Month: February 2020

Los Angeles politicians will make housing affordable, by force if necessary.

On Friday, City Councilmember Gil Cedillo introduced a motion that asks city staff to draft plans for using eminent domain to seize Hillside Villa Apartments, a 124-unit, privately-owned development in the city’s Chinatown neighborhood to avoid rent increases at the property.

The property is currently under an affordability covenant that requires its owner to rent out a number of its units at below-market rates. That covenant is set to expire soon, meaning rents on some 59 units will increase to market rates—which means rent hikes of up to $1,000 per unit.

“We think it is important enough that we need to take action to preserve those units. We don’t want to generate more homeless people,” Conrado Terrazas Cross, Cedillo’s communications director, tells Reason, saying that many tenants would not be able to afford the coming rent increases.

“I think it’s a brilliant idea but I need to know: Are we in Cuba or Venezuela?” says Tom Botz, the L.A.-area developer who owns the building, about the proposal to seize his property.

Botz tells Reason he purchased the development company that built Hillside Villa roughly 20 years ago. The building’s construction had been financed by a number of government grants and loans, including a $5.4 million loan from Los Angeles’ since-abolished Community Redevelopment Agency in 1986.

A condition of that loan was that the developer rent out units in the building at below-market rates for 30 years. Other government grants and loans that helped finance the building came with their own specific affordability requirements.

The affordability requirements from the redevelopment loan were supposed to expire in June 2019. Beginning in May 2018, tenants in Hillside Villa started to receive notices that their below-market rents would be increasing in a year’s time. In March 2019, tenants were given the option of signing new leases at the increased rates or face eviction.

In June 2019, several tenants, with the assistance of the Legal Aid Foundation of Los Angeles and the National Housing Law Project, sued Botz, claiming the eviction notices tenants received did not give them proper notice.

That lawsuit was dropped in July after a compromise was tentatively reached in which Botz agreed to extend the affordability covenant on his property for another 10 years in exchange for the city wiping away the debt he still owed on the redevelopment loan.

Botz eventually decided to not go through with that deal. He says that he had no hope that once the extended affordability requirement expired, activists and the city wouldn’t just try to pressure him again into maintaining below-market rents at the building.

The past six months have seen bitter feuding between Botz, tenant organizers, and Cedillo’s office. Activists picketed his home, according to The Malibu Times.

Cedillo has accused Botz of reneging on their agreement to not raise rents. Botz contents nothing concrete was ever agreed to. The dispute has now culminated in Cedillo asking the city to seize Botz’s property.

Extreme as it might be, this use of eminent domain could well be constitutional says Jim Burling of the Pacific Legal Foundation, a public interest law firm.

“It’s theoretically possible for the city to thread the needle to make this work constitutionally,” Burling tells Reason, saying the government would probably be within its rights to condemn a property for the purpose of preserving affordable housing.

But the devil is in the details, he says. “If [the city] get[s] sloppy or they get greedy and don’t want to pay what this property is actually worth, there could be some serious constitutional challenges.”

Regardless of whether this seizure meets constitutional muster, it will certainly erode property rights, says Burling.

“Why are you going to spend 30 years maintaining a property and keeping it in good shape if you know that at the end of the day, the government can basically rip up the agreement?” he says.

Terrazas Cross says that eminent domain could be deployed to seize other properties where affordability covenants are set to expire.

Cedillo’s motion asks the city’s Bureau of Engineering to consult with the city attorney and then prepare a report on seizing Hillside Villa within 30 days. Botz says he will fight any effort to seize his property in court.

Ideally, tenants currently receiving subsidized rents at Hillside Villa would be able to find adequate market-rate housing, even if rents at their current residence shot up. That they can’t is a product of Los Angeles not allowing enough construction of new housing at rates that would keep rents stable over time.

The solution to that, however, would be allowing more private housing construction. Instead, the city is now looking at just taking over the limited number of private developments government regulation has allowed to be built.

In 2019, the Los Angeles City Council voted unanimously to oppose SB 50, a state bill that would have legalized four-unit homes on most residential land and mid-rise apartment buildings near major transit stops and job centers.

Should the city go down the path of seizing private developments to preserve units, it will discourage investment in developing new housing.

The Los Angeles Times reports that Cedillo’s motion will now head to the city council’s housing committee, which he chairs.

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Most people probably wouldn’t think of President Donald Trump as a socialist. At last night’s State of the Union address, he repeatedly inveighed against the ideology, in both foreign and domestic settings. He touted the diplomatic coalition aligned “against the socialist dictator of Venezuela, Nicolás Maduro,” who he cast as an “illegitimate ruler” and “a tyrant who brutalizes his people.” He warned of an impending “socialist takeover of our health care system,” criticized Democrats who supported a government-run plan, and promised that he “will never let socialism destroy American health care.” 

“Socialism destroys nations,” he said. “But always remember: Freedom unifies the soul.” 

There can be no doubt of Maduro’s tyranny, and when the leading proponent of Medicare for All is a self-declared democratic socialist, it is more than fair to cast single-payer health care, and its backers in Congress, in this light as well. With Sen. Bernie Sanders (I–Vt.) currently a front-runner for the Democratic presidential nomination, Trump was previewing a likely attack strategy for this year’s presidential contest, and attempting to exploit a growing rift in Democratic Party politics over its leftward drift. 

There are sound political reasons for Trump to adopt this strategy. Polls show that Republican voters are widely opposed to socialism, and although Democrats are substantially more favorable, they are, relatively speaking, more divided. The presidential campaigns of both Sen. Kamala Harris (D–Calif.) and Sen. Elizabeth Warren (D–Mass.) showed how practical questions about how to pay for and implement Medicare for All can drag down presidential campaigns, even in a nominally receptive Democratic primary race. (Sanders, for his part, has largely dismissed such questions as impossible to answer.) Trump is on solid political ground running against America’s nascent socialist movement and its primary project, the remaking of the nation’s health care system. 

Yet Trump’s fervent anti-socialism makes for an odd fit with much of the rest of his speech, which boasted of various spending and infrastructure projects, along with a new branch of the military, Space Force. The disjointedness was particularly notable in his dual commitment to “always protect your Medicare” and “always protect your Social Security,” a line punctuated by a final “always,” as if to say that old-age entitlements are forever sacred. 

Although Trump recently suggested, in a brief and somewhat vague exchange, that the programs might eventually be up for some sort of cost-saving reform, he has historically positioned himself as a defender of those programs. As with his attacks on socialism, there is a clear political logic to this stance: The programs are popular, and they benefit seniors, who make up a disproportionate share of Trump’s voter base. 

Trump’s speech was a warning to these voters that Democrats would threaten their benefits by extending them to outsiders, in particular to illegal immigrants. Democratic proposals, he said, “would raid the Medicare benefits of our seniors and that our seniors depend on, while acting as a powerful lure for illegal immigration.” (Nevermind that California, which he cited as an example, spends only a tiny fraction of its gargantuan health care budget on undocumented immigrants.) 

Yet what are Medicare and Social Security except socialist programs limited by age requirements? They are not mandatory savings systems, as many believe, but direct transfer programs in which young workers fund the benefits of older retirees; on average, today’s seniors will receive benefits that far exceed what they paid in. Indeed, the mismatch between expected revenues and the expected cost of paying for those benefits is why both programs have substantial long-term shortfalls, and why they are, in tandem, the biggest drivers of long-term federal debt. 

Trump isn’t a democratic socialist in the Sanders mold. But by casting Medicare and Social Security as sacrosanct, as untouchable foundations of the American project, Trump is endorsing a kind of debt-funded socialism for seniors, in which the way to access the benefits of massive government welfare programs is to turn 65. It’s no wonder, really, that Bernie Sanders’ base of support is younger voters; Sanders is promising, in many ways, to expand the sort of benefits that Trump wants to protect for seniors to the young and middle-aged. 

There are obvious policy problems with Trump’s brand of big-government anti-socialism, chief among them that it ignores the costs of running an entitlement system that was designed under wildly different demographic assumptions. 

But the rise of Sanders specifically and youth socialism generally is a reminder that there are serious political ramifications as well. The seniors-only entitlement state that Trump has vowed to preserve has created an expensively protected beneficiary class. Eventually, those who are not part of that class will want benefits of their own, at even greater expense. So it’s true that Sanders’ particular brand of socialism is especially unaffordable and that it would exacerbate the fiscal problems associated with today’s entitlement system. But Trump’s preferred alternative is a politically convenient status quo that is destructive and unsustainable on its own terms. 

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James Dailey, a Florida death row inmate, has gained an interesting group of supporters. Eight current and former prosecutors and attorneys general, some of whom have stood behind death sentences, filed a brief asking the U.S. Supreme Court to review Dailey’s death sentence. 

As Reason previously reported, Dailey was sentenced to death over the murder of Shelly Boggio. Boggio’s body was found on May 6, 1985. She was naked and her body had been stabbed multiple times. Dailey’s former roommate, Jack Pearcy, who had actively tried to spend intimate time with the Boggio, admitted to stabbing her at least once and provided details of the crime to investigators. He owned a knife consistent with the stab wounds and was the only person identified by eyewitness the night she was murdered. Now serving a life sentence for murder, he has also confessed that he was solely responsible for the crime at least four times. Twice he’s told other inmates that Dailey was innocent.

Dailey was ultimately convicted based on the testimony of unreliable jailhouse informants like Paul Skalnik.

Skalnik is recognized for being one of the most prolific and egregious jailhouse informants in history. Not only is Skalnik’s truthfulness still being questioned to this day, but it is apparent that his cooperation in convicting Dailey earned him a reward. Though he promised the jury he was receiving nothing for his testimony, he was released from jail just five days after Dailey was sentenced to death. A Florida Parole and Probation Commission memo cited his “cooperation with the State Attorney’s Office in the first-degree murder trial” as the reason for his early release despite his parole officer already labeling him a flight risk and a danger.

This was not the first time Skalnik was rewarded for his cooperation. Prosecutors once dismissed a child-sex charge involving a 12-year-old girl in exchange for his testimony, a fact withheld from the jury in Dailey’s case.

The eight prosecutors and attorney generals who signed the amicus brief in support of reviewing Dailey’s case believe prosecutors took on too much risk by relying on the “inherently unreliable” testimonies of jailhouse informants, especially when no physical evidence tied Dailey to the crime. 

“We know, as former or current prosecutors and attorneys general, the inherent risk that jailhouse informants give false testimony to gain personal benefits,” they wrote. “Because informant testimony is inherently unreliable, prosecutors have an obligation to present an accurate and complete picture of the benefits received so that jurors can consider in context the credibility to which the testimony is entitled.”

The brief cites two sources showing jailhouse testimony to be the leading factor in convictions for death row cases that were eventually exonerated. A Center on Wrongful Convictions study from 2005 found that of the 111 exonerations carried out following the re-establishment of the death penalty in 1973, jailhouse informants had accounted for 45 percent of the wrongful convictions.

“The use of jailhouse informants like [Skalnik] is one of the great abuses in criminal trials across America,” Bennett Gershman tells Reason. Gershman, who was a New York prosecutor for ten years and is now a professor at Pace Law School and a leading voice on prosecutorial misconduct, signed the brief.

Identifying Skalnik as the “worst of the worst” of jailhouse informants, Gershman says his inclusion made a “mockery” of the idea that Dailey received a fair trial. When asked what could be done to avoid similar missteps in the future, Gershman notes that the jury is predisposed to believe the prosecutor’s evidence. Because of this, prosecutors have the responsibility of making sure they are using credible witnesses and presenting reliable evidence. Corroboration of the jailhouse informant’s testimony, he says, would help.

Gershman believes if Florida Gov. Ron DeSantis, a Republican, looks “extra closely” at the facts of the case, he too would conclude that the case against Dailey was a “travesty of justice.” He adds that he’s always believed that the death penalty was “an ineffective punishment.”

“No one should be put to death unless we are absolutely certain that he committed the crime and that he committed it with the intent which is necessary before we find him guilty and sentence him to death,” former Florida prosecutor Bruce Jacob says. He also signed the brief. “In this case, the facts are not clear. It’s even possible that he did not commit the crime.”

Harry Shorstein, another Florida prosecutor who signed the brief, previously wrote in The Miami Herald that Dailey should receive executive clemency before it was too late. He argued that the jury was never given the full picture of Skalnik’s cooperation with prosecutors or even his own criminal past.

Dailey’s supporters also include the Innocence Project of Florida and an interfaith coalition that recently sent another letter to the governor asking for clemency.

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“As a freelancer, I have the flexibility to do work while I’m at school, or do work late at night, or, you know, not work that week because I’m busy,” Kassy Dillon, a journalist and graduate student at Pepperdine University, told Reason in late 2019.

On January 1, 2020, earning that extra cash got a lot more difficult. California Assembly Bill 5 was designed to constrain the growth of the so-called gig economy, based on the theory that companies like Uber, Lyft, and Postmates are taking advantage of contract labor.

Dozens of professions, including many jobs in health care, commercial fishing, grant writing, hair styling, and the fine arts, are exempt from the law. Journalists were allotted a partial exemption of 35 submissions per year per client, which was negotiated by the bill’s author, California Assemblywoman Lorena Gonzalez (D–80th District).

“Was it a little arbitrary,” Gonzalez told the The Hollywood Reporter regarding how she came up with that number, “Yeah. Writing bills with numbers like that are a little bit arbitrary.” (Gonzalez declined Reason’s interview request.)

Vox, which had hailed the new law as a “victory for workers everywhere,” announced in December that it will be ending contracts with more than 200 freelancers who lived in or covered California. Those 200 freelance contracts will be replaced with 20 part-time or full-time staff positions.

“This is a really unusual position for people in creative fields like freelance journalism to be in,” says Randy Dotinga, a San Diego-based freelance journalist and the former president of the American Society of Journalists and Authors. “By nature, most of us are liberal, progressive Democrats. We’re also pro-union for the most part. And here we are saying this goes too far.”

Journalists “might write on a blog post in 20 minutes and they might write dozens of blog posts every month or every year,” says Dotinga. “A lot of publications don’t have the resources to put someone like that on staff. So they’re either going to be limited in what they can write or they’re just going to be let go.” The American Society of Journalists and Authors has filed a lawsuit arguing that the bill is unconstitutional.

If regulating freelancers is a good idea, why were there so many vaguely defined exemptions written directly into the text of the law? In the lead-up to its passage, most lip service was paid to the plight of Uber and Lyft drivers.

Veena Dubal, a law professor at the University of California Hastings, thinks that drivers are mis-classified as independent contractors. “If you have such little bargaining power with the folks that you’re consulting with or you’re freelancing for,” says Dubal, “then it’s exploitative.”

Uber and Lyft maintain that drivers have flexible schedules and are therefore correctly classified as independent contractors. And 95 percent of California’s Uber and Lyft drivers say that the job’s flexibility is “extremely” or “very” important to them.

Coral Itzcalli, a spokesperson for Mobile Workers Alliance, which is trying to unionize the industry, says that Uber and Lyft “are paying workers very little wages. You’re looking at workers driving 14, 16 hours a day. There’s no flexibility in that.”

But California Lyft drivers spend an average of 3 hours per week on the app. And according to a 2019 study commissioned by Lyft, the company will likely have to end its arrangements with around 250,000 drivers, and the part-timers, who make up the majority, would be the first to go. 

“For us,” says Itzcalli, “this is about focusing on ensuring that jobs are good jobs. If we have one or 100 jobs that are paying less than minimum wage, there is absolutely no benefit. I [would] rather have 50 good jobs than a 100 bad paying jobs.”

But who gets to make that choice? The labor movement or the freelancers taking those jobs?

“I hope that there’s some way that the labor movement can look at freelancers of all types, and say this is a valid, honorable profession,” says Randy Dotinga. “We are workers too. And many of us choose this field. We are not exploited. We don’t exploit others. We’re not scabs. We’re small businesses and we deserve to be treated that way.”

Produced by John Osterhoudt. Camera by Osterhoudt, Zach Weissmueller, and James Marsh.

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