Editors note: Our correspondent Erik Walker does the only thing appropriate to the NFL these days: Makes fun of a league in shambles.
RAIDERS 45, BROWNS 42 (OT)
In a pregame full of fear and potential loathing, with the specter of losing to the Browns dangling over Mark Davis’ hideous hairdo, the Raiders and Browns put on a game of free-wheeling huge plays (could that be bad defense? Oh, come come!), bonehead mistakes, dropped balls, interceptions, fumbles and everything that should make for a fan crushing display of ineptitude, and turned it into the most entertaining game of the season.
If that’s Doormat Division play, then I’m all for it. New Brownie savior Baker Mayfield did his part, turning the ball over four times (though 1 interception and 1 fumble were not his fault), with a pick-six for the first score, but also pulling off plays of almost hilarious daring and speed. The Browns have a real QB. Until just this moment the Browns have been like most rock bands — terrible lead singers. After a while you just give up and go with whoever can stand in front of a mic and scream (or mumble), and maybe remember lyrics. Just filling space, and always opening first on a bill with seven bands. The punk days, bless them, were Doormat Gold. If you had a good singer, nobody trusted you. So Baker Mayfield looks like a young Pavarotti right now… just ignore the low trajectory on the passes, shhhh.
Raider QB Derek Carr responded with two interceptions of his own, and hurled 58 passes. There were three runs over 40 yards, two for TDs, multiple big yardage pass plays. It was like the old AFL.
The teams still got off 13 punts, and how you score 87 total points when you keep bailing, well, you gotta have just the right combo of good and bad. These teams have it. For one day, and 38 total possessions. That’s an average of holding onto the ball for only 1:57 for each possession.
The Browns really appeared to be robbed of a first down when Carlos Hyde’s knee touched down just shy of the marker (sure didn’t look like it to us!) at the end of regulation. They would have run out the clock and won. Las Vegas called the replay booth or something, there. Good grief. The Raiders then scored the tying TD and two-point conversion. TVs all over Cleveland are still stuck in freeze-frame on that spot of the ball.
Skinny rookie Raider kicker Matt McCrane, one of a chorus line of kickers rotating around the league right now, who missed twice when kicking from the 2nd base bag earlier, chipped in the last FG late in the OT to hang the win on Raiders, now 1-3 and no longer perfect. Browns return to having a losing record, and everyone can relax a little bit.
It is now proven that, despite having Brent Musberger as their new radio play-by-play man, the Raiders can win a football game. I cannot tell you how off-putting and completely wrong it is to have ol’ Brent as the Raiders announcer. So, utterly, totally WEIRD.
Let’s have a look at the standings:
DOORMAT DIVISION WEEK 4
NFC W-L PF PA DIFF
Arizona 0-4 37 94 -57
NY Giants 1-3 73 95 -22
Detroit 1-3 94 114 -20
Santa Clara 1-3 100 118 -18
Atlanta 1-3 116 122 -6
AFC W-L PF PA DIFF
Buffalo 1-3 50 106 -56
Oakland 1-3 97 123 -26
Houston 1-3 96 108 -12
Indy 1-3 94 100 -6
NY Jets 1-3 89 89 0
Pittsburgh 1-2-1 102 116 -14
Cleveland 1-2-1 102 104 -2
Lotta losing going on, here, something’s gotta give.
THE GAMES
CARDINALS 17, SEAHAWKS 20
It took everything they had, including shanking a winning FG with 1:50 left, but perseverance pays off. The Cardinals lost a game they were in deep danger of winning, going right down to 0:00 to fall to the Seahags. Let’s face it — the Crudinals wanted it more. Last 0-fer team left in the league. Cards engaging in too many close scores. They need a blow-out loss. Let’s see what they can dial up next week in Santa Clara.
BILLS 0, PACKERS 22
The Bills have clearly righted the ship, and wiped the memory of that bizarre victory over the Vikes last week from the collective memory: 11 first downs, three turnovers, 87 passing yards, 8 punts, 7 sacks. Wow. Only three penalties, but when you are just refusing to do anything, it’s hard to get penalties. Still the early favorite to take the AFC.
49ers 25, CHARGERS 27
His name isn’t BeatHard for nothing. SF QB C.J. Beathard takes another shellacking, with LT Joe Staley having to leave the game, but doesn’t seem fazed, as the Whiners barely escape Los Angeles with the loss. Neither team seemed sure about winning the game, but, ultimately, the worst kicker on the field kicked the winning field goal. San Diego kicker Caleb Sturgis missed TWO extra points, but scraped in three out of four field goal tries, and juuuuust saved his job, and didn’t have to go back to the high-kicking unemployment chorus line.
DOLPHINS 7, PATRIOTS 38
The worst 3-0 team in the NFL met up with reality yesterday, and took their usual beat-down from the Patriots, who, for one week, returned to being the best team in the AFC East. Which isn’t hard to do, when your competition is the Nyets, the Nils, and the Floppers. Woulda been a goose-egg, but the Patriots started playing fans from the stands (only ones with the best costumes!) late in the 4th and the Floppers got a pointless touchdown and 5 phony first downs on their last drive. They had only SIX first downs until that tortured crawl down the carpet. I hate when stats get skewed like that.
GIANTS 18, SAINTS 33
The Gnats score first. And then pretty much stopped. 1-3 and right behind the Cards in the standings. Still, NY fans (not the Mets fans) can just ignore all this until the Wednesday Wild Card game is over. Football?
COLTS 34, TEXANS 37 (OT)
They gave the Colts multiple chances to win, but to no avail. Another wild Doormat game goes in the books, and the Toxins have to take a win. A total of 944 yards, 20 penalties, 11 sacks, two lost fumbles.
Gotta love those porous defenses when they meet up.
STEELERS 14, RAVENS 26
Our commissioner called on the red phone around 6:00 last night, and notified us that the Steelers were on the top step of the Basement stairs, an extremely rickety construction, and gingerly taking the next step down. We could hear the tattered hulk of Big Ben looming up there, in the dark (the light burned out three years ago), fumbling with the light switch, hoping for some vision. The Shower Curtain? The Reelers?
BUCS 10, BEARS 48
The Bucs have not just come down to earth, they went under a steam roller yesterday. It was 38-3 by halftime, it was so efficient. The Bucs yank Fitzpatrick as daBears keep dynamiting every team they play, throw in Jameis Winston, and he delivers with a couple interceptions. But…the Bears! QB Michael Trubisky throws 6 TD passes, almost tying HOF Bear god Sid Luckman for most ever (7) in a game. Bears are exiting the Basement.
Remember last year and ‘Orange You Bad’? Our Orange teams this year have turned it around: Bears 3-1, Bengals 3-1, Broncos 2-1 (not after tonight), Miami 3-1, and Cleveland 1-2-1.
JETS 10, JAGS 31
Jets QB Sam Darnold may well be the QB of the future, but, right now, he’s the QB of a Doormat contender. Keep an eye on the Jets. I don’t know if you should WATCH them, but…
FALCONS 36, BENGALS 37
Anotherwild game, and though they don’t play like it, the Falcons just keep on losing. 1-3 and who knows what wheels will come off in the next couple weeks.
Next week will clear out the standings, for sure.
aaaAAAAAAnd That’s the View From the Basement!!!!!
Some of the 2018 contributions from Diana "DeDe" Wilsey's real-estate firm. Source: OpenSecrets
In the wake of the horrifying Kavanaugh hearings, it seems likely most San Franciscans are hoping that the GOP loses control of both the House and the Senate in the fall.
But a prominent San Francisco society figure has given more than $500,000 in 2018 to help keep Republicans running Congress.
Some of the 2018 contributions from Diana “DeDe” Wilsey’s real-estate firm. Source: OpenSecrets
Diane Wilsey, through her real-estate firm, gave $300,000 to the Republican Congressional Campaign Committee and $100,000 to the Republican National Senate Committee, campaign finance records show.
DeDe Wilsey, patron of the DeYoung museum, is also a patron of the GOP
And she’s also pouring money into electing Jessica Ho in District 4 and Sonja Trauss and Christine Johnson in District 6.
Wilsey also gave $250,000 to Progress SF, an IE controlled by tech plutocrat Ron Conway that has spent more than $180,000 supporting Ho and another $250,000 supporting Trauss and Johnson, according to Ethics Commission filings.
The Trauss and Johnson IE that got the Progress SF money is called San Franciscans for Change.
And that’s just as of Sept. 22. There could be far more money poured into these key district races, which will determine whether Mayor London Breed has a majority to support her policies.
Candidates have no control over IEs; by law, they have to be entirely separate operations. So Ho, Trauss, and Johnson can’t return that money or influence who gives to help them get elected.
But some say it’s a bit alarming that a person who thinks the Republican Party should control Congress, and is supporting one of Kavanaugh’s strongest allies, also thinks Ho, Trauss, and Johnson should be running San Francisco.
Trauss and Johnson did not respond to my emails seeking comment. Christian Kropff, campaign director for Ho, said that “Jessica’s campaign has no control over who contributes to any IE in the race. Jessica’s campaign is focused on the issues of the district and finding solutions to the problems that district 4 residents face everyday.”
But Edward Wright, a spokesperson for the Gordon Mar D4 campaign, told me that “it’s alarming that the same people who are aligned with Trump Republicans – and especially Lindsey Graham, who has been the strongest voice to silence women – are trying to influence a San Francisco election with big money. These are not San Francisco values. The Sunset needs someone who can stand up for the people who live here.”
Matt Haney, who is running in D6, told me that Wilsey “does not sound like someone who shares my values, so I should not be surprised that she is spending all this money to defeat me. Her donations ago against SF values. It’s ironic that they are calling their IE San Franciscans for change, because I don’t think this is the kind of change San Franciscans want.’
Haney noted: “It’s important for people to understand where all this TV and direct-mail money is coming from.”
Business Improvement Districts, which are in essence private tax assessors that spend money to spiff up certain parts of town, have been using public money to advocate for laws attacking homeless people, a new UC Berkeley study has found.
The study, done by the Policy Advocacy Clinic at Berkeley Law School, examined how BIDs deal with homeless people and found a long list of problems – some involving potential violations of state law.
BIDs have become more and more popular in the past 20 years in California. Under a 1994 law, property owners in a defined district are allowed to vote to tax themselves to pay for “special” improvements that the city can’t or won’t provide.
In the early days, that meant things like new landscaping, better street lights – that sort of thing. But now these BIDs – and there 189 in 69 cities – are using money to lobby for anti-homeless laws and to pay private security guards to roust homeless people, the study concludes.
In fact, the study shows, a lot of what the BID money goes for these days is political advocacy – for anti-homeless laws. Two examples:
In 2010, San Francisco’s Union Square BID submitted letters of support and testified at numerous public forums for Proposition L, an anti-homeless measure to restrict sitting or lying on public sidewalks between 7 a.m. and 11 p.m. (so-called “sit-lie” laws).
In 2012, the CEO of the nonprofit that manages the Downtown Berkeley BID was the major individual financial contributor to the campaign for Measure S, a proposed sit-lie law.
The BIDs work through the California Downtown Association, which
actively mobilized its BID members to oppose Assembly Bill 5, the Homeless Person’s Bill of Rights and Fairness Act, and Senate Bill 608, the Homeless Right to Rest Act.
And the money they are making is used for politics:
San Francisco’s Union Square BID spends assessment revenue on policy advocacy under a category of services labeled “Marketing, Advocacy, Beautification and Streetscape Improvements,” and its executive director is a lobbyist registered on behalf of the BID with the City and County of San Francisco.
Los Angeles’ Downtown Industrial BID does not mention policy advocacy in its planning documents, yet in its quarterly reports to the city, it classifies activities like testifying at city council meetings and meeting with council staffers as assessment-funded “Economic Development and Communications” programming.
Assessment-funded policy advocacy expenses in the Union Square BID, the Downtown Sacramento Partnership, and Oakland’s Jack London Improvement District represent the full or partial salary costs of various personnel who engage in policy advocacy.
Business groups have every right to lobby and organize for their own interests. That’s probably not what the Legislature had in mind when it created this strange private-taxation authority, but that’s what has happened.
However, when public money is involved, it’s a very different situation. And there’s a lot of public money involved.
The BIDs (unlike the normal tax-assessment process) can hit up government agencies for money. And a lot of the money from some of these BIDs comes from the taxpayers.
This, the report says, is a problem.
The 1994 BID law permitted districts to collect assessment revenue from publicly owned properties and it increased BID spending authority. State law, however, does not authorize BIDs to spend assess- ment revenue from public parcels on all kinds of policy advocacy.151 In fact, state laws prohibit the use of public funds to support or oppose local or state candidates and ballot measures.152 Interpreting one such law, the California Supreme Court said: “A fundamental precept of this nation’s democratic electoral process is that the government may not ‘take sides’ in election contests or bestow an unfair advantage on one of several competing factions.”
In general, when BIDs use assessment revenues from publicly owned properties for policy advocacy, the public—as owners of assessed property—is being taxed to fund advocacy on behalf of businesses. We found specific instances in which BIDs or BID officials engaged in formal lobbying, support for ballot measures, and other policy advocacy.We also found examples of BIDs and their officials making financial contributions in local elections.Through the use and leveraging of assessment revenue from publicly owned properties, BIDs are spending government revenue to take sides in the democratic process.
BID use of public funds for policy advocacy may sometimes result in expenditures that local agencies themselves could not make. For example, under state law, cities and counties may spend public funds to lobby if the city or county has deemed passage or opposition of the legislation at issue to be beneficial or detrimental to the city or county.When BIDs spend assessment revenues from publicly owned properties to lobby on issues that only their managing nonprofits have identified as priorities, they bypass legal requirements designed to ensure that taxpayer funds are used to advance the public’s interests.
Then there’s the role this special districts play in enforcing laws against homelessness. The report found that many of these agencies routinely use private security forces to harass homeless people or press local law-enforcement to do that job.
The researchers found more than 2,000 pages of emails between Sacramento BID officials and the Sacramento Police Department, which included messages like this:
Sacramento BID executive asked, “Can someone swing by our building [. . .] and remove the homeless person hanging around in the corner?” Another email from a Sacramento BID to a police lieutenant asked: “When one of your officers has a chance, could s/he please ask the homeless person who is sleeping in front of
Suite C/D to leave. They are sleeping on the concrete walkway with a hacking cough . . . not very enticing for customers.”
The study found a correlation between the political activity of BIDs and the rise of anti-homeless laws – although there are clearly other factors involved.
The study also concluded that, while some BIDs try to work with social-service providers to help homeless people, the results are often not helpful.
In San Francisco, the Union Square BID attempts to move lawful (nonaggressive) panhandlers from the district.Because such panhandling is not prohibited by law, BID ambassadors are instructed first to “inform the person that their behavior is not supported by downtown businesses and actually harms the image of downtown.” If the person continues to panhandle, the ambassador is to then “stand ap- proximately 15’ away from the panhandler educating the public not to give to panhandlers, but rather agencies that can help” and will “continue this around the panhandlers [sic] area (until they move out- side of the district).”
And since most homeless people don’t trust and have had bad experiences with the BIDs, referrals and communications are worthless.
The report has a long list of policy recommendations, starting with a ban on using BID assessment revenue – particularly from public property – for anti-homeless advocacy. Cities have the ability to monitor and oversee these operations, and they need to pay more attention to an area that is largely ignored.
It’s an arcane area of law, and nobody pays much attention to it – but for the homeless population, this is a big deal.
California often gets credit for being an environmental leader, but such plaudits overlook the many neighborhoods in California that live a nightmarish reality due to the toxic effects of the oil and gas industry. In Los Angeles, our health suffers daily from poisonous air emissions released by oil wells and the dangerously leaky Aliso Canyon gas facility.
Governor Brown is hosting a climate summit in San Francisco, where he will warn us about climate change and boast about his leadership. But our experiences raise serious questions about whether this governor has the fortitude to take on the fossil fuel industry.
Oil wells in LA are causing health problems
In South Central Los Angeles, families are surrounded by oil wells that emit noxious fumes that make our children sick. The emissions from one well, operated by AllenCo, were so severe that when federal inspectors visited the site they all got sick just minutes after exposure. AllenCo is surrounded by nine schools, including one for disabled children, and an affordable housing community.
When one of our daughters was just a child, she suffered from nosebleeds, headaches and nausea from AllenCo’s fumes. While operations at the site have been temporarily halted, thanks to community efforts that won the help of former Senator Barbara Boxer, AllenCo is now pushing to resume drilling. There are several other wells nearby that are just a handful of the 5,000 active oil wells within the Los Angeles County.
Twenty miles northwest of the AllenCo well lies the Aliso Canyon gas field, perched above the San Fernando Valley. Three years after the facility had the biggest gas blowout in the nation’s history, leaks continue to send toxic gas downhill to the neighborhoods of Porter Ranch, Granada Hills and Northridge. Recently released testimony from a SoCalGas engineer shows that this gas contains dangerously high levels of benzene—a known carcinogen.
One of our daughter’s nosebleeds and respiratory problems that began after the blowout continue to this day. Our neighbors and their pets also suffer from ongoing severe breathing problems, rashes and nose bleeds—just like families living by oil wells across town.
Our pleas to the governor for relief have been dismissed and deferred. Brown refuses to exercise his power to shut down Aliso Canyon and neighborhood oil drilling operations, even though they aren’t needed to supply energy, and tells us that they will go away – someday. Just not under his watch.
We wonder whether Brown’s inaction is due to contributions from the industry. Brown has taken millions in campaign contributions from the oil and gas industries, and his sister has earned $1 million in stock and cash to serve on the board of Sempra, the company that owns Aliso Canyon.
So perhaps it isn’t surprising that Brown has let these interests continue business as usual despite his dire warnings on climate change.
Statewide, Brown has refused to ban fracking or take any action to limit oil drilling in California, leaving communities and local governments to fend for themselves and fight an industry with endless financial reserves. His office is quick to say that campaign contributions don’t affect his decisions, but Brown once said the opposite himself.
We who suffer the consequences of Brown’s fossil-friendly policies, certainly smell the stench of political cowardice. Governor Brown has the authority to put an end to these dangerous and polluting practices, but he refuses to act. That’s why more than 750 organizations have formed the Brown’s Last Chance campaign, which includes supporters such as Food & Water Watch and Consumer Watchdog, to shine the light on Brown’s record of negligence.
We will be in San Francisco to bring our message to the Governor directly at his climate summit this week. And if he fails to act, we will keep working to push the next governor to be the real climate leader that California desperately needs.
Monic Uriarte and Helen Attai live in Los Angeles.
Nicole has resorted to storing her wages in an office desk drawer at her place of work after funds she was saving for a rental deposit were garnished from her checking account for child support.
Due to the deceptive mortgage loan Teresa was sold, which she thought was a fixed rate, she was forced to sell the home she had inherited from her grandmother. Amanda was receiving on average 50 phone calls a day from debt collectors demanding payment. After taking out a payday loan, Dominic ended up paying over twice his original loan.
These are four real stories I learned about during my research on how the financial services industry is exploiting consumers in San Francisco.
Image by Francois Vigneault
Consumer financial protection is a 21st-century civil rights issue. These protections are regulations thatprotect consumers from unfair, deceptive, or abusive financial products and services. They favor the consumer over the financial services industry. The financial services industry comprises a widerange of businesses that manage money,which include banks,credit unions, and credit card companies, as well as more nefarious companies such as debt collectors, payday lenders and check cashers.The industry controls many aspects of people’s lives — from the ability to access credit, to cashing a paycheck, to keeping their homes, and everything in between. Consumer rights are vital for protecting and building financial assets, particularly for low-income communities, people of color, the elderly, and immigrants.
In response to the 2008 financial crisis, the Obama administration created the Consumer Financial Protection Bureau, the federal agency responsible for protecting consumers from abusive, deceptive and predatory practices of the financial services industry. The CFPB’s Consumer Complaint Database has been an important resource for the American public for the past seven years. The Consumer Complaint Database is a publicly available collection of complaints made by Americans across the country on a range of consumer financial products and services.
This tool has helped to enable the bureau to recover more than $12 billion in relief for almost 30 million consumers and identified bad actors of the financial services industry.[1] For example, the database was instrumental in revealing that Wells Fargo opened 3.5 million fake accounts without consent of its customers.[2] This data has also been harnessed to create stronger consumer financial protections and increased regulations that promote industry accountability.
There is very limited data to describe the specific problems San Francisco residents face with financial products and services. This deficit creates difficulty for city policymakers to accurately identify the trends and agents responsible for financial practices causing harm specifically in San Francisco. One resource that has yet to be fully leveraged is the Consumer Complaint Database, which has almost 3,400 consumer complaints filed by San Francisco residents.[3]
Unfortunately, recently there has been an alarming rate of deregulation of consumer financial protections at the federal level by the interim acting director of the Bureau, Mick Mulvaney, who was appointed by Donald Trump last November. Consumer advocates are extremely concerned that the Consumer Complaint Database may not survive the Trump era of the Bureau’s leadership.[4] In April 2018 those fears were realized when Mick Mulvaney suggested that he might remove the databaseof complaints to the agency from public view.[5]
In June, the White House nominated Kathy Kraninger to succeed Mulvaney to lead the CFPB. She reported to Mick Mulvaney at the Office of Management and Budget and managed the budgets for the Department of Homeland Security. If confirmed, Kraninger would lead the CFPB for a term of five years and it is believedshe will attempt to execute Mulvaney’s plan of taking down the Consumer Complaint Database from public view.[6] Kraninger’s nomination was postponed earlier this month by the Senate Banking Committee after Democrats questioned her lack of experience in financial regulation and her role in executing the “zero-tolerance” policies that have led to thousands of immigrant family separations.[7]
I asked Deborah Jackson, who works on financial empowerment programs for the San Francisco Housing Development Corporation, about what effect the removal of the database would have on the communities SFHDC serves, who predominantly live in Bayview-Hunters Point, the Western Addition and Potrero Hill. She said, “we already are dealing with an overwhelming problem in the Bay Area with uninformed people, and the possibility of them being ripped off more, without any recourse, will be greater.”
Given the precarious fate of the CFPB Consumer Complaint database, I conducted the first deep data analysis of the 3,400 public complaints filed by San Francisco residents. With an estimated 353,287 households living in San Francisco, these complaints provide a robust sample size to understand some of the financial struggles of the wider population of the city.[8] My research highlights how predatory financial services are a citywide problem: San Franciscans living at every income level and in every part of the city are struggling to resolve their financial issues with the wolves of Wall Street, the financial services industry. Putting this revelation in context of what’s happening at the national level, cities like San Francisco need to step up where they can to take the place of the federal government and provide consumer financial protections and education for city residents.
What the data tells us
As of March 1st, the Consumer Complaint Database had collected a total of 978,213 complaints. Californians had 137,701 complaints published, and 3,390 of those complaints have been submitted by San Francisco residents.
Fig. 1. The top five product complaints at the national level and at the local level between December 2011 and March 2018
The product complaints at a national level do not mimic the complaints at the local level. It’s important that city policymakers are aware of the unique financial challenges in San Francisco, so they can create policy and programs that address the distinct issues local residents are having with financial services and products. Additionally, if city policymakers are unaware of these nuances, they could be developing policies and prioritizing programs that don’t actually address the specific needs of San Franciscans.
The broad range of complaints about financial products and services speaks to the diversity of the consumers themselves. Different types of consumers use different types of financial services and products. Although the database doesn’t collect information on the consumer’s race or income, we can nonetheless make certain inferences about who the consumer might be, as demonstrated with a few examples. For instance, a mortgage complaint would come from someone who is a homeowner, who, according to Prosperity Now’s 2017 Scorecard, makes up 36 percent of the San Francisco population. A debt collection complaint would come from someone who is behind on bill payments and is likely struggling financially. Someone complaining about a payday loan is underbanked, meaning that they might have a bank account but use other alternative high-cost services to meet their financial needs.
The same Prosperity Now report found that 16.9 percent of San Franciscans are currently underbanked. Complaints about money transfers or virtual currency include remittances, a service that is used by immigrants who send money back to their home country. Assessing the different types of products and services San Francisco residents demonstrates the diversity among the consumers going to the CFPB for help.
Fig. 2. The number of published complaints submitted by San Francisco residents to the CFPB organized by product
Most of the consumer advocates and direct service providers I interviewed were surprised that payday loans were not ranked higher. Mohan Kanungo, director of programs and engagement at Mission Asset Fund, suggested that this might be due to the fact that the payday lending industry is highly regulated in San Francisco.[9] Ernesto Martinez of Mission Economic Development Agency reacted to the data findings by saying that he thought payday lending, check cashing and money transfers seemed underrepresented from this data set.Both agreed that it is highly likely that lower-income, non-English speakers are less likely to submit a complaint to the CFPB.
Almost 70 percent of the public complaints were associated with a specific San Francisco area of the city. The top five neighborhoods that submitted complaints to the CFPB were Nob Hill (189), Inner Mission / Bernal Heights (165), South of Market / Downtown / Civic Center (152), Ingleside-Excelsior / Crocker-Amazon (145) and North Beach / Chinatown (145). A majority of the 22 neighborhoods had roughly the same amount of complaints: the median of the data set was 109.5 complaints and the average was 106.9. This shows that problems with the financial services industry are widespread and not concentrated in certain areas of the city.
Fig. 3. San Francisco complaints organized by district[10]
Breaking the data down by district highlights the fact that complaints can vary by district. For the purposes of this article, I compared my district, District 1, to District 5. As you can see, the two districts have similar population sizes but District 5 has double the amount of complaint. Their respective top three product complaints are also very distinct.
Fig 4. Comparison of top three product complaints for District 1 and District 5[11]
This finding should be used in three powerful ways. First, the information can help inform each district supervisor of the specific issues with which their constituents struggle with. Second, the finding will help them assess the proper actions to prioritize in an effort to help their residents resolve issues with their financial products and services. This information can also help policymakers develop better curated consumer education for different areas of the city, and provide that information to their partner agencies who are involved in financial empowerment integration.
The limitations of the database
There are a number of limitations to the database. Although it’s another valuable resource the city should use to inform its local consumer financial protection policies, the database should not be viewed as the sole means for having a comprehensive understanding of all the major consumer harms experienced by the entire San Francisco population. By understanding the database’s limitations, we can then propose how to find supplemental information to fill the identified gaps.
Unfortunately, many consumers haven’t ever heard of the CFPB, much less that the database exists. Many low-income people who are working multiple jobs just might not have the time to submit a complaint. This is where the data might be skewed, with an overrepresentation of complaints from wealthier individuals. However, this research can only make intelligent inferences because income is not a piece of data the CFPB collects when a consumer submits a complaint to their database.
Since the CFPB doesn’t track race, gender or income, this study is limited in better understanding who is represented in these submitted complaints.
Two demographics who are likely to be severely underrepresented that were mentioned in my interviews with community non-profits were the homeless population and immigrant communities. Jennifer Friedenbach of the Coalition on Homelessness told me that because many people who are experiencing homelessness are most likely living in crisis, they probably only have the mental bandwidth to focus on their immediate needs and don’t have the wherewithal to submit a complaint.
There are two major reasons why the immigrant population might be underrepresented in the data. First, the public complaints on the CFPB website are only viewable in English. This might be a huge problem because according to the US Census, 44 percent of people living in San Francisco speak a language other than English at home.[12] A consumer can call the CFPB, and help is available in 180 languages but only 6 percent of consumer complaints are received via telephone calls.[13]
Secondly, given the Trump Administration’s xenophobic rhetoric and harsh stances on immigration, immigrants, especially the Latino community, are fearful to access any type of government resource or take advantage of any legal rights due to the threat of deportation.
Lastly, given that the CFPB’s Consumer Complaint Database has transitioned from a pro-regulation and pro-consumer administration to a deregulation and pro-industry administration, it’s also important to think about how many San Francisco residents have not submitted complaints because they didn’t believe or trust the Trump administration would do anything to resolve their issue. It would be difficult to quantify this number, but it will be interesting to see if the number of complaints filed in 2018 fall now that the CFPB is being led by the Trump Administration, who is focused on defanging the entire agency.
What should the city of San Francisco do with this data analysis?
The federal government is quickly absolving itself from the responsibility to protect consumers from the wolves of Wall Street. Local governments should not stand idly by when the Trump administration is creating an environment that will enable the financial services industry to once again abuse consumers without any major repercussions. Luckily, San Francisco is taking proactive actions to develop its own local consumer financial protections, and they will need to leverage all the data and resources available to create policies that address the specific needs of their city residents.
My recommendations
All relevant city stakeholders should review this research’s findings to inform the direction of the city’s local consumer protection policy
This data analysis can be used to help improve existing programs,develop future policy and share information with community partners.The findings that surfaced from this research should interest a variety of stakeholders which include: Mayor London Breed and the Board of Supervisors, the Office of Financial Empowerment, and other city departments that are relevant to consumer protection or are interested because of how it affects their constituents. For example, given that mortgages were consistently a top consumer complaint, this data should be shared with entities like the San Francisco Housing Authority and the Mayor’s Office Of Housing and Community Development. The City Attorney’s Office and the District Attorney’s office might be interested in specific companies who have harmed San Francisco residents and would be able to pursue legal action against the bad actors. Given that economic inequality is a major campaign topic, city candidates running in the November 2018 should be aware of the consumer financial harms happening in the city and in specific districts, especially given the product complaint differences across the districts. Industry experts, non-profit partners, and consumer advocates should also be interested in these findings as they develop strategies in the Trump era.
San Francisco should develop a Consumer Bill of Rights
The reality is that many consumers don’t know all of their rights. This paces them at high-risk of getting taken advantage by the financial services industry, which could result in devastating and debilitating consequences. The bill of rights could be passed by the Board of Supervisors and it would outline the rights related to the financial services industry that consumers already have. Such rights could be taken from both state and federal law in order to avoid preemption. The bill of rights should be written in plain language that is easy to understand and made available in many other languages besides English. The San Francisco Consumer Bill of Rights should be showcased on various city departments’ websites and shared electronically and on printed material with community partners and other relevant stakeholders.
City Hall should commission a household level study to obtain more qualitative information about the financial struggles of San Franciscans, particularly low-income communities and families of color
As mentioned, the limitations of the CFPB Consumer ComplaintDatabase seem to suggest that there might be overrepresentation of middle to high-income consumers, and an underrepresentation of low-income consumers. We also don’t know other important information about the consumers (ex. Race, gender, employment status, level of education) that would be very helpful to know. A household level study would complement the data findings to help reveal how consumer harms are impacting real people’s lives. It would also be able to demonstrate the intersectionality of the consumers who live in San Francisco and are experiencing problems with the financial industry. For example, a consumer might be a low-income immigrant who predominantly speaks Spanish and had a problem with a money transfer. The household level study would further humanize the problems San Franciscans are having with predatory financial practices.
The methodology of this report should be shared with other cities around the country so they can utilize the CFPB Consumer Complaint Database while it’s still available to the public
Other cities should be contacted and notified about the precarious fate of the CFPB Consumer Complaint Database and be strongly advised to download their city’s information so they can conduct their own analysis of the consumer financial harms affecting their residents.
Moving forward
Given that the CFPB Consumer Complaint Database is a relatively new resource that many people are not aware of, it’s striking that almost 4,000 SF residents have filed a complaint to the CFPB in an attempt to get a response from the company and resolve their issues. If this many people were able to find the Consumer Complaint Database and were upset enough to take the time to file a complaint, how many other city residents are struggling alone with their financial company?
We are living in a time where consumer financial protections cannot be taken for granted; they must be fought for. It’s clear that for the foreseeable future we cannot depend on the leaders in Washington to hold the financial services industry accountable. Instead, it will be up to progressive cities like San Francisco to remain fierce champions of consumer financial protections; people’s lives depend on it. Jessica Lindquist received her Master’s degree In Public Affairs from the University of San Franciscoin May. This article is adapted from her Capstone thesis.
[1]Kathryn Vasel, “The CFPB’s Giant Database of Consumer Complaints,” CNN Money, November 27, 2017, https://money.cnn.com/2017/11/27/pf/cfpb-database-complaints/index.html.
[4] Wendy Brown, “Undoing Democracy: Neoliberalism’s Remaking of State and Subject,” in Undoing the Demos(New York: Zone Books, 2015), 27.
[5] Sylvan Lane, “Acting CFPB Chief Mulls Taking Down Public Complaint Database,” The Hill, April 24, 2018, http://thehill.com/policy/finance/384697-acting-cfpb-chief-mulls-taking-down-public-complaint-database.
[6] Irina Ivanova, “How Kathy Kraninger Plans To Run The Consumer Financial Protection Burea,” Money Watch, July 19, 2018, https://www.cbsnews.com/news/how-kathy-kraninger-plans-to-run-the-consumer-financial-protection-bureau/.
[8] Prosperity Now, “San Francisco County, CA Prosperity Now Scorecard 2017.”
[9] In May 2008, the city worked with the Planning department to pass the “Fringe Financial Service Restricted Use District (Municipal Code section 249.35),” which prohibits new or relocating check cashers and payday lenders from six special districts, and prohibits them from within a ¼ mile of an existing fringe financial service.
Inside the Hall of Justice, white anti-crime folks put pressure on a black judge. Outside, a rally for racial justice
Yesterday, I sat in the Hall of Justice anticipating a wave of Stop Crime SF members who planned to pack the courtroom with the intent of sending a message to Judge Christopher Hite in the DeShawn Patton case. Patton is a 21-year-old black man whose case has been under extreme scrutiny by this anti-crime coalition. They’re hoping that their organizing, vociferous critique, and visibility will sway Judge Hite to make an example out of Patton, and send him to prison instead of suspending his sentence.
Inside the Hall of Justice, white anti-crime folks put pressure on a black judge. Outside, a rally for racial justice
On the anti-crime group’s web site, the organization claims to “understand the larger issues of economic displacement and inequity that contribute to crime rates.”Yet the demographics of this coalition seems to be a fairly homogenous – mostly white people attempting to pressure a black judge to be tough on crime.
Stop Crime SF member Joel Engardio told me “…we don’t want to lock people away and throw away the key. But this case in particular, it feels like some people might need a time out because there’s so many felonies he [Patton] has been indicted for.”
I’m sorry, but prison is not a “time out.” And it’s not a rehabilitation center. Prison is an inhumane bastille that offers no cure, especially for people struggling with trauma and/or socio-economic issues. And if we really wanted to fix crime, we would be funding programs that help lessen income inequity.
The pressure had no immediate impact: The sentencing of Patton was rescheduled. Due to reports filed by two probation officers that included new information, along with a delayed update, we learned in advance of the hearing that the sentencing was pushed to October 3. Still, as resilient as ever, ten members of Stop Crime SF showed up to the hearing to make their presence was known.
The hearing was relatively short, lasting about eight minutes at most. The court was empty except for the legal staff, the court officers and Stop Crime SF. Ultimately, the court agreed to delay the case because of improper materials, new information, and a motion to exclude and seal certain documents.
But the irony of this situation came after the hearing ended, when the members of Stop Crime SF left the court and walked into an anti-police-brutality vigil held by Mothers on the March. The group had celebrated their 100th week of filling the court stairs with community members demanding police accountability. The names of young black and brown victims were projected into a microphone one by one: Alex Nieto, Oscar Grant, Jesus Delgado. Not one Stop Crime SF member stopped to observe.
I couldn’t help but draw the parallels between the mothers of dead victims demanding accountability for police brutality in front of the courts to these white folks demanding accountability for two black men who have no affect or personal claim to their livelihoods. Could they not see their hypocrisy?
If accountability was important, along with their claims of equity, surely someone would have stopped to listen to the rally. But the was not the case. Stop Crime SF wants so desperately to be heard and to be visible, but easily disregard marginalized voices, like these mothers and like DeShawn Patton.
The failure of news outlets and groups like Stop Crime SF to explore the possible socio-economic status of DeShawn Patton and other factors that might have led him to a life crime is irresponsible. We constantly feed into the narrative of young black and brown men being subjected into the prison system while ignoring systematic racism, along with the effects of a city whose demographics and economics have changed vastly within the last 15 years.
This week marked the 63rd anniversary of Emmett Till’s death. Till was a young black man who was lynched and murdered. And yesterday, in that court, I couldn’t help but think of Emmett and Patton and Judge Hite becoming casualties to this mob mentality.
An auto burglary case that, thanks in part to an SF Chron column, has spurred anger among mostly white anti-crime crusaders comes before a Superior Court judge Friday/31 – and the outcome is far more important than one young man’s future in the criminal justice system.
The Stop Crime SF group plans to pack the courtroom to put pressure on Judge Christopher Hite not to allow DeShawn Patton to accept a suspended sentence for a series of car break-ins.
This is from Stop Crime SF’s Facebook page
The politics are potentially ugly: If Hite, who is African American and a former public defender, doesn’t send Patton, who is African American and 21 years old, to prison for his crimes, some fear the outcome could be an attack on the judge and the independence of the local judiciary.
This picture of Patton and Judge Hite is also on the Stop Crime SF FB page
The furor started with a column by Heather Knight that portrayed Patton as a violent serial criminal who has somehow managed to escape accountability for his long record of car thefts:
Anyway, the grand jury indicted Patton on 11 felonies, including eight counts of auto burglary, one count of receiving stolen property, one count of resisting an executive officer and one count of hit-and-run causing injury.
The grand jury also indicted him on nine misdemeanors, including two counts of receiving stolen property, one count of possession of a burglary tool, one count of unauthorized use of a radio communication, three counts of resisting police officers, one count of theft and one count of hit-and-run causing property damage.
Shortly after the indictment, Gascón said, “Individuals like this are behind the city’s property crime challenge, and by tying them to multiple incidents, we can ensure they face consequences that are commensurate with the impact they’ve had on our community.”
Well, not really. For that, you need a judge to impose those consequences.
The very forgiving judge I mentioned is Superior Court Judge Christopher Hite, who previously worked as an attorney in Public Defender Jeff Adachi’s office.
Hite is perhaps best known for flushing all 64,713 outstanding warrants issued in quality-of-life cases from January 2011 through October 2015, giving police no authority to detain people who skipped court appearances and rendering the citations meaningless. He did so as part of a court-wide consensus that fining poor people who can’t afford to pay is pointless.
Then-Mayor Ed Lee was irate at the decision, saying the point of citations isn’t to collect money from poor people, but as leverage to compel them to accept treatment, shelter and other services.
At the time, Lee said through a spokeswoman that the judges were not “meeting the responsibilities voters elected them to. When one branch of government fails — be it executive, legislative or judicial — we all fail.
It could be argued San Francisco is about to fail again. Patton faces a maximum sentence of seven years and eight months in state prison. On July 27, prosecutors offered Patton five years and eight months, meaning he’d probably serve less than three years with good behavior. He has been held in county jail since November. Hite said he’ll be on probation for three years.
But Patton’s attorney and Hite reached their own tentative deal. Patton agreed to plead guilty to most of the grand jury charges, and Hite indicated he will put him on probation and release him, according to several people present in the courtroom that day.”
Let’s unpack this for a second.
First of all, Hite may be “best known” for “flushing” those warrants – but the entire Superior Court was on board with that decision, and it was in his courtroom just because he happened to be handling that duty. Everyone in the courts agreed that it’s silly to put out warrants to arrest people who are so poor that they can’t ever pay their (ridiculous) tickets for the crimes of being poor.
Any judge on the bench would have made the same decision. They all agreed to it.
So there’s that.
Then there’s Patton. The guy has been in trouble with the law since he was 17. On KQED Forum, Knight said that she had no idea if he had any previous trauma or mental-health issues because his lawyer wouldn’t talk to her. But Public Defender Jeff Adachi pointed out that if you look at a 21-year-old who has this kind of record, “something is wrong.”
Adachi told me that there’s a very successful program called Young Adult Court that takes offenders like Patton and helps them find jobs.
“When I ask people involved in car burglaries what would get them out of that life of crime, they overwhelmingly say jobs,” Adachi said.
He also said that almost every single person who he has worked with at YAC had some sort of serious trauma in their young lives. The program has trained therapists to help them through that. It works.
In the wake of Knight’ story, StopCrimeSF has made a big deal of this case. We talked to Frank Noto, a leader in the group, and he told us:
“We think [Patton] needs serious time to think about what he’s done and then utilize programs after. We don’t think parole is working for him. We would like to see him sent to prison to turn his life around.”
Adachi, however, noted “all the studies show that when you send a young person to prison, they graduate with a much higher chance of re-offending.”
There’s endless data on this: Send Patton to state prison, and when he gets out, the odds are overwhelming that he will go back to breaking into cars – or worse.
Prison is not going to turn his life around.
So now let’s look at the “lenient” sentence Judge Hite is talking about.
Alex Bastian, a spokesperson for DA George Gascon, told me that the prosecution had offered a plea bargain of five years, eight months in state prison. Patton has been held in jail since last November for the crimes he’s accused of. Since nonviolent prisoners who behave well typically get half of their sentences reduced, and given the time he’s already served, Patton under that deal would have probably served another 27 months. A little more than two years.
Under Hite’s proposal, Patton would plead guilty to and accept a sentence of more than six years – and he would be on “felony probation.” The sentence would be suspended – meaning that if Patton did anything at all (even a minor crime), Hite could immediately and without a hearing send him to state prison for the full term.
The Adult Probation Department has made it clear they can work with this.
Adachi told me that his staff sees these kinds of deals “as a devil’s bargain.” In many cases, he said, the shorter sentence is better for the defendant. In no way, he said, is this a “lenient” deal.
And if there’s any chance of Patton getting his life together, it most likely won’t be in prison. According to the National Institute of Justice, the likelihood of an applicant with a record getting a job is reduced by 50 percent in comparison to an applicant without a record. Unsurprisingly the punishment for African Americans and Latinos are disproportionately higher than white applicants with records. As reported by the New York Times, men with criminal records account for about 34 percent of all unemployed men between the age of 25-54.
Without the proper tools to succeed, many ex-cons are cycled in and out of the system. According to the Bureau of Justice Statistics, 76 percent of all inmates end up back in prison within five years.
Ellen Chaitin, a retired Superior Court judge who still handles some cases, told me that she can’t comment on this case. But, she said, our society is increasingly coming to understand that sending someone to prison who has not been charged with any violent crimes doesn’t always make sense.
“Sooner or later, most people who go to prison are going to get out,” she said. “And if there are services that can prevent a return to crime, and close supervision, that’s something to consider.”
Chaitin’s right: After years of failed “lock-‘em-up” policies created an expensive disaster of a prison-industrial complex (and did little to stop violent crime) we are starting to see that alternatives to incarceration — keeping people out of jail — ought to be a goal of the criminal justice system.
Politics has played a role in this case from the start. Gascon has been pushing to get more money for an auto-burglary task force (which then-Mayor Mark Farrell rejected), and in an April 23 news release on the Patton case, he noted that he was asking for more money “in order to enhance the role that prosecutors can play in reducing the city’s auto burglary challenge.”
Gascon, in an unusual move, took the Patton case to a grand jury to get multiple indictments so that he could seek a longer sentence.
We’d like to think that in San Francisco in 2018, a judge wouldn’t get attacked in a highly politicized case for being too “soft on crime.”
That’s what’s at stake in the Friday sentencing hearing.
The battle over state Proposition 10, which could dramatically slow evictions in cities like San Francisco, is going to dominate the fall ballot, with both sides spending millions of dollars.
And for the landlord lobby, one of the most pervasive arguments is going to be a study by Stanford Business School professors that says rent control leads to gentrification and is bad for renters.
Tenants rally in Los Angeles for Yes on 10
If that sounds counter-intuitive, it is: A new study released by supporters of Prop. 10 shows that the Stanford study was not only flawed but misses some of the key points in the rent-control debate.
But the Yes on 10 campaign analyzed the data and found some serious problems – starting with the fact that
Diamond is a former Goldman Sachs asset manager, while McQuade previously worked for UBS Investment Bank. Their research has long sought to downplay the harms of gentrification, and their work has even argued the drawbacks of building low-income housing in richer neighborhoods.
Their conclusion that “rent control causes gentrification” is at odds with reality, the new report says:
First, the study does not consider and address the many other historical and economic factors responsible for gentrification in the Bay Area, let alone throughout the U.S. Among the most significant drivers of gentrification in cities across the country is the extreme wealth divide that has increased exponentially over recent decades, combined with the real estate speculation and deregulated financialization of housing that this has directly fueled. The three richest people in the U.S. now own as much wealth as the bottom half of the population, or 160 million people (Collins and Hoxie 2017). Since 1980, the richest one percent’s share of wealth has steadily climbed (Mishel et al. 2015). Meanwhile, during this same period, median wages have stagnated – and even declined for the bottom 50 percent (Mishel et al. 2015). Real estate serves an arena for the uber wealthy to invest their monstrous wealth, while the renter majority is easily swept aside by rising prices. Los Angeles, for example, was recently voted by international investors as the number one site in North America for real estate investment — as one investor put it, L.A. “still has room for rents to rise,” (Vincent 2017).
As for San Francisco rent control, the Prop. 10 study says,
On top of this, San Francisco’s limited rent control has gaping loopholes allowing for condo and “tenants-in-common” (TIC) conversions. Dampening market pressures and plugging these loopholes would have helped stem the conversion problem, but the authors choose to ignore this entirely.
But beyond the study and its flaws, there are larger issues here that Peter Dreier, an eminent writer and thinker on urban issues, discussed in an interview with me.
Dreier is professor of political science and director of the Urban and Environmental Policy Project at Occidental College. He is widely regarded as one of the leading experts on the economics of urban development and land use in the nation.
He was among those who reviewed the Yes on 10 report, and he said he supports its research, methods, and conclusion with no reservations.
The Stanford study, he said, was so wrong that it has no credibility at all.
But what I really wanted to talk to Dreier about was the upside of rent control – not just for the tenants but for local economies.
The central issue with Prop. 10 is allowing cities to extend rent controls to vacant apartments. In the 1980s, cities like Berkeley, Santa Monica, and West Hollywood had those rules, called “vacancy control.” Rent was set at a level that allows a landlord to get what the state Supreme Court calls “a reasonable return on investment.” Then the cities limited annual rent increases – on all apartments, occupied or vacant.
When a tenant moved out, the next tenant paid the same controlled rent.
Then in 1994, the state outlawed that practice. The Legislature passed the Costa-Hawkins Act, which gives landlords the right to raise rents to whatever the market will bear whenever a unit becomes vacant.
That, of course, gives landlords a huge incentive to evict long-term tenants so they can raise the rent – and make not just a fair return on investment, which is required by state law, but a huge windfall, which is not.
The landlords – and the Stanford Business School profs – say that if you impose rent controls on all apartments, you’ll get blight, vacant buildings, and urban decline. As Diamond put it to me:
There would be zero maintenance and upkeep of the apartments. Likely many apartments would simply be left vacant, as the meager rents would not even compensate landlords for simple maintenance, taxes, and costs to screen tenants to rent. Further, in the long run, some tenants will move out of their rent-controlled units for personal reasons, and at this time owners could sell of the units for owner occupants, even without evictions or formally converting to condos. Further, no developer would ever consider building new rental housing in this environment, since these extreme rules would signal that new development would likely be brought under rent control in the future. This would lead to the few apartments available for rent to cost extremely high prices.
But Dreier, who was the head of housing in Boston when the city had real rent control, said the evidence shows otherwise:
“Under credible rent-control laws, landlords are allowed a reasonable across-the-board rent increase every year, but to get it they have to demonstrate that they are maintaining their properties. In fact, we found the rent control improves the quality of housing.”
As for the doom-and-gloom predictions?
“You could drive through Berkeley and Santa Monica and you didn’t see any abandoned buildings,” he said.
So no, real rent control doesn’t cause problems. But it does, Dreier said, help local small businesses.
That’s because rent control is, in effect, a transfer of wealth from the landlord class (which, more and more, is big absentee investors) to the tenant class, which is more likely to be low-to-moderate income.
When you put money in the pockets of rich investors, they tend to suck it out of town and put it into other investments. If you put money into the pockets of working-class people, they tend to spend it in town.
“The money from lower rents goes back into the local economy,” Dreier said. “If it weren’t for their ideology, the Chamber of Commerce should be supporting Prop. 10.”
The other element of rent control that helps local business: If you hold down the cost of housing, you allow small employers to hire and keep workers. We are already seeing businesses scrambling to find workers and to pay the wages necessary to allow their employees to find housing.
There’s a good argument that real rent control – which in effect treats housing as a human right and regulates it like a public utility – makes cities, communities, and local economies more healthy.
Tenants urge Assembly members to support tenant rights. Housing Rights Committee photo via Twitter
Editors note: This is the testimony Professor Peter Dreier gave June 21 at a joint hearing of the state Senate Judiciary Committee and the Assembly Committee on Housing and Community Development.
My name is Peter Dreier. I am the Dr. E.P. Clapp Distinguished Professor of Politics, and chair of the Urban and Environmental Policy Department, at Occidental College. Before joining the Occidental faculty in 1993, I served for nine years as Director of Housing at the Boston Redevelopment Authority and senior policy advisor to Boston Mayor Ray Flynn. I earned my Ph.D. at the University of Chicago. I’ve written three books on urban policy and published many articles about housing policy for a wide range of publications, including the Harvard Business Review, Real Estate Finance Journal, Housing Policy Debate, the Journal of the American Planning Association, and many others.I’ve received research funding from, and been a consultant to, many organizations, including the U.S. Department of Housing and Urban Development, the Ford Foundation, the Eisenhower Foundation, the Haynes Foundation, the U.S. Conference of Mayors, the MacArthur Foundation, and others. I’ve served on many task forces on housing and economic development and currently serve on the Los Angeles Revenue Commission. In 1993, the Clinton administration appointed me to the Advisory Board of the Resolution Trust Corporation (RTC), the agency responsible for cleaning up the Savings-and-Loan mess.
Tenants urge Assembly members to support tenant rights. Housing Rights Committee photo via Twitter
I’m here today to discuss California’s severe housing crisis, the consequences of that crisis for its economy and its residents, and what can be done to address it. Because of the limited time I have to speak today, I will focus most of my remarks on the proposal to repeal the Costa-Hawkins Act, about which I’ve written a great deal. But first I’d like to put that issue in broader context.
California’s Housing Crisis
Forty-three percent of all households in America (51 million households) don’t earn enough to afford a monthly budget that includes housing, food, child care, health care, transportation and a cell phone, according to a new study by the United Way. Of all those basic necessities, housing is the most expensive. The worst states are California and Hawaii, where 49 percent of families are struggling to make ends meet. And in California, housing is the biggest reason why so many families can’t make ends meet.
Along with Hawaii, California has the worst housing crisis of any state in the country. Its home prices and rents are far above the national average and higher than those in all other states except Hawaii.
Nationwide, 57 percent of households can afford a median-priced home. But only 31percent of California households could afford to purchase the $538,640 median-priced home in the first quarter of this year. A minimum annual income of $111,500 was needed to make monthly payments of $2,790, including principal, interest, and taxes on a 30-year fixed-rate mortgage at a 4.44 percent interest rate.
Because home prices have escalated much faster than incomes, California’s homeownership rate is declining and the percentage of Californians who rent is increasing. The percentage of renters among California households increased from 42.6 percent to 45.9 percent between 2010 and 2016.
As a result, a growing number of middle-income Californians are now renters and may remain renters for many years. They are competing with working-class and low-income renters for the scarce supply of rental housing. Not surprisingly, this had led to dramatic rent increases as well as the displacement of many working-class families, low-income families and senior citizens. Sometimes this is called “gentrification” and it is accelerating across California, not just in most expensive coastal cities.
Moreover, rents have been rising much faster in California than in the rest of the country. Between 2000 and 2016, rents in California increased 85 percent while median household income increased by 43 percent. In other words, rents increased twice as fast as household income. (Incomes for tenant households rose by 48 percent during that period).
In California, the Fair Market Rent (FMR) for a two-bedroom apartment is $1,699. In order to afford this level of rent and utilities — without paying more than 30 percent of income on housing — a household must earn $5,665 a month or $67,976 a year. Assuming a 40-hour work week, 52 weeks per year, this level of income translates into an hourly Housing Wage of $32.68. (Only Hawaii’s Housing Wage — $36.14 – is higher).
The Housing Wage is over $20 an hour in Riverside-San Bernardino-Ontario, Sacramento-Roseville, Salinas, San Luis Obispo, Vallejo-Fairfield, and Yolo County. It is over $30 an hour in many metropolitan areas, including Oxnard-Ventura-Thousand Oaks, San Diego-Carlsbad; Santa Rosa; Santa Ana-Anaheim-Irvine; Los Angeles-Long Beach-Glendale; Santa Barbara-Santa Maria-Santa Barbara; and Santa Cruz-Watsonville; It is over $40 an hour in Oakland-Freemont and San Jose-Sunnyvale-Santa Clara. It is $60 an hour in San Francisco.
Moreover, California’s gap between household incomes and housing costs (home prices and rents) is the widest of any state. The result is that California renters are paying a much higher proportion of their household income just to keep a roof over their heads. This is true even though more middle-income households are now renting.
In fact, 54 percent of California renters pay more than 30 percent of their income for housing. And 29 percent of California renters pay more than 50 percent of their income for housing. This is the highest rate in the country, according to Harvard’s State of the Nation’s Housing report.
Of the 11 metropolitan areas in the country with the lowestrental vacancy rates – the tightest rental housing markets – six of them are in California. (San Jose, San Francisco, San Diego, Los Angeles, Sacramento and Fresno. Fresno is the worst, with a 3.1 percent rental vacancy rate). Vacancy rates for affordable rental housingare even lower.
The Costa-Hawkins Act Hasn’t Worked
We’ve gone to the ballot today because Costa Hawkins took away one of the most important tools for local governments to address the housing crisis. Costa Hawkins is one of the major impediments to cities responding effectively to the huge rent increases that are destabilizing people, families, communities and local economies across the state.
Since the Costa-Hawkins Act was passed in 1995, California’s housing crisis has gotten worse.
There are three major provisions of the Costa-Hawkins Act that are obstacles to addressing the housing crisis.
First, Costa Hawkins prevents local governments from enacting meaningful rent control, because it prohibits cities from regulating rents when a unit becomes vacant. This creates a perverse incentive for landlords to evict tenants, often by illegal means, including harassment.
Even the strongest forms of rent control do not freeze rents. Rent control simply prevents excessive rent increases but allows the rent increases that are actually necessary for real estate investors to obtain a fair return on their investment.
We take it for granted that government can and should place some controls on public utilities. Housing — like electricity, water and gas — is also a basic necessity. It’s time to restore the ability of local governments to regulate rents.
Repealing Costa-Hawkins doesn’t mean that most, or many, cities will adopt stronger rent control laws. It simply gives them the option to protect tenants and preserve the supply of affordable rental housing by allowing rents to steadily increase based on a formula that provides landlords with a fair return. It stops landlords from taking advantage of the rental housing shortage by rent “gouging.”
Second,the Costa-Hawkins Act prohibits local government from regulating rents on rental housing built after the law was passed in 1995. Costa-Hawkins was passed 23 years ago, but the date for exempting “new construction” has never changed! Because of Costa Hawkins, no units built in Los Angeles after 1978 — 40 years ago — can be covered by any rent regulations. The mortgages on many of these developers have been paid off or are a small part of the building’s operating budgets.
There isn’t a single city in the U.S. where rent control covers new construction. Every California city that adopted some form of rent regulation priorto the passage of Costa Hawkins, exempted new construction, even without the prohibition on it. Cities should be able to adopt a “sunset” provision so that, say, 20 years after a rental building is built, local governments should have the authority to regulate rents.
Third, the Costa-Hawkins Act ties the hands of local government from dealing with the “Blackstone problem.” Since the mortgage crisis of 2008, large Wall Street financial institutions — like the global private equity firm Blackstone — have gobbled up millions of foreclosed single-family homes. California is ground-zero for Wall Street absentee corporate landlords. About one-third of the rental units in California (2.2 million units out of 6 million rental units) are single-family buildings. They house 7.8 million of the state’s 17 million renters. Local jurisdictions should be able to regulate rents for large corporate absentee landlords with large inventories of single-family houses.
Five Reasons to Repeal the Costa-Hawkins Act
Repealing Costa-Hawkins gives cities an additional tool to address skyrocketing rents. We don’t know whether cities will adopt any form of rent regulation if Costa-Hawkins is repealed. But we doknow that rent control has many positive benefits that are often overlooked in the public debate. The LAO report downplays the positiveeconomic impacts and the cost savings if cities adopt stronger rent controls.I would like to highlight five benefits to repealing Costa-Hawkins.
First, rent control is good for the economy and good for business. Rent control will put money back in the local economy. If local governments are able to limit excessive rent increases, tenants will have more money to spend. Most people spend almost all their money in the localeconomy. This will boost local businesses, increase local sales taxes, and increase jobs for businesses that prosper as a result of the additional consumer demand.
Also, California employers cannot thrive if people can’t find a place to live close to work. In California, workers are moving further and further away from jobs in order to find housing. For example, I recently conducted a survey of Disneyland employees and almost one-third (31 percent) of them commute more than two hours a day getting to and from work.
Second,developers may not realize how rent control can increase demand for new housing developments. If cities have rent control that protects tenants in existing buildings, then you have to build more for the wealthier tenants who want to move into the area. Most studies of rent control laws around the country have found that rent control does not inhibit new construction. In fact, rent control encouragesnew construction by channeling higher income workers into the market for newly-built apartments rather allowing them to displace sitting tenants from existing housing
The rate of new housing construction depends primarily on local zoning laws, not rent control. Despite this, the landlord lobby continues to perpetuate the myth that rent control discourages new construction. This is very similar to when the automobile industry claimed that seat belts would destroy the auto industry and “kill jobs.” There’s no reason to believe the landlord lobby when it comes to rent control.
Third, rent control will save many local governments, as well as the state government, a great deal of money that they now spend addressing the growing problem of displacement and homelessness. It is well-known that it is less costly to preventa problem than to address it afterit has become a serious crisis.
Everyone agrees the rising and unaffordable rents are a major cause of California’s homelessness crisis. State, county, and municipal governments spend a significant amount of funding on law enforcement, emergency shelters, and other efforts to deal with homelessness. A study from 2016 found that Los Angeles County spent close to $1 billion a year caring for and managing homeless people, including health needs, social services, and law enforcement.A 2015 report found that the City of Los Angeles spent more than $100 million a year coping with homelessness, including $87 million on law enforcement. Last year, the mayor of Oakland proposed spending $185 million over two years to address that city’s growing homelessness crisis. Most of it was targeted to helping prevent people from losing their homes as well as to build affordable housing.
Zillow released a study that showed that a 5 percent rent increase in Los Angeles County causes an additional 2,000 people to lose their homes.
By reducing homelessness, rent control will reduce these significant costs to local government.
The LAO report suggests that eliminating the Costa-Hawkins law might reduce local property taxes. This is inaccurate. For one thing, rent control won’t reduce local property tax revenues. It might slow the increase in local property taxes, depending on what kind of rent regulation – if any – cities adopt.
But in those cities that do adopt stronger rent control laws, it will reduce the need for health, mental health and other human services and for temporary and long-term housing assistance, all of which are very expensive to provide, and will result in a net fiscal benefit to State, county, and local government.
Fourth, repealing the Costa-Hawkins Act could reduce a great deal of human suffering. The Costa-Hawkins Act has led to enormous harm. It has led to rising rents. Rising rents have caused widespread eviction, displacement, and disruption of families’ lives. It causes families to live in overcrowded apartments and even in garages. They wind up living in substandard and dangerous conditions. And for the privilege of doing so, they pay 50, 60, and even 75 percent of their incomes in rent.
Housing insecurity, the constant threat of eviction, displacement and constantly have to move involuntarily imposes enormous stress on renters, including depression, heart problems, and other health issues — similar to post-traumatic stress disorder (PTSD). Like people who suffer post-traumatic stress disorder (PTSD), these problems often do not disappear but persist over many years, often over a lifetime. Children who move frequently don’t do as well in school. This is especially true among low-income children. Seniors who are faced with eviction suffer enormous stress, which can lead to depression, heart attacks and other problems. Housing insecurity hurts workers’ performance on the job.
In his award-winning book Eviction, Matthew Desmond found that housing insecurity for tenants creates enormous stress that has serious harmful physical and mental health effects. Similarly, Gary Evans and Michelle Schamberg found that among low-income families, stress – including involuntarily displacement due to eviction — has harmful effects on the mental functioning of children that continue on into adulthood.
Of course, the most serious consequence of rising rents and displacement is homelessness, which is particularly traumatic for adults and children alike. California is home to 12 percent of the nation’s population, but a disproportionate 22 percent of the nation’s homeless population.
People who become homeless often never recover from the trauma – their physical and mental health deteriorates when they lose the stability of a secure home and the social ties that accompany housing security. Our society winds up paying for these human costs in our health care system, our mental health system, our schools, and our criminal justice system.
As LA Mayor Eric Garcetti said the other night on The Daily Show, homelessness is a “humanitarian crisis.” It particularly tragic because we know how to solve the problem.
A recent study by three economics professors at Stanford found that rent regulations in San Francisco enabled thousands of lower-income tenants to remain in the city who otherwise would have been displaced. It also found that some owners used loopholes in San Francisco regulations to gain exemption from rent control or convert units to condominiums. The study findings would be very different if the City eliminated those loopholes.
Fifth and finally, repealing Costa-Hawkins is about local control: This is a fundamental principle of America’s federalist system of government, the division of responsibility between the federal, state, and local governments. If the Costa-Hawkins Act was repealed, local governments would be allowed to decide for themselves what kind of rent regulations – if any – to adopt. Many cities would choose not to adopt any form of rent regulation at all. Others would maintain their current rent laws while some others would strengthen theirs. That should be their option to decide.
Why the Arguments Against Rent Control Are Wrong
Besides the myth that rent control hampers new housing construction, there are two other myths that the landlord lobby and some others use to try to discredit rent control.
First,the idea that rent control will have a negative fiscal impact on cities is very misleading. The simple passage of the ballot measure to repeal the Costa-Hawkins Act will have no fiscal impact. It all depends on what local governments do, if anything. Any analysis of fiscal impacts has to also look at the resulting increase in sales tax revenue, the savings to local and state government from reduced costs to address homelessness, and the costs of addressing the physical and mental health consequences of housing insecurity, instability, and displacement.
Second, there’s the myth that we can quickly build our way out of California’s severe housing crisis. To divert attention away from the need for rent control, the landlord lobby often says that the solution to our housing crisis is not to adopt rent regulations but to build more housing. That is partly true. The California Department of Housing and Community Development (HCD) projects that the state will need to add 1.8 million new housing units to meet projected population and household growth. That’s 180,000 new homes annually – compared to the annual average of less than 80,000 new homes annually over the last 10 years.But even that figure is misleading, because it does not include the need to address the housing concerns of those who cannot afford market rents.
Even if we marshall the political will to do so, however, constructing the new housing we need will take decades – and only if local governments end the practice of restrictive exclusionary zoning that limits new housing construction.
But we can’t wait until increased supply “catches up” and “trickles down.” Excessive rent increases are creating extreme hardship now. Only rent control can provide some immediate relief. If cities want, they can decide to lift or revise local rent control laws once the vacancy rate of affordable housing– rental housing that middle class and poor families can afford without paying more than 30 percent of their income – reaches eight percent or above.
Across the county, only one-quarter of families who are eligible for subsidized housing receive it. The authors of the Stanford study argue that a system of universal rent subsidies would be a better solution than rent control. Even if they are right, that is not likely to happen in our lifetimes. And even if we had enough federal housing vouchers for every eligible family, we don’t have enough apartments for them to rent. It is like giving people food stamps when the supermarket shelves are empty. As a nation, and as a state, we need to build more housing and expand funding for subsidized housing. But in the meantime, we have an immediate crisis, and that requires protecting the existing supply of affordable housing to avoid making the housing crisis even worse. Rent control is one policy that allows cities to do that.
The landlord lobby has been “crying wolf” about rent control for decades, just as the restaurant lobby has been “crying wolf” that raising the minimum wage destroy their business and “kill jobs.” Why should we believe people and groups who have been consistently wrong for so long?
Reasonable controls on sky-rocketing rents, as determined by local government, will keep more people in their homes and reduce the number of our children, seniors and others who are ending up on their friends couch, in their cars, or on the street.
California has the fifth largest economy in the world. It has more billionaires than any other state in the country. And yet it is also the state with the highest poverty rate . It is the homeless capital of the country. We need to give our cities the tools to establish reasonable rent regulations and we need to do it quickly.
State Assemblymember Phil Ting is taking on an issue that has pretty much everyone in California angry right now – the lines at the DMV – and he seems to be the only one willing to do something about it.
Gov. Jerry Brown, who doesn’t have to wait in the DMV line and probably hasn’t in many years, cares nothing about this. Lite Guv Gavin Newsom, who is likely our next governor, has said zero about the issue.
Actually, no — you’re not.
And while I’m not a proponent of people driving, the DMV is a lot more than a motor-vehicle permit shop: The vast majority of Californians have to go through that agency to get the ID card that allows them to board an airplane, get a bank account, visit a family member in jail, or do any of the hundreds of other things that require a state-issued ID.
In California, there is only one that works, and it comes from the DMV.
I have been told that I am a bad socialist because I hate waiting in lines, and I’ve had my own bad DMV experiences in the past couple of months — but I am still able to stand for long periods, last several hours between bathroom breaks, and take time off from work without a penalty.
The lines are a huge deal to a lot of people. If it takes five hours to get your ID, you have to miss an entire day of work. You need to pay someone to take care of your kids or your parents or others who need your support. You are trapped in line; seniors have no place to sit down, there’s no water, you can’t get to the bathroom – this is no joke.
“Elderly people, caregivers, people with families – they can’t be in line like this,” Nannette Miranda, communications director for Ting, told me.
And remember: This isn’t a hot new restaurant or club, or even a vacation trip at the airport. You don’t like the lines, you can skip those things. The vast majority of Californians, particularly working-class Californians, have no choice but to deal with the DMV to get the ID they need to function in society.
Meanwhile, the poor workers at the DMV, who are trying their best to deal with angry customers and strict rules (forgot that one piece of paper? Sorry you had to wait five hours; the law says you have to start again, another day) that they didn’t write, get nothing but abuse.
It’s gotten so much worse because the feds want to change the rules for getting a state ID; everyone now has to present even more paperwork, even more documents, and it takes even longer.
This is the world capital of technology. We are a rich state. There is no reason this has to happen.
“What Californians are experiencing at our DMVs is unacceptable,” said Ting. “It’ll get worse if we don’t fix it now because more and more Californians will be switching from their current driver license or state ID to the new federally-compliant Real ID card.”
The state Legislature gave the DMV $16 million more this year to address the crowding. They will add more Saturday hours, make it possible to start (but not complete) your application online. That’s all fine.
But really: Why is there only one DMV office to serve nearly 800,000 people in San Francisco? There ought to be at least three.
Why are there no DMV outreach workers who can go to senior centers, community centers, the homes of those who can’t get out easily, and provide services there?
Why, with the secure servers that exist today, can’t you do almost all of this online?
Why is this essential public service effectively rationed – by who has the time and physical ability to stand in line?
Ting is going to hold a hearing Aug. 7, to “get to the nitty gritty of why this is happening,” Miranda told me. But I think it’s clear why this is happening; The DMV vastly underprepared for the Real ID crush – and nobody in the Governor’s Office cares enough about the working people who are suffering from the outcome to do anything about it.
Instead, we have a situation that should make the Republicans really happy: People are angry at and losing faith in the ability of government to provide an essential service. They are furious about the bureaucracy. And the private sector is looking for ways to take this over.
A hearing is good, but it’s just a start. We need legislation to overhaul this entire process of getting a state ID. Like so many things, the state has gone to such great lengths to prevent what is really a very small chance of fraud that it’s made the vast majority of law-abiding folks miserable.
(And if you are really worried about fraud? It’s probably easier these days to get a fake ID than a real one. Which is ridiculous.)
