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April 2022, Volume 28, Number 2

California: People, Water, Housing

California had 39 million residents in July 2021, 10 million more than Texas with 29 million. California had two million people in 1900, 10 million in 1950, 37 million in 2000, and is projected to have 45 million people in 2050.

The state’s fastest growth decades were the 1920s, when the population rose by 60 percent, and the 1940s and 1950s, when the population jumped 50 percent each decade during and after WWII.

The 2020 census found that 39 percent of California residents were Latino; 35 percent were non-Hispanic white; 15 percent were Asian; five percent were Black; and five percent were multiracial and Native American. About 27 percent of California residents were born abroad.

Major cities in high-cost areas, including New York, Los Angeles, Chicago and San Francisco, lost residents in 2021, while smaller cities such as Austin and Boise gained residents.

Water. California had atmospheric rivers in October and December 2021 that delivered more rainfall than had fallen during the previous 12 months. Water levels in reservoirs rose, and there was talk of an end to the years-long drought. However, there was no significant precipitation in January, February, and March 2022, when the Sierra snowpack was less than 40 percent of normal levels and over 90 percent of the state was in severe drought.

Precipitation whiplash, high rainfall followed by no rain, is expected to become the new normal. The federal Central Valley Project announced zero deliveries of water in 2022, and the state water project promised five percent of normal deliveries in 2022. The federal government promised $2.2 billion in March 2022 to begin construction of the Sites Reservoir in the Sacramento Valley to store more water in wet years.

Over 80 percent of the state’s developed water is used by agriculture. Of the 20 percent used by households and industry, 80 percent is used outdoors, often to water lawns.

The proposed Guenoc Valley project near Middletown in Lake County could add 4,000 residents to an area that burned three times in the past seven years, raising questions about building new homes in areas prone to wildfires. The 1970 California Environmental Quality Act was amended to include wildfire as a factor that must be considered during environmental reviews, marking a move from making individual homes more fire-proof to blocking development in fire-prone areas.

The CEQA is often used to block new housing development. Groups suing to block new housing developments argue that, with more wildfires due to climate change, residents could be unable to evacuate safely. Developers counter with plans for more fire stations, underground utilities and vegetation management.

The CEQA was in the spotlight in 2022 when Save Berkeley’s Neighborhoods sued to block the construction of more dorms because UC-Berkeley expanded enrollment without considering the environmental impacts of more students. UC-Berkeley said it would reduce the size of the incoming 2022-23 class to maintain total enrollment at 42,300, but a quickly enacted state law overrode the decision that used the CEQA to block more students. UC-Berkeley typically admits about 21,000 first-year and transfer students, and 9,500 enroll.

Filing suits that allege developers did not consider all of a project’s environmental impacts can raise costs enough to prompt developers to abandon projects.

Housing. California has 50,000 chronically homeless people, half in Los Angeles. Efforts to end homelessness have stumbled, with cities using approaches that range from destroying tent encampments to enticing homeless people to move into housing. California began to close state mental hospitals in the 1960s, but never fully funded the community mental health facilities that were to replace them.

The median price of a US home rose 19 percent in 2021, raising questions about whether home prices can continue to increase faster than incomes. Housing experts say that a combination of more remote work, investors buying homes based on algorithms rather than in-person inspections, and migration from expensive to cheaper housing markets can keep home prices rising faster than incomes for years.

Some expect more housing supply and rising interest rates to slow the increase in home prices, but the home-price increase of 2021 is unprecedented and may continue longer than expected if aging baby boomers remain in their homes rather than downsizing into smaller condos or nursing homes. Less than a quarter of California residents have incomes that are sufficient to buy the median single-family home.

California aims for 100 percent clean energy by 2045. Solar panels on homes are a key element in the strategy to achieve this goal, and they provided about 10 percent of the state’s electricity in 2021. Unions and utilities are pushing to reduce current subsidies for residential roof top solar panels that are installed by non-union workers.

Budget. Governor Gavin Newsom in January 2022 unveiled a $286 billion budget for 2022-23 aimed at accelerating state efforts to deal with climate change, covid, homelessness, the cost of living and crime. The top one percent of California taxpayers pay over 50 percent of the state’s income tax, and their taxable incomes are largely tied to the performance of the US stock market. California has a budget surplus due to stock market gains that generate income tax revenues.

Democrats, who have supermajorities in the Legislature, want to introduce a single-payer health insurance system called CalCare to be financed by additional taxes on businesses and high earners. AB 1400, which would have created CalCare at a cost of over $500 billion a year to be financed by new taxes, died in the Legislature. If approved, CalCare would oversee and fund about 15 percent of the state’s economy.

About 10 percent of California’s 40 million residents lack health insurance, including 2.2 million unauthorized foreigners. Poor residents under 26 are eligible for Medi-Cal benefits, and those 50 and over become eligible in May 2022. Governor Gavin Newsom proposed that the state’s remaining 700,000 poor undocumented foreigners become eligible for Medi-Cal at a cost of $2.2 billion a year to the state in January 2024.

California relied on an independent commission to draw new boundaries to elect federal and state politicians after the state lost one congressional seat as a result of slow population growth between 2010 and 2020. In a third of the new congressional-level districts, Latinos are a majority of residents.

California’s gas prices averaged $1.20 more per gallon in 2021 than the US average due to higher gas taxes and regulations aimed at limiting greenhouse gas emissions that require a unique blend of gasoline.

California’s Film Commission provides $330 million a year in subsidies to firms that make movies and TV programs in the state, and doubled the subsidies in 2022 and 2023 to $660 million a year. California began to subsidize film production in the state in 2009, and expanded subsidies in 2014 so that up to 25 percent of in-state spending of up to $100 million in crew salaries and other costs can be recouped from the CFC. Since 2009, the state has paid $2.5 billion to subsidize almost 600 film productions.

San Francisco voters on February 15, 2022 recalled three school board members who were instrumental in keeping schools closed to in-person instruction during covid, ended merit-based admissions to Lowell High School, and tried to rename 44 city schools that carried the names of US leaders such as Lincoln and Washington.

San Francisco Mayor London Breed supported the recall and will appoint new school board members. Breed favors pragmatism over progressives who want to transform society, including supporting a recall of District Attorney Chesa Boudin in a June 2022 election. San Francisco has more dogs, over 120,000, than children under 18, 115,000, a reflection of high housing prices that encourage families to move to lower cost areas.

Oakland has 80 public schools for 35,000 students, while districts with similar numbers of students have about 40 schools. The school district voted to close 11 schools to keep its $700 million a year budget in balance, drawing protests from parents and students.

The California High-Speed Rail Authority in February 2022 estimated the cost of the 500-mile bullet train between Northern and Southern California would be $105 billion; the original 2008 estimated cost was $40 billion. The first 120-mile stretch in the San Joaquin Valley is expected to open in 2022.

California in 2020 enacted a law that created a nine-member task force to develop reparation proposals by 2023 for African Americans, especially descendants of those enslaved. In March 2022, the task force recommended 5-4 that payments be limited to African-American descendants of enslaved people and descendants of freed Black people living in the United States before the 19th century. The dissenters countered that all of the state’s 2.6 million Black residents have suffered from the consequences of slavery.

California is home to 26 of the 100 richest people in the US, and 189 of the 724 US billionaires on the Forbes list for 2021 (New York is second with 126 billionaires). Forbes says that 44 percent of the California’s billionaires made their money in tech, 23 percent in finance, and seven percent in real estate. The three richest Californians are Mark Zuckerberg of Facebook and Larry Page and Sergey Brin of Google.

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