City Council meets tomorrow night. More socialism-based policies and the ongoing screwing of Santa Monica residents and taxpayers are on the agenda.
Item 7-C continues City Hall's decades-long agenda of setting minimum wages for anybody and everyone who works within city borders.
When low-educated, under qualified, or entry level workers can earn $15 an hour by 2020 ($15.37 for hotel union workers by 2017), then wages for everyone else will also have to be adjusted upward.
A few years ago, a local restaurateur said that if he had to pay a dishwasher $15 per hour, he'd have to raise pay for all his employees. It amounted to hundreds of dollars in increased weekly payroll costs across the board. This meant raising prices and risking losing customers or the business, itself.
People on fixed incomes, such as social security or fixed pensions, see their buying power diminish and are forced further down the economic scale. We trade one group - young, entry level workers (who can probably find a job, but maybe at a lower wage than they'd like) being forced deeper into poverty for another demographic like seniors and the disabled who have no way to reverse their increasingly dire economic circumstances.
Why adopt regulations favoring just one elite class of workers? I'm talking about Here Unite, Local 11 hotel workers. This initiative has nothing to do with poverty and everything to do with political payoffs.
The Santa Monicans for Renters' Rights political organization that controls City Council depends on the hotel union for campaign workers and other support at election time. SMRR even recently appointed two key Local 11 organizers to its Steering Committee.
The union wields clout and SMRR will obviously pander to its demands. Meantime, voters and residents pay through poor governance, higher taxes and fees and less citizen-serving services.
Speaking of higher taxes and fees, another item on tomorrow's council agenda is Item 8-A. It asks council to provide direction on a report prepared by the city's Housing Commission regarding potential sources of funding for affordable housing and to review potential financing opportunities for creating it.
With the cessation of Redevelopment Agency funding a couple of years ago, City Hall allowed developers with low income apartments in their projects, or that set aside money for a low income housing fund, to build much taller and denser projects than would be normally allowed under code. Developers factor the costs of the low-income units rents for their market rate units to maximize return.
A well-intentioned but failed policy that's driving middle class tenants out of the local rental market and producing a two-tier housing system - one for the wealthy and the other for folks near the bottom of the economic scale.
Economists Benjamin Powell and Edward Stringham conducted a recent study for the Reason Public Policy Institute and determined that housing starts in eight California cities dropped off significantly after inclusionary zoning went into effect. In the seven years before the law was implemented, over 28,000 new homes were built. In the seven years after, only 11,000 were constructed. Of those, only 770 were “affordable.” 17,000 homes were never built, exacerbating the housing shortage at all price levels while driving prices out of the reach of even more buyers.
Nevertheless, council is reviewing the following options for raising funds to build more “public” housing as opposed to things like renovating our water infrastructure or giving property owners (and renters) a break on the cost of city services such as water, trash and sewage fees.
Council could cut current services paid for through the General Fund to save money that could be used for new low-income housing.
Three options would require majority voter approval.
Attempt to pass a documentary transfer tax, currently $3 per $1,000 of real estate sale value to generate $2.4 Million for each $1.50 increase. Institute a tax that would equal 5-percent of calculated value of all commercial and for-profit multifamily construction with a companion measure requesting that funds be spent on affordable housing. Which could raise up to $7.5 million annually.
Increase in the 9.5-percent sales tax on retail goods. A quarter percent increase would raise $7.5 million annually. Keep in mind that there will also likely be a measure on the November ballot asking voters to approve another increase of the County's portion of the sales tax to pay for additional Metro transit projects, and to issue a $100 million general obligation bond, paying for it by imposing a $220/year per property tax for a 30 year period. That requires 2/3 voter approval as would a new parcel tax of $334/year per property to raise $8 million annually.
Other options under consideration but not likely to win approval for various reasons (insufficient income, etc.) include increasing the hotel transit occupancy tax, currently at 14-percent, to bring in $3 million for each one percent increase, raising the utility user tax on gas, electric, phone, cable TV, etc. from its current 10-percent. Each one percent increase in the UUT would bring in $3 million for low income housing.
Lastly, increase the current 10-percent tax on parking fees, but each percent jump would only raise $1 million, annually.
This is another one of these cases where the public be damned. I doubt that the majority of residents will cough up increased taxes/fees to build more large and unattractive developments for out-of-towners who want to but can't afford to live here.
The social engineers in City Hall better get ready for a knock down, kick butt fight.
Bill can be reached at mr.bilbau@gmail.com.
