Job Creators

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

With the news that California’s economy is now the sixth largest in the world and that the state’s economic growth last year exceeded nearly all other states, it is worth celebrating the state’s economic standing. Still, no one should lose focus on the number one issue for Californians—job creation.

The May Public Policy Institute of California poll respondents named jobs as the most important issue, nearly twice as high as the second place issue of water and drought.

Job creation should be a prime emphasis of the legislature. The California Chamber of Commerce has gained notoriety over the years for its list of job killer bills—those bills that the Chamber feels will prevent job creation or reduce the number of jobs in the state. Since the job killer list has existed, legislators and governors of both parties have paid close attention to the Chamber’s concerns, often siding with the Chamber on these bills.

Less well known is the CalChamber’s list of job creator bills. These bills would help businesses create jobs or encourage businesses to expand in the state. For four years now the Chamber has put out a job creator list. This year the list consisted of 14 bills.  Unfortunately, the job killer list this year is longer at 20 bills.

The success of job creation will keep California safely perched at its new position of the sixth largest economy in the world.

On Friday, the Chamber heralded the moving forward of three job creator bills from their house of origin. Here are those bills with notes from CalChamber on the bill’s goals.

SB 1069 (Wieckowski; D-Fremont): Increases Housing Supply

The housing shortage in California has reached crisis levels. The average California home currently costs about two-and-a-half times the national average home price. The average monthly rent in California is 50% higher than the rest of the nation and even higher in cities such as San Francisco, San Jose, Oakland, and Los Angeles. All four of these cities’ average rents are among the top 10 most unaffordable in the nation. San Francisco’s average rent is the highest in the United States, at an average of $3,500 per month.

In a seminal 2015 publication, California’s High Housing Costs: Causes and Consequences, authored by the State Legislative Analyst’s Office, data clearly show that the lack of affordable housing, particularly in coastal California, is one of the biggest drivers of institutional and generational poverty cycles. The analysis showed that the bottom 25% of income earners are spending 67% of their income on housing. This is clearly not acceptable or sustainable.

The inability of the traditional housing delivery system to meet demands has resulted in increased competition for fewer available homes, rising prices, overcrowding, community dislocation, and adverse environmental impacts caused by longer commutes and more traffic congestion. California families are hurting and the economy is slowing.

Innovative solutions are needed to make a dent in this crisis.

Accessory Dwelling Units (ADUs) are the only widely supported approach to get thousands of low-cost units on the market fast. ADUs provide lower cost and low-carbon footprint homes in existing neighborhoods consistent with architectural traditions. ADUs are great for low- and middle-income renters, small families, and align with state climate change goals. Studies demonstrate that ADUs cost less to build and rent for less than new market rate housing, making ADUs affordable by design.

Santa Cruz, Berkeley, Oakland and San Francisco have already approved legislation to facilitate the development of ADUs. The states of Hawaii and Massachusetts are considering similar bills. With simple policy changes, such as reduced process, parking and lot coverage requirements, California can vastly increase its housing stock.

In the San Francisco Bay Area, there are approximately 1.5 million single family homes. If just 10% of households adopted ADUs, housing stock would increase by 150,000 units.

SB 1069 amends existing State Second Unit Enabling law to further simplify the process of ADU adoption for residents by reducing parking requirements, streamlining the permitting process, and allowing ADUs by permitting building within existing structures. State and local laws should enable residents to quickly and easily provide a home to someone in their community rather than set up barriers that make this impossible.

AB 2664 (Irwin; D-Thousand Oaks): Increased Innovation, Entrepreneurship

AB 2664 will allow the University of California (UC) and Berkeley National Laboratory to expand their capacity and increase access to existing innovation and entrepreneurship centers.

The UC’s innovation and entrepreneurship centers provide incubator space, legal services, entrepreneur training and more for researchers and other individuals looking to establish new businesses and develop innovative products and solutions that benefit Californians. These centers have a proven track record for helping to turn ideas into companies that provide jobs for Californians and help drive the state’s economy.

AB 2664 directs the UC to expand the infrastructure necessary to keep up with the growing need for workspace and training for start-ups, and help attract private sector investors. In exchange, the state will benefit from increased economic activity and job growth, as well as from the innovative solutions new companies are able to bring to market due to the help they receive from the UC and Berkeley National Laboratory.

SB 936 (Hertzberg; D-Van Nuys): Loan Access

An Assembly policy committee will soon consider SB 936 which expands the availability of loans through the Infrastructure and Economic Development Bank’s (IBank) California Small Business Loan Guarantee Program.

The program helps businesses create and retain jobs. The bill promotes statewide economic development by supporting loans to small businesses that would not otherwise qualify.

Small businesses establish a favorable credit history with a lender under this program and then are able to obtain future loans on their own. The program has been in place since 1968 with almost no defaults.

SB 936 increases the IBank’s ability to leverage state and federal funding, thus incentivizing private lending and economic investments. The loan guarantee program uses state and federal funding to create a loan loss reserve, which reduces the risk of lending to small businesses.

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