New Guide Gives State and Local Leaders Tools to Fight Corporate Monopolies

ILSR issued the first-ever comprehensive guide for state and local policymakers and activists seeking to combat the increasing power of corporate monopolies. More than ever, as states and cities contend with the devastating economic fallout from the Covid-19 epidemic, fighting concentrated corporate power is a crucial strategy to reassert a basic fairness into the American political and economic system. … Read More

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City Leaders Rally Around a Fix: Cancel the Rent

April 1 means nothing to a virus, but it has worked like a magnifying glass to concentrate the economic sting of the Covid-19 shutdown on out-of-work residents and rent-burdened families. As millions of Americans struggle to make rent — or sacrifice other necessities to do so — a growing cohort of local leaders around the country are questioning the steps taken by lawmakers to protect renters. Representatives from city councils in nine major U.S. cities, including several dealing with profound health crises due to the coronavirus pandemic, used the first day of the month to call on lawmakers to cancel rent obligations altogether.

In an intra-city press conference on April 1, officials in Boston, Los Angeles, Minneapolis, New Orleans, New York City, Philadelphia, San Francisco, Seattle, and St. Paul, Minnesota, said that Congress and state governors need to cancel rent payments now, echoing the urgent demands of frustrated tenants and activists in those cities and beyond. Apartment residents owe roughly $22 billion in rent, according to CoStar, but nobody knows how much renters can actually afford to pay right now.

“I have never heard from so many people scared, anxious, and in distress about their families and their future,” said Los Angeles City Council member Mike Bonin, adding that with the April rent due, “that [anxiety] is magnified today.”

The city councilors highlighted the new crisis dynamics brought into stark relief by the rent due date, the first to hit since stay-at-home orders devastated local economies. Specifically, the city council members are asking statehouse leaders to use emergency powers to cancel rent obligations and impose a moratorium on mortgage payments. States such as New York and Pennsylvania are already considering these laws. The coalition of council members — assembled by San Francisco Supervisors Hillary Ronen and Matt Haney — also said that Congress has to provide more direct support for out-of-work renters by declaring a national rent jubilee, starting now and extending for the foreseeable future. That, they insist, is only way for millions of families to avoid lasting financial damage.

The alternatives are unthinkable, says Minneapolis City Council member Jeremiah Ellison, notwithstanding the local eviction moratoriums now in place. Many Minneapolis families won’t be able to cover the next rent check, whenever it’s due. “Instead of two to three weeks out of work, [by May 1] we’re going to be at that point almost two months into this thing,” Ellison says. “Any sort of savings that out-of-work people have today is going to be extremely depleted when we get to next month and the month after that.”

Current renter protections vary from region to region, and even orders that seem sweeping can leave holes when not combined with long-term assistance. On March 27, for example, California Governor Gavin Newsom issued an executive order that effectively limited the number of evictions that can be completed for the next 60 days, in an attempt to stop renters from being put out on the streets due to non-payment of rent during the state’s shelter-in-place. But housing advocates and state legislators on the April 1 press call insisted that California’s eviction measure falls short.

“Right now, unfortunately, millions of Californians have effectively no protection from eviction,” said State Senator Scott Wiener. “A renter can be evicted on paper during the emergency, and when it ends the renter can be physically ejected from their apartment.”

Tenants can still receive three-day eviction notices. If they don’t pay their rent or respond to the notice during those three days — and even if they do send landlords proof that they have coronavirus-related income loss — they can still have eviction lawsuits filed against them in court. Most pressingly, tenants will all be on the hook for back rent and eligible for eviction as soon as the 60-day period is up, sparking fears of mass expulsions in June.

“Once they serve that three-day notice and it expires, absent some other defense, the landlord has a cause of action to evict you,” Brian Augusta, director of the Rural Housing Project for California’s Rural Legal Assistance Foundation, told CityLab. “It’s just a matter of when.”

Even on-paper evictions that don’t result in tenants being kicked out of their rental can have damaging long-term effects, said Sarah Steinheimer, who works with Legal Services of Northern California, a nonprofit law firm. An eviction filing can ding a renter’s credit score or lead to future discrimination by landlords, even if the detainer is dismissed.

Because of a growing patchwork of protections at the federal, state and local level, she says, some renters believe they have rights that they do not in fact have. “The vast majority of tenants do not have attorneys in unlawful detainers,” she said. “It’s already very confusing and difficult for tenants on their own without an attorney to navigate unlawful detainee and court process. It’s even more confusing today.”

California State Assembly member Phil Ting is working with Wiener to introduce state legislation for a moratorium on non-payment evictions that would also create a structure for renters to gradually pay back their bills, potentially at a diminished rate.

The best solution, according to Augusta, would be to issue a statewide blanket ban on eviction filings, stalling new eviction processes entirely. But that method still kicks the can down the road: “At some point all of this will be lifted and we’ll go back to normal and then this question arises,” he said. “What do we do about the unpaid rent?”

During Wednesday’s all-city pitch for a national rent holiday, council member after council member spoke about the enormity of the challenge their residents are already facing. Brad Lander, a New York City Council member, said that at one food pantry line in the Brooklyn district he represents, eight out of 10 people in the queue were turning to food aid for the first time in their lives. New Orleans City Council member Kristin Gisleson Palmer talked about the double-whammy of the city’s deeply entrenched poverty and the evaporation of essential tourism dollars. Rental assistance will be key to ensuring the city’s survival, and for as long as the crisis lasts. “It’s not going to continue for just the next 60 days.,” said Palmer, whose district includes the racially and economically diverse French Quarter, Marigny, Bywater, and Treme neighborhoods.

Helen Gym, a Philadelphia City Council member, said that her city expects to reach a crisis point with Covid-19 infections within the next week or two. Other cities face the same dire curve. Leaders need to deliver a solution to the housing crisis before their attention is subsumed by the health crisis. “It’s partly why it’s so crucially important to talk about housing now,” Gym says. “I deeply, deeply worry that the only thing we’re going to be focused on for the next several weeks is keeping people alive.”

As a policy solution, a rent holiday raises the prospect of broad economic chaos. If landlords are still required to pay their mortgages eventually, while renters aren’t paying their rents at all, landlords are going to fail or go out of business — which doesn’t help their tenants much. Forgiving mortgage payments just shifts the burden up the financial ladder onto the bondholders who invest in securitized mortgages. This might look like two birds with one stone for people eager to decommodify housing — to decouple its role in investment from its function as shelter. The problem is, many mortgage-bond investors are insurance companies and pension funds. Distress in these markets eventually rebounds to real people.

Yet chaos is coming one way or another, and the task before leaders now is to decide the safest course for managing the fallout. Under the status quo, the people who are going to suffer the most — who are hurting already — are the poorest and most vulnerable tenants in every city.

Gym, the Philadelphia representative, notes that immigrants in sanctuary cities like hers are already paying a price, thanks to the new public charge rule authorized by the Trump administration, which could remove millions of families from benefit programs like food stamps and Medicaid. “The indescribably and unnecessarily cruel ruling that legal immigrants have to choose between subsidies that they have paid for or citizenship in the U.S. is unconscionable during this time,” she says. Undocumented immigrants, and many immigrants with status, are ineligible for unemployment insurance, says Lander in New York. “It just doesn’t work for literally millions of New Yorkers.”

Mitra Jalali, a city council member in St. Paul, said that even if every resident in need in her city gets help, it won’t be enough to keep them in their homes. Her city, like every other metro in the country, faced an affordable housing crisis before the pandemic struck. The need before coronavirus was already astronomical.

“The stimulus check from the federal government is $1,200, but the median rent in St. Paul has tipped past $1,100,” Jalali said. “The resources sometimes feel like you’re throwing a twig into a bonfire.”

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An Urbanist Investor’s Table Stakes for Tech Leaders

Don’t let the WeWork, Uber, and Lyft implosions fool you. Hundreds of urban tech startups are thriving right now—and billions of dollars are still being invested in them. Venture capitalists and the entrepreneurs they invest in are more excited than ever about building new tech startups to improve urban life and governance. Richard Florida recently estimated in CityLab that between 2016 and 2018, urban tech investment totaled more than $75 billion, representing roughly 17 percent of all global venture-capital investment.

I encounter these urban tech entrepreneurs and their investors regularly: I’ve interviewed them on my podcast Technopolis, I’ve taught them in my Berkeley Haas class, and I’ve even joined a few of their advisory boards. Like any savvy venture capitalist, when I meet a new urban techie, I size them up to understand whether they’re a good investment—of my time. Most VCs assess for product/market fit, how well the founding team gets along, or how scalable their solution is, and those are all important indicators for success. But for me, there’s one indicator that is essential for the success of an urban tech startup: Are they civically engaged?

Sure, as the early Uber lobbyist Bradley Tusk suggests, every urban tech startup should invest in a smart government and community relations strategy. But, that’s not what I’m talking about here. I’m talking about the founder who boasts their startup will make streets safer, or the investor who boasts their portfolio companies will make cities smarter.

While they’re “solving” those issues for cities around the world, how much do they care about those very issues in their own backyards? Based on my conversations with hundreds of urban tech entrepreneurs and investors, I’d estimate that many don’t. How can I tell? I convene groups of tech leaders to talk about local politics regularly, and host ballot analysis events every election cycle. The attendees are sometimes well-versed in the high-profile ballot measures (eg. taxing Uber/Lyft) and top-of-ticket candidates (e.g. president, senator, mayor). But when I ask them what city council district they’re in and which local candidate they’re voting for, only about two out of ten of them have any idea. Many will then confess, quietly, that they usually leave that one blank.

How can someone genuinely care about solving city problems if they don’t care enough to vote for city council?

That’s why I’ve come up with five Urban Tech Table Stakes. (Table stakes, according to Urban Dictionary, is “the minimum amount required to play a hand of poker. Also, the minimum amount of effort your lazy ass needs to expend to compete at work, in relationships and basically all facets of life.”) In other words, if you want to be an urban tech entrepreneur or investor, here is the bare minimum you should do to be civically engaged—and credible:

Join a neighborhood group

I confess, I avoided this for a long time. As someone who’s been engaged in local politics and on the boards of local policy organizations, I thought that relatively powerless (and oftentimes NIMBY) neighborhood groups wouldn’t be a good use of my time. I was wrong. Joining my neighborhood group has connected me with neighbors I’d never have met and helped me understand different perspectives on urban policies I’ve worked on for years. It’s also helped give me a more visceral comprehension for how how grassroots politics impacts decision-making in city hall (in a city like San Francisco, that impact is huge). And the best part is, I now know more about what’s going on around my corner and when that new restaurant will finally open.

Attend a public meeting

It can be both inspiring and depressing to see our local democracy in action. Sometimes public meetings show the best of our cities: when elected officials demonstrate their diligence and diplomacy, advocacy groups fight for their values, and citizens from all corners of the city have a chance to chime in. Alas, public meetings are usually more mundane or dysfunctional than that. And in many cities the “STPs” (same ten people) show up to every public meeting (because few citizens have time time, or care, to attend) and have a disproportionate impact on decision-making for everyone. That is exactly why we should still participate. And while your neighborhood group might help you understand the perspectives of folks who live near you, a public meeting can help you get out of your neighborhood bubble and understand the perspectives of different communities.

Read—and subscribe—to your local news outlet

CityLab is fantastic, but it doesn’t cover your city as closely as your local paper will. Your local paper can not only help you be a more informed voter, it can help you stay up to date (and more involved) in local policy issues. Reading your local paper is good for you, but subscribing to it is good for your city. Many have documented how local papers act as watchdogs to keep municipal budgets in check, increase voter participation and the number of people running for elected office, and decrease partisanship. Subscribing or contributing helps keep that paper in business.

Know who represents you in city hall

Mayors are high profile and I’ve found that most urban tech leaders are familiar with the executive branch of their city government. But the legislative branch (eg. the city council) is just as important if not moreso. In some cities, council members can be like mini mayors, with huge sway over what happens in their districts. In others, city councils hold far more power than mayors. So, don’t just vote for the top of the ticket. Learn about who your local representatives are and what their voting record is on issues you care about. Your vote—for or against them—can have a significant impact on how your city funds and regulates those issues (particularly when voter turnout is low).

Vote

While we’re all focused on the top of the ticket this primary season, many municipalities have local officials on the ballot too. And those elections can have as much, if not greater, impact on your city than a presidential election. Unfortunately, voter turnout is abysmal for local elections. CityLab’s Kriston Capps recently documented that in 15 of the 30 most populous cities in the U.S., voter turnout in mayoral elections is less than 20 percent. So, I’ll make this easy for U.S. voters: register here.

Some of these stakes might feel like time-consuming distractions to busy urban tech leaders. They’re building global businesses that improve millions of lives around the world, they’d say. No time for the pettiness of local politics. I’d respond that being civically engaged in your own city can give you insights that help you build a more effective, and successful, urban tech business. And I’d also remind them that while the private sector may be an important lever for change, public policy is the greatest lever for change in our cities. So if you genuinely care about the future of cities, learn how to pull the policy lever, not just to benefit your company, but to benefit everyone. And start in your own backyard.

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