Economy

Will Airbnb pay its accumulated tax debt to SF?

Sasha Cuttler
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Will Airbnb pay its accumulated tax debt to SF?

So now that Airbnb has agreed to start collecting and paying the transient occupany tax in San Francisco sometime this summer — finally acknowledging that’s the only workable way to meet the tax obligation it shares with its hosts — that leaves open the question of whether this $10 billion corporation intends to pay the tax debt it has accumulated for years while trying to duck its responsibility to the city.

That’s at least several million dollars that the city could really use right now. As we’ve previously reported, Airbnb commissioned and publicized a study in late 2012 claiming its San Francisco hosts collected $12.7 million from Airbnb guest in fiscal year 2011-12, meaning they should have collected and remitted to the city $1.9 million.

In early 2012, the San Francisco Tax Collector’s Office held public hearings to clarify whether the TOT applies to the short-term rentals facilitated by Airbnb and similar companies, ruling in April 2012 that the TOT does apply to those stays and that it is a “joint and several liability” shared by the hosts and Airbnb, which conducts the transaction and takes a cut.

As we also later reported, despite heavily lobbying during the hearing and being acutely aware of the outcome and its resulting tax obligation, Airbnb simply refused to comply and tack the 15 percent surcharge onto its transactions, as similar companies such as Roomorama were doing.

So if Airbnb was really being the good corporate citizen that it’s now claiming to be, it would not only start charging the 15 percent fee and sharing that money with the city, it would also cut San Francisco a check for around $4 million, or whatever the tax would be on what this growing business has collected from its guests since April 2012.

That’s at the very minimum, giving the company the benefit of the doubt that there really might have been an honest difference in opinions on whether the clear language of the tax code really applied to its transactions. But if we really wanted to be sticklers about this, Airbnb would actually owe the city millions of dollars more than that, going all the way back to its founding in 2008.

“The April 2012 regulation did not change the tax.  It provided more information about the definition of room and the merchant of record in a transaction.  We have always expected for operators to collect and remit the applicable transient occupancy tax,” Greg Kato, the policy director for the San Francisco Tax Collector’s Office, tells the Guardian, later adding that short-term stays “have always been taxable,” even in apartments.

Airbnb continues to duck questions from the Guardian, including our latest on whether it intends to pay its back tax obligation, and the Chronicle didn’t raise the issue with Airbnb. But a statement that Airbnb’s David Hantman put out on the company’s website yesterday does offer some clues about its change of heart.

After announcing plans to collect and remit the TOT in Portland last week, Hantman said he held a question-and-answer session with its hosts in San Francisco “and announced that we’ll soon be collecting and remitting taxes on behalf of our hosts in San Francisco as well.”

Note the legalistic language that continues to avoid accepting that the company is also responsible for that tax debt, not just its hosts. But it appears the company finally realized it can’t just pass the buck to its hosts.

“We have repeatedly said that we believe our community in San Francisco should pay its fair share of taxes. We know from countless discussions with our hosts that they want to pay taxes, but some of these rules are arcane and difficult to follow. Some hosts have even tried to pay taxes in San Francisco and been turned away,” he wrote.

But that statement is a deceptive one, avoiding the fact that short-term stays are actually illegal in San Francisco, violating Administrative Code Section 41A, as well as a variety of planning and zone codes that prevent tourist hotels from being located in residential areas.

That’s why Airbnb hosts have had a hard time paying their taxes, as the Guardian has repeatedly reported, not because “these rules are arcane and difficult to follow.” It’s because Airbnb’s business model isn’t legal, something that Board of Supervisors President David Chiu has been trying to create legislation to address, although negotiations have now dragged on for more than a year.

“We want to help solve this problem. We’re still working on some operational details, but our goal is to launch this program for San Francisco hosts this summer,” Hantman wrote, making the company sound helpful and oh-so-public spirited.

Given that any decent coder could probably figure out how to add a 15 percent surcharge onto Airbnb’s San Francisco transactions in less than an hour, I’m a little skeptical about the “operational details” that will drag its tax compliance out for several more months. My guess is it is trying to retain some political leverage in negotiations over the Chiu legislation.   

“We are a growing company in a new economy. We are taking this action—and initiating our entire Shared City program—as we strive to help make cities stronger, safer, more financially stable. And we’re excited to continue this pilot program in San Francisco. This city is our home and we look forward to continuing to work with everyone here to make it an even better place to live, work and visit,” was how Hantman closed his post.

Hopefully that means San Francisco can expect a $4 million check from Airbnb any day now. 

Billionaire helps poke holes in oil industry’s argument for drilling Monterey Shale

Sasha Cuttler And Mary Magee
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Billionaire helps poke holes in oil industry’s argument for drilling Monterey Shale

“We’ve been told that there’s a great oil boom on the immediate horizon,” billionaire investor and Pac Heights resident Tom Steyer noted at the start of a March 27 talk in Sacramento. 

But Steyer (who has pledged to spend $100 million on ad campaigns for the 2014 election to promote action on climate change) wasn’t there to trumpet the oil industry’s high expectations. Instead, he introduced panelists who dismissed the buzz on drilling the Monterey Shale as pie-in-the-sky hype.

Dr. David Hughes, a geoscientist with the Post Carbon Institute, and researcher Robert Collier had been invited to speak by Next Generation, a policy group focused on climate change that was co-founded by Steyer.

Last year, researchers from the University of Southern California released a study that wound up being cited time and again as the basis for the oil industry’s arguments in the context of a statewide debate on fracking ignited by environmentalists.

Partially funded by the Western States Petroleum Association, oil industry lobbyists, the USC report outlined a rosy economic outlook stemming from oil extraction in the Monterey Shale, a vast geologic formation touted as “a new, economy-spurring natural resource.”

The Monterey Shale spans 1,750 square miles, running beneath much of the San Joaquin Valley and into Southern California. Authors of a private-sector report produced by INTEK, referenced by the USC report, estimated that 15.4 billion barrels of oil could be extracted from the shale formation – mostly through nontraditional methods such as fracking or acidizing, a process that involves pumping acid underground.

But Hughes, the geoscientist, characterized this estimate as unrealistic. “The Monterey Shale certainly will produce more oil and gas, but likely only a very small fraction of what’s been reported in the INTEK report,” he said. “Projections are highly unlikely to be realized.” The Post Carbon Institute and Physicians, Scientists and Engineers for Healthy Energy published their own report, Drilling California: A Reality Check on the Monterey Shale.

Also unlikely to be realized are the optimistic figures on job creation and economic activity, Collier noted.

California is the nation’s fourth largest oil producer, but its production has been on a steady decline for the past two decades. “So the hopes for the Monterey Shale come in the context of a gradual decline, and the hopes that California will echo the big boom of North Dakota and Texas,” he said.

The USC report contained sensational projections, predicting that 2.8 million net new jobs would be created statewide in sectors indirectly or directly associated with oil. The most optimistic scenario predicted 4.4 million net new jobs. The report also predicted that opening up the Monterey Shale for drilling would result in a 14 percent increase in per capita GDP, as well as  $24 billion in state and local tax revenues.

And as the debate about regulating fracking raged on, the findings in this study were “echoed by politicians of both parties,” Collier noted.

But prominent economists, tapped by Next Generation to analyze the study, said they could find no basis for certain claims.

Next Generation researchers turned to University of California economists Jerry Nickelsburg of UCLA, Jesse Rothstein of UC Berkeley and Olivier Deschênes of UC Santa Barbara. “They said: ‘We cannot see any justification for these incredible numbers,” Collier reported. “They seem too big to be believable.”

Instead, the economists believed the potential job creation was closer to 100,000 in total direct and indirect employment, he added. More information is presented in Next Generation’s report.

So arguments that the oil industry has been using in favor of opening up the Monterey Shale might be based on flimsy math. 

Steyer, at the close of the talk, put in a plug for focusing on clean-energy sector growth instead.

“When we sit here and talk about jobs, let’s remember that the clean energy jobs are most likely to solve our employment problems,” he said. “If we want a boom in energy production, then we have a boom in energy production. I think it’s clear, our future is in advanced energy.”

Appeal to the Giants

Michael Redmond
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By John Farrell

OPINION We all love our 2010 and 2012 World Champion Giants and wish them all the best in 2014. But I also want to see the team do right by San Franciscans.

The Giants organization built its ballpark for over $350 million in 2000 and leased land from the Port. The 2012 property assessment was approximately $196.8 million, at least $200 million under value in my opinion, resulting in a property tax loss to the city of over $2.3 million annually.

Yet the Giants are appealing even this $196.8 million assessment, seeking to reduce the value to $140 million, an additional revenue loss to the city of over $650,000 annually.

When I worked in the San Francisco Assessor’s Office years ago, one of my assignments was to value the Giants ballpark. After construction was completed in 2000, a principle appraiser, a senior manager, and I met with Giants management in 2003 to finalize the ballpark value. I have worked with the Giants management numerous times in the past and they have always been professional, courteous, and fair.

Both parties agreed that a cost approach would be the preferred method of valuation and agreed on costs of around $350 million up to that point. The only difference in the final valuation being challenged was a marketing cost of $7 million in assessed value, reflecting $80,000 in tax revenue.

The Giants agreed to a middle ground to increase the assessment by $4 million. I advised the senior manager to accept this middle ground since it was reasonable and since the Giants already agreed to the approximate $350 million construction cost. It was a win-win for both the Giants and the city.

But this senior manager refused and would not budge on the $7 million assessed figure, reflecting a difference of only $35,000 in revenue. Giant’s management left the office very upset. I looked at the principle appraiser and he also couldn’t get over that we wouldn’t work with the Giants.

I had worked closely with this principal appraiser over the years and we always got the best and fairest value for the city. I left the office a year later and the Giants subsequently appealed and received a reduction of $200 million in assessed value and have been receiving a reduced assessment ever since.

When a taxpayer files an appeal for a reduction in property value under Proposition 8, it is generally due to a decrease in value as the result of a stagnant economy. I can understand the Giants asking for a reduction if their revenues were going down and justify it.

Without the ballpark, the Giants would not receive its revenues from the tickets, vendors, restaurants, advertising, cable TV, etc. Its revenues continue to grow, which is wonderful. But in my opinion and experience, the Giants should have never received such a reduction in assessment.

The proposed reduction to $140 million makes no sense. The land assessment alone is at least $40 million, from the capitalization of lease payments to the Port leaving the balance of $100 million for the improvements.

Naming rights were never assessed. Pacific Bell paid $45 million for naming rights in 2000, which was subsequently transferred to AT&T. What are these naming rights worth today? Keep in mind that the 49ers/York and Levi Strauss & Co recently entered into a naming rights agreement for a 20-year, $220 million deal at $11 million annually. Are you telling me the Giants naming rights are not worth at least half this amount when its contract with AT&T expires?

I appeal to the Giants owners and management to withdraw all their assessment appeals, which are insulting to the taxpayers of San Francisco, and continue to be the class act that they are. This appeal is from a fifth generation San Franciscan who has been a Giants fan since I can remember and had the privilege to see the two Willies, Juan, the Clarks, the Bonds and other Giants greats along the way.

John Farrell, MBA, Broker/Realtor®, former Assistant Assessor, Budget and Special Projects

 

San Francisco’s untouchables

Michael Redmond
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San Francisco’s untouchables

Rebecca@sfbg.com

In one sense, San Francisco’s homeless residents have never been more visible than they are in this moment in the city’s history, marked by rapid construction, accelerated gentrification, and rising income inequality. But being seen doesn’t mean they’re getting the help they need.

Not long ago, Lydia Bransten, who heads security at the St. Anthony’s Foundation on 150 Golden Gate, happened upon a group of teenagers clustered on the street near the entrance of her soup kitchen. They had video cameras, and were filming a homeless man lying on the sidewalk.

“They were putting themselves in the shot,” she said.

Giggling, the kids had decided to cast this unconscious man as a prop in a film, starring them. She told them it was time to leave. Bransten read it as yet another example of widespread dehumanization of the homeless.

“I feel like we’re creating a society of untouchables,” she said. “People are lying on the street, and nobody cares whether they’re dead or breathing.”

Condominium dwellers and other District 6 residents of SoMa and the Tenderloin are constantly bombarding Sup. Jane Kim about homelessness via email — not to express concern about the health or condition of street dwellers, but to vent their deep disgust.

“This encampment has been here almost every night for several weeks running. Each night the structure is more elaborate. Why is it allowed to remain up?” one resident wrote in an email addressed to Kim. “Another man can be found mid block, sprawled across the sidewalk … He should be removed ASAP.”

In a different email, a resident wrote: “The police non-emergency number is on my quick dial because we have to call so often to have homeless camps removed.”

It’s within this fractious context that the city is embarking on the most comprehensive policy discussions to take place on homelessness in a decade.

In 2004, city officials and community advocates released a 10-Year Plan to Abolish Chronic Homelessness. One only needs to walk down the street to understand that this lofty objective ultimately failed; people suffering from mental illness, addiction, and poverty continue to live on the streets.

Most everyone agrees that something should be done. But while some want to see homelessness tackled because they wish undesirable people would vanish from view, others perceive a tragic byproduct of economic inequality and a dismantled social safety net, and believe the main goal should be helping homeless people recover.

“The people living in poverty are a byproduct of the system,” said Karl Robillard, a spokesperson for St. Anthony’s. “We will always have to help the less fortunate. That’s not going to go away. But we’re now blaming those very same people for being in that situation.”

sabrina

Sabrina: “The streets can be mean.”

Guardian photo by Rebecca Bowe

 

HOMELESS MAGNET?

A common framing of San Francisco’s “homeless problem” might be called the magnet theory.

The city has allocated $165 million to homeless services. Over time, it has succeeded in offering 6,355 permanent supportive housing units to the formerly homeless. Nevertheless, the number of homeless people accounted for on the streets has remained stubbornly flat. The city estimates there are about 7,350 homeless people now living in San Francisco.

Since the city has invested so much with such disappointing results, the story goes, there can only be one explanation: Offering robust services has drawn homeless people from elsewhere, like a magnet. By demonstrating kindness, the city has unwittingly converted itself into a Mecca for the homeless, spoiling an otherwise lovely place for all the hardworking, law-abiding citizens who contribute and pay taxes.

That theory was thoroughly debunked in a Board of Supervisors committee hearing on Feb. 5.

“The idea of services as a magnet, … we haven’t seen any empirical data to support that,” noted Peter Connery of Applied Survey Research, a consultant that conducted the city’s most recent homeless count. “The numbers in San Francisco are very consistent with the other communities.”

He went on to address the question on everyone’s mind: Why haven’t the numbers decreased? “Even in this environment where there have obviously been a tremendous number of successes in various departments and programs,” Connery said, “this has been a very tough economic period. Just to stay flat represents a huge success in this environment.”

As former President Bill Clinton’s campaign team used to say: It’s the economy, stupid.

 

LIFE OUTSIDE

For Sabrina, it started with mental health problems and drug addiction. She grew up in Oakland, the daughter of a single mom who worked as a housecleaner.

“Drugs led me the wrong way, and eventually caught up with me,” she explained at the soup kitchen while cradling Lily, her Chihuahua-terrier mix.

“I had nothing, at first. You have to learn to pick things up. Eventually, I got some blankets,” she said. But she was vulnerable. “It can get kind of mean. The streets can be mean — especially to the ladies.”

She found her way to A Woman’s Place, a shelter. Then she completed a five-month drug rehab program and now she has housing at a single room occupancy hotel on Sixth Street.

“You don’t realize how important those places are,” she said, crediting entry into the shelter and the drug-rehab program with her recovery.

Since the 10-year plan went into effect, Coalition on Homelessness Director Jennifer Friedenbach told us, emergency services for homeless people have been dramatically scaled back. Since 2004, “We lost about a third of our shelter beds,” she explained. About half of the city’s drop-in center capacity was also slashed.

“Between 2007 to 2011, we had about $40 million in direct cuts to behavioral health,” she said at the Feb. 5 hearing, seizing on the lack of mental health care, one of the key challenges to reducing homelessness.

“The result of all three of these things, I can’t really put into words. It’s been very dramatically negative. The increase in acuity, impact on health,” she said, “those cannot be overstated.”

The need for shelters is pressing. The city has provided funding for a new shelter for LGBT homeless people and a second one in the Bayview, but it hasn’t kept up with demand. And for those who lack shelter, life is about navigating one dilemma after another, trying to prevent little problems from snowballing into something heinous.

Consider recent skirmishes that have arisen around the criminalization of homelessness. Department of Public Works street cleaning crews have sprayed homeless people trying to rest on Market Street. Sitting or lying on the sidewalk can result in a ticket. There are few public restrooms, but urinating on the street can result in a ticket. There are no showers, but anyone caught washing up in the library bathroom could be banned from the premises. Sleeping in a park overnight is illegal.

“The bad things that happen are when people don’t see homeless people as people,” said Bevan Dufty, the mayor’s point person on homelessness. “That’s the core of it — to be moved away, to be pushed away, citing people, arresting people.”

Friedenbach said the tickets and criminalization can ultimately amount to a barrier to ending homelessness: “You’re homeless, so you get a ticket, so they won’t give you housing, because you wouldn’t pay the ticket. And so, you’re stuck on the streets.”

 

ORDINARY EMERGENCIES

A man slumped over his lunch tray and fell to the floor. Within minutes, a medical crew had arrived on the scene, set up a powder-blue privacy screen, and cleared away a table and chairs to administer emergency care.

Throughout the dining hall, most continued lifting forkfuls of mashed potatoes, broccoli, and shredded meat to their mouths, unfazed. Volunteers clad in aprons continued to set down heaping lunch trays in front of diners who held up laminated food tickets. At St. Anthony’s, where between 2,500 and 3,000 hot meals are served daily to needy San Franciscans, this sort of thing happens all the time.

“A lot of our guests are subject to seizures, for one reason or another,” Robillard told me by way of explanation. Behind him, a pair of medics hovered over the man’s outstretched body, his face invisible behind the screen. “In almost all cases, they’re fine.”

Seizures are just one common ailment plaguing the St. Anthony’s clientele, a mix of homeless people, folks living on the economic margins, and tenants housed in nearby single room occupancy hotels.

Jack, an elderly gentleman with a gray beard and stubs on one hand where fingers used to be, told me he’d spent years in prison, battled a heroin addiction, and sustained his hand injury while serving in the military. He previously held jobs as a rigger and a train operator, and said he became homeless after his mother passed away.

St. Anthony’s staff members mentioned that Jack had recently awoken to being beaten in the head by a random attacker after he’d fallen asleep on the sidewalk near a transit station.

A petite woman with a warm demeanor, who introduced herself as Kookie, said she’d been homeless last August when she faced her own medical emergency. “I was in the street,” she said. “I didn’t know I was having a stroke.”

She’d been spending nights on the sidewalk on Turk Street, curled up in a sleeping bag. When she had the stroke, someone called an ambulance. Her emergency had brought her unwittingly into the system. At first, “They couldn’t find out who I was.”

She said she’d stayed in the hospital for six months. Once she’d regained some strength, care providers connected her with homeless services. Now Kookie stays at a shelter on a night-by-night basis, crossing her fingers she’ll get a 90-day bed. She’s on a wait-list to be placed in supportive housing.

Kookie unzipped a tiny pouch and withdrew her late husband’s driver’s license as she talked about him. Originally from Buffalo, NY, she lived in Richmond while in her early 20s and took the train to San Francisco, where she worked as a bartender. She’s now 60.

“When I was not homeless, I used to see people on the ground, and I never knew I would live like that,” she said. “Now I know how it is.”

kookie

Kookie: “I used to see people on the ground, and I never know I would live like that.”

Guardian photo by Rebecca Bowe

HOUSING, HOUSING, HOUSING

Way back in 2003, DPH issued an in-depth report, firing off a list of policy recommendations to end homelessness in San Francisco once and for all. The product of extensive research, the agency identified the most important policy fix: “Expand housing options.”

“Ultimately, people will continue to be threatened with instability until the supply of affordable housing is adequate, incomes of the poor are sufficient to pay for basic necessities, and disadvantaged people can receive the services they need,” DPH wrote. “Attempts to change the homeless assistance system must take place within the context of larger efforts to help the very poor.”

Fast forward more than a decade, and many who work within the city’s homeless services system echo this refrain. The pervasive lack of access to permanent, affordable housing is the city’s toughest nut to crack, but it doesn’t need to be this way.

At the committee hearing, Friedenbach, who has been working as a homeless advocate for 19 years, spelled out the myriad funding losses that have eviscerated affordable housing programs over time.

“We’ve had really huge losses over the last 10 years in housing,” she said. “We’ve lost construction for senior and disability housing. Section 8 [federal housing vouchers] has been seriously cut away at. We’ve lost federal funding for public housing. There were funding losses in redevelopment.”

A comprehensive analysis by Budget and Legislative Analyst Harvey Rose found the city — with some outside funding help — has spent $81.5 million on permanent supportive housing for the formerly homeless.

That money has placed thousands of people in housing. Nevertheless, a massive unmet need persists.

 

WAITING GAME

Following the hard-hitting economic downturn of 2008 and 2009, San Francisco saw a spike in families becoming homeless for the first time. Although a new Bayview development is expected to bring 70 homeless families indoors, Dufty said 175 homeless families remain on a wait-list for housing.

Yet the wait-list for Housing Authority units has long since been closed. And many public housing units continue to sit vacant, boarded up. Sup. London Breed said at a March 19 committee hearing that fixing those units and opening them to homeless residents should be a priority.

DPH’s Direct Access to Housing program, which provides subsidized housing in SROs and apartments, was also too overwhelmed to accept new enrollees until just recently. Since the applicant pool opened up again in January, 342 homeless people have already signed up in search of units, according to DPH. But only about a third of them will be placed, the results of our public records request showed.

Meanwhile, the city lacks a pathway for moving those initially placed in SROs into more permanent digs, which would free up space for new waves of homeless people brought in off the street.

City officials have conceptualized the need for a “housing ladder” — but if one applies that analogy to San Francisco’s current housing market, it’s a ladder with rungs missing from the very bottom all the way to the very top.

In the last fiscal year, HSA allocated $25 million toward subsidized housing for people enrolled in the SRO master-lease program. “It’s often talked about as supportive housing,” Friedenbach notes. “But supportive housing under a federal definition is affordable, permanent, and supportive.”

In SROs, which are notoriously rundown — sometimes with busted elevators in buildings where residents use canes and wheelchairs to get around — people can fork over 80 percent of their fixed incomes on rent.

“An individual entering our housing system should have an opportunity to move into other different types of housing,” Dufty told the supervisors. “It’s really important that people not feel that they’re stuck.”

Amanda Fried, who works in Dufty’s office, echoed this idea. “Our focus has to be on this ladder,” she told us. “If people move in, then they have options to move on. What happens now is, we build the housing, people move in, and they stay.”

 

START OF THE CYCLE

Homelessness does begin somewhere. For Joseph, a third-generation San Franciscan who grew up in the Mission and once lived in an apartment a block from the Pacific Ocean, the downward spiral began with an Ellis Act eviction.

After losing his place, he stayed with friends and family members, sometimes on the streets, and occasionally using the shelter system (he hated that, telling us, “I felt safer in Vietnam”). He now receives Social Security benefits and lives in an SRO.

Homelessness is often a direct consequence of eviction. Last year, the city allocated an additional $1 million for eviction defense services. Advocates hope to increase this support in the current round of budget talks. The boost in funding yielded measurable results, Friedenbach pointed out, doubling the number of tenants who managed to stave off eviction once they sought legal defense.

There’s also a trend of formerly homeless residents getting evicted from publicly subsidized housing. Since 2009, the Eviction Defense Collaborative has counted 1,128 evictions from housing provided through HSA programs. Since most came from being homeless, they are likely returning to homelessness.

Dufty said more could be done to help people stay housed. “Yes, we’re housing incredibly challenged individuals. And we have to recognize that allowing those individuals to be evicted, without the city using all of our resources to intervene to help that person, that’s not productive,” he said. “It’s debilitating to the person. It’s just not good.”

Fried said the city could do more to provide financial services to people who were newly housed. “You were homeless on the street — you know you didn’t pay some bill for a long time. Really that’s the time, once you’re housed and stable, to say, ‘let’s go back and pull your credit.’ Once we have people in housing, how are we increasing their income?”

Gary

Gary: “If I knew how to fix it, I would.”

Guardian photo by Mike Koozmin

SEARCH FOR SOLUTIONS

The reopening of [freespace], a community space at Sixth and Market temporarily funded by a city-administered grant, attracted a young, hip crowd, including many tech workers. A girl in a short white dress played DJ on her laptop, against a backdrop where people had scrawled their visions for positive improvements in the city. Some of the same organizers are helping to organize HACKtivation for the Homeless, an event that will be held at the tech headquarters of Yammer on March 28. The event will bring together software developers and homeless service providers to talk about how to more effectively address homelessness.

“The approach we’re talking about is working with organizations and helping them build capacity,” organizer Ilana Lipsett told us. The idea is to help providers boost their tech capacity to become more effective. And according to Kyle Stewart of ReAllocate, an organization that is partnering on the initiative, “The hope is that it’s an opportunity to bridge these communities.”

Other out-of-the box ideas have come from City Hall. Sup. Kim, who stayed at a homeless shelter in 2012 during a brief stint as acting mayor, said she was partially struck by how boring that experience was — once a person is locked into a shelter, there is nothing to do, for 12 hours.

She wondered: Why aren’t there services in the shelters? Why isn’t there access to job training, counseling, or medical care in those facilities? Why are the staffers all paid minimum wage, ill-equipped to deal with the stressful scenarios they are routinely placed in? Her office has allocated some discretionary funding to facilitate a yoga program at Next Door shelter, in hopes of providing a restorative activity for clients and staff.

More recently, Sup. Mark Farrell has focused on expanding the Homeless Outreach Team as an attempt to address homelessness. Farrell recently initiated a citywide dialogue on addressing homelessness with a series of intensive hearings on the issue. He proposed a budgetary supplemental of $1.3 million to double the staff of the HOT team, and to add more staff members with medical and psychiatric certification to the mix.

But the debate at the March 19 Budget and Finance Committee hearing grew heated, because Sup. John Avalos wanted to see a more comprehensive plan for addressing homelessness. “I’m interested in people exiting homelessness,” he said. “I’d like there to be a plan that’s more baked that has a sense of where we’re going.”

Farrell was adamant that the vote was not about addressing homelessness in the broader sense, but expanding outreach. “We have to vote on: do we believe, as supervisors, that we need more outreach on our streets to the homeless population or do we not?” he said.

Sup. Scott Wiener defined it as an issue affecting neighborhoods. “When we’re actually looking at what is happening on our streets, it is an emergency right now,” he said. “It’s not enough just to rely on police officers.”

When other members of the board said homeless advocates should be integrated into the solution, Wiener said, “The stakeholders here are not just the organizations that are doing work around homelessness, they are the 830,000 residents of San Francisco … It impacts their neighborhoods every day.”

Asked what she thought about it, Kim told us she believed sending more nurses and mental-health service providers into the city’s streets was a good plan — but she emphasized that it had to be part of a larger effort.

“If you’re just going to increase the HOT team, but not services,” she said, “then you’re just sending people out to harass homeless people.”

 

STILL OUT THERE

Mike is 53, and he’s lived on the streets of San Francisco for five years. He was born in Massachusetts, and his brothers and sisters live in Napa. We encountered him sitting on the sidewalk in the Tenderloin. “I don’t like shelters,” he explained. “I got beat up a couple times, there were arguments.” So he sleeps under a blanket outside. “It’s rough,” he said. “I do it how I can.”

A few blocks away we encountered Gary, who said he’s been homeless in San Francisco for 17 years. He was homeless when he arrived from Los Angeles. He said he’d overdosed “a bunch of times,” he’s gone through detox five times, and he’s been hospitalized time and again. “Call 911, and they’ll take care of you pretty good.”

Gary is an addict. “If I knew how to fix it, I would,” he said. “Do yourself a favor, and lose everything. It’s like acting like you’re blind.”

Gary and Mike, chronically homeless people who have been on the streets for years, are HOT’s target clientele. “My slice of the pie is the sickest, the high-mortality, they’re often the ones that are laid out in the street,” said Maria Martinez, a senior staff member at DPH who started the HOT program.

“I went through years of the 10-Year plan,” she added. “Do I feel like I could take this money [the HOT team supplemental] and do something effective with it? Yes. Do I think there’s a lot of other things that we could address? Yes.”

Pressed on what broader solutions would look like, she said, “There has to be an exit into permanent housing. I’ve seen that we’ve been creative around that. We can make lives better. I say that vehemently. And permanent housing is critical to exiting out of homelessness.”

Mike

Guardian photo by Mike Koozmin

Draining the tank

Michael Redmond
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Draining the tank

rebecca@sfbg.com

When University of California Berkeley students Ophir Bruck and Victoria Fernandez first made contact with the University of California Board of Regents, it was a far cry from the genial hobnobbing they engaged in over lunch at the March 19 Regents meeting in San Francisco, as special guests called Student Advocates to the Regents.

About a year ago, they were outside a Regents meeting in Sacramento and, joined by about 60 other students, symbolically locked to a pair of handmade, 10-foot-tall models of oil rigs they’d set up outside the conference center.

“The idea was the symbolism of us being chained to an extractive economy that’s not sustainable,” Bruck explained to us. The message they hoped to impart to the Regents was: “They have the keys to our fossil freedom.”

Taking advantage of the public comment session to get their point across, the students were there to call on the Regents to withdraw UC investment holdings in companies such as Exxon, Chevron, BP, and other leading fossil fuel companies. The campaign, Fossil Free Cal, is just one of dozens of student-led efforts nationwide seeking to convince campus administrations to withdraw funds from oil and gas companies as a way of curbing greenhouse gas emissions and fighting climate change.

Some local institutions of higher education have already committed to divestment from fossil fuels. Oakland’s Peralta Community College District, the Foothill-DeAnza Community College Foundation, and the San Francisco State University Foundation have made commitments to divest.

But other prominent schools have declined. Last October, Harvard University announced that it would not honor students’ request to withdraw investment holdings from the fossil fuel sector, saying such a move would “position the university as a political actor rather than an academic institution,” and could “come at a substantial economic cost.” A student effort to have Brown University divest from fossil fuels also went down the tubes.

Divestment by California’s flagship public university system would have a significant impact. UC Berkeley’s endowment is $3 billion, while the total UC system endowment is $11 billion. Fossil Free Cal organizers estimate that about 5 percent of that money is tied up in the fossil fuel sector.

Beginning with the kickoff to their divestment campaign at that first Regents’ meeting in Sacramento, the students’ message seems to have resonated. In the time since, they’ve attended every Regents meeting, met individually with certain board members, submitted reports in support of divestment, and earned an official endorsement from the UC Students’ Association, a student government that spans all UC campuses. Some individual regents have been receptive — but so far, the powerful UC governing board has not seriously taken up the question of divestment.

“We’re worried about what our future looks like, and what they are doing with our money,” Fernandez said. “We’re saying, if we’re invested in fossil fuels, we’re inherently invested in the destruction of students’ future.”

Nationwide, the campaign to divest from fossil fuels is a proactive, youth-led movement hinged on a moral argument: Since climate scientists have said it is dangerous to continue burning fossil fuels at current rates, universities have an ethical obligation to withdraw support from those corporations sticking to existing business models for extracting and burning fossil fuels.

To argue their case, the students are highlighting a quandary. There’s global scientific consensus that burning fossil fuels is the reason climate change is occurring, and this has led the international community to take action. In 2010, members of the United Nations agreed to take steps to prevent an average global temperature increase above 2 degrees Celsius.

But according to a 2012 report issued by the Carbon Tracker Institute, a London-based think tank, the amount of carbon stored in reserves by the world’s leading 200 leading fossil fuel companies is enough to trigger that temperature increase five times over, if all the reserves were extracted and burned. That would severely alter the global climate with dangerous and irreversible impacts, according to climate modeling scenarios.

To lessen that damage, students are advising their campus administrators to withdraw from fossil fuels, arguing that it makes good business sense. Internationally, some economists have begun referring to a “carbon bubble,” with Green Party members of the European Parliament releasing a study last month to warn of the effect it could have on the pension funds, banks, and insurance companies in the European Union.

Even with the dawning realization that fossil fuel companies’ holdings can’t be burned if the international community is to meet its goals to fight climate change, the UC Regents have yet to make any clear indication on whether they will continue to keep millions of dollars tied up in that sector.

“All successful student movements took sit-ins and mass mobilizations,” Bruck said during an interview at UC Berkeley’s Free Speech Café, named for the historic campus movement.

It may well go there, but at this stage, organizers are still hoping the Regents will take leadership in response to their campaign. Specifically, they’re pushing for UC to drop all existing investments in fossil fuel companies over the next five years, and roll out a climate change investment strategy.

On April 4, organizers behind this effort will host 300 students representing 100 schools from across the United States and Canada, for a conference on the fossil fuel divestment movement. The two-day strategy session, which will be held at San Francisco State University, aims to strengthen the youth-led movement to fight climate change by getting at the economic root of the problem, through divestment.

“Our goal is divesting in the next two semesters,” Fernandez said. But since students cycle out of the universities over four years, and Regents are appointed for terms lasting 12 years, she realizes accomplishing this goal might mean relying on newly engaged students: “Maybe our freshmen right now will have to bring it home.”

The unanswered question: How do we bridge SF’s affordable housing gap?

Sasha Cuttler
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186
The unanswered question: How do we bridge SF’s affordable housing gap?

Nobody has a good answer to San Francisco’s most basic housing problem: How do we build the housing that existing city residents need? It was a question the Guardian has been posing for many years, and one that I again asked a panel of journalists and housing advocates on Friday, again getting no good answers.

The question is an important one given Mayor Ed Lee’s so-called “affordability agenda” and pledge to build 30,000 new housing units, a third of them somehow affordable, by 2020. And it’s a question that led to the founding 30 years ago of Bridge Housing, the builder of affordable and supportive housing that assembled Friday’s media roundtable.

“There really isn’t one thing, there needs to be a lot of changes in a lot of areas to make it happen,” was the closest that Bridge CEO Cynthia Parker came to answering the question.

One of those things is a general obligation bond measure this fall to fund affordable housing and transportation projects around the Bay Area, which Bridge and a large coalition of other partners are pushing. That would help channel some of the booming Bay Area’s wealth into its severely underfunded affordable housing and transit needs.

When I brought up other ideas from last week’s Guardian editorial for capturing more of the city’s wealth — such as new taxes on tech companies, a congestion pricing charge, and downtown transit assessment districts — Parker replied, “We’d be in favor of a lot of that.”

Yet it’s going to take far more proactive, aggressive, and creative actions to really bridge the gap between the San Francisco Housing Element’s analysis that 60 percent of new housing should be below-market-rate and affordable to those earning 120 percent or less of the area median income, and the less than 20 percent that San Francisco is actually building and promoting through its policies.

Stated another way, about 80 percent of housing we’re building is for a small minority of city residents, or the wealthy people that these developers hope to attract to the city. And we’re not building housing for the vast majority of city residents. That is a recipe for gentrification, displacement, and destruction of San Francisco as a progressive-minded city.

Parker parroted Lee and other pro-development boosters, including SPUR, in arguing that city needs to make it easier and faster for developers to build new housing of all types. “In San Francisco, we do need to expedite the [housing] entitlement process,” Parker said.

But when asked whether meeting or exceeded Lee’s housing production goals would ever bring the price of market-rate housing down to the level where someone more 120 percent of AMI — which HUD recently set at $81,550 for single San Franciscans, or $116,500 for a family of four — Parker conceded that it wouldn’t.

The bottom line for San Francisco and its overheated real estate market is we can never built our way to affordability. The only way to build housing that most people can afford is with public subsidies, and San Francisco just isn’t asking enough from its wealthy individuals, corporations, and developers to create an Affordable Housign Trust Fund that is anywhere near big enough to meet the real demand.

That kind of assertion seems radical by the standards of today’s skewed political (and online) discourse. But when I raised it to a panel that included Bridge Housing officials, members of SPUR and HOPE SF, and a panel of journalists from such pro-development outlets as San Francisco Business Times, San Francisco Magazine, SocketSite, The Registry SF, KQED, and TechCrunch (as well as the more Guardian-aligned Mother Jones), nobody had any good answers or remedies to that basic question that we’ve raised again and again.

Instead, some of the business journalists offered a more sober assessment of what’s to come than most of this city’s pro-development boosters, noting a few signs of irrational exhuberance in the local economy.

The Registry’s Vladimir Bosanac said he’s observed a recent trend of developers buying up unentitled land, indicating more optimism in the sustainability of this development boom than market conditions might warrant. Adam Koval of SocketSite, an early predicter of the last dom-com crash, also voiced sketicism in the pervasive “this time is different” faith in the tech sector, noting how realms such as gaming and online coupons are losing steam and predicting that commercial rents are plateauing.

“I think there are some real gut checks coming up,” Koval said of the tech sector and the sustainability of its growth and valuations.

Perhaps it’s also time for a gut check by Mayor Lee and others who argue that we can build our way to housing affordability without any major new efforts to capture more of the wealth now being generated in San Francisco, wealth that might not be here later if we continue avoiding the question of how to provide the housing that San Francisco needs. 

Dispatches from SXSW: Day 1

Steven T. Jones
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0
Dispatches from SXSW: Day 1

[Ed note: George was going to write a recap of the first day’s shows and general SXSW revelry, but with news of last night’s horrendous accident making the rounds, that felt a little inappropriate. Stay tuned for more festival coverage.]

Last night tragedy struck SXSW when a drunk driver rammed into a crowd of people. Two people are confirmed dead, one man from The Netherlands and one local woman. In total, 23 people have been reported injured; eight remain in the hospital. The suspect has been charged and is currently in custody, and his or her identity will be made public later today.

SXSW’s official statement on the matter:

“Our thoughts and prayers go out to those affected by the tragic accident that took place last night here in Austin. We appreciate and commend the first responders, as well as the city agencies who so quickly sprung into action. We will be making schedule and venue changes for programming in the surrounding area of last night’s events. All other programming will continue as previously scheduled.”

I was fortunate enough to have already been at my friend’s house and asleep when the tragic incident occurred. In fact, I didn’t even find out about it until I woke up this morning to a total of nine emails, texts, and missed calls from my parents. When I reading about the coverage of the incident, one tweet in particular stood out for me: “A horrible wake up call for a rapidly growing city with an economy based on alcohol and terrible public transportation, this is awful” — a stark reminder that sometimes horrible things occur not only because of reckless individuals but as a result of our environment.

In that vein, some attendees I talked to expressed how unsurprised they were that this happened, given the continent-sized amount of alcohol drunk by thousands of people here, all stumbling around within a few square miles. From what I’ve seen, the city of Austin, the SXSW organizers, and participating venues have all gone to great lengths to ensure people’s safety. Unfortunately, there are some things you just can’t prepare for.

East Bay grace

Michael Redmond
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0
East Bay grace

arts@sfbg.com

DANCE Though it’s gone mostly unnoticed by us San Francisco-dwelling dance watchers, a remarkable thing has been growing across the bay on the other side of the tunnel. On March 6, the Walnut Creek-based Diablo Ballet celebrated its 20th anniversary with a gala — without fancy gowns, but with an hour-long program that did what galas are supposed to do: look at the past and the here and now, and say thank-you to a lot of folks.

While it might have been gracious to have acknowledged the contributions of co-founder Lawrence Pech and brothers Nikolai and Viktor Kabaniaev — all of whom danced, choreographed, and contributed to running the company — Diablo Ballet is the product of that still-rare breed in American ballet, a woman artistic director.

When she set out to create Diablo Valley’s first professional ballet company, Lauren Jonas had a lot going for herself: a brand new, beautifully equipped theater in what is now called the Lesher Center for the Arts in Walnut Creek; generous private support by ballet-loving local entrepreneurs; and an audience willing to take its chances on a small, easily accessible company. I can’t remember how many times in those early years I heard people during intermission commenting on how happy they were “not to have to fight the tunnel.”

Above all, Jonas had taste, standards, and knowledge of the available repertoire. Locally trained at Marin Ballet, she had performed in national companies as well as Oakland Ballet under Ronn Guidi, in both 19th and 20th century classics. She also knew that the Bay Area, and other parts of the country, had plenty of professional ballet dancers who were eager to perform, and on whose talent and experience she could draw.

At the gala, the petite and charming Jonas was repeatedly praised for her commitment to community and her capacity for work. She must also have an iron determination to carry out her vision of professionally-danced professional choreography. It may not be easy to say “no” to her.

The auspicious beginnings, which included an orchestra, didn’t last. Money dried up because of the economy but also because foundations redirected their priorities. The first to go was the live music; eventually the Lesher facility became too expensive for a full season. There were times when Jonas went back on stage to perform because she couldn’t afford to hire another dancer.

That’s when Jonas’ backbone kicked in. She didn’t change her vision but adapted to the changed circumstances by shifting her performances to the Shadelands Arts Center, one of Walnut Creek’s neighborhood rec centers, where the company rehearsed. They attracted new audiences who could never have afforded the ticket prices in the downtown venue.

In some ways Shadelands seems an impossible place for ballet. With no theater lighting, a stage the size of what looks like a large table, and terrible sight lines — recently improved by installed risers — it was difficult to imagine ballet dancers whipping pirouettes and traveling jetés. But they did and they do. The opportunity to see these experienced artists close up, noticing the impetus behind a move or even the fatigue creeping up on them, makes up for much of what is lost in scale.

The gala, which included some history and many tributes, started with a simple but charming waltz by an octet of former dancers. It ended with “Variation and Finale” from Balanchine’s Who Cares? Rearranged for six dancers by Jonas, with a fine interpretation of Gershwin by Diablo music director Greg Sudmeier and his jazz trio (live music remains important to Jonas), the sextet got the spirit though not always the precision of the original. Robert Dekkers’ casual charm, however, didn’t keep him from delivering “Variation”‘s spitfire turns and beats with utmost confidence.

Dekkers, also Diablo’s choreographer in residence, premiered his lengthy and goofy cares you know not for Mayo Sugano and Diablo’s newest dancers, Tetyana Martyanova and Justin Vanweest.

Welcome contributions came from Derek Sakakura and Rosselyn Ramirez’s pas de deux in Eugene Loring’s Billy the Kid, a ballet that in 1938 was much condemned for including gestures drawn from life. Roy Bogas contributed the spiffy piano arrangement of Aaron Copland’s cowboy tune-flavored score.

Making good and practical use of available technology allowed filmed versions of parts of a ballet which then continued live on stage. Tina Kay Bohnstedt and David Fonnegra shone in a torrid pas de deux from Val Caniparoli’s Lady of the Camellia. The dancers in Kelly Teo’s Dancing Miles at first looked like sparks in the night but live, they filled the stage with jazzy energy. On film, Teo, who danced and choreographed for Diablo, declared his gratitude: “I left my profession fulfilled; I had accomplished what I had wanted to do.” Not a bad record for 20 years. *

www.diabloballet.org

 

Bogus chain store study ignores small biz benefits

Michael Redmond
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10

OPINION

Earlier this month, San Francisco’s Office of Economic Analysis waded into the debate over whether the city should beef up its policy restricting the spread of chain stores. In a new study, the OEA concludes that the city’s regulations are harming the local economy and that adding additional restrictions would only do more damage. But this sweeping conclusion, hailed by proponents of formula retail, rests on a deeply flawed analysis. The study is riddled with data problems so significant as to nullify its conclusions.

San Francisco is the only city of any significant size where “formula” businesses, defined as retail stores or restaurants that have 10 or more outlets, must obtain a special permit to locate in a neighborhood business district. The law’s impact, in one sense at least, is readily apparent: Independent businesses account for about two-thirds of the retail square footage and market share in San Francisco, compared to only about one-quarter nationally. Although chains have been gaining ground in San Francisco, the city far outstrips New York, Chicago, and other major cities in the sheer numbers of homegrown grocers, bookstores, hardware stores, and other unique businesses that line its streets.

San Francisco’s policy has gaps, however, which have prompted a slew of recent proposals to amend the law. Members of the Board of Supervisors have proposed a variety of changes, such as extending the policy to cover more commercial districts (it only applies in neighborhood business districts) and broadening the definition of what counts as a formula business.

The OEA presents its study as an injection of hard economic data into this policy debate. There are three pieces to its analysis. Let’s take each in turn.

First, the OEA reports that chains provide more jobs than independent retailers do. It presents U.S. Census data showing that retailers with fewer than 10 outlets employ 3.2 workers per $1 million in sales, while chains (10 or more outlets) employ 4.3 people.

One major problem with this statistic is that the OEA includes car dealerships. Retail studies generally exclude the auto sector, because car dealers differ in fundamental ways from other retailers and car sales account for such a large chunk of consumer spending that they can skew one’s results. The OEA’s analysis is a classic example of this. Because the vast majority of car dealerships are independently owned and employ relatively few people per $1 million in sales, by including them, the OEA drags down the employment figure for local retailers overall.

If you take out car dealers, which are not subject to San Francisco’s formula business policy anyway, and also remove “non-store” retailers, a category that includes enterprises like heating oil dealers and mail order houses, a different picture emerges. Retailers with fewer than 10 outlets employ 5.3 people per $1 million in sales, compared to only 4.5 for those with 10 or more locations.

The actual difference is even a bit more than this, because chains handle their own distribution, employing people to work in warehouses, while independents typically rely on other businesses for this. And, of course, a portion of the jobs chain stores create are not local jobs; they are housed back at corporate headquarters. The OEA fails to mention either of these fairly obvious caveats.

The superior ability of non-formula businesses to create jobs is notably evident across many of the categories that generate most of the city’s formula business applications, including clothing, grocery, and casual dining. The only exception is drugstores, a category in which chains appear to be supporting more jobs. But even this may not be a true exception, since most independent pharmacies focus almost exclusively on medicine, while chain drugstores are hybrid convenience stores, employing people to ring up sales of cigarettes and greeting cards.

The second and third pieces of the OEA’s analysis are linked together. The study concedes that, compared to chains, independents circulate more of their revenue in the local area, creating additional economic activity and jobs. But, it contends, prices at chains are 17 percent lower; enough, according to the OEA’s math, to outweigh the economic benefits of this recirculation.

On the lighter side of this seesaw calculation sits the OEA’s estimate of how much money local retailers circulate in the city’s economy. This estimate is notably smaller than what other studies have found. When I asked Dan Houston, a principal with Civic Economics, why his firm’s studies show that independent businesses have a bigger impact, he pointed to two areas where his firm’s figures differ from the OEA’s. One is labor.

“We’re finding that local wages and operating income [at independent businesses] are much bigger, closer to 25 percent [of expenses] rather than the 15 percent the OEA finds,” said Houston.

The other is spending on inventory. Civic Economics has found that independent retailers and restaurants source some of their goods locally, whereas the OEA assumes that all of this spending leaves the area.

Sitting on the heavier side of the OEA’s seesaw is its conclusion that chains charge lower prices. As definitive as its 17 percent figure sounds and as pivotal as it is to the study’s math, it is a highly questionable number. It’s based on a limited sampling of prices in which large swaths of the retail sector, including apparel stores and restaurants, were excluded.

“I just hate to see a statistic like that being used when it is so limited in what was being measured,” said Matt Cunningham, another principal at Civic Economics.

It only takes a slight adjustment of these wobbly figures to produce the opposite conclusion: that formula businesses do more economic harm than good. All one has to do to tip the OEA’s seesaw in the other direction is to assume a slightly larger recirculation of revenue on the part of independents and a slightly lower price advantage on the part of chains. (Just dropping the price difference to 14 percent will do it.)

Perhaps the worst aspect of the OEA’s study is that it seems to float in space, untethered to what’s actually happening on the ground. Many of the chains that are clamoring to open in the city’s neighborhoods are high-end retailers whose products carry a price premium. Their arrival typically drives up commercial rents, making it harder for businesses that sell basic low-margin goods to survive.

Nor does the OEA attempt to situate its analysis in the context of several peer-reviewed studies that don’t just model the potential impacts of corporate consolidation, but actually track them. In a study published in Economic Development Quarterly, for example, economists Stephan Goetz and David Fleming report that counties that have a larger share of their economy in the hands of locally owned businesses have experienced higher median household income growth than places dominated by large corporations.

The OEA’s study will not be the city’s only analytical look at its formula business policy. The Planning Department has commissioned its own study, preliminary findings of which were released this week. Among other useful statistics, the draft notes that most formula business applications are approved and fully one-quarter of the retail space in the city’s neighborhoods is now occupied by chains, which suggests the permitting process is not as unfriendly to formula businesses as the law’s opponents contend.

Still, this figure is much smaller than in San Francisco’s more centralized commercial districts, which are not covered by the policy. Here, the chains’ share of the available square footage stands at 53 percent and growing.

___

Stacy Mitchell is a senior researcher at the Institute for Local Self-Reliance and author of Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for America’s Independent Businesses.

 

Is Newsom on the wrong side of high-speed rail history?

Sasha Cuttler
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38
Is Newsom on the wrong side of high-speed rail history?

As California struggles to reduce its greenhouse gas emissions and meet the long-term transportation needs of a growing population, officials from Gov. Jerry Brown to Mayor Ed Lee have steadfastly supported the embattled California High-Speed Rail Project, which Lt. Gov. Gavin Newsom recently withdrew his support from. California now has until July 1 to find funds to match the federal grants.

It’s not exactly surprised that this calculating and politically ambitious centrist would cave in to conservatives like this, particularly as Newsom tries to set himself up to succeed Brown in four years. But it’s a sharp contrast to more principled politicians like Brown, and to those trying to create the transportation system future generations will need, as President Barack Obama took a step toward doing today by announcing new federal transportation funding.

US Transportation Secretary Anthony Fox is also taking part in the three-day High Speed Rail Summit, sponsored by the United State High-Speed Rail Association, that began yesterday in Washington DC. Its theme is Full Speed Ahead.

“Secretary Foxx’s experience at the local level as mayor of Charlotte is extremely valuable for shaping national transportation policy. We look forward to working with the Secretary to advance high speed rail in America across party lines,” USHSRA President and CEO Andy Kunz said in a press release. 

While Newsom’s new tact may play well with myopic, penny-pinching, car-dependent moderate and conservative voters, many of his allies and constituents were furious with his about-face on a project that promises to get riders from downtown San Francisco to downtown Los Angeles in less than three hours. 

Among those unhappy is San Francisco resident Peter Nasatir, who forwarded the Guardian a well-written letter that he has sent to Newsom’s office:

Dear Lt. Gov. Newsom,

I am a long time San Francisco resident, and although I have criticized many of your policies, I’ve always respected your commitment to be at the forefront of controversial issues.  Even if the issue could have wrecked your political career, you still had the guts to take the lumps for a righteous cause.

That is why I’m so shocked you would publically decry the High-Speed Rail project.  Yes there are cost overruns.  Yes the public is sour to it today, but what would you propose as an alternative:  more freeways, more runways?  Every expert in the field has already signed off that runways and freeways have expanded as far as they can.  Are you not a leading voice in demanding technical innovation in all levels of government? 

In your book, Citizenville, did you not put forth the clarion call for citizens to embrace technological change?  Did you not say that San Francisco was behind the likes of Estonia and South Korea in terms of digital governance?  Is it not fair to say that California is behind Europe and Asia when it comes to high speed rail?

Could you have said something along the lines that the trajectory the project is going is troubling, but Californians for generations to come will benefit from it.  This project must be saved, because to do otherwise will send California back 60 years.

You are a political maverick who had put his career on the line many times with such controversial positions as same-sex marriage, and walking the picket line with hotel workers on Union Square.  High-speed rail is coming.  The economy demands it, the environment demands it, and Central Valley population growth demands it.  You may get some votes from moderates in the short run, but in the long run, you have positioned yourself as the most prominent person in the state to be on the wrong side of history.

 

Peter Nasatir

 

 

 

Fight for higher minimum wage resumes

Michael Redmond
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0

An event at the San Francisco Women’s Building on Feb. 6 marked the 10-year anniversary of San Francisco’s minimum wage ordinance, passed by voters in 2003 with Proposition L. The landmark initiative not only raised the minimum wage in San Francisco to $8.50 per hour, but stipulated that the amount would rise every year to reflect inflation. Thanks to Prop. L, San Francisco now boasts the highest minimum wage in the nation, at $10.74.

But in pricey San Francisco, it still isn’t enough.

“Who thinks living in San Francisco is really expensive?” asked one of the event organizers and staff member of the Chinese Progressive Association, Shaw San Liu. All hands in the room shot up before the Spanish and Mandarin translators even had a chance to repeat the question.

Raising the minimum wage in San Francisco has been a hot topic recently, and Mayor Ed Lee even endorsed a significant increase back in December. While a wage of $15 per hour has been floated, nothing has been set in stone.

In addition to celebrating the 10-year anniversary of the minimum wage ordinance, Thursday’s event was also the official launch of the Campaign for a Fair Economy, a push to support the city’s lowest-paid workers and close the ever-growing wealth gap.

Raising the minimum wage is only part of the campaign, and advocates are also fighting for accountability from large chain businesses, stricter enforcement of existing labor standards, and expanding access to jobs for disadvantaged workers.

“San Francisco has led the way for employment policies in the past,” said Kung Feng, lead organizer for Jobs With Justice, which is helping to lead the campaign. “We need to continue that.”

Despite San Francisco’s long legacy of championing workers’ rights, there is still a tough battle ahead. Currently, the minimum wage in the city automatically goes up every year to match inflation (on Jan. 1, 2014, it rose from $10.55 to $10.74). Any further increase requires voter approval.

While it seems a higher minimum wage does have strong support and has already been endorsed by major political figures, there’s still a powerful lobby against it from some businesses and restaurant associations.

Higher wages and tenants’ rights, for the win

Michael Redmond
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10

As we document in this week’s cover story, a citywide coalition has sprung up to fight for tenants’ rights in the face of mounting evictions and soaring rents, and momentum on this issue is steadily growing.

But that isn’t the only sign of a newly invigorated movement that’s beginning to count its victories and advance forward on behalf of tenants, workers, and thousands of San Franciscans who are less focused on turning a quick profit and more concerned with bringing about positive change. Last week brought several high notes on this front.

Citywide legislation that will limit discriminatory practices by employers and housing providers by reforming background check policies won initial approval at the Feb. 4 San Francisco Board of Supervisors meeting.

Introduced by Sup. Jane Kim, the Fair Chance Act is part of a “ban the box” movement, backed by local grassroots organizations that came together to champion the rights of individuals who’ve encountered barriers to improving their lives due to past convictions that have left them with a permanent stigma.

At the meeting, Kim mentioned a woman who’d been told she “need not apply” for a job working as a cook — because of a simple shoplifting conviction from when she was in high school. The ordinance will require certain employers and housing providers to refrain from criminal history checks until after an initial job interview, and would make certain kinds of information off-limits, such as arrests that never resulted in a conviction.

Meanwhile, an initiative to curb height limits on waterfront development amassed enough signatures last week to qualify for the June ballot. That effort grew out of a successful referendum last November against the 8 Washington project, a key pushback where San Francisco voters rejected luxury condominiums at the ballot.

The Chinese Progressive Association and Jobs With Justice held a celebration last week to commemorate the 10-year anniversary of the passage of the city’s minimum wage ordinance.

While it remains the highest in the nation, San Francisco’s 2014 minimum wage of $10.74 an hour still isn’t enough to make ends meet, so allies of low-wage workers are launching the Campaign for a Fair Economy to push for a higher minimum wage at the ballot and to implement a higher wage standard for major retailers and chain stores.

There remains much to rail against, to be sure. A Craigslist ad for a $10,500-per-month two-bedroom apartment in the Mission generated a barrage of angry commentary from those who read it as doomsday for the historically Latino area, especially since the tone-deaf author used the word caliente to describe the neighborhood.

But the start of 2014 has already delivered some promising victories for progressives, and many have their sights set on even greater horizons.

 

Advocates for higher minimum wage celebrate past success and look ahead

Sasha Cuttler And Mary Magee
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56
Advocates for higher minimum wage celebrate past success and look ahead

Balloons, snacks, cake, live music, an open wine bar and nearly 100 guests marked a Thu/6 celebration at the Women’s Building in San Francisco’s Mission district. You might never guess a party this fun would be held to celebrate the birthday of a city ordinance.

February marks the 10-year anniversary of San Francisco’s minimum wage ordinance, passed by voters in 2003 with Proposition L. The landmark initiative not only raised the minimum wage in San Francisco to $8.50 per hour, but stipulated that the amount would rise every year to reflect inflation. Thanks to Prop. L, San Francisco now boasts the highest minimum wage in the nation, at $10.74.

But being the nation’s highest still isn’t enough.

“Who thinks living in San Francisco is really expensive?” asked one of the event organizers and staff member of the Chinese Progressive Association, Shaw San Liu. All hands in the room shot up before the Spanish and Mandarin translators even had a chance to repeat the question.

Raising the minimum wage in San Francisco has been a hot topic recently, and Mayor Ed Lee even endorsed a significant increase back in December. The number that keeps floating around is $15 per hour, but nothing has been set in stone.

In addition to celebrating the 10-year anniversary of the minimum wage ordinance, Thursday’s event was also the official launch of the Campaign for a Fair Economy, a push to support the city’s lowest-paid workers and close the ever-growing wealth gap.

Raising the minimum wage is only part of the campaign, and advocates are also fighting for accountability from large chain businesses, stricter enforcement of existing labor standards, and expanding access to jobs for disadvantaged workers.

“San Francisco has led the way for employment policies in the past,” said Kung Feng, lead organizer for Jobs With Justice, a group that fights for workers’ rights. “We need to continue that.”

To say that San Francisco is leading the way is no understatement. In addition to having the highest minimum wage in the country, SF was also the first place in the U.S. to mandate paid sick leave, and the Health Care Security Ordinance works to guarantee medical benefits for all workers in the city.

Despite San Francisco’s long legacy of championing workers’ rights, there is still a tough battle ahead. Currently, minimum wage in the city automatically goes up every year to match inflation (on Jan. 1, 2014, it rose from $10.55 to $10.74). Any further increase requires voter approval.

While it seems a higher minimum wage does have strong support and has already been endorsed by major political figures, there’s still a powerful lobby against it from some businesses and restaurant associations. Despite the upcoming battle, advocates seemed optimistic.

“Who in here can tell me the significance of the Year of the Horse?” Liu of CPA asked the audience, referring to the ongoing Lunar New Year. A small woman sitting in the front row excitedly responded, “Maa dou gung sing!”

“Success comes in the horse year,” Liu explained. “And this will be a year of success and accomplishments for workers rights in San Francisco.”

Debunking SF Mag’s Ellis Act apologist article, point by point

Erica Hanna
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Debunking SF Mag’s Ellis Act apologist article, point by point

Well, everyone’s got an opinion. And when it comes to San Francisco’s housing crisis, that’s doubly true.

San Francisco Magazine’s opinion though, amounts to a cry for help for (they say) the oft-demonized landlords from what they call the ever-overblown Ellis Act eviction crisis.

In his Tweet earlier today, San Francisco Magazine Editor-in-Chief Jon Steinberg said “We’re calling BS on San Francisco’s eviction crisis.” The article, by San Fran Mag Web Editor Scott Lucas, lays out a San Francisco that’s hard to recognize, one where evictions and rental increases aren’t displacing people in droves. At least, not enough to qualify as a “crisis.”

Sorry Jon, we’re calling BS on your article.

The Guardian reached out to Ted Gullicksen, executive director of the San Francisco Tenant’s Union and Erin McElroy, the head of the Anti-Eviction Mapping Project, to debunk some of the claims made in SF Magazine’s attempt to de-fang the threat of Ellis Act evictions. 

You can read the full article here, but we’ve reproduced lines from the piece and included responses from Gullicksen and McElroy addressing their points one by one. 

San Francisco Magazine The narrative was a straightforward one: Because the Bay Area has seen an influx of people—largely young, white, and working in tech—who need housing (and can pay for it), greedy landlords, many of them out-of-town speculators, are throwing longtime San Franciscans into the streets and turning the city over to gentrification. It looked cut-and-dried.

It’s not. In fact, Ellis Act evictions represent only a small proportion of the city’s total evictions—and they’re not even historically high to begin with. 

Ted Gullicksen That is incorrect on a couple levels. First off, it’s important to understand that the main way people are evicted these ways are via the Ellis Act followed by a buyout. The reason for that is that San Francisco passed strict condominium conversion prohibitions several years ago. If you do an Ellis, you generally are not going to be able to convert to condos ever. 

(You need to) include the Ellis threats… for every single Ellis Act eviction filed with the rent board, they’re where the speculators tried to get the tenants to bite… for every Ellis Act eviction, there are about five buyouts where Ellis Act was used as a club.

I come to that number by the number of people coming to the Tenants Union concerned about buyouts, and comparing those with the rent board’s numbers. Pretty consistently we see 33 percent of what the rent board sees. 

Erin McElroy California is the only state where the Ellis Act is utilized, it’s hard to say whether it’s historically high or not. We also see it’s being utilized by landlords repeatedly. It’s being used as a business model, not a way of going out of business which was its intended use in 1986. 

SFM In the 12-month period ending on February 28, 2013, the total number of Ellis Act evictions was 116—an almost twofold increase over the previous year, but a nearly 70 percent decrease since 2000, when such evictions hit an all-time high of 384. All told, the Ellis Act was behind less than 7 percent of the 1,716 total evictions in the city between February 2012 and February 2013. “Isn’t it far more likely,” asks Karen Chapple, a professor of city planning at UC Berkeley, “that more units are being lost [from the market] through Airbnb?”

TG That number, the 1,716 number, includes “for fault” evictions. If you just include no-fault evictions, Ellis Act evictions are the highest amounts. No-fault evictions are the ones we’re all talking about here. There are a number of rental units lost from the market and that’s a big problem, but the TIC and condominium conversions far surpass tourist conversions (like AirBNB).

EM First of all, for every Ellis Act being recorded, there is not a recording of the units evicted. While you can say there is a number of evictions, it doesn’t represent the units or people being displaced: it doesn’t record the number of people losing their homes.

What we’ve done through the Anti-Eviction Mapping Project is to match those petitions with the number of units. If you go to our website you can see the number of units lost since 1997 in each petition. While the city (of San Francisco) only recorded about 1,300 Ellis Act evictions since then, there have been at least 4,000 units lost. We don’t know how many people are in each unit. There could be between 1 and 6 people in each on average. 

SFM Laying the blame on nefarious Rich Uncle Pennybags types isn’t exactly right either. A recent report commissioned by Supervisor David Campos is clear on that point: The increase in Ellis Act evictions, it found, “occurred simultaneously with significant increases in San Francisco housing prices.” In other words, the problem isn’t speculators. It’s the market. 

TG The problem is indeed the speculators. Most of these buyouts are done by speculators, of the current Ellis Act evictions right now, most of the buyouts are done by one of twelve speculators. 

The Anti-Eviction Mapping Project showed that these real estate speculators form Limited Liability Corporations for each building. The Anti Eviction Mapping Project went through all these LLC’s and identified actual owners and compared them to Ellis Act evictions at the rent board. One person involved is doing six Ellis evictions right now. 

EM Speculators are taking advantage of the market. If there weren’t people to buy luxury condos, Ellis Act evictors wouldn’t buy up the units and turn them into condos. 

It’s one thing for a landlord to issue an Ellis Act one time because they’re done being a landlord, it’s another to see serial evictors use it over and over again through Limited Liability Corporations. Urban Green has 40 or so LLC’s, they’re using them all to push the Ellis Act. See our serial evictor chart and you’ll see 12 different people that use that serial evictor model. It’s a way for them to make money. 

SFM The city simply doesn’t have enough housing to keep up with job growth. And as real estate values rise, the incentive for a property owner to sell grows considerably. No villainy. Just economics.

TG The city is building a ton of housing, as anyone can tell you. The city, though, is building nothing but luxury condos. There’s plenty of housing, but nothing affordable.

EM If displacing long term residents and folks with disabilities and seniors is just economics, it’d be an argument against our economic system. The city offers services for trans folk, queer folk, people with HIV, all reasons people moved to San Francisco and it has a popular place in people’s imagination. Native San Franciscans are also not being valued. If that’s economics, San Francisco has lost its heart and its soul.

SFM Even if incremental changes happen, San Francisco’s affordability problem will likely continue almost unabated. Ellis Act evictions are, in Chapple’s words, not a cause of the housing crisis, but rather “a symptom. Fixing it is like using a Band-Aid for brain cancer.”

TG The Ellis Act is in fact a cause, because it’s taking thousands of units off the rent control market. When we’re losing more and more rent control units, supply dwindles and the rents go up. 

EM I would agree the Ellis Act isn’t the cause of the problem. The problem is it’s being utilized with other forms of evictions for landlords to take advantage of a political economy with the relationship between the city and tech. The problem is the relationship with the new tech class and the impunity it maintains through city government.

State of the City speech filled with unsupported promises

Sasha Cuttler
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State of the City speech filled with unsupported promises

It was maddening to watch Mayor Ed Lee deliver his annual State of the City address this morning. This was pure politics, from the staged backdrop of housing construction at Hunters Point Shipyard to the use of “regular people” props to the slate of vague and contradictory promises he made.

“This place, the shipyard, links our proud past to an even more promising future,” was how Lee began his hour-plus, invite-only address.

Later, he touted the housing construction being done there by Lennar Urban as emblematic of both his promise to bring 30,000 new housing units online by 2020 — the cornerstone to what he called his “affordability agenda” — and the opposition to unfettered development that he is pledging to overcome.

“A great example is the place we’re standing right now. This took us too long,” Lee said after decrying the “easy slogans and scapegoating” by progressive activists who place demands on developers.

But that implication was complete bullshit. As we and others have reported, progressive and community activists have long encouraged Lennar Urban (which has a close relationship to Lee) to speed up development on this public land that it was given almost a decade ago, particularly the long-promised affordable housing, rather than waiting for the real estate market to heat up.

That was just one of many examples of misleading and unsupported claims in a speech that might have sounded good to the uninformed listener, but which greatly misrepresented the current realities and challenges in San Francisco.

For example, Lee called for greater investments in the public transit system while acknowledging that his proposal to ask voters this November to increase the vehicle license fee isn’t polling well. And yet even before that vote takes place, Lee wants to extend free Muni for youth and repeal the policy of charging for parking meters on Sundays without explaining how he’ll pay for that $10 million per year proposal.

“Nobody likes it, not parents, not our neighborhood businesses, not me,” Lee said of Sunday meters, ignoring a study last month by the San Francisco Muncipal Transportation Agency showing the program was working well and accomplishing its goals of increasing parking turnover near businesses and bringing in needed revenue.

Lee also glossed over the fact that he hasn’t provided funding for the SFMTA’s severely underfunded bicycle or pedestrian safety programs, yet he still said, “I support the goals of Vision Zero to eliminate traffic deaths in our city.”

Again, nice sentiment, but one that is totally disconnected from how he’s choosing to spend taxpayer money and use city resources. And if Lee can somehow achieve his huge new housing development push, Muni and other critical infrastructure will only be pushed to the breaking point faster.  

Lee acknowledges that many people are being left out of this city’s economic recovery and are being displaced. “Jobs and confidence are back, but our economic recovery has still left thousands behind,” he said, pledging that, “We must confront these challenges directly in the San Francisco way.”

And that “way” appears to be by making wishful statements without substantial support and then letting developers and venture capitalists — such as Ron Conway, the tech and mayoral funder seated in the second row — continue calling the shots.

Even with his call to increase the city’s minimum wage — something that “will lift thousands of people out of poverty” — he shied away from his previous suggestion that $15 per hour would be appropriate and said that he needed to consult with the business community first.

“We’ll seek consensus around a significant minimum wage increase,” he said, comparing it to the 2012 ballot measures that reformed the business tax and created an Affordable Housing Fund (the tradeoff for which was to actually reduce the on-site affordable housing requirements for developers).

But Mayor Lee wants you to focus on his words more than his actions, including his identication with renters who “worry that speculators looking to make a buck in a hot market will force them out.”

Yet there’s little in his agenda to protect those vulnerable renters, except for his vague promise to try to do so, and to go lobby in Sacramento for reforms to the Ellis Act. While in Sacramento, he says he’ll also somehow get help for City College of San Francisco, whose takeover by the state and usurpation of local control he supported.   

“City College is on the mend and already on the path to full recovery,” Lee said, an astoundingly out-of-touch statement that belies the school’s plummeting enrollment and the efforts by City Attorney Dennis Herrera and others to push back on the revocation of its accreditation.

Lee also had the audacity to note the “bone dry winter” we’re having and how, “It reminds us that the threat of climate change is real.” Yet none of the programs he mentions for addressing that challenge — green building standards, more electric vehicle infrastructure, the GoSolar program — would be as effective at reducing greenhouse gas emmisions as the CleanPowerSF program that Lee and his appointees are blocking, while offering no other plan for building renewable energy capacity.

Far from trying to beef up local public sector resources that vulnerable city residents increasingly need, or with doing environmental protection, Lee instead seemed to pledge more of the tax cutting that he’s used to subsidize the overheating local economy.

“Affordability is also about having a city government taxpayers can afford,” Lee said. “We must be sure we’re only investing in staffing and services we can afford over the long term.”

How that squares with his pledges to put more resources into public transit, affordable housing development, addressing climate change, and other urgent needs that Lee gives lip service to addressing is anybody’s guess.  

Lee panders to motorists and undermines SFMTA with Sunday metering repeal

Sasha Cuttler
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Lee panders to motorists and undermines SFMTA with Sunday metering repeal

First Mayor Ed Lee ignores the rising cost of living in San Francisco (fueled partly by his own corporate welfare for the tech industry and commercial landlords), and now he’s using his sudden concern about gentrification as an excuse to make parking meters free again on Sundays, a blatant bit of political pandering that blows a $6 million annual hole in Muni’s budget.

Maybe it’s understandable that a politician worried about his reelection prospects with restive voters would take a page from the playbook of former Gov. Arnold Schwarzenegger, who slashed the state’s vehicle license fee to win that office. But what makes this move stink even more is it’s being supported by the San Francisco Municipal Transportation Agency, a supposedly independent (yet mayoral appointed) body whose top officials methodically and courageously have made a strong case for Sunday metering.

“We’re just willing to partner with the mayor to address affordability,” SFMTA spokesperson Paul Rose told us, admitting the agency hasn’t yet identified a funding source to fill that gap if Sunday metering is repealed on July 1 as proposed. Sunday meters were budgeted for $1 million in revenue, but they actually brought in $6 million in the last year because of more tickets than expected, feeding the outrage of motorists who feel entitled to use public roads for free. 

We’re waiting for calls back from SFMTA Executive Director Ed Reiskin and Chairman Tom Nolan to find out whether they no longer stand by the arguments they’ve been making for Sunday metering, claiming it helps the local economy by making parking spaces available in neighborhood commercial districts and that it’s consistent with the city’s official transit-first policy.

“What does this say about the city’s commitment to the policy of promoting transit first?” San Francisco Bicycle Coalition Executive Director Leah Shahum said, saying she was shocked by the announcement given how underfunded the SFMTA’s transit, bicycle, and pedestrian improvement programs all are. “Why in the world are we even talking about this?”

Lee claims this is about affordability, telling the Chronicle “it was just nickel-and-diming people to death,” yet his own plans call for asking voters to approve more than $6.3 billion in taxes to fund Muni’s needs over the next 15 years, including a proposal to increase the sales tax in 2016, a regressive tax that will hit those already struggling harder than Sunday metering does to the 70 percent of San Francisco households that have an automobile.

Lee has also proposed ballot measures for this November that would increase the vehicle license fee and issue a $500 million general obligation bond, paid for on the property taxes of all city households. His own polls show the measures could be difficult sells to voters, and it’s not clear why he won’t wait for those results before ending Sunday metering.

When we asked mayoral Press Secretary Christine Falvey about all this, she selectively answered our questions with the following response: “The mayor believes a comprehensive funding strategy to not just maintain, but improve Muni performance, pedestrian and bike safety and the condition of our roads is what will finally turn the corner on improving San Francisco’s Transportation System. That’s why he has spent the better part of a year with the Transportation 2030 Taskforce, that recommended several ways to support these goals, including a $500 million general obligation bond, which the mayor supports. Because of a strong economy, the mayor believes it’s time to eliminate parking fees for six hours on Sundays and permanently fund Free Muni for low income youth to help working families in San Francisco and ease the affordability issues he hears about from families across the City.”

But at this point, that’s just political rhetoric, and Lee’s “comprehensive funding strategy” remains a vague and distant dream — one that will soon be $6 million a year tougher to make a reality. 

End poverty and create wealth with public banks

Michael Redmond
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By Ken Walden

OPINION How would you like to increase your spending power by 10 times (or more), relieve student debt by more than 90 percent, increase Social Security benefits, lower taxes, increase pay for teachers, and lower loan amounts for homes and small business to 1-2 percent?

I’ll bet I have your attention. I’m sure you think this is crazy talk, but this is based on a movement that is already happening. It’s the public banking movement.

In 1950s, the buying power of the dollar was over 10 times what it is today. That means you were able to buy 10 times the amount of goods and services with a dollar compared to what you can now.

What happened? Why is it so hard for most people to just barely get by these days? And why are so many are not getting by at all?

First, let’s review how money is created. Did you know the money we have in circulation today is created out of thin air? Most of it is just an entry in a computer system. A small percent is printed dollar bills like you have in your wallet or purse, and a very small percentage is metal coins.

Money is simply trusted as being worth what it says on the bill, coin, or computer screen. Did you also know that money for loans is created this way as well?

When you take out a loan from a bank (for a home loan, a student loan, a business loan, a car loan, etc.), the money that the bank loans you (with interest charges) is not taken from other people’s deposits. It is made (mostly) out of thin air. It is simply an entry in their computer system … that’s it.

Most people think they are borrowing money that is deposited into the bank by other people, but this is not true.

Here is quote from Robert Anderson, the secretary of the US Treasury in 1959, on this topic: “When a bank makes a loan, it simply adds to the borrower’s deposit account in the bank by the amount of the loan. The money is not taken from anyone else’s deposits: it was not previously paid in to the bank by anyone. It’s new money, created by the bank for the use of the borrower.”

Why is this a problem? Let’s look at how much interest we’re paying on a variety of loans. If you buy a house for $500,000 in 30 years at an average interest rate, you will pay an additional $580,000 in interest on money the bank made from thin air. With a public bank you, would pay less than half this amount.

On public projects like bridges, roads and schools, 30-50 percent of the cost is interest. The new span of the Bay Bridge that was just opened at a cost of $7 billion, the interest on this project is estimated to be an additional $7 billion. It’s estimated that the cost of almost everything you buy is increased by 35-40 percent because of interest.

This is just the tip of the iceberg.

The solution to the problem is a public bank. With public banks, these billions of dollars of profit (via interest) are recycled back into the public treasury instead of funneled off to private banks.

If you think this is some theoretical fantasy you should know that San Francisco is currently looking at creating a public bank, 20 states are also considering them, and North Dakota has had a public bank for over 90 years. This is not a new idea.

It’s impossible to give you an in-depth overview in a short article so please go to our website (www.whattheworldcouldbe.com) and on the ‘Solutions’ page click on the box titled ‘Creating Jobs, Student Debt Relief, & the New Green Economy’.

Public banks have the possibility to dramatically change our lives for the better and you can help.

Ken Walden is director of What the World Could Be.

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