side of Adachi were his California Bar exam guides and books, and the time he spent selflessly preparing both traditional and non-traditional students for the grueling California Bar exam. His dedication to ensuring that everyone had the tools to succeed on a notoriously difficult test was unwavering; so much so that many California lawyers often credit Adachi for being the sole reason they passed the Bar.

Jeff Adachi took seriously one of the basic principles of this republic – Justice is blind. Justice should not look to whether your wallet is full, your skin is of a certain color, or your papers are in order. Justice’s only job is to review the case of any accused and determine what needs to be done under the law.

Adachi’s Public Defender’s Office was not the usual staid lawyer’s den. It was a place where questions were raised, public officials were called into account, and the rich or powerful got the same treatment as the downtrodden.

We will see who takes Adachi’s place. Matt Gonzalez, Deputy Public Defender, an equally true believer who is not know for running away from a good fight? Let’s hope that the Chief Public Defender that follows Jeff Adachi truly defends and does not merely appease the powerful. Let’s hope he or she is as dedicated in providing a level playing field.

Adachi protest 2
Jeff Adachi leads a “Hands Up Don’t Shoot” rally in San Francisco in 2014

Progressive Cities: We Have a Problem

San Francisco is one of California’s jewel cities.  Prized not only for its magnificent views, but also for its progressive populace.  There is not a tax the City does not love, or a compassionate deed that is left undone.

Yet, the City’s vistas, cable cars, resident technology giants, multi-million dollar mansions, as well as its busybody Board of Supervisors have taken a back seat in the City’s consciousness to its streets littered with human feces, discarded needles, and homeless misery. San Francisco has 7,499 unsheltered and sheltered individuals, in the streets or in temporary living arrangements. This number is not surprising, since one-quarter of homeless people in the United States live in California, even though Californians make up only 12% of the U.S. population.

Once Far Back In Time and Now

CableCarTurstile

San Francisco was once called “The City That Knows How,” where streets were clean and safe. Those were the days before the immense tragedy of the AIDS epidemic, before liberals took over City Hall, before developers – for profit or not – joined forces with corporate think tanks to redraw the City, before environmentalists hit upon the gold mine of climate change, and before the City’s Department of Public Works had a Poop Patrol or the City’s Department of Health had free injection needles.

Now Downtown, and increasingly the neighborhoods, is a place where one walks gingerly in order not to accidentally step of human faces or on discarded needles. In spite of the talk about placing children’s playgrounds in every neighborhood, parents are cautious least their children are inadvertently injured by drug paraphernalia on the ground.

Why the Descent Into Hades?

Unfortunately, no one agrees on the cause of the City’s descent; therefore, remedies are irrelevant and ineffective. The laundry list of culprits is varied:

* High-income technology workers that bid up housing costs and displace lower-income residents.

* Out-of-towners attracted by relatively balmy weather that allow for outdoor living, generous public assistance, a permissive population, and free injection needles.

* A welfare-homeless cabal that profits from the homeless trade. Think social workers, non-profit organizations, shelter operators, food banks.

* Legislators that seem to work to attract and keep the homeless. For example, the City is working hard to establish “safe-injection sites,” where homeless addicts can shoot up under the supervision of medical professionals. Another example, the City’s Mayor has proposed legislation that would forcefully place homeless individuals who cannot take care of themselves into conservatorships administered by the City’s Public Guardian. Once plugged into a conservatorship, no legal escape from the City is possible without a Court order.

From the Experts

The health implications of the mounting trash are stark. Discarded needles may be contaminated with diseases like Hepatitis B and C and HIV, infectious disease scientist Lee Riley told NBC Bay Area back in February. Dried feces, he added, can release viruses into the air … Riley, a University of California, Berkeley scientist who has researched the effects of extreme poverty on the health of some of the poorest groups in the world, said the contamination in San Francisco was “much greater than [in] communities in Brazil or Kenya or India.”  Newsweek 08/02/18

Mohammed Nuru, the director of San Francisco Public Works, told Boston’s NPR-affiliated WBUR station the waste is tied to the San Francisco’s high rates of homelessness. People often live in tents with little access to sanitation facilities or trash collection, he said … “Our city has been a magnet for providing services, and you know a large number of the people we see on our streets are not necessarily from San Francisco,” Nuru told WBUR. “They’re coming from surrounding counties and in some cases even from across state lines.”  Newsweek 08/02/18

San Francisco has a ‘Poop Patrol’ to deal with its feces problem, and workers make more than $184,000 a year in salary and benefits.  Business Insider 08/24/18

The main reason that so many people in San Francisco, and other cities like Los Angeles, are living on the streets is that the cost of housing over the past two decades has vastly exceeded the amount of income that people earn making minimum-wage jobs or bring in from modest pensions, disability, or welfare … Before Reagan took office and destroyed the American safety net, and San Francisco decided to be the West Coast Manhattan, you could live on SSI or a low-wage job and still pay rent in this town. When that changed, people who were formerly housed became homeless.  San Francisco Tenants Union 06/07/18

Bad and Beautiful

As one approaches the City for the first time as a tourist, a convention attendee, or a prospective resident, one might notice two breathtakingly beautiful bridges, as well as an ugly as sin structure visible for miles from all parts of the City. The dichotomy is made readily clear.

January Should be MTC Awareness Month

The San Francisco Bay Area is ground zero for tech companies, astronomical housing costs, and homelessness.  Those who are priced out of the housing market or their own homes often blame the influx of high-earning techies into the Bay Area particularly within the last 5 years or so.  Few are aware of the powerful trio micromanaging Bay Area residents’ lives, and how in-spite enormous power, the trio has not been successful in making the Bay Area “affordable.”  To the contrary, the trio might have made matters worse.

The trio in question consists of Plan Bay Area, the Association of Bay Area Governments (ABAG), and the Metropolitan Transportation Commission (MTC).  Enabled by California’s state legislators, the MTC and ABAG determine how much land will be available for building homes (not much:  about 90% of the Bay Area is “protected” from development in one way or another), how many people must be accommodated within each county (too many according to those who prefer tranquility over GDP growth), how dense cities and counties need to be (pretty dense:  remember the 90% under protection?), and how many residents must have access to subsidized housing.  All the plans, mandates, and ever-intensifying goals are spelled out in Plan Bay Area.

The lion’s share of the trio’s power rests in the hands of one MTC Executive Director and 21 opaquely-selected MTC Commissioners.  MTC’s Executive Director will retire at the end of February 2019, and MTC is searching for a replacement.  Commissioner’s term expires in the middle of February 2019, and cities/counties must select new ones or re-appoints old ones.

Given MTC’s enormous power, its significant effect on the lives of Bay Area residents, and the opportunity for activism presented by MTC’s changing of its guard in February, the Nine-County Coalition — an organization dedicated to fighting the growth of entities run by unelected bureaucrats — has decided to unilaterally declare January 2019 “MTC Awareness Month.” 

Just Vote No joins them in their effort to make the voting public aware of MTC, its track record, and its obscurely-picked Commissioners.

Pictured below is MTC’s latest effort: the Bay Area’s multibillion-dollar Transbay Center, which opened with much fanfare August 2018, and closed for structural failures six weeks later.

transbay terminal opening 3

Challenge “Free Speech Zones!”

Kevin Shaw was not happy when he was told by a school administrator to stop distributing pocket Constitutions outside the campus free speech zone or risk being led out. So, he sued, and won.

On December 12, 2018, the Los Angeles Community College District Board agreed to open the main areas of Los Angeles Pierce College to student expression, revoke a district-wide policy that declared all property on its nine campuses to be “non-public forums,” and pay $225,000 in attorneys’ fees.

The LACCD’s actions did not come about as a result of their suddenly being “woke” to the fact that ensuring free exchange of ideas should be a principal function of an educational institution, judging by an announcement on the LACCD’s website,

In settling the lawsuit, the LACCD agreed to make the designated free speech zone at Pierce College much larger and to make sure all of the nine colleges have similar processes to allow student free speech activities.

No, the LACCD’s actions were the result of a lawsuit that Judge Otis Wright of the U.S. District Court for the Central District of California refused to dismiss. The lawsuit moving forward, media picking up the story, and Jeff Sessions (in the days he was still U.S. Attorney General) filing a Statement of Interest in the case put the LACCD in a precarious condition worthy of a fast retreat.

The Lawsuit

The lawsuit in question is Shaw v. Burke (the Burke party refers to Kathleen F. Burke, then president of Pierce College). In November 2016, Kevin Shaw, a member of Young Americans for Liberty (YAL) and student at Pierce College, was distributing copies of the U.S. Constitution outside of the college’s tiny free speech zone (the campus occupies 426 acres, and the free speech zone was 616 square feet). A college administrator warned him that he needed to file a “free-speech permit” and restrict his activities to the college’s free speech zone, or be asked to leave the campus.

In March 2017, Shaw filed the law suit with the sponsorship of the Foundation for Individual Rights in Education (FIRE). In January 2018, Judge Wright rejected a motion by Pierce College for dismissal of the case. On December 12, 2018, the Los Angeles Community College District settled.

In light of the District’s attitude towards free speech, the $225,000 in taxpayer money the LACCD paid as attorneys’ fees as part of the settlement was probably the best use of taxes the college made in a while.

The Victory in Shaw vs. Burke is Only a Beginning

Judge Otis Wright’s Order rejecting Pierce’s motion for dismissal of the case lists the strengths and weaknesses of Shaw’s complaint and of Pierce’s response based on prior cases. As a result, the Order denies Pierce’s motion to dismiss the case and grants an injunction in LACCD’s practice of approving (or denying) permits, but cites prior decisions that say exercising one’s First Amendment rights in areas where one is disrupting foot traffic or otherwise interfering with the activities of others is not permissible.

Therefore, the LACCD can say it has made the free speech zones on campuses “much larger,” as opposed to it has eliminated them. But who decides how large such zones need to be, and based on what criteria?

Maybe the next step is for liberty-leaning individuals and/or groups to file lawsuits in an attempt to overturn court decisions that allow for restraints by government agencies imposed prior to a free speech event.  Actually obstructing traffic, interfering with other people’s activities, disrupting the main purpose of education facilities – learning, or engaging in any kind of violence should be the reason for restrictive responses, not the prospect of someone stepping outside a designated zone!

The Bigger Picture

Shaw vs. Burke was filed in the state of California, where the populous coastal cities are epicenters of progressive politics, political correctness, safe spaces, and the “Resistance.” It would not be far-fetched, therefore, to surmise that folks living in these epicenters would prefer restrictive speech rater than open discussion that might disturb the accepted wisdom.

John Stuart Mill, in his epic tome On Freedom, goes beyond laws and formal bills of rights, and observes that government’s restriction of free exchange of ideas is unacceptable, even when done with the full consent and agreement of the populace.

Let us suppose, therefore, that the government is entirely at one with the people, and never thinks of exerting any power of coercion unless in agreement with what it conceives to be their voice. But I deny the right of the people to exercise such coercion, either by themselves or by their government. The power itself is illegitimate. The best government has no more title to it than the worst.

[T]he peculiar evil of silencing the expression of an opinion is, that it is robbing the human race; posterity as well as the existing generation; those who dissent from the opinion, still more than those who hold it. If the opinion is right, they are deprived of the opportunity of exchanging error for truth: if wrong, they lose, what is almost as great a benefit, the clearer perception and livelier impression of truth, produced by its collision with error.  John Stuart Mill, On Freedom, Chapter II: Of the Liberty of Thought and Discussion.

Poverty in the Land of Plenty

The U.S. is a rich country judging by its massive economy as measured by GDP, standard of living and availability of goods and services. Yet, the U.S. has one of the highest poverty rates in the world. Among OECD (Organization for Economic Co-operation and Development) member countries, mostly developed countries, the U.S. ranks third highest in poverty.

Poverty is not evenly distributed among the U.S.’s 50 states, but is concentrated in a few, with California leading the way as having the highest poverty rate in the nation and contributing the most to the U.S.’s lamentable rank among developed countries. Even more disturbing is the fact that California’s GDP in current U.S. dollars ranks No. 1 among all other states.   Read More

Supplemental Poverty Measure

 

 

If You Are Poor, You Are Not Alone.

The Big Picture

The U.S. is a rich country judging by its massive economy as measured by GDP, standard of living and availability of goods and services. Yet, the U.S. has one of the highest poverty rates in the world. Among OECD (Organization for Economic Co-operation and Development) member countries, mostly developed countries, the U.S. ranks third highest in poverty.

When viewed as percentage of a population, poverty rates usually understate the misery. The OECD’s as well as many other measures of poverty count individuals living below a certain poverty income line. Therefore, individuals need to be countable and receiving some form of income, which leaves out people participating in underground economies and other invisible endeavors.

Income is defined as household disposable income in a particular year. It consists of earnings, self employment and capital income and public cash transfers; income taxes and social security contributions paid by households are deducted. OECD: Household Income and Wealth

The Smaller Picture:  U.S. States

The big picture shows the U.S. as having a significant GDP in relation to other countries, as well as a noteworthy poverty level. What drives such unfortunate poverty numbers? For example, what U.S. states contribute the most to the bleak figures?

Poverty rates

The above figures show the number and percentage of people living in poverty by state, using a 3-year average over 2015, 2016, and 2017. Additionally, these figures, provided by the U.S. Census Bureau on September 2018, are the Supplemental Poverty Measure, which factor in cost of living in each state. One state stands out: California.

The Golden State, Not So Golden

California has 7.5 million people living in poverty, the nation’s highest rate.  The next worse is Florida with 3.7 million — a little less than half of California’s numbers.  And remember these are the people that are counted, not living in invisible settings.

State legislators throw up their hands, blame the “housing crisis” in the state for the lamentable poverty numbers, and return to their business as usual: creating more poverty by insisting on restrictive land use, irresponsible fiscal policies, curbing mobility of residents (think rent control; think high property taxes and Proposition 13), and just plain brain washing folks against the idea of striking out in search of better opportunities. In California everybody is supposed to stay put, stay progressive, stay PC, and stay either very poor or very rich.  The strategy may not be working all that well considering the state’s net out migration, but California has mighty persistent politicians.

Were California less effusive in bragging about its economy – never mentioning its poverty rate as a self-inflicted wound, and seldom mentioning its unsustainable unfunded pension liabilities; and were California more focused on making efficient use of its enormous tax revenues instead of “resisting” change, it would have been mean spirited to pick on California as the lead contributor to the regrettable U.S. poverty rate. But, given the circumstances, it is not wrong to randomly throw the blame on the Golden State.