Daily Business Report-June 10, 2019
Residential rents could rise only up to 7 percent plus inflation per year under a bill approved by the California Assembly—an unusual victory in the Capitol for renters. (iStock photo)
A rare tenant win and a lingering question:
Why don’t California renters have more political clout?
By Matt Levin | CALmatters
California tenants just scored a rare victory in the state Capitol—emphasis on the rare.
A high-profile bill passed by the state Assembly would impose a “rent-gouging cap” on annual rent increases for the vast majority of renters. If approved by the state Senate and signed by Gov. Gavin Newsom, it would make California the second state to provide such protections.
“I’m thrilled that the Assembly has taken one step forward to providing some relief to millions of tenants one rent increase away from losing their homes,” said Assemblyman David Chiu, Democrat from San Francisco and author of the bill.
Tenant rights group can rightfully celebrate the vote as an achievement—mostly because of the near-herculean effort it took to get a renter bill this far.
AB 1482 was significantly watered down to accommodate reluctant lawmakers and appease opposing interest groups: The proposed rent cap was raised from 5% to 7% plus inflation, it exempts landlords who own less than 10 single family homes, and it would expire in 2023. And it still just squeaked by the Assembly. A twin bill that would have mandated landlords evict tenants only for “just cause”—which many argue is necessary for Chiu’s bill to be effective—failed to make it out of the same chamber.
You’d expect California’s 17 million renters to have more juice.
More than 40 percent of Californians are tenants, including 12 million of voting age—a major swath of the potential electorate. Rents have soared to alarming highs, causing more than half the state’s tenants to meet the federal definition of “housing-cost burdened.” In one of his first addresses in office, the state’s new progressive governor called on a Democratic supermajority of state lawmakers to send him a package of tenant protection bill as soon as possible. This weekend a recently formed Democratic “renters caucus” will host an event at the state party convention.
And yet, legislation aimed at helping California’s renters almost always has struggled to get through the state Capitol.
Earlier this month, a bill that would have allowed California cities to expand rent control to more residences was withdrawn by its author when it became clear the bill couldn’t even muster enough support to pass its first committee hearing. A proposal that would have created a statewide rental database to reliably track evictions and prices—data that’s hard to come by for anyone but landlords—was quietly buried before it could advance to a full floor vote.
“We have in California in both houses a supermajority of Democrats, many of whom will tell you that they’re concerned about the housing crisis,” said Brian Augusta, legislative advocate for the California Rural Legal Assistance Foundation and a lobbyist for tenant interests who has watched a handful of tenant protection bills die or get watered down in recent years. “And yet when we go to try to secure their vote for what seem like very reasonable policies, they’re not going up (to vote).”
So why can’t tenant groups wield the political muscle you’d think their numbers would warrant?
Money is the easy answer: Landlords have it, renters don’t.
“We still have to have plausible arguments, and our arguments still have to resonate,” said Deb Carlton, lobbyist for the California Apartment Association. “A lot of these bills are extreme and they’re not willing to compromise on these issues.”
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San Diego employers endorse regional goal to create
50,000 new quality small business jobs by 2030
In an effort to sustain San Diego’s economic competitiveness, San Diego Regional EDC and its Inclusive Growth Steering Committee of 40 employers officially endorsed a regional goal to create 50,000 new quality jobs within small businesses by 2030. Driven by EDC’s latest study release, this regional goal and accompanying set of recommendations aim to help small businesses in San Diego to compete – the second of three main goals of EDC’s Inclusive Growth initiative.
“If you care about the future of San Diego—economic competitiveness and mobility—then you need to pay attention to small businesses,” said Janice Brown, board chair, San Diego Regional EDC. “From large employers to elected officials, it’s everyone’s responsibility to make sure that small businesses have the tools to succeed.”
In its new study, EDC found that while small businesses employ the majority of San Diego’s workforce, only 26 percent of jobs in small businesses are quality jobs – those that pay enough for economic security (paying wages of at least $40,529 per year or $19.49 per hour).
Additional key findings include:
- Due to financial challenges, small businesses pay 14 percent lower average wages.
- Only 36 percent of all businesses are minority-owned, and about the same proportion
are woman-owned.
- Opportunity industries, such as construction and transportation, offer a greater number of
quality jobs than many innovation industries, including precision health and cybersecurity. Additionally, many opportunity industry jobs can be accessed without a bachelor’s degree.
By focusing more on job growth within these opportunity industries, San Diego can drive a greater economic impact and broaden access to quality jobs, especially for San Diegans in communities with lower rates of educational attainment.
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Chula Vista’s Brandywine Distribution
Center sold for $24.4 million
Brandywine Distribution Center, a 170,011-square-foot industrial complex in Chula Vista, has been sold for $24.4 million to a partnership of New York-based KKR and Chicago-based Alpha Industrial Properties.
Located at 1670 & 1690 Brandywine Ave., the project is comprised of two distribution buildings on 9.84 acres originally built in the late 1980s. Key tenants in the project include SolarCity, Tecnico, Curbell Plastics, and Surgical Specialties.
Cushman & Wakefield’s San Diego and Orange County offices represented the seller in the transaction, Stos Partners.
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LEAD San Diego presents its 2019 Visionary
Awards for outstanding community service
LEAD San Diego honored six individuals for outstanding community contributions, presenting them with its 17th annual Visionary Awards at a June 6 program in front of nearly 800 business, community and elected leaders.
“At LEAD we are equipping the leaders we need today and developing those who will lead us into the future,” said LEAD Board Chair Jeff Gattas, assistant chancellor/chief of staff at UC San Diego. “As we look to the future, we are focused on building on the strong foundation LEAD has created over the past 37 years. This means enriching our programming and broadening our reach so LEAD classes truly reflect the community we are serving.”
Six awards were presented to local leaders in honor of their contributions to the region’s growth and potential through their time, talent, and innovation:
- Neil Morgan Memorial Award for Lifetime Achievement — Karen S. Haynes, president, California State University San Marcos
- LEAD Graduate of the Year award — Paul Hering, chairman, West Region, Marsh & McLennan Agency
- Innovation and Economic Opportunity Award — Felena Hanson, founder, Hera Hub, and Silvia Mah, founder, Hera Labs; president, Connect
- Ronald Kendrick Memorial Award for Regional Collaboration — Bishop Cornelius Bowser, co-founder, Community Assistance Support Team (CAST)
- Charles Nathanson Memorial Award for Cross-Border Region Building — Jean Guerrero, Border Reporter, KPBS
- 2019 Community Spotlight Award — Mia and Steve Roseberry, founders of Wounded Warrior Homes.
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County budget hearings begin this morning
The county Board of Supervisors today will hear a formal presentation from Chief Administrative Officer Helen Robbins-Meyer on the $6.21 billion recommended budget for fiscal year 2019-2020. The meeting is set for 9 a.m. in Board Chambers, 1600 Pacific Highway, Room 310, San Diego.
The recommended budget plan is part of a two-year operational plan that will help determine how the county spends its resources. Public hearings on the balanced budget begin today, but an evening hearing will take place at 5:30 p.m. on Thursday, June 13. Budget deliberations and formal adoption of the first year of the budget plan are scheduled for June 25 at 2 p.m. At that time, the Board will also approve the second year in principle for planning purposes.
