Tag Archives: California

New way of measuring poverty gives California highest rate

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The Census Bureau tried changing the definition of poverty and it put California at the top of the list for poverty:

California continues to have – by far – the nation’s highest level of poverty under an alternative method devised by the Census Bureau that takes into account both broader measures of income and the cost of living.

Nearly a quarter of the state’s 38 million residents (8.9 million) live in poverty, a new Census Bureau report says, a level virtually unchanged since the agency first began reporting on the method’s effects.

Under the traditional method of gauging poverty, adopted a half-century ago, California’s rate is 16 percent (6.1 million residents), somewhat above the national rate of 14.9 percent but by no means the highest. That dubious honor goes to New Mexico at 21.5 percent.

But under the alternative method, California rises to the top at 23.4 percent while New Mexico drops to 16 percent and other states decline to as low as 8.7 percent in Iowa.

Not surprisingly, the new methodology has become political:

It’s now routinely cited in official reports and legislative documents, and Neel Kashkari, the Republican candidate for governor, has tried to make it an issue in his uphill challenge to Democratic Gov. Jerry Brown, even spending several days in Fresno posing as a homeless person to dramatize it.

The definition of poverty is an interesting methodological topic that certainly has social and political implications. I assume the Census Bureau argues the new definition is a better one since it accounts for more information and adjusts for regional variation. But, “better” could also mean one that either reduces or increases the official number which then can be used for different ends.

Daily water allocation next in dry California?

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Groups in California are considering daily water allocations per household to help conserve water in the current drought:

The latter represents the amount of water you are allowed to use per day. If you don’t know it, you probably should. Not knowing could cost you money. As California’s severe drought moves into a fourth year, state and local water agencies are working on something called “allocation-based rate structures,” a kind of precursor to water rationing that’s all the rage in Sacramento and in some areas such as Santa Cruz, Irvine and Santa Monica.

Here’s how it works: Your local water company, special district or city assigns you and your household a number in gallons — a daily water allocation. Usually, one number applies to maximum indoor water use, i.e. showers, kitchen and bathroom faucets, dishwashers, clothes washers, etc., and an extra allocation is assigned for outdoor use such as lawn irrigation.

Using census records, aerial photography and satellite imagery, an agency can determine a property’s efficient water usage.

At the Irvine Ranch Water District, number of residents, amount of landscaping and even medical needs are factored into a household’s water allocation or water budget.

It will be interesting to see how this is received and how much arguing there might be about the calculations. As the article goes on to note, one popular method is to start charging really high rates for people who exceed their water levels, which in some places are already set at about 60 gallons per person.

California issues first autonomous car driving permits

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Several corporations recently received California’s first autonomous car driving permits:

On Tuesday, Audi became the first car manufacturer to receive a California autonomous car driving permit (as of this writing, Mercedes-Benz and Google have also filed for and received permits). The permit was presented to Audi by Sen. Alex Padilla, who signed the state’s new autonomous vehicle laws that went into effect Tuesday; the law will allow for the legal testing of autonomous vehicles on public roads…

One is the specific mention of a visual indicator that clearly signals to the driver when autonomous mode is engaged. Making sure the driver is completely familiar with the technology and understands when the car is under machine control versus human control is something carmakers must get absolutely right. Consider what GM is doing with its Super Cruise technology, which allows the car to take over steering and pedal operations in certain highway conditions. Earlier this month GM announced that Super Cruise will be available in select 2017 model year cars. Those cars will likely have the same indicator that we experienced when testing Super Cruise—a large light bar on the top of the steering wheel that indicates when the car is in control (green), when the driver needs to take over (red), and when the driver has control (blue). Hard to miss that. Oh, and it issues an audible alert as well.

Something else to consider: According to the permit, should the driver be unable to take control of the vehicle during an emergency or system failure while autonomous mode is engaged, “the autonomous vehicle shall be capable of coming to a complete stop.” Pretty important! But also a little scary when you think about a car just stopping on the highway. After all, the permit doesn’t say the car must be able to safely pull off the road and come to a complete stop. And in reality, that’s probably asking a lot for now. It’s a reminder that if we want to test autonomous vehicles in the public domain seriously, we have to understand there will be risks…

Lastly, it’s worth noting that the permit calls for an extra device—separate from the data recorders already required in cars—to specifically monitor and record the autonomous systems and their sensors. On top of that, the information must remain accessible for three years. As optimistic as lawmakers and auto manufacturers are about the potential for autonomous vehicles, they also know that one bad accident could stymie progress and reaffirm the public’s worst fears. In case an accident does happen—and eventually, it will—at least they’ll know exactly what went wrong.

Some interesting extra pieces to these permits. All of this suggests that there are still some important things to sort out before driverless cars hit the roads in large numbers.

A few other possible additions that came to mind:

1. An indicator on top of the car or with the front and back lights that shows other drivers that the car is in autonomous mode. We haven’t heard much how such vehicles would change their behavior based on the drivers around them. Say someone doesn’t like their speed and so they tailgate the car, an action that sometimes leads to the front driver speeding up. What would an autonomous car do?

2. A running set of easy-to-understand output from the autonomous car to the driver. It is one thing to provide an indicator that the car is running itself but another to give feedback to the potential driver. Granted, these vehicles are likely making a ridiculous number of calculations per second but I’m guessing some users would like to know what the car is “thinking” as it acts.

Drought leads to more lawn spray-painting, lawn removal in California

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Painting the lawn is not new but the practice has picked up in California with the big drought underway:

For about $300, the New York Times reports, homeowners can transform their sun-baked brown lawns into lush, bright shades of green. According to the Times, “there are dozens of lawn paint options available, from longer-lasting formulas typically used on high-traffic turf such as ballparks and golf courses, to naturally derived products that rely on a highly concentrated pigment.”

Drew McClellan, who launched a lawn-spraying business in July, told the paper he has more requests than he can handle…

According to LawnLift, a San Diego lawn paint manufacturer, sales of its “all-natural, non-toxic and biodegradable grass and mulch paint” have tripled this year.

In April, Gov. Jerry Brown issued an executive order that limited the watering of “ornamental landscape or turf” to no more than two days per week. Violators are subject to fines of up to $500…

A spokesman for the Metropolitan Water District of Southern California told The Associated Press that the consortium received requests to remove 2.5 million square feet in residential lawns in July, up from 99,000 in January. The Municipal Water District of Orange County is taking in 20 to 30 applications a day, the AP said. The Santa Clara Valley Water District, which serves Silicon Valley, received more than 1,700 requests.

Between the ripping out of lawns and painting the lawn, this is a rather large project. Two quick thoughts:

1. I wonder if this signals a long-term shift away from lawns in California. The drought may answer this question, particularly if it lasts a long time, but it would be interesting to see what happens if the drought ends soon: would people go back to lawns?

2. Could a green lawn now become even more of a status symbol, symbolizing that a person has the means to keep it going even under these dry conditions? Or, perhaps the shift away from lawns will be accompanied by the development of new status symbols in yards.

Illinois property taxes second-highest in the nation

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A new report shows at the end of 2012 Illinois had the second-highest property taxes, just behind New Jersey:

Property taxes in Illinois average 2.28 percent of a home’s value, according to the Urban Institute. In New Jersey, they’re 2.32 percent, and in lowest-taxing Hawaii, they’re 0.27 percent. (The lowest among mainland states is Alabama, at 0.46 percent.)All the states that ranked ahead of Illinois in the 2007–11 chart saw their tax rates go up in 2012. But the rate in Illinois went up more…

What’s moving us up the list? Home values are down but taxing bodies’ appetites are up, as Costin sees it. Illinois home values fell farther and are improving more slowly than those in many other states. The latest Case-Shiller index data, which came out on New Year’s Eve, showed that while home values in the nation’s ten major cities have recovered, on average, to June 2004 levels, they’re only back to February 2003 levels in Chicago. At the same time, Costin says, “most local taxing bodies do the maximum increase they can do under the law each year.” Lombard and Lake County are notable exceptions, he says; both have reduced their rates.

When they’re asking for more total dollars in taxation on a smaller pot of aggregate home values, the tax rate is what goes up. It doesn’t necessarily mean that the amount of tax you have to pay goes up, as Cook County pointed out earlier this year.

While there are concerns about the federal budget as well as the monetary issues of the state of Illinois, these rising property taxes hint at another concern: the need for tax revenues for lower levels of government. These property taxes primarily go for local schools, cities, and other local services. See where property taxes go in one town in DuPage County. Or how one Chicago suburb is thinking about privatizing more of its roads to pay for their maintenance.

It is interesting to note that property taxes are higher in specific states but not others. For example, much of the Northeast and upper Midwest has higher property taxes but while Kansas and Texas do, Oklahoma does not. And, California does not. In a state where one city went bankrupt are others have looked to outsource municipal services, the property tax revolts of the 1970s (see Prop 13) have successfully kept property tax rates down (though home values are still high). Yet, if the money doesn’t come through property taxes, it likely comes from other sources.

Update on increasing number of teardowns in Los Angeles

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The number of teardowns isn’t close to the peak of 2006 but there is increasing teardown activity in Los Angeles and this is drawing concern:

The rebounding housing market has sparked the demolitions. In November, the median price for a home in Southern California was $385,000, up nearly 20% compared with the same month a year earlier, according to research firm DataQuick. Builders such as Leonard are constructing houses “on spec,” confident that they’ll find buyers…

In the city of Los Angeles last year, builders received approval to raze 1,227 houses and duplexes from January through mid-December, according to Department of Building and Safety records. That’s 29% higher than in all of 2012, though still well off the pace of more than 3,000 in 2006, during the housing bubble…

Carlton and his neighbors want the city to take action. They are pushing Los Angeles to tighten the so-called anti-mansionization ordinance passed in 2008. Critics say it has failed to stop the construction of outsized homes that rob views, block sunlight and alter the character of established neighborhoods.

In October, the Los Angeles City Council imposed additional size limits on new houses in the Beverly Grove neighborhood. But the changes don’t mandate a particular style…

Tear-downs have long stirred controversy, especially in beach communities — once-funky towns that have seen property values skyrocket over the years amid an influx of wealthy residents, chic boutiques and cafes. Many who grew up in the area have moved out, unable to afford a house with an ocean breeze. Many who did own homes couldn’t resist cashing in.

I don’t think there is an easy answer to this, particularly in Los Angeles. Because the housing market is currently tight, teardown opportunities are attractive to builders. Additionally, there is enough money floating around for people to want to purchase expensive new homes. This, of course, alters existing neighborhoods in a way that tends to irritate neighbors who think the new homes are all about the individual owner and not about fitting in with the neighborhood. I wonder how many residents who oppose teardowns would prefer no new construction at all, perhaps going for historic preservation rather than tighter mansionization guidelines.

I’m not sure why this strikes me right now but it does seem a bit odd that California, the home of American dreams (weather, Hollywood, sprawl leading to single-family homes and lots of driving), seems to be home to so many bitter housing and land disputes. Perhaps the stakes are higher – people’s dreams are on the line – so the fights get more intense. Or places like Los Angeles and San Francisco are simply too desirable and there isn’t enough housing to go around. Or all of this helps lay bare the American tendency to want to be the last one in to enjoy the neighborhood before slamming the gate behind them to preserve the features forever.

Richmond, CA wants to address foreclosures with eminent domain

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Richmond, California is seriously considering a more radical municipal approach to foreclosures:

The city has offered to buy more than 600 underwater mortgages at below the homes’ current value.

“If they are unwilling to negotiate a sale of the loans, which we want them to do, then we will consider using eminent domain as another option to purchase these loans at fair market value,” said Richmond Mayor Gayle McLaughlin…

Richmond is the first city in the country to take the controversial step of threatening to use eminent domain, the power to take private property for public use. But other cities have also explored the idea…

Banks, the real estate industry and Wall Street are vehemently opposed to the idea, calling it “unconstitutional” and a violation or property rights, and something that will likely cause a flurry of lawsuits.

It will be interesting to see how this plays out. I suspect a number of communities would argue they have few other options in order to force the hands of mortgage providers.

Stockton, CA the first big US city to enter bankruptcy

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Stockton, California, home to more 291,000 people and over 685,000 people in the metropolitan area, is the largest US city to enter bankruptcy:

A judge accepted the California city of Stockton’s bankruptcy application on Monday, making it the most populous city in the nation to enter bankruptcy.

U.S. Bankruptcy Judge Christopher Klein said the bankruptcy declaration was needed to allow the city to continue to provide basic services…

Its salaries, benefits and borrowing were based on anticipated long-term developer fees and increasing property tax revenue. But those were lost in a flurry of foreclosures beginning in the mid-2000s and a 70 percent decline in the city’s tax base

The city’s creditors wanted to keep Stockton out of bankruptcy—a status that will likely allow the city to avoid repaying its debts in full.

They argued the city had not cut spending enough or sought a tax increase that would have allowed it to avoid bankruptcy.

An interesting case. I think the real question is whether Stockton is the last or biggest city to declare bankruptcy and whether there are more to come. Stockton is part of an area in California that was hit particularly hard by the housing bubble and a number of other cities have experienced financial difficulties. For example, several California cities have outsourced basic services.

Speaking more broadly, what punitive measures can be leveled against a community in such debt? Is it the taxpayers and creditors who end up being the real losers?

Hispanics will be largest group in California by 2020

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New demographic projections for California suggest Hispanics will pass whites to be the largest group by 2020:

Population projections released Thursday by the state Department of Finance show that Hispanics will become the dominant ethnic group in California for the first time.

By 2020, demographers say Hispanics will be about 41 percent of California’s population, with whites less than 37 percent.

The white population will fall to about 30 percent by 2060 from the current 39 percent, affecting politics and public policy in the nation’s most populous state. Whites currently lack a majority in only Hawaii and New Mexico.

It will be worth watching to see what changes this brings to California’s society, economy, and politics. Another issue to consider is whether the trend in California will extend to other states or whether California is uniquely positioned to experience this sort of demographic change. While we have been reading about these projected demographic changes in California for years, I don’t recall seeing similar projections for states like Texas. This, of course, could suggest demographic change is taking place more slowly in other states.

More California communities in fiscal trouble

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The Los Angeles Times suggests more California communities are going to have to go beyond contracting out services and consider more drastic financial moves:

Once rare, turning to bankruptcy has become a painful but enticing option for cities whose labor costs and municipal debt far outpace anemic tax revenues. The Bay Area city of Vallejo began the current trend in May 2008, filing for Chapter 9 bankruptcy protection because, city leaders said, salaries and benefits for its public safety workers were eating up too much of the general fund.

Last month, Stockton became the largest city in the state to seek bankruptcy protection after it was unable to come to agreement with its employee unions and creditors on a plan to close a $26-million gap in its general fund. On July 2, the tiny resort town of Mammoth Lakes filed bankruptcy papers in part because it was saddled with a $43-million court judgment it couldn’t pay.

San Bernardino couldn’t close a $45.8-million budget shortfall and would be unable make its payroll this summer. Days before Tuesday’s City Council vote, the city of 211,00 people had just $150,000 in the bank. The city barely scraped together enough money to cover its June payroll.

Rising pension costs are are a growing issue in many places but not the only concern in this situation. Both states and the federal government have less money to contribute for local services and budgets. Tax revenues, property and sales taxes, are at least not growing much if not down. Residents and employees make it difficult to reduce service levels. How many people will be willing to live in certain suburbs and cities if the service levels have to decrease?

It will be interesting to watch these communities that have declared bankruptcy. The current mayor of Vallejo, California suggests the move wasn’t necessarily good for the community:

The Bay Area city of 112,000 was forced to shut down two of its fire stations and today fixes just 10% of its crumbling roads. Its workforce, including police and firefighters, is about half its pre-bankruptcy size and those people left are “insanely” overworked.

Meanwhile, Vallejo spent $10 million on legal fees. It ended up with employee contracts that Osby thinks the city could have struck more cheaply if it had stayed out of bankruptcy court and turned to the bargaining table.

But perhaps bankruptcy is the only route that “successfully” convinces everyone that something needs to change…