In 2017 the Federal Government created the latest entry in a long series of programs leveraging various combinations of tax cuts and economic incentives to enrich zillionaires at the expense of poor urban communities of color. The current incarnation is known as an Opportunity Zone. Opportunity Zones, like their predecessors, use powerful economic and policy tools to promote displacement, to incentivize gentrification, and to siphon money from the treasury to zillionaire coffers. The heroic economic justice activists in SAJE have done a great deal of deep and fundamental research into this program, including its likely effects on Los Angeles, published in a blockbuster report called Displacement Zones.
The Los Angeles muncipal government, which can fruitfully be conceptualized as an incredibly efficient alchemical process for transformatively combining human misery and real estate into zillionaire gold,1 is, as you’d expect, right on top of this newly created opportunity for grift. And, also as you’d expect, they’ve hidden many parts of the process from the public, not by carrying them out in the proverbial but by now outmoded smoke-filled rooms, but by obscuring them beneath multiple layers of semantically empty words, distributing pieces of the process across multiple council files, mostly supplementary, in the effectively-unsearchable-by-design Council File Management System, and so on.2
But with careful attention to the City’s various announcements and close reading of motions it’s occasionally possible to become aware of some of their moves. This is how I learned that in June 2019 Joe Buscaino introduced a couple of motions with the phrase “City Economic Development / Asset Management Framework Review” in their titles, each along with a specific address. These are Council File 12-1549-S14, which is about 500 S. Mesa Street and Council File 12-1549-S15, which is about 1845 E. 103rd Street. Both motions note that the properties are located in Opportunity Zones. The motions instruct various City departments to evaluate the properties “for economic development purposes” according to some set of criteria called “the Asset Management Framework” and then report back to Council on their findings.
The report-backs hit the Council Files a few weeks ago (500 S. Mesa Street and 1845 E. 103rd Street). Both recommend, as they seem to have been intended to do, that the City issue a request for proposals to use the properties for economic development, potentially through private development. The fact that the two reports are identically worded except for a few specific details about the properties suggests that not much care was taken in their creation. This supports the view that the outcomes of the evaluations were predetermined. The fact that the criteria for what counts as economic development are so vague supports the view that the ultimate point is to sell these valuable parcels off to some developer with a superficially plausible story about tax benefits or whatever.
And the fact that the City is going to sell the properties to private developers3 supports the view that the goal is grift rather than using City-owned resources to help residents of the City. It’s not like the City of Los Angeles itself can’t develop its properties for commercial use, which would support economic development just as much as if a private developer owned the land, or more because more of the money would go to the City. Just for instance, the City owns plenty of parking garages, many of which have retail space at street level. The City offers these for lease to commercial tenants, a proposition which must be of more value to the City than if a private developer is involved in any capacity and taking out profits.
Furthermore, the fact that Buscaino is proposing to sell off these properties for whatever nebulous uses happen to be included in the pragmatically vague category of economic development rather than using them for publicly controlled social housing is appalling. This City has no need greater than the need for housing, and decades of experience have shown that giveaways to developers aren’t solving the problem. City-owned apartments will solve it. There’s no reason for the City not to build apartments on these parcels with retail on the ground floor, rent the apartments to Section 8 recipients, and require commercial tenants to hire locally, maybe in exchange for a tax break or discounted rent. The City has the resources, the ability, and the capacity to do this and the only reason they won’t is because it won’t enrich developers.
And as you might expect, it’s not just developers who are getting enriched by these selloffs. The procedure for divvying up the proceeds is in yet another Council File, CF 12-1549-S3.4 In 2016 Council passed a measure allocating half the proceeds to a newly established Economic Development Trust Fund and the other half to the Real Property Trust Fund of the Council District where the relevant property was located. Each CD’s Real Property Trust Fund probably has some vague dedicated purpose but they move money around between these discretionary funds at will. Once it hits the CM’s funds it’s all just fungible slush money.
And what the money gets spent on is famously hard to track, but it’s clear that a not insignificant part of it goes into constituent-pleasing projects like street slurrying or extra cops in neighborhoods. And of course these contribute to the already massive advantage enjoyed by incumbent councilmembers in elections. In other words the City Council is selling off pieces of our City to private developers and spending half the proceeds on ephemeral matters that ultimately promote their political careers. This is not only not fiscally prudent but it’s not sustainable. They’re trading land, an irreplaceable resource, for votes, which are transitory and only valuable to them.
Now, you may well recall that in December 2019 the Council passed a measure requiring that all City owned property identified for housing purposes to be used only for 100% affordable housing. This is contained in Council File 19-1362. At the time I was impressed by their taking such a bold move, even to the point of tweeting about it without sarcasm. But these two motions reveal the unexpected loophole in that superficially progressive plan, which we can expect to be exploited vigorously. CF 19-1362 only applies to property identified for housing purposes. If City property is not so identified then it doesn’t have to be used for housing.
I’m not sure how a property gets identified for housing purposes in general, but the two motions involved here (500 S. Mesa and 1845 E. 103rd) state that the property may be suitable for economic development purposes, that is not for housing purposes, and ask the staff tasked with reporting back to make this determination. And the reports dutifully found that, indeed, the properties were suitable for economic development purposes, that is, not for housing. I can’t imagine that all this wasn’t intentional, that they didn’t purposely include precisely this back door in their superficially bold and progressive motion apparently but not really dedicating City owned properties to affordable housing.
On the one hand I’m a little embarrassed that I didn’t spot this at the time. I’m a little embarrassed that I was publicly optimistic about it on Twitter, that I was fooled yet again by these charlatans. But, you know, I’m not that embarrassed. There’s nothing shameful in being optimistic, in assuming elected officials aren’t a nihilistic pack of mendacious vultures.5 After all, if we can’t imagine our City being run by honest people with good intentions how are we ever going to make that happen? Did I mention that Nithya Raman is running against David Ryu in CD4 and Lorraine Lundquist against John Lee in CD12?
Image of Joe Buscaino is ©2020 MichaelKohlhaas.Org and blah blah blah et freaking cetera.
- That’s not all the City government is, but you won’t go very wrong assuming that that’s all it is.
- This is a known although not well-understood technique of the criminals who run City Hall, increasingly discussed critically in progressive political circles. For instance Nithya Raman, challenging incumbent David Ryu for CD4 in March 2020, has dedicated a whole section of her platform to transparency and related issues. Everything she says there is excellent although she doesn’t address all aspects of this fundamental problem with Los Angeles City Government.
- The reports state that some kind of public/private partnership is an option, but there’s no way it’s a serious option. Unless they’re stopped these properties will be sold into private hands.
- There are a lot of different motions, only tangentially related, in that Council File. Stuffing many motions into one File number is one of the important methods the City uses to obscure its actions in the Council File Management System. Another is distributing many strongly related motions across many different File numbers.
- I know probably vultures come in flocks or one of those nonsensical made-up collective nouns for groups of animals that certain folks are so weirdly obsessed with these days, but I want to invoke hyenas too! It’s going to be fine!