How Housing, Policing and Environmental Issues Disrupted California City Government

This is a companion piece to the podcast California Battleground, hosted by Robb Korinke. You can subscribe to that podcast on Youtube, Spotify and anywhere you get podcasts.

Last week we explored how the GOP share of local government seats has been in freefall over the last five years. You can catch up on the discussion here, but we focused a lot on macro political trends driving that, and this week we'd like to shift gears to how the policy landscape has shifted and contributed to that phenomenon. There has been a remarkable convergence of state and federal issues with local governance in the last decade, and it's had a pretty substantial impact on local elections.

Nominally non-partisan races, it is clear that policy making at the local level at the local level was showing increased signs of partisanship in the early part of the decade. We saw cities increasingly setting their own course on issues like pensions, immigration and environmental regulations. This was notably different from the early 2000s, where progressive activists were focused pretty squarely on federal issues, like the Iraq War, healthcare and Climate. On the conservative side, there was just a smattering of business groups and a few ideological groups like Lincoln Club active locally. 

 Today, progressives have zeroed in on local governments on issues like sustainability as well as housing, policing, cannabis and even budget making and are much more involved in local level campaigning and advocacy. The state GOP actually made local offices a strategic priority in the early part of the 2010s, and had pretty measurable success, but abandoned that initiative and rather quickly saw the bottom fall out. 

It is difficult to measure the impact of any given policy on the kinds of candidates that run and win local seats, but it is unquestionable that hot button political issues have to a large degree become local government issues. Advocates have realized the City Councils, regardless of what state laws may allow, have tremendous power to actualize policy. If you want cannabis sales or housing developments, just because California law allows or encourages such activity, it is typically a local city council that makes it reality or bars it from materializing. This has drawn candidates with a stronger ideological agenda to local elections, and galvanizing outside groups around local races in substantially new ways. 

A few ways in which this is demonstrably true:

Environment.

Where environmental interests have fallen short in the State Capitol, there is now a practiced and routine effort to take fights into City Halls. Over 150 California cities passed plastic bag bans and more than 120 Styrofoam bans -- virtually all of them since 2010. Dozens of cities and counties have banned fracking in the same period, even where there is no oil drilling. Where there is oil extraction, in LA and Ventura county in particular, but even in Central Valley communities you’re seeing increased local activism on the issue.

Some of this is organic grassroots activity, but i think to larger degree its a strategic initiative by environmental groups to “Swiss Cheese” local regulations and force the hand of the legislature to enact statewide policy, or prime the pump for ballot action on these issues. 

You can see this take place in real time if you follow the passage of local plastic bag bans in the run-up to the statewide ban in 2016. What began in Marin County and Malibu spreads to more liberal enclaves of the Bay Area and LA County, to college towns and left-of-center suburbs and pretty soon you have a magic number of “100 bans” and leverage in the state capitol. Notably, there is near unanimity among Bay Area cities within a 4 year span of the issue gaining momentum, a testament to energy around environmental/grassroots organizing in the Bay Area, but also to a degree that region’s more lockstep politics. 

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Housing.

The centrality of land use authority and “local control” really can’t be understated as the DNA of local cities, especially in suburban California and much of LA basin. The only real reasons to incorporate a city are to have more control over your housing policy and your public safety policies. You could argue taxes but taxes in incorporated areas tend to be higher than in unincorporated areas.

Consider now that a great many of the LA and Orange County cities incorporated in the post war era turned right around and contracted with County Sheriff for policing -- didn’t even created a police department -- and you get a sense of the centrality of housing policy in why these cities exist. 

In the 2000s it was common to see developers and environmentalists spar over individual housing developments as part of the larger fight against “sprawl.” These were typically project-specific, one-off kinds of fights, but after the housing meltdown and into today’s housing crisis, much larger fights have emerged around “YIMBYism” and a pronounced awareness of younger voters on City Councils role in permitting housing. Seeing 20 years olds advocating in the RHNA process is not something you would have expected in 2005. Additionally, while state level action on Rent Control has proven elusive, more than a dozen rent control initiatives have appeared on local ballots in the last two years, and one local candidate rode such an initiative to a successful 2020 council bid in Burbank (though the measure itself lost). 

The largest cleave in local government was SB 375. This bill uses regional transportation plans developed by metropolitan planning organizations (MPO) to “improve land use and transportation policy.” The League of Cities supported the bill alongside the building industry and a host of environmental groups. A pretty diverse coalition, but the League's support enraged the more conservative cities and it actually led to a breakaway group in Orange County and number of cities to actually halt dues to the League. That group still exists today, the Association of California Cities Orange County, or ACC-OC.

There are significant demographic forces at work here as well. California is getting (a lot) older. The population of seniors is an order of magnitude greater than in the 1960s, and it may yet double again in the next 25 years. Homeownership rates among younger demographics have, meanwhile, collapsed -- cut in half among many younger cohorts from where they were 40 years ago. So this sets up a young vs old dynamic, compounded by older Californians being substantially more white than younger generations.  

Homelessness.

Related but separate from housing is the homelessness issue, which has exploded across California in the last ten years. Formerly a province of large cities it is now an issue virtually everywhere, from Redding to Calexico. While a consistent topic of state legislation, homelessness has put local officeholders in a precarious position with their voters and it is a powerful anti-incumbent message. Siting of homeless shelters is a toxic process in local communities, and an array of groups petition City Councils on all sides of the debate around encampments and homeless housing. 

This is a powerful anti-incumbent cudgel. Addressing root causes of homelessness is likely beyond the scope of any individual local politician, but any incremental steps to enact local solutions are likely to be met with fierce opposition from local residents and come at a great political cost. 

One example might be recently unseated LA City Councilmember David Ryu, who represented Koreatown/Hollywood and Sherman Oaks. His loss to Nithya Ramen was heralded as a landmark victory for progressives in LA -- which it certainly was -- Ryu was nonetheless a fairly progressive member by the standards of just a few years ago and ran as an “outsider” as he defeated the retiring member’s chief of staff in 2015. His one-term tenure was besieged by the homeless issue. He made it a focus of his term but gets loudly booed at forums on the issue in more suburban parts of the district in Sherman Oaks, NIMBYs rail against plans for local shelters, he becomes boxed on the issue all while his eventual opponent Raman founds a neighborhood homeless coalition and ousts him largely on failings around the homeless issue. 

Crime and Public Safety.

Gang violence, certainly in large cities, was a key issue in the 1990s and into the 2000s, but as crime rates fell this issue shifted substantially. Part of this was Jerry Brown’s “devolutionary” approach to prisoner overcrowding via AB 109. But more profoundly, the civil rights movement around policing is very much a local government issue. Advocates in cities large and small increasingly advocate not only in public meetings but protest at local government officials’ homes.

The inverse of this movement, and pushback against “Defunding the Police” has also been a campaign issue used to success in various kinds of communities, including the central valley. 

If you want a pretty strong proxy for how the policing issue is playing in local communities, look at the LA DAs race from last November, where George Gascon unseated Jackie Lacey. You will see the ways in which Lacey held most of the suburban areas in a "ring around the county" visual that is increasingly indicative of LA County voter behavior. 

Cannabis.

While 57% of California voters approved Proposition 64 legalizing recreational cannabis in 2016, to this day only about 170 of nearly 550 cities and counties in California permit for cannabis. Look just at cities, Prop 64 passed in nearly 400 of the 478 cities.

So less than a third of communities permit, and many of those that technically do are severely limited or, like the City of LA, very dysfunctional. So four years after legalization, there are only about 700 storefront retailers of recreational cannabis, nearly a third of those are in just LA, Long Beach, San Francisco, Santa Ana and Sacramento. There are more than 8,000 liquor stores. 

This has led to industry groups and cannabis advocates taking a stronger role in local elections, and some grassroots groups organizing against it. It's a lesser issue than some of these others, but 5 and 6 figure expenditures in small cities is not nothing and it does have a fundamentally partisan orientation and is new in the last few years.

Pension and Budget Issues.

As a watchword “fiscal responsibility” was perhaps the most common refrain regardless of party affiliation for years, but the financial crisis and burgeoning pension debt of local cities have made this a far more salient local issue. For pension hawks, the large portion of unfunded pension liabilities and bond debts lay within local governments -- maybe more than a trillion dollars, depending on who you ask. The “official” CALPERS’ estimate is somewhere around only around $200 billion. 

This has also amplified labor’s engagement in local races. Not only for the purposes of favorable bargaining, cities have never recovered their staffing levels from the 2008 recession, and also the elimination of Redevelopment agencies in 2011. A recent study of Bay Area cities showed still operating with 7% less staff than a decade ago. Nationwide, studies have shown that local government employment per capita is down about 8 percent. 

The regular city budget process has also drawn previously unseen grassroots engagement. In 2012, Vallejo established the first city-wide Participatory Budget process in the US, and there are a number of cities that have some form of that process now. Oakland was the first US city to use that process to allocated federal block grant dollars in 2017. Advocates in Long Beach propose an annual “People’s Budget.”

What's Next.

There is a notable through-line of several of these issues. Housing, homelessness, crime and budgeting all have inter-connected aspects. They also happen to be some of the most pressing and difficult political and policy issues facing California, and they all fall into the lap of local officials to address with immediacy.

There are more issues on the horizon. Wildfire as well as coastal planning will both prove expensive and politically fraught issues that play out locally. The fallout from the pandemic and public health measures, whether ideological and/or economic, have already begun to emerge and will likely linger well into the coming election cycle. Finally, we have court decisions that may loosen the rules for passing local tax measures. This will bring pressure from interest groups to shore up local finances through revenue enhancement, all while Californians have been increasingly rejecting tax hikes.

Welcome to the roaring 20s.

We talk about all this and more on the California Battleground podcast. Subscribe on Youtube, Spotify and anywhere you get podcasts.

 

Rev & Tax

Thursday, June 17, 2021 - 05:22

Cities like Fresno and Ontario have been courting online retail giants with generous sales-tax rebate programs that return as much as 50 to 80% of the tax to the retailers.