Our Governor Sets a New Tone
We are very encouraged by our new governor’s bold decision to enforce the state housing laws – he gets thee gold stars and a pat on the back. It is only fair to give credit when credit is due. The real test will be when he gets push back from these wealthy cities. Does he have Marin county in his sights next?
SAN FRANCISCO CHRONICLE
California sues Huntington Beach to force it to plan low-income housing
By Alexei Koseff – January 25, 2019
SACRAMENTO — The state sued the Orange County city of Huntington Beach on Friday to force it to plan for more affordable housing, part of a campaign by Gov. Gavin Newsom to boost construction in California as residents grapple with soaring housing costs.
Newsom said Huntington Beach has refused to meet a state mandate to provide new housing for low-income people. He promised that cities that do not do their part will be “held to account.”
“The time for empty promises has come to an end,” state Attorney General Xavier Becerra wrote in the complaint, which was filed in Orange County Superior Court. California is seeking an order that would compel Huntington Beach to set aside additional sites for low-income housing.
THE FRESNO BEE
To solve California’s housing crisis, the state and cities must aim for the same goal
By McClatchy California Opinion Editors – February 1, 2019
First Gov. Gavin Newsom said he wanted 3.5 million new homes to be built to address California’s housing crisis. Next he sent a shock wave through municipalities with a lawsuit no one saw coming.
Newsom, through the Attorney General’s Office, sued the city of Huntington Beach on Jan. 25 for failing to have a housing plan that addresses the needs of all residents in the Orange County coastal community.
The governor’s action was the first of its kind under a new law that allows the state to sue a local jurisdiction found to be out of compliance with its housing goals.
Huntington Beach is not alone. Fifty-one other cities in California are currently listed by the state as having housing plans that are out of compliance with requirements. Among them are a handful of Valley cities — Clovis, Selma, Orange Cove, Dos Palos and Atwater — as well as the coastal resort town of Pismo Beach.
Environmental organizations’ lack of diversity is the main reason they support unfair and discriminatory environmental regulations and policies. The Sierra Club and NRDC have a history of putting spotted owls’ welfare before brown babies. Their lack of opposition to the many prisons built over the past decade is the best testament of that.
The war on climate change is a righteous one but it should be fought in a way that equitably balances the needs of people and the cost to improve the environment. It should not be fought in a way that is blind to the impact on people. This is especially true when climate policy falls regressively on the lower classes. Indeed, legislators have required that the economic costs on Californians are to be clearly identified. However, the way this war is currently pursued makes communities of color collateral damage and lacks creativity in distributing the pain fairly across social classes.
The 200 have filed a discrimination lawsuit against the California Air Resources Board (CARB) – the new scoping plan by CARB is so Trumpian. It raises the cost of badly needed new houses by $40,000 (CARB’s estimate) so they will achieve a “net zero” energy use. How many folks will that price out of the market verses the improvement in air quality?
CARB’s plan includes developing a per person pollution quota that requires local government to enforce. This plan also includes a vehicle per miles travel quota which would disproportionately affect low-income families who must commute from lower cost communities to feed their families. Would CARB propose such policies if it had more diversity of thought in upper management?
THE CHRONICLE OF PHILANTHROPY
Environmental Groups Get Poor Marks for Diversity Efforts
By Jullian Wyllie – January 10, 2019
Diversity at many large environmental organizations has stagnated or worsened in the past year,though a few have shown progress, according to two new reports.
The figures come from Green 2.0, an independent advocacy campaign, in its second annual”Transparency Report Card” on the leaders, boards, and stafs of environmental nonprofits andfoundations. The report is based on self-reported data to GuideStar as of April 1, 2018.
Whitney Tome, executive director of Green 2.0, said the updated report card shows that not muchhas changed from its first report released in 2017. The “green ceiling” has prevented nonprofitsand foundations from advancing their missions, she says.
Diversity at Nonprofits
The percentage of women working full-time at environmental nonprofits increased from 59percent to 64 percent year-over-year from 2017. The senior staf is evenly divided between menand women, and there were 3 percent more women on boards in 2018.
Over all, racial diversity declined among full-time staf, decreased slightly among boardmembers, and grew from 14 percent to 21 percent among senior staff.
Tome said some of the larger nonprofits “refuse” to disclose data about their diversity. She listedPew Charitable Trusts and Oceana as examples in a conference call to media.
Other nonprofits that did not disclose any data for the report this year, according to Green 2.0,include Conservation International and Root Capital, though Root Capital disputes that. Others did not disclose numbers for specific categories, like staff or leadership.
Representatives from Oceana did not provide a response to the data in time for this article.
A spokeswoman for Pew Charitable Trusts said, “Pew is a public charity working on a number of issues including the environment, health, consumer finance, fiscal and economic policy, and state policy. We are also active in funding programs that help the most vulnerable and improve civic life in Philadelphia, and we conduct research about the issues, attitudes, and trends shaping America and the world. We do not consider ourselves an environmental organization. We are committed to creating a workplace that provides equal employment opportunity, values diversity, and fosters inclusion.”
A spokeswoman for Conservation International said the organization “has a strong commitment to diversity, and our numbers reflect that.” Further, she said, “across the globe, 90 percent of staff in our country programs are led by local nationals that represent the various communities, ethnicities, and cultures of the nearly 30 countries that we operate in. Unfortunately, due to an oversight, we missed the chance to share those numbers in time for this report’s release. We are working to correct that by submitting data to Green 2.0 as soon as possible and look forward to participating in future reports.”
In a statement, Kristin Williams, a communications manager for Root Capital, said the nonprofit has more than 100 staff members in the United States, Costa Rica, Kenya, Mexico, Nicaragua, Peru, and Senegal.”As such, most of our team members are from the diverse countries where we work, representing many different communities. That diversity is at the heart of our ability to transform lives in rural areas. While we were not previously aware of the Green 2.0 initiative or asked to provide demographic data for this report, we’re proud to showcase our entire global staff, including senior leadership, on our website. We invite everyone to come meet our team and see for themselves.”
Lack of Transparency
Robert Raben, president and founder of the Raben Group and Green 2.0, said diversity at some organizations is “pretty lousy.” He also said it can set a bad example when leaders don’t report their data.
“This is a solvable problem. In the 21st century, we don’t have a supply problem, we have a demand problem,” Raben said. “There’s a tremendous pool of talented people of color who can handle leadership at the board level and the C-suite.”
He added, “It is inconceivable to me that some key environmental organizations refuse to talk about the subject, and by talk about the subject in this case I mean report their data.” He later said Pew Charitable Trusts and Oceana are among “the incredibly bad actors.”
Tome said it will be necessary to apply public pressure on organizations that have skirted efforts to avoid self-reporting on their diversity numbers.
“It is clear that some have been slow to understand why it’s important to highlight the diversitywithin their organizations,” she said. “Some are continuing to refuse outright.”
Foundations See Declines
Full-time staffs at foundations are still largely female, at 69 percent. Women senior staff account for 60 percent at foundations, although boards have slightly more men. As for race, the report showed big decreases in diversity among full-time staff, senior staff, and board members from 2017.
One foundation, the John D. and Catherine T. MacArthur Foundation, disputes the findings. A spokesman said the organi-zation publishes staff and board diversity annually on its website — which Green 2.0 did not cite — “in the interests of transparency and to hold ourselves accountable.” Further, the spokesman said, “For us, diversity includes but is not limited to age, disability status, economic circumstance, ethnicity, gender, race, religion, and sexualorientation.”
Some of the top foundations did not disclose some of their data.
“Foundations specifically exist to infuse resources, to cultivate innovation and action where government and perhaps culture even lag,” Tome said. Those that do not take equity and inclusion seriously shouldn’t be trying to drive innovation among grantees,” she added.
Some foundations have taken steps to do better, Tome noted.
In the conference call, Nellis Kennedy-Howard, director of equity, inclusion, and justice for the Sierra Club, spoke about her experience identifying as a queer woman of color and said she has seen Sierra Club’s slight improvements over time.
The Sierra Club increased its racial diversity among senior staff. But the data shows there is room for improvement among full-time staff. Also, the racial diversity on boards decreased from 33 percent to 14 percent.
“We have a majority female-identified executive team and a majority female-identified board executive committee. That being said, people of color like myself remain minorities on both of these bodies,” Kennedy-Howard said. “The reality is that we do not reflect the demographics of the communities where we live, work, and love.”
One way to increase diversity, the nonprofit has said, is to alter its marketing practices. The Sierra Club recently launched a new effort to attract more Latinos to programs by featuring them in its marketing material. In the past, stock photos on its website were considered inauthentic and lacked the personal touch needed to persuade Latinos that they were welcome.
In another case, the William and Flora Hewlett Foundation has increased racial diversity among boards and staff. (The Hewlett Foundation is a financial supporter of the Chronicle ofPhilanthropy.)
Larry Kramer, president of the foundation, said in the conference call that it is important for a foundation to collect information on itself to understand its implicit biases against grantees and workers.
“We’re never going to build the kind of political coalition that we need to really move the country forward unless we have fully engaged all of the audiences of color,” Kramer said.
Notes: This article has been updated to clarify that Root Capital says it did not receive a request for data for the report. Green 2.0 stands by its statement that it made the request but received no data.
It has also been updated to include a comment from the John D. and Catherine T. MacArthurFoundation. Although it was not named in the original piece, the foundation disputes the data in the Green 2.0 report.
Are We Eating Our Seed Corn?
The M&MS (minorities, millennials and students) coalition is a natural alliance for The Two Hundred since they share the same concerns. Communities of color, particularly in California, are disproportionately young and eventually will become the backbone of our economy. We must take actions now to ensure that they are able to become homeowners since that is the tried and true avenue to build long term wealth. This is not just a morally good thing to do but practical. We need our future workers to be successful with enough wealth to support the multitude of retiring and aging baby boomers. Our current housing crisis is a result of short-term thinking. Are we going to keep repeating the same mistakes over and over again to our collective detriment? (see below)
Millennials Are About to Get Locked Out of the Real Estate Market – Again
By Shawn Tully – January 12, 2019
Over the past couple of years, rising pay and low mortgage rates finally converged to make the dream of home ownership a reality for America’s millennials, many of whom had long been locked out of the housing market. But now, the door is on the verge of slamming on the under-35 crowd, leaving young families outside looking through the picture window—again.
That’s the scenario sketched by Mark Boud, chief economist for Metrostudy, a unit of real estate data and marketing company Hanley Wood. Metrostudy surveys housing trends in hundreds of towns and cities from the ground up, by visiting subdivisions to record how many homes are being built, going to contract, and sold—the latter evidenced by curtains on the windows and tricycles in the driveway.
During the housing-bubble frenzy from 2004 to 2006, as Boud recently recounted to Fortune, easy credit sent sales soaring, inflating prices and leading to a gigantic oversupply of new homes. In 2008 and 2009, the banks and other lenders, overwhelmed with defaults and foreclosures, throttled back so hard on credit that demand collapsed, and housing prices went into a tailspin.
The upshot: From 2009 to 2017, the housing market severely overcorrected, with prices steadily rising once again. “Housing went through a long period of undervalution,” says Boud. It wasn’t millennials, he points out, who benefited from the cheap prices and rescued the market. “The millennials had loads of college debt, and many had bad credit in general, often because their previous loans had been foreclosed on. And they were too young to be stable in their jobs,” he says. The upshot: The youthful cohort couldn’t get mortgages from lenders, who suddenly were rejecting all but class-A credits.
Instead, it was the affluent and investors that profited from low prices and soaked up the excess inventory. “The rich were the buyers without the credit problems,” says Boud. “And institutional investors bought houses cheap and rented them out.” In fact, he says, many of these new owners’ tenants were the very millennials shunned by the banks. In terms of home ownership, millennials became the lost generation.
A lost generation comes home
By 2015, the wealthy and the investors had absorbed the excess. America began generating far more new jobs than new homes, as construction was severely constrained by a shortage of ready-to-go lots. Starting around 2017, the millennials got back in the game, in a big way. The job rolls expanded, and wages jumped. The mortgage market reopened for the more well-to-do 30-somethings. So even though credit overall remained tight, sales to millennials rose, from 22% of new homes sales around 2011 to 50% in 2018—an extraordinary figure, given that millennials account for just one-third of the U.S. population.
Now says Boud, the market is once again turning against what’s now the biggest, and still hungriest, class of buyers. “Prices have risen a lot, and they’re still rising because we’re still way under-building compared to household formation,” he says. “At the same time, rates on home loans are rising, making it much harder for millennials to qualify.” The affordability problem will intensify because of the types of homes the builders are erecting. The only way to make money on expensive land is to build big houses, so “the average home size is 3,000 square feet, which is way too big most first-time buyers,” Boud says. “Ten years ago in Las Vegas, that sized house cost maybe $225,000 [thanks to the housing plunge]. Now it costs $350,000, way out of the reach of young buyers.”
Hence, Boud sees sales shifting back to the affluent who’ve held high-paying jobs for decades, can qualify for more expensive mortgages, and want the big houses. Eventually, he says, the surge in prices will sow the seeds of a correction. But supply is so tight that the drop should be mild––unless America suffers a recession. “In that case, prices would be lower, but employment and incomes would also drop. So millennials could remain locked out.” Another problem: Millennials who secured a 3.5% fixed rate in 2016 or 2017 will stay in their existing home to keep the low monthly payment rather than trying to move up the housing ladder.
The solution, says Boud, is for builders to lower costs by shifting to factory-built homes they can offer at far lower prices. Homebuilders should also work with the banks to offer interest-only mortgages that would hold down monthly payments in the early years, and allow far more millennials to qualify for credit. He also notes that developers need to take steps to lower home owner association dues that can add $200 to a family’s monthly payments. More 2,000-square-foot houses would also be welcome, but for that to happen, municipalities would need to loosen zoning laws to allow far more lots to be subdivided, far more quickly. Today, towns are trending the wrong way, towards even tighter restrictions.
The outlook for sales is strong, Boud says, because so many Gen-Xers and baby boomers are renting, and more of them want to buy homes. Those folks can both afford to buy, and qualify for mortgages on $450,000-to-$700,000 homes. As for millennials, the generation that housing lost, then briefly found is about to be lost once more.