Good morning!

Chaos continues to ensue at the federal level while in California things are beginning to settle into the new normal. The markets are showing signs of uncertainty even with the delay in tariffs but locally one of the big questions is who will lead Oakland? As the largest city in Alameda County, policymakers and business leaders understand that Oakland’s economic recovery impacts the region. San Francisco is going all in to revitalize its retail and tourism sectors.

Here are some interesting articles and summaries to help catch up on last week's news, all of which directly impact our local community.

What’s Inside?

It’s not an understatement to say that the Bay Area is watching the Oakland Mayoral race. City budgets across the regions are seeing major shortfalls as emergency COVID money runs out and downtowns remain shadows of their pre-pandemic heights. This past week the Alameda County Democratic Central Committee, the official governing body of local Democrats, voted to endorse former Congress Member Barbara Lee. Meeting the required threshold of 60% across the entire county, Barbara Lee will go into the April Special Election with one of the most prized endorsements. The endorsement comes with funding and voter contact support from local Democrats which will bolster the support from local unions that have unified behind the former Congress Member.

San Francisco Mayor Lurie has just announced the creation of a hospitality zone police task force to cover the Union Square, Convention Center, San Francisco Centre, and Yerba Buena Gardens areas downtown. The goal is to attract tourists and shoppers to the area. At the San Francisco Mayor’s Forecast earlier this month, it was noted that the hospitality industry remains the slowest to recover. The SF Hotel Vacancy Rate notes that “In 2023, 23.1 million people visited the City, making up $9.3 billion in business revenues.” In fiscal year (FY) 2023-24, the SF Annual Comprehensive Financial Report states the hospitality sector brought the city and county $283 million. That’s no chump change.

Meanwhile, some people are organizing to designate the neighborhood as a historic district in the North Beach neighborhood. Housing experts say this is an attempt to prevent them from building their fair share of housing. Remember that San Francisco is required to build 82,000 new housing units by January 31, 2031. Looking at the data from 2023, it seems unlikely San Francisco will meet its goal with the available land let alone by removing over 600 parcels in a high-demand area.

More changes to federal funding are coming. The most eye-popping came from the US Department of Transportation. A recent memo states the DOT “shall prioritize projects and goals that… give preference to communities with marriage and birth rates higher than the national average.” The Urban Institute did a breakdown of how that would impact funding and the results shouldn’t be a surprise. Affluent white communities would win and the investments would likely go to highways, major arterials (long roads with wide lanes with speeds up to 50 - 70 MPH), and sprawling developments. This is bad. These are the things that help create traffic congestion rather than solving it. This has led to more people living more than 90 minutes away from work.

There’s no relief in sight from the new administration’s attack on career staff. Just last week the Senate confirmed Russel Vought to lead the Office of Management and Budget. Vought was one of the key architects of Project 2025 and appears to be leading the efforts to consolidate the president’s power through the control of Congress-appropriated funds. The use of grants, formula funding, and other funding mechanisms will be leveraged to meet Project 2025’s goals. I would summarize the goals of Project 2025 as helping rich white people get richer and more powerful while making people of color second-class citizens. 

The Center for American Progress report on Project 2025 should have been required reading for voters before the election. Understandably, most people probably haven’t read it. I urge you to take a look to understand what we will go through in the next four years.

Right before the end of the year, Governor Newsom called a special session of the legislature to legally prepare for a second Trump term. The legislature put together a $50 million package for the upcoming legal battles but it was postponed to focus on the fires that broke out in Los Angeles County. Per Politico’s reporting, “The legislation includes $25 million for court battles with the federal government and $25 million for nonprofits providing legal aid to immigrants facing deportation, eviction and other threats from federal actions.”

With battles over funding between California and the Federal Government commencing, the demands across the state for money will become challenging to meet. The LA fires destroyed homes and a lot of infrastructure like school facilities. One source of funding that is being considered to help them rebuild is Prop. 2 which just passed in November 2024. The challenge is that $10 billion across all of the state’s school districts and rebuilding from the fires will deplete the funding quickly. CalMatters reported the experience of Paradise after it’s fires and seven years later they are still struggling. “The district [Paradise Unified] has so far spent $155 million to rebuild campuses, but needs $150 million more to fix everything that needs fixing, Taylor said. The district is hoping to break ground on Paradise Elementary School, one of the schools that was completely destroyed.”

Prop 2 is a general obligation bond that requires voter approval. Pasadena Unified School District was already facing challenging budget forecasts which caused its board to implement a Fiscal Stabilization Program last year. One way to address the rebuilding problem and the funding issue is to consider using a combination of Prop 2 funds and revenue bonds. Revenue bonds can be issued without voter approval but they must be backed by the revenue produced by the constructed facility. However, schools don’t generally produce revenue so how would this work? The school district can use some of its school sites to build revenue-generating facilities like market-rate homes, commercial, retail, etc. With its own construction funds, the school district would be in a better position to rebuild faster and know that it would generate its own funding for future needs rather than competing for more state bond money and average daily attendance formula funds per student. These funds will likely shrink for the short term as families that have been displaced eventually return.

Thank you for reading! The world is full of constantly evolving information, so I hope I was able to provide you with something useful. Please subscribe, share with one person, and share your thoughts in the comment section.

Until next time!

With regards,

Victor Flores
The Ramble