State spends less on renters + SVB failure divides Democrats + Newsom signs abortion pill letter

Good morning and welcome to the A.M. Alert!

CALIFORNIA SPENDING BENEFITS HOMEOWNERS MORE THAN RENTERS, STUDY SAYS

Via Lindsey Holden

California is producing only a fraction of the affordable housing it needs, and the state spends far more money to support homeowners than it does to help renters, according to new data from the California Housing Partnership.

The Partnership on Wednesday released an Affordable Housing Needs Report showing that California’s leaves few affordable options for tenants, who have seen the state’s median rent increase by nearly 40% since 2000.

The state’s housing crisis has been well-documented, but it is especially serious for low-income renters. More than 50% of California renters are considered low-income, the report says.

Almost 80% of the state’s extremely low income tenants are considered severely cost-burdened, meaning they spend more than 50% of their income on housing.

Gov. Gavin Newsom has struggled to meet the ambitious housing goals he has set for the state. As a gubernatorial candidate in 2017, he famously called for the state to build 3.5 million new housing units by 2025.

The governor and the Legislature now want to see 2.5 million units by 2030, including 1 million for low-income households.

The Partnership and other organizations in 2021 produced Roadmap Home 2030, which shows how California could produce 1.2 million new affordable homes by 2030.

The state has significantly increased its affordable housing production since 2019, but California programs in 2022 funded only 20% of the nearly 120,000 units it needs, according to the Roadmap.

Affordable housing production is lowest in the San Joaquin Valley, which has produced just 13% of the units needed. The greater Bay Area has produced 38% of the affordable housing it needs, and the greater Sacramento area has produced 30%.

In addition, California has spent significantly more money on assistance for homeowners, such as property tax and mortgage interest deductions, than it has on programs funding affordable rentals.

To address these issues, the Partnership suggests solutions such as investing nearly $8 billion in 2023-2024 state budget dollars into affordable housing programs — a tough ask in a challenging budget year.

The Partnership also supports Assembly Bill 1657 from Assemblywoman Buffy Wicks, D-Oakland, which would create an affordable housing bond to raise a yet-to-be-determined amount of money. If the bill makes it through the Legislature, voters would consider it during the 2024 election.

SVB FAILURE LEAVES DEMOCRATS DIVIDED

Last week, the collapse of Silicon Valley Bank came as a thunderclap, and it has left Democrats in the Golden State divided over the best way to respond.

Newsom called for the Federal Deposit Insurance Corporation to shore up the bank’s depositors, and praised President Joe Biden when he gave the FDIC the go-ahead protect all deposits at the bank, not just those up to $250,000 as federal law requires.

Newsom has a personal stake in the bank’s well-being, as reported by The Intercept, with three of Newsom’s businesses listed as clients of the bank and his wife, Jennifer Siebel Newsom, receiving a $100,000 donation from the bank to her charity, California Partners Project. Though, as Newsom spokesman Nathan Click told The Intercept, the governor’s businesses have been held in a blind trust since 2018.

While state Democrats have mostly been mum about those ties, they have offered competing proposals for how best to handle the bank’s failure.

That includes Reps. (and U.S. Senate candidates) Katie Porter and Adam Schiff.

Porter on Tuesday announced that she is partnering with fellow bank watchdog Sen. Elizabeth Warren on a bill to repeal a Trump-era law that rolled back “critical Dodd-Frank protections,” such as stiffer capital requirements and stress tests.

“In 2018, politicians rolled back critical regulations protecting Americans’ deposits—ignoring warnings from financial experts in favor of Wall Street special interests. I’m calling on Congress to restore common-sense guardrails that keep corporate greed in check and restore confidence in our financial system,” Porter said in a statement.

For his part, Schiff said he also is introducing a bill, “to hold execs at failed banks accountable.”

“When banks fail, it’s working people who suffer the consequences. Missed paychecks and economic uncertainty.After 2008, we went for exec bonuses and compensation.We should do so again. This time we must succeed,” Schiff wrote in a Monday tweet.

NEWSOM, OTHER GOVS PEN WARNING LETTER TO PHARMACY COMPANIES

Fresh off of going after pharmacy retail giant Walgreens for its decision to no longer sell the abortion medication Mifepristone in certain states, including some where abortion remains legal, Newsom has joined with 13 fellow Democratic governors to send a letter to the CEOs of CVS, Rite-Aid, Walmart, Safeway, Kroger, Costco and Health Mart, thanking them for “carefully considering” how they can expand access to the medication.

“We understand you are carefully reviewing the new Mifepristone certification process. We look forward to receiving your plans for dispensing Mifepristone in states where such care is legal, as well as any other actions you plan to take to safeguard access to reproductive health care,” the letter reads in part.

The letter sounds friendly enough, but the CEOs are almost certainly taking it for what it is: A warning.

Newsom last week announced that the State of California would cut business ties with Walgreens, including the termination of a $54 million contract with the state’s Department of General Services to provide medications to the California Department of Corrections and Rehabilitation for incarcerated people.

“We will always put the rights of our people first and will continue to protect and defend their legal and necessary access to basic health care,” the letter goes on to say. “As companies that dispense critical, life-saving medications, we urge that your decisions continue to be guided by well-established science and medical evidence and a commitment to the health and well-being of patients — not politics or litigation threats.”

CALCHAMBER LABELS ANOTHER BILL AS ‘JOB KILLER’

A Senate bill to mandate a statewide greenhouse gas emission reduction is a “Job Killer,” the California Chamber of Commerce said.

CalChamber announced the dreaded designation on Tuesday, with policy advocate Brady Van Engelen saying in a statement that SB 12, by Sen. Henry Stern, D-Canoga Park, that California businesses and residents are struggling with an affordability crisis caused in part by rising energy prices.

“At a time when Californians are suffering from nearly record high prices on many essential goods from groceries to gas, increasing costs is the wrong approach to take,” Van Engelen said.

He added that CalChamber supports “cost-effective, technology-neutral and ... market-based strategies” for tackling climate change.

“SB 12 does not take any of these into account and will lead to excessive costs, hurt California residents and businesses, and severely damage the state’s economy,” he said.

California already has a goal to cut emissions to 40% of the 1990 level by the end of 2030; SB 12 would increase that amount to at least 55%.

QUOTE OF THE DAY

“It’s time for Congress to ban assault weapons – we did it in 1994, and shootings dropped. After Republicans in Congress let it expire – mass shootings tripled.Today, I’m signing an Executive Order to fight gun violence, but Congress must act. Enough is enough.”

- President Joe Biden, who visited California on Tuesday to meet with survivors of the January Monterey Park mass shooting, via Twitter.

Best of The Bee:

• A California appeals court ruled Monday that Proposition 22, which classifies gig delivery drivers as independent contractors rather than employees, could stand as state law, via Maya Miller.

• Californians do have a bigger tax burden than rival states Texas and Florida, via David Lightman.