Part of a common site for Neighborhood Councils and Homeowners groups of the San Fernando Valley and information concerning the Valley issues Information about the November 5, 2002 election
A joint project of Los Angeles Alliance for a New Economy and UCLA Center for Labor Research and Education
Full report in original format
Table of Contents
Acknowledgements
Executive Summary
Section One Introduction
Section Two: A Closer Look at Poverty: Income and housing trends
in Los Angeles City, and in the Valley and Hollywood secession areas;
and the need to take a regional approach to fighting poverty.
The Shrinking Middle Class
LA Housing Crisis
Fighting Poverty: A Regional Approach
Section Three: Charter vs. General Law Cities: The difference in
powers between charter and general law cities, and the difficulty in
becoming a city with "home rule" authority.
Empowering Local Government
Limitations on the Powers of General Law Cities
Difficulties in Becoming a Charter City
Section Four: Lost in Transition? (Part I):
Section Five: Lost in Transition? (Part II):
Section Six: A Good Job Is Hard to Find:
LEFT BEHIND:
The Impact of Secession on Low-Income Residents and Workers in the San Fernando Valley and Hollywood
by
Karen Klabin Lead Author, LAANE
Julian Gross Legal Consultant
Mary Cummins Research Associate, UCLA Center for Labor Research and Education
October 2002 To index
This report would not have been possible without the help of many people.
The research was supported with a grant from Kaiser Permanente. We would like to thank Kaiser Permanente’s Leland Wong for allowing LAANE, in collaboration with the UCLA Center for Labor Research and Education, to study the critical issue of secession’s impact on low-income residents and workers.
We are grateful to City Administrative Officer William Fujioka and staff members Ellen Sandt, David Hirano, Mark Granado, and Sarai Bhaga, who provided us with extensive information on city programs, ordinances, and budget and personnel matters. Most valuably, the CAO staff devoted a considerable amount of time to meeting with us, answering our questions, and digging up city documents and information from all of the city departments. Senior Counsel Fred Merkin and Deputy City Attorney Rene Stadel, from the city attorney’s office, supplied us with helpful information about city ordinances and an analysis of the difference between charter and general law cities. We would like to thank Los Angeles City Mayor James K. Hahn and deputy mayors Matt Middlebrook and Felipe Fuentes for facilitating our research.
Thank you Julie Butcher and Teresa Sanchez from Service Employees International Union local 347 for helping to elucidate the complex issues surrounding secession’s effect on city personnel. Amadis Velez and Steven Ochoa from the Mexican American Legal Defense and Educational Fund put in long hours assembling census data and maps that documented poverty in Los Angeles and the two proposed secession areas, and also shared their research into secession. Beth Steckler, from Livable Places, and Larry Gross, from Coalition for Economic Survival, provided important input on housing issues. Attorney Michael Lawson, of Thomson Lawson LLP, provided his thoughts about municipal legal authority.
Thank you Jim Malinda and Clara Moreno for sharing your stories.
From the LAANE staff, we would like to thank Rosalba Mata, who helped interview workers for the report. Paula Barragan-Ortega translated the executive summary into Spanish on short notice. Madeline Janis-Aparicio and Jessica Goodheart provided guidance throughout the research and writing of the report.
The authors take full responsibility for the contents of this report and are solely responsible for any errors or omissions. To index
Next month, voters in Los Angeles will decide whether Hollywood and the San Fernando Valley should secede from the city. If the areas win voter approval to break off from Los Angeles, the result will be a fundamental change in municipal resources, in needed programs that serve residents throughout the city, and in laws that help ensure quality of life for workers and residents.
Previous analysis and media coverage of secession have often focused on what effect it may have on the remaining city. This study looks specifically at what could happen to the low-income residents of the Valley and Hollywood, and the public employees who currently serve those areas. It’s another piece of the argument why Los Angeles should remain one city. To index
Up through the 1960s, Los Angeles was the most white and middle class of the nation’s largest cities. {1} The city has undergone radical change in the past 30 years. As is frequently noted, Los Angeles is now the most diverse city in the world. It has also become a city of economic extremes, peopled by a larger and poorer low-income populace, a diminished middle-class, and the fantastically wealthy. As ethnic diversity has spanned all parts of the city {2}, so has poverty, pulling down working families, recent immigrants and long-time residents, and the elderly and young in neighborhoods throughout Los Angeles.
This section documents the increasing poverty and need in the city as a whole, and in the Hollywood and Valley secession areas. In response to the regional trends outlined below, the City of Los Angeles has instituted a number of programs over the years, ranging from the Housing Trust Fund to the Los Angeles Living Wage Ordinance. Those policies and programs—and the impact secession may have on them—will be detailed in Sections Four and Five. To index
Through the mid-century, Los Angeles afforded economic opportunities for vast numbers of migrants coming from the mid-West and South. It was a period of infrastructure development, quality public education, well-paying manufacturing jobs with benefits, subdivisions of one story homes and detached two-car garages. In 1940, the city had 1.5 million residents. By 1970, the population had nearly doubled, reaching 2.8 million people.
During the latter part of the century, the city underwent a dramatic restructuring of its economy, the result of globalization and sharp cutbacks in aerospace-defense manufacturing— for decades the backbone of the city’s economy. Recently released income data from U.S. Census 2000 illustrate the decline in economic opportunity responsible for the city’s shrinking middle class.
Although the 1999 median income level for the nation’s households, including those in metropolitan and central city areas, showed a continued rise, median household income in Los Angeles had dropped 9 percent during the 1990s, a reflection of the deep losses in the manufacturing sector. In 1989, the median household income in the City of Los Angeles was approximately $40,300; ten years later it had dropped to approximately $36,700 (both figures in 1999 dollars). {3} By comparison, the median household income in the U.S. in 1999 was nearly $41,000, having risen 8 percent from the 1989 median household income of close to $38,000 (in 1999 dollars). {4} Middle-income households—taking in between $25,000-$100,000 annually—comprised only 51 percent of total city households, compared to the 57 percent of middle-income households nationwide. {5}
Families on the lower end of the city’s economic ladder fared even worse during the 1990s. While poverty had been declining steadily across the nation, it continued to rise in Los Angeles. By the end of the decade, more than 800,000 L.A. City residents (22 percent of the population) lived below the federal poverty line, up from 644,000 city residents (19 percent of the population) in 1989. The city’s poverty rate was nearly double that of the U.S. poverty rate of 11.3 percent, a figure approaching a record national low set in 1973.
The myths of the Valley and Hollywood as an archetypal middle-class suburb and wealthy entertainment capital, respectively, are belied by their own poverty data. In 1999, approximately 206,000 people were living below the federal poverty level in the Valley secession area: 15.2 percent of Valley residents and 25.7 percent of impoverished residents citywide. In Hollywood, the gap between rich and poor was even more pronounced. An estimated 47,500 Hollywood residents lived below the poverty line: 25.8 percent of area residents and 5.9 percent of impoverished residents citywide, slightly higher than the area’s share of the city’s population. {6}
Although the percentage of Valley residents living in poverty is lower than its share of city residents, poverty in the Valley is worsening. During the 1990s, poverty in the Valley increased by 56 percent, nearly double the rate of poverty growth in the city as a whole. Like the rest of Los Angeles, lower-income residents in the Valley tend to live in discrete clusters, concentrated in neighborhoods such as Van Nuys, Pacoima, North Hollywood, Sun Valley, Panorama City, Valley Glen and North Hills—communities where Latino residents, in most cases, comprise the overwhelming majority, and where there are high concentrations of youth under age 18. There are also increasingly dense pockets of poverty in Reseda, Canoga Park, and Northridge. For Hollywood, poverty is found below the hills, diffused in the eastern and southern sections of the proposed secession area.
While researchers continue to assess L.A. City poverty and demographic information just released by the U.S. Census Bureau, recent studies have documented poverty in the county as a whole that elucidate problems faced by the city—particularly the rise in working poverty. Using a more expansive definition of poverty encompassing those with incomes under 200 percent of the federal poverty level (therefore, still qualified for government benefits programs), working people constitute a substantial proportion of the poor in Los Angeles. Near the end of the century, almost two-thirds of all lower-income adults and children in Los Angeles County lived in a household in which at least one member worked full-time. {7} The number of working poor in the county increased by 34.3 percent during the 1990s, grossly out of step with the less than 5 percent rise in overall employment. {8} By the end of the decade, almost 1.1 million working people had income levels low enough to still qualify them for public benefits, while 336,000 working people were considered out and out poor by federal standards. {9}
The consequences of [the city’s] housing short age are enormous. The number of rental units in Los Angeles with physical problems—such as faulty plumbing, heating and electrical systems and upkeep— increased 55% from 1995-1999, according to new data from the Census Bureau and the Department of Housing and Urban Development… In the city, more than 67,000 units, a 74% spike, had no heat and were uncomfortably cold for at least 24 hours the previous winter. More than 66,000 units had nonworking toilets, and nearly 30,000 were infested with rats. Altogether, one in six of the city’s rental units falls short of housing codes." —Tai Glenn and Jenny Hontz; Working Toilets Should Not Be a ‘Maybe’ in L.A. Housing; Los Angeles Times; May 30, 2001.
Recent housing data also provide a good indication of poverty in Los Angeles. In a May 2000 report to city government, the Housing Crisis Task Force warns, “The City of Los Angeles is in the grip of a profound crisis of housing affordability… The City's housing prices have risen so high that they not only devour the wages of working families, but threaten the City's continued economic growth.” In a state with the largest gap in the nation between wages and housing costs {10}, Los Angeles renters, making up 60 percent of the city’s households, pay a higher proportion of their incomes for rent than anywhere else in California. {11} Although the federal government sets the standard of housing affordability at 30 percent or below of a household’s income, more than half of the city’s renters spend 30 percent or higher of household income for rent. {12} A recent report examining the intersection between housing and poverty in Los Angeles County notes that housing costs take from 52-73 percent of the monthly income of low-earnings households .{13} Using the federal government’s housing affordability guidelines, a Los Angeles household would have to bring in close to $27,160 per year to afford a rental priced at the city’s median gross rent of $679 per month. According to Census 2000, more than one-third of L.A. City households, however, bring in less than $25,000 annually.
The profound need for affordable housing can be illustrated by the size of the waiting list for the city’s Section 8 program, which provides a federally funded rent subsidy for low-income individuals and families. When the city reopened its waiting list in 1998, more than 150,000 families signed up. Because the city only has about 39,000 vouchers, affordable housing advocates have calculated that it could take ten years to receive rental assistance. To index
As the U.S. government continues to release important data collected during the 2000 Census, researchers, anti-poverty advocates and policy makers will gain a better understanding of the city’s social and economic trends. Based on those findings, the city can continue to formulate public policy responses that take into account societal needs, and to answer those needs as an integrated community. The depth of poverty in Los Angeles—and its relationship to issues of housing, transportation, education and employment—dictates a broad-range, holistic approach to policy making that also honors the city’s diversity. The problems in the city’s labor and housing markets are regional and are best addressed as a large city—one with considerable lobbying power and resources. Rather than working to resolve such acute regional problems, secession creates more fragmentation and division, taking Los Angeles further from the goal of being a city of openness and opportunity. To index
As a charter city, empowered to create its own laws and operational structure, Los Angeles is best able to respond to its residents’ needs and protect their interests through innovative services and ordinances. If the San Fernando Valley and Hollywood secede, they will not retain the same government powers. A newly incorporated city reverts back to the general law authority of the state and must adhere to its sweeping restrictions. Serious legal barriers would then hinder the new cities’ ability to provide the kinds of programs and protections badly needed by lower- and fixed-income residents and workers.
Below is an explanation of the difference in the powers of the two types of cities, and the difficulty in becoming a city with "home rule" authority. To index
Thirty years after the 1849 adoption of the California Constitution, a convention was held in which a main purpose was to debate the merits of community-based government. Prior to that time, the Constitution had vested the state legislature with considerable power over local governments. "The Legislature, not local communities, had the power to incorporate cities, set up their finances and provide local services," writes Fred Silva, senior advisor at the Public Policy Institute of California and an expert on state-local fiscal relationships. {14} "This arrangement was largely the result of the framers’ concern that local governments would ignore the needs of— or even oppress—their citizens." Following widespread call for reform, the new Constitution of 1879 allowed cities with populations greater than 100,000 to frame charters for their own government, a provision which, at the time, only applied to the city of San Francisco. Today, the state gives all cities the option to function either under the state’s general laws or under home rule authority.
The state’s general laws provide a complete framework for running municipal government, prescribing the manner in which public contracts should be awarded, zoning systems function, city’ finances are organized, and so forth. Most of the smaller cities in California are general law cities.
Nearly all California cities of significant size and complexity, however, find the general law framework inadequate and limiting. Under general law, cities have no power to enact ordinances that conflict with state law, and they have little flexibility in government operations, since the general state laws are so numerous and detailed. The California Constitution allows cities to get out from under the state’s restrictions by adopting a city charter with a majority vote of the city’s electorate. {15} Cities that have adopted a charter are called charter cities or home rule cities.
A city charter sets out the governmental structure for the municipality. It dictates how power is distributed between the mayor, the city council, and the city manager; how many city council districts there will be; what commissions the city will have, and with what powers and responsibilities the commissions will operate. Once a charter is enacted, it is the controlling law for local government operations. City charters are analogous to a "constitution": all of the municipality’s ordinances as well as all aspects of its operations must conform to the charter.
Because a charter supersedes the state’s general laws regarding city operations, a charter city can ignore the legal framework by which general law cities are bound. Once a city has enacted a comprehensive charter, the only state laws that the city has to follow are those which the state legislature has passed with the explicit intent to provide a uniform rule throughout the state. (For example, the Brown Act requires all local governments, whether under charter or general law, to hold open meetings in order to ensure the public’s right to be informed and participate in decision making processes.) Accordingly, charter cities have broad authority to control virtually every aspect of their municipal affairs. General law cities, in contrast, must follow the rigid framework of the state’s statutes. Because of the flexibility that charter cities are given, charters vary widely from city to city, both in their basic governmental structure and in the areas addressed. To index
The general law framework works for small cities, which generally find that the generic statewide approach is perfectly adequate. The new Valley city, however, would be the sixth largest city in the nation, with approximately 1.5 million residents. Hollywood would have approximately 184,000 residents. Both new cities would be larger than any existing general law city in California, and the new Valley city would be more than seven times larger than the most populous general law city in the state.
The size and complexity of the new cities would undoubtedly strain the state’s general law framework. The state’s general laws would limit the new cities’ flexibility in a number of important ways. Following are only some of the areas in which charter cities have more flexibility and control—and thus more self-determination for city residents—than do general law cities:
choosing what officers and employees the city will have;
distributing power between city council, city manager, and mayor;
running elections and adopting initiatives and referenda;
structuring oversight of police departments;
imposing taxes;
regulating land use;
enforcing housing safety codes;
building and maintaining public works, streets, and utilities;
distributing city funds;
awarding public contracts;
entering into cooperative arrangements with other governmental
entities for performance of services;
recalling elected officials;
enacting special assessment districts; and
investing public money.
For example, charter cities have much greater flexibility in establishing zoning laws and regulating land uses. General law cities must follow the state Zoning Law, which sets out in great detail zoning, permitting and code enforcement processes. {16} The state zoning law makes no provision for the several aggressive code enforcement programs Los Angeles has adopted, discussed below.
Charter law cities also have much broader authority to tailor their contracting programs to serve various needs. General law cities must follow the detailed Public Contracting Code, which, among other restrictions, prevents them from establishing certain programs that assist small businesses in the contracting process . {17}
Charter cities likewise have more options for raising revenue to finance city activities. Charter cities can enact a real property transfer tax, collecting tax dollars from the purchaser of real property in an amount proportional to the property’s value. State law prohibits general law cities from enacting such a tax. {18} Charter cities can also design their own systems for forming and financing special assessment districts, while general law cities can only enact one of the types of special assessment districts described by state law, which are limited in financing and purpose. {19}
Residents of the secession areas are now served by a local government that has the broadest possible powers to advance their interests. If the secession initiatives pass, they will instead be governed by cities whose powers are limited in dozens of ways. Without the home-rule powers and the flexibility that charter cities exercise, the new city governments face significant legal obstacles in their efforts to fight poverty. To index
City charters can only be enacted or amended by a majority vote of the city’s electorate. Should Hollywood and the San Fernando Valley successfully secede, the new cities would probably eventually enact their own charters. That step would likely be years down the road, however. Charters are extremely complex, and the charters of California cities vary widely. Developing a charter appropriate for a large, diverse new city takes considerable time.
Charter enactment processes typically involve years of public and private meetings, drafting, and revising before a charter is ready to be presented to the voters. This process cannot wisely be sidestepped: rushing a charter proposal to the voters without first laying the groundwork for it diminishes the chances that it will pass at the ballot box—and increases the chance that, if it passes, it won’t work well for the city.
For those reasons, the process of drafting and presenting to the voters a document as complex and important as a new city charter typically takes several years and millions of dollars. And even then, there is no guarantee that voters will enact it. The comparatively simpler process of amending the Los Angeles City charter was lengthy, expensive, and contentious. (See text box on the L.A. City Charter Revision Process, below.)
Because of those factors, it may be many years before the new municipalities become charter cities. Only then would they have the power and flexibility Los Angeles has to protect and support its citizens. In the meantime, as described below, many established and effective poverty-fighting ordinances that Los Angeles has developed will lapse—to be reenacted much later, if at all.
The 1999 Charter Revision Process in Los Angeles
On June 8, 1999, Los Angeles voters approved a comprehensive revision to the city’s charter. The revisions were the product of three years of deliberation and negotiations. Over that period, two separate commissions—one elected, one appointed—developed proposals for charter reform. The two commissions then worked for months to develop a single, compromise proposal that was eventually presented to the voters.
The reform effort streamlined the city charter by focusing it on broad principles and the basics of the city’s governmental structure, leaving the finer details to the ordinance process. The reform effort also made several important substantive changes in the charter, which were the focus of most of the attention leading up to the vote. The new charter:
broadly expanded the power of the mayor, at the expense of the city
council;
required regular audits of city finances;
established a network of advisory neighborhood councils;
broke the city’s planning commission into smaller, more accessible
units; and
clarified the role of the Los Angeles Police Department’s Inspector
General.
Former Mayor Richard Riordan and the city council engaged in a bitter battle over the proposal as the vote neared, with the mayor strongly supporting charter revision proposals, and a majority of the city council adamantly opposed. Proponents of charter revision outspent opponents approximately six-to-one.
Despite the money spent on the revision process and its campaign, only about 20 percent of the city’s registered voters turned out for the election. Those who voted were strongly in support of charter reform, however. The reform proposal passed easily citywide and in 11 of the 15 city council districts, as well.
Implementation of the new charter provisions over the past two years has been a complex process, requiring the drafting and enactment of over 100 new ordinances, the revision of hundreds of regulations, as well as substantial restructuring of city government operations. If the secession initiatives pass, however, each of these voter-approved changes would be lost to the residents of the Valley and Hollywood, and the cities would have to begin the process again. To index