California Escalates Its War on the Marijuana Black Market

“Having utterly failed to end the marijuana black market in California, lawmakers have decided to backslide into the drug war by increasing fines on those who operate outside of the state’s very costly and tightly regulated legal cannabis system.

California will begin 2022 not just by increasing taxes on legal marijuana cultivation but also by introducing new fines against anybody “aiding and abetting” any unlicensed dealers in the state.”

“California’s implementation of recreational cannabis regulations, authorized by the passage of Proposition 64 in 2016, has been a massive mess. The ballot initiative allowed for municipalities to decide whether to allow cultivation and dispensaries, and two-thirds of them still refuse to do so despite the public vote. The state levies high cultivation and excise taxes that are escalated further by local sales taxes in any municipality that does allow for dispensaries to open up shop.

The result has been price and availability issues so severe that experts estimate that between two-thirds and three-quarters of all marijuana purchases take place through unlicensed dealers, which means that the state isn’t getting its share of the revenue. The problem is so severe that the editorial board at the Los Angeles Times recently acknowledged that high taxes for goods fuel black markets.”

Will New York Copy California’s Most Successful Housing Reform?

“In a truly rare turn of events, California’s successful approach to legalizing more types of housing is serving as inspiration for reforms elsewhere in the country.

Over the past several years, lawmakers in the Golden State have passed a suite of bills that make it much easier for homeowners to build accessory dwelling units (ADUs), sometimes called granny flats or in-law suites, on their property, while also making it harder for local governments to stop such construction.

It’s proven to be one of the few YIMBY (yes, in my backyard)-inspired zoning reforms that has actually led to more housing being built. Now other states and cities with their own affordability crunches are passing or considering their own ADU deregulations.

Last week, New York Gov. Kathy Hochul, a Democrat, released her 200-page State of the State legislative agenda. Among other things, it took a swipe at local rules that prevent homeowners from turning their garage or attic into a new housing unit.

ADUs “can provide an affordable multi-generational housing option that helps families live closer together,” reads the State of the State book. “Current land use restrictions prevent homeowners in some communities from building ADUs.”

The governor’s agenda says she’ll propose legislation that would require localities to allow at least one ADU on owner-occupied residential lots. This legislation, per the agenda, would also prevent localities from adopting rules that legalize ADUs on paper, but prevent their construction in practice.

That reflects a lesson learned from California’s ADU experience, where state laws allowing homeowners to build a backyard apartment have technically been on the books since the 1980s.

For decades, however, cities were able to stop them from being built by imposing infeasible requirements that they come with off-street parking, be a minimum size, or receive special, discretionary permits in order to be built.

It took the passage of several additional bills between 2016 and 2019 limiting what localities could require of ADUs, and then several lawsuits to actually enforce those new rules, to really kick off new ADU construction.

The results have been pretty amazing so far.”

“To be sure, neither California’s nor New York’s high housing costs are going to be completely solved by more granny flats. But these reforms are an important piece of the puzzle.”

California’s weed market should be flourishing. But bureaucracy is blunting it.

“Complicated local rules, understaffed city departments and slow communication with state regulators have made starting a weed business in California a protracted and risky ordeal. Red tape and paralyzing legal battles are stunting the market’s growth, leaving aspiring entrepreneurs in cities such as Los Angeles, Pasadena and Fresno waiting months or even years for permission to open, often while leasing empty storefronts.”

California Promised Street Vendors More Freedom. Instead They Got More Rules.

“the Los Angeles Times published an excellent editorial on Los Angeles County’s continued and outrageous mistreatment of the city’s “iconic” street-food vendors.

The editorial centers on the county’s failure to implement California’s Safe Sidewalk Vending Act. The much-touted, statewide law, which I touched on after then-Gov. Jerry Brown signed it into law in September 2018, was supposed to decriminalize and legalize street vending for the estimated 10,000 underground food vendors in Los Angeles County—and others across the state. As the Times editors detail, that hasn’t happened in Los Angeles.

“Street vending may be legal in California, but for the vendors selling sliced fruit, tacos and other food items it’s nearly impossible to get a permit to operate without fear of penalty, particularly in Los Angeles County,” reads the lede. They blame “state and county public health regulations for selling food from a street cart [that] remain so complicated, impractical and expensive that the vast majority of vendors have not—and cannot—get permitted.”

Hence, years after the law was passed, L.A. County has only issued permits to around two-percent of the underground vendors who sell there. One of the most onerous requirements to obtain a permit, the Times explains, is the rule that vendors must spend thousands of dollars to buy a needlessly fancy food cart that features “four sink compartments, multiple water tanks for washing cookware and hands, and mechanical exhaust ventilation… which is just not practical for vendors who earn $15,000 a year, on average.””

No Mass Transit Grants for California, Biden Administration Rules

“the U.S. Department of Labor has denied California $12 billion in transit funding, including grants from the recently signed infrastructure bill. The reason? A 1964 federal law requires the labor department to certify that the state agencies seeking any mass-transit grants are “protecting the interests of any affected employees,” The Fresno Bee reported.

So, the Biden administration is claiming that California—the state that provides its public employees with unparalleled pay and pension benefits, and provides collective-bargaining rights unheard of anywhere else—is being mean to its “affected” public employees because the state passed a 2013 law, authored by Democrats, that infinitesimally reined in pension benefits.

As SFist summarized, “Biden is withholding giant amounts of federal money from California public transit because the state’s public-employee pension system is apparently not paying people enough.””

California is ending a rule that helped cause its housing crisis

“With a stroke of his pen, Gov. Gavin Newsom has officially ended the over 100-year scourge of single-family-only zoning in California.

Single-family-only zoning laws make it illegal to build anything but a single-family home on a particular lot of land. Now (with small exceptions like for fire-prone areas) it is also legal to build duplexes.”

“While overhauling single-family-only zoning might sound revolutionary, the bills are gentle attempts at increasing density: legalizing duplexes and quadplexes and making it easier to build small apartment buildings that provide up to 10 homes. This doesn’t mean single-family homes are outlawed or can no longer be built, but it provides homeowners the option to convert their homes into duplexes or sell their homes to people who want to do so. Before now, it was illegal for someone to convert their home to a duplex on a lot zoned for single-family zoning. Not anymore.

This isn’t a panacea for housing production. UC Berkeley’s Terner Center for Housing Innovation found that SB 9 (the bill that legalizes duplexes) will “modestly accelerate the addition of new units relative to the status quo.” Other laws that restrict the building of new and more affordable homes are still in effect — in particular, local laws around minimum lot sizes will continue to make it illegal to turn single-family homes into duplexes if the existing lot is too small to subdivide while still adhering to the size regulations.

However, the Terner Center finds that “approximately 700,000 new, market-feasible homes would be enabled under SB 9.” That’s a lot! But because many people won’t want to sell their homes or subdivide them themselves, “only a share of that potential is likely to be developed, particularly in the near term. … As such, while important, the new units unlocked by SB 9 would represent a fraction of the overall supply needed to fully address the state’s housing shortage.””

What’s causing California’s unprecedented wildfires

“There are several key ingredients needed for wildfires. They need favorable weather, namely dry and windy conditions. They need fuel. And they need an ignition source.

The California Department of Forestry and Fire Protection said that they are still investigating the origins of most of the blazes underway. But other factors this year stacked the deck in favor of massive conflagrations.

California and much of the western US are in the midst of a years-long drought. With limited moisture, plants dry out and turn into kindling. Ordinarily, vegetation at higher altitudes would still hang onto some moisture and act as a barrier to wildfires in places like the Sierra Nevada. However, the severity of the drought has caused even this greenery to turn yellow and gray.”

“human activity has made wildfires worse at every step. Climate change caused by burning fossil fuels is increasing the aridity of western forests and increasing the frequency and severity of extreme heat events.

People are also building closer to wildland areas. That means that when fires do occur, they cause more damage to homes and businesses. That proximity also means that humans are more likely to spark new infernos. The vast majority of wildfires are ignited by people, up to 84 percent, whether through errant sparks, downed power lines, or arson.

And for hundreds of years, people have suppressed naturally occurring fires. European settlers also halted cultural burning practices from the Indigenous people of the region. Stopping these smaller fires has allowed forests, grasslands, and chaparral to grow much denser than they would otherwise. Paradoxically, that means more fuel is available to burn when fires do occur, causing blazes to spread farther and faster.”