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April 2021, Volume 27, Number 2

California: Fresno, Water

Fresno county had over a million residents in 2021, including almost 550,000 in the city of Fresno. Median wages in Fresno county were $17 an hour in 2019, making the state?s $12 minimum wage 70 percent of the Fresno median wage. Some Fresno employers complain that, as the state?s minimum wage rises to $15 in 2022, they will have to raise the wages of all of their employees to maintain their wage hierarchy.

Among large US cities, Fresno has the most people per household, followed by Bakersfield and Modesto. Fresno had an average 3.6 persons per household in 2019, and 36 percent of households were families with children under 18. Many Fresno households pay over half of their income in rent, which averaged $1,022 in 2019.

Rents jumped to an average $1,000 for one-bedroom apartments and $1,200 for two bedrooms in spring 2021 as some workers in coastal cities who could work remotely moved to the San Joaquin Valley to take advantage of lower rents.

Fresno County has 98 mobile home parks in non-incorporated areas, and is considering an ordinance to regulate rents after residents of the Shady Lakes Mobile Home Park protested an increase in their monthly fees to $610 a month in mid-2021. Most Shady Lakes residents are farm workers from San Miguel Cuevas in Oaxaca, and most own mobile homes that are difficult to move. Many San Joaquin Valley mobile home parks are being bought by outside investors who raise monthly fees.

California?s Housing Accountability Act of 2017 requires cities to zone land for affordable housing. The state makes Housing Needs Allocations every eight years, allocating a total number of housing units and a number of affordable housing units that are needed over the next eight years based on population, employment and household growth.

Counties and cities respond by zoning land for affordable housing, which they cannot force developers to build. Developers say affordable housing requires higher-density developments near transit hubs, the type of housing that often draws opposition from local residents.

Water. California is facing a drought in 2021, as the winter months of December, January and February brought few of the storms called atmospheric rivers that carry huge amounts of water from the ocean to inland areas. In April 2021, the water content of the Sierra snowpack was 60 percent of normal and the lakes behind the largest dams, Shasta and Oroville, were half full. The Sierra snowpack normally provides a third of California?s water.

Farming uses 80 percent of California?s developed water, that is, water stored behind dams that can be used to irrigate in summer. Many lower-value annual crops such as cotton and grains may not be planted in 2021. A drought year could mean another season of wildfires; in 2020, over 9,000 wildfires burned four million of the state?s 100 million acres.

With federal and state water systems promising a fraction of 2020?s water deliveries, San Joaquin Valley farmers are likely to fallow land that normally is planted to field crops such as alfalfa, grain and cotton in order to preserve limited ground water supplies for almonds and other tree crops.

Work. The Governor?s Future of Work Commission released a report in March 2021 that urged the state to develop a ?new social compact for work and workers? by 2030. The report found that fewer than half of California workers have quality jobs, defined as those offering a living wage, stable and predictable pay, and work-related benefits. A third of the state?s workers earned less than $15 per hour in 2020, when the state?s minimum wage was $13.

The report urged the state to guarantee jobs for all those who want to work using federal funds, ensure that more workers obtain work-related benefits such as health insurance and pensions, and help workers to form unions.

The fight over whether gig workers are employees or independent contractors continues. The California Supreme Court in its 2018 Dynamex decision held that gig workers were employees of a business unless they satisfied an ABC test of being: (A) free from the control and direction of the business; (B) performing work that is outside the usual scope of the business; and (C) engaged in similar work for other businesses.

The California Legislature enacted AB 5 in 2019 to implement the Dynamex decision, effectively converting most gig workers into employees. Uber, Lyft and other tech platforms put Prop 22 on the ballot to make gig drivers independent contractors, and voters approved Prop 22 in November 2020. In January 2021, the California Supreme Court decided that Dynamex applied retroactively, so that workers classified as independent contractors could sue for back wages. An effort to have Prop 22 declared unconstitutional failed.

Budget. Governor Gavin Newsom proposed a $227 billion state budget for 2021-22, reflecting an upsurge in state income taxes from billionaires. California has a quarter of US billionaires, many of whom benefitted from the rising stock market in 2020. Two-thirds of California?s revenue is from the state?s personal income tax.

Newsom promised a million more housing units a year during his tenure, and made tackling homelessness a priority before Covid took precedence. The ability to work remotely sent many Californians to states without income taxes, including Texas and Nevada. Meanwhile, California struggles to enact state laws that aim to overcome not-in-my-backyard (NIMBY) attitudes embodied in stringent zoning regulations that limit the construction of affordable housing.

Some say that liberal Democrats support higher taxes to help the poor and homeless, but oppose affordable housing in their neighborhoods. Many areas zoned for single family homes oppose changes that would allow apartment buildings.

Newsom became the target of a recall effort in winter 2021 amidst debate over state orders to open and close restaurants and other businesses and shifting priorities of who gets priority for Covid vaccination. Recall supporters obtained 1.5 million signatures on a petition to recall Newsom, and hope to repeat the 2003 recall election in which Republican Arnold Schwarzenegger replaced Democrat Gray Davis.

California in March 2021 reserved 40 percent of Covid vaccines for residents of 400 low-income zip codes. In some counties, employers arranged to have farm workers vaccinated during breaks from their work.

Schools. President Biden and Governor Newsom want children back in school for in-person instruction, but teachers? unions resisted, arguing that the extra $450 per student promised by the state for frequent testing is not enough. AB 10 would require schools to open within two weeks of moving out being placed in the red tier signifying fewer Covid cases.

San Francisco?s Board of Education in January 2021 voted 6-1 to rename 44 schools that honor people ?who engaged in the subjugation and enslavement of human beings,? including Washington, Jefferson and Lincoln. There was an immediate backlash. SF?s Black mayor questioned why renaming schools was more important than reopening schools for in-person instruction.

Home prices are climbing in California and the US, as the Covid pandemic prompted many of those working remotely to seek more space. Many new houses are found via virtual tours online.

The hot housing market refocused attention on real estate brokerage fees, which are often five to six percent of the sale price in the US, compared to less than two percent in the UK and other industrial countries. This means that $30,000 fees in the US on a $500,000 home would be $10,000 in the UK. Several US realty firms aim to reduce brokerage fees by rebating some of the five to six percent commission. Such rebates are unlawful in some states.

The National Association of Realtors controls most of the 600-plus multiple listing services, and has been sued for steering buyers and sellers away from homes that offer realtors reduced commissions.

A March 2021 Gallup poll found that Republicans underestimate the risks of Covid and Democrats overestimate Covid risks. Many Republicans resist wearing masks despite their ability to slow the spread of the virus, while many Democrats support school closures despite few Covid risks for children. Those conducting the poll concluded that conservatives are more skeptical of government intervention to solve social problems, while liberals want government intervention to change behavior.

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