Apple’s Second Headquarters Could Join Amazon To Flip A Red State To Blue

Many U.S. states that voted Republican in 2016 could be flipped to blue if a few big tech companies located campuses there, given the influx of new tech workers who overwhelmingly vote Democrat. I explored the potential electoral impacts of Amazon locating its second headquarters in either low-population red states or high-population “light red” states. Now Apple is announcing a second headquarters to be located outside of California (and Texas).

If the two companies coordinated their siting efforts, it could have a big impact on both the United States Senate and presidential elections going forward. According to Newsweek, Apple’s new facility will bring 20,000 tech workers (plus spouses and associated tech industries to support the campus) to the new state. Add that to the 50,000 workers in Amazon’s new campus, and you have a potentially pretty big demographic shift favoring Democrats.

Amazon already announced that it narrowed its list of candidates to 20 cities. Based on my earlier analysis, the most impactful cities on that list include any in the “purple” states:

  • Columbus, Ohio
  • Philadelphia, Pennsylvania
  • Pittsburgh, Pennsylvania
  • Miami, Florida
  • Raleigh, North Carolina

Second-most impactful would be citing the headquarters in states that are slowly losing their Republican demographic advantage and could “flip” relatively soon (next decade or so):

  • Atlanta, Georgia
  • Austin, Texas & Dallas, Texas
  • Indianapolis, Indiana
  • Nashville, Tennessee

Not helpful, from an electoral standpoint, would be citing in any of these solid blue states/jurisdictions:

  • Denver, Colorado
  • Los Angeles, California
  • Boston, Massachusetts
  • Chicago, Illinois
  • Montgomery County, Maryland
  • New York City, New York
  • Newark, New Jersey
  • Northern Virginia, Virginia
  • Washington D.C.

And of course, REALLY not helpful to American politics would be citing the facility in Toronto, Ontario.

To the extent that these tech companies see it as in their interest to have more Democrats elected to Congress and the presidency, they could coordinate their expansion plans. Campaign contributions and lobbying are obviously another way to influence the process, but it’s hard to beat the impact of hundreds of thousands of new voters arriving in a single state.

People Use Social Media To Wind Down, But Experience Negative Emotions Overall, Per UC Berkeley Study

As the global epidemic of smart phone addiction settles into normalcy, new research is dispelling some common assumptions about its effects. For example, a recent award-winning UC Berkeley dissertation by then-PhD candidate and now Google employee Galen Panger refutes the popular image of social media as a vehicle for getting people riled up or venting anger and other negative emotions. Instead, Panger found that people tend to use the technology to relax:

“I think most people wouldn’t associate the word ‘calm’ with social media,” [Panger] said. “But one of the more robust findings of the dissertation is that people tend to wind down – feel more relaxed, sleepy, bored – when they browse social media, both Facebook and Twitter.”

Most of the time, it seems people start browsing social media when they have downtime and want to chill, like before bed or waiting for the train.

But overall, and disturbingly, the study found that people experience a “slight tilt” toward negative emotion when they access social media. The triggering of envy in particular is a big problem:

Panger found Facebook posts tend to be more positive than emotional life in general, with posts with photos of ourselves among the most positive. There is evidence in his dissertation and in other research that this spreads envy, a potential source of resentment and antisocial behavior.

“One implication for the general population is to be mindful about spreading envy with your Facebook posts,” advised Panger. “I think anything we can do to reduce the resentment floating around right now would be a good thing.”

It’s good advice, given that smart phones and social media have become ubiquitous, with few practical ways for people to control their dependence on and overuse of the technology. Perhaps limiting their use among teenagers would be a good start, to avoid what appears to be some very damaging effects on the first generation to use them consistently. And there are options to make your phone “dumber,” such as by switching off the alluring color schemes that make us want to check them constantly.

But as more research like Panger’s emerges, at least people will have information about the risks and can be more mindful of the impact this technology is now having on our society.

Will NIMBYs & Developers Manipulate Bus Service In Response To Transit-Oriented Development Incentives?

Scott Wiener’s revolutionary SB 827 proposal to ease local restrictions on transit-oriented development is part of a growing legislative trend to tie development incentives to proximity to major transit stops. These stops are defined to include those with frequent bus service. As a result, some pro-growth advocates worry that NIMBYs will respond by lobbying their transit agencies to decrease bus service in their neighborhoods so developers can’t access these benefits and build more in their area.

But what about the opposite problem, where developers lobby transit agencies to increase bus service, merely to get some of the permit streamlining and density boosts that would follow? The danger is that transit agencies would comply, perhaps as a favor to a politically connected developer, but the project at issue wouldn’t actually be transit-oriented or otherwise justify the increased transit service.

And a worse situation might involve the transit agency increasing bus service only temporarily to qualify the project for the land use and permitting benefits, and then later reduce the service. The consequence could be a type of “density sprawl” with projects that wouldn’t serve transit (or have transit serve them) and instead increase overall driving miles and pollution.

To be clear, we want to encourage development near major bus stops. And this policy trend of tying incentives to transit proximity started before SB 827. For example, SB 375 (Steinberg, 2008) provides permitting relief through streamlining provisions under the California Environmental Quality Act (CEQA) for projects within 1/2 mile of a major transit stop, including frequent bus stops. Similarly, SB 743 (Steinberg, 2013), also relaxes CEQA’s transportation impact analysis for projects in these areas.

But both possibilities of manipulating bus service either to 1) avoid new development in the right transit-oriented areas or 2) facilitate car-oriented projects in less transit-friendly areas would be bad.

What’s the solution? Transit agencies will need to develop strong and transparent standards governing their decisions about when to expand or retract major bus service (defined as 15 minute peak headways during commute times). Follow-up state legislation could potentially accomplish this outcome by mandating such standards on local transit agencies (something these transit agencies would probably hate). Or transit agencies that don’t already have such policies on the books could adopt such standards on their own, perhaps using some best practice examples from around the state and country.

Right now, I don’t think this kind of transit service manipulation is a serious problem, although I’ve started to hear some anecdotes from local transit agencies. But if SB 827 passes in anything like its current form, it may become an issue that policy makers at either the local or state levels will need to address.

“California Goes Green” Book Review: Helpful Summary Of California’s Climate Policies

California Goes Green is a self-published 2017 book that provides an overview of California’s history of climate leadership, including some anecdotes on key policies and the leaders who helped develop and implement them. It was written by two longtime energy policy leaders with first-hand perspectives: Michael Peevey, former president of the California Public Utilities Commission and energy executive, and Diane Wittenberg, who has been involved in electric vehicle policies since the 1990s and in the utility world before that.

Peevey and Wittenburg are therefore well positioned to describe this history, and their book focuses largely on California’s efforts to decarbonize the electricity and transportation sectors. It touches on renewable energy, energy storage, energy efficiency, and electric vehicle policies, preceded by some general environmental and cultural history in the state.

Overall, California Goes Green provides a brisk (142 pages, including an epilogue) overview of why Californians care about the environment, dating back to battles to reduce smog in Los Angeles after World War II. The authors recount how the state’s culture and politics was shaped by the work of universities, business leaders, and policy advocacy organizations to bolster policy and technology responses to environmental challenges.

The highlights of the book include some interesting anecdotes on some of Peevey and Wittenberg’s topics of expertise, like the 2000-01 state energy crisis, the formation of major environmental agencies in the 1960s and 1970s, the ballot battle over the failed Prop 23 initiative to suspend California’s climate law in 2010, and California’s ultimately successful effort to obtain a federal waiver from the EPA under the Clean Air Act in the 2000s. We also learn some interesting historical tidbits, such as former Governor Schwarzenegger taking an interest in rooftop solar policies because his friend (and movie director) James Cameron had trouble getting approvals for his solar array and called on the governor for help.

But the book offers relatively superficial accounts of some of the most crucial policy battles. Although the authors acknowledge interviews and other communications with key figures involved, the narrative does not feature any direct quotes from those present. Nor do the authors explore in any meaningful depth the various interest group positions and concerns and compromises that went into some of the key policy deals.

There’s also the nagging feeling that the authors are overstating Peevey’s role in some of this history (although he clearly was a central figure on utility regulation and some other policy fronts for an important period of time). For example, at one point the book suggests that Peevey single-handedly was responsible for bringing to California the idea of installing smart meters, after a trip to a utility conference in Italy. But this sounds a bit far-fetched, given the longstanding and broad-based movement to bring smart grid technology to the U.S. But perhaps that’s an unavoidable drawback of having one of the players on the field write the history of the game.

The authors also represent the book as a guide for other jurisdictions and countries who want to follow California’s policy lead, and it should be helpful in that respect. But they don’t provide readers with a basic overview of what climate policies are needed in a developed economy at a macro scale, like a mini version of the state’s comprehensive scoping plan. As a result, the authors focus the book mostly on electricity and transportation but fail to cover in any real way key climate issues such as transportation infrastructure, land use and sprawl, and short-lived climate pollutants, just to name a few. These are all significant contributors to greenhouse gas emissions and merited more attention in the story.

Despite these shortcomings, the book is useful background for anyone working in climate policy or just wants to know more about California’s efforts to date. It also does a nice job giving credit to some relatively unheralded environmental leaders through various “profile” pages. But we still need a fuller story of how these and other leaders got these landmark policies adopted. These details would be both illuminating and entertaining to read for not just for policy wonks, but for the general public that would benefit from a comprehensive and accessible account of California’s pioneering efforts to combat change.

Could Alexa Boost Traditional Radio News?

Alexa and other home smart speakers are changing the way Americans access media, but could they actually save radio news? With an estimated 15% (and growing) of Americans using these voice-activated technologies in the home, we’re already changing the way we listen to music, news and other media. It’s yet another big behavioral and technological shift, following the move from radio air waves to the internet, through podcasts and other forms of on-line listening.

Whereas some predict doom-and-gloom for NPR-type news in this new hyperactive technology environment, radio journalists Gabriel Spitzer and Brian Edwards-Tiekert make the case that radio news could fit neatly into the way people use these devices:

Listeners are (still) busy and distracted. The most common location for an Amazon Echo is in the kitchen, suggesting the use case for smart speakers is the same as for radio: It’s a good way to get information when you need your hands and eyes free for other tasks (e.g., cooking).

Dominant use: morning routine. In our discussions with early adopters of both Google Home and Amazon Echo, the most common use time was in the morning, as part of a daily routine. The platforms design for this: Ask Google Home to tell you about your day, and it gives you the time, the local weather, traffic conditions on your commute, upcoming appointments from your calendar, and then plays news headlines. Expect news products that are updated daily (or more frequently) to perform better in this context than less-frequent long-form products.

Radio leaders will clearly have to adjust to these new technologies, as the traditional habits of turning on a radio for news are clearly diminishing, especially for the younger, tech-savvy generations. But while adaptation will be necessary, perhaps the upside is more than just avoiding extinction but actually finding a path to thrive and survive. Let’s hope so, as NPR-style radio provides critical information, particularly in an era when facts appear up for grabs among an increasingly cynical and distrustful public.

Will California Ban Internal Combustion Engines By 2040?

Countries like China, Norway and the U.K. have made headlines recently with plans to ban the sale of internal combustion engine passenger vehicles by 2040 or soon thereafter. Is California next?

Governor Brown expressed interest in the state following suit, to maintain its mantle as a global electric vehicle leader. And now Assemblymember Phil Ting (San Francisco) has introduced AB 1745 to ban registrations of new internal combustion engines by 2040.

As a legal matter, California probably won’t be able to enforce this ban without a waiver from the federal government under the Clean Air Act, which otherwise prevents states from issuing stronger tailpipe emissions standards than federal regulations. But that issue is a long way off.

So in the meantime, the bill would be a symbolic but also a practical signal to industry and state policymakers in various agencies that California is serious about phasing out fossil fuel use in passenger vehicles. And it would give the state direction to start laying the policy foundation to make this transition in a more aggressive way.

Fortunately, automakers are already moving in this direction, albeit tepidly. Part of the problem, as Bloomberg covered last month, is that forecasts for EV adoption are uncertain:

Electric cars—which today comprise only 1 percent of auto sales worldwide, and even less in the U.S.—will account for just 2.4 percent of U.S. demand and less than 10 percent globally by 2025, according to researcher LMC Automotive. But while consumer appetite slogs along, carmakers are still planning a tidal wave of battery-powered models that may find interested buyers few and far between.

It’s a bit of a chicken-and-egg problem, but no automaker wants to be caught flat-footed on what looks to be a potential revolution in transportation.

Meanwhile, the transition to zero-emission vehicles raises all sorts of policy questions, as the New York Times explored recently. The bottom line is that we’ll need more charging infrastructure and vastly reduced costs in batteries to make the vehicles ubiquitous. Part of that involves a more secure battery supply chain.

One point of disagreement with the Times piece though: the article claims people may be too attached to the feel and smell (!) of internal combustion engines to switch to electric. But for anyone who’s driven an electric vehicle and experienced its superior driving experience, this fear is almost laughable. The product is simply better than a gas engine.

Ting’s bill will benefit from that technological superiority and falling costs of batteries. But it will face some serious political headwinds from entrenched interests that benefit from gas-powered vehicles.

Impacts Of Federal Tax Changes — My Takeaways From Monday’s City Visions Discussion

On Monday night, I hosted a discussion on City Visions on the impacts on California of the new federal tax law. You can listen to the audio, but here are some of my takeaways from our expert panel:

  • The new law was mostly about making the U.S. corporate tax rate competitive with other countries through a massive cut. Nations are now apparently in a “race to the bottom” to keep corporate profits in-country by lowering their rates, and this bill only ups the ante.
  • The corporate changes will likely face challenges under World Trade Organization provisions.
  • Many of the individual tax benefits are temporary and set to expire in the coming years.
  • High cost “blue state” efforts to blunt the impact to their taxpayers from the loss of state and local tax exemptions are unlikely to be viable in the long run. Whether states set up a charitable fund for people to pay state taxes (as California is seriously contemplating) or shift income taxes to employers (as New York is investigating), the IRS and/or Congress is likely to challenge these arrangements, creating uncertainty going forward that most taxpayers won’t want to bear.
  • In the long run, the best way for states to minimize the impacts of the bill on their taxpayers is through new federal legislation.
  • The bill is incredibly complex, and because Republicans never held a single hearing on it, it’s riddled with errors and oversights that will need to be corrected.
  • Some taxpayers will be in for a big shock, such as those who recently got divorced and were planning to deduct alimony payments but can now no longer do so. Overall, most people have no idea at this point how the law will affect them.

Ultimately, this is a good time to be a CPA, as Californians (and most Americans) will be sifting through the changes in this law for months — if not years — to come.

Mitigating Displacement Of Low-Income Renters From New Transit-Oriented Housing

In my excitement over SB 827, the new bill that would dramatically boost badly-needed new housing in job- and transit-rich areas in California, I overlooked one potentially important source of opposition: low-income renters near transit. As I described, the bill would limit local restrictions on height, density and parking near transit. I assumed that these changes would mostly affect relatively affluent single-family home neighborhoods near transit, whose residents and allied elected officials often prevent new housing for reasons ranging from the deplorable (racism) to the understandable (fear of more traffic and related hassles).

But for renters and their advocates in existing low-income neighborhoods near major transit stops, the SB 827 approach raises different fears: eviction through displacement and gentrification. They fear the relaxed local government rules under SB 827 will prompt developers to gobble up their existing low-income buildings, evict the tenants, tear down the structures, and then build market-rate housing for people with much higher-income levels. In short, they see SB 827 putting displacement and gentrification in these transit-rich, low-income communities on steroids.

The fear is legitimate, though I believe potentially overstated, depending on the neighborhood. And it’s also something that can be mitigated, with the right policy approach. First, it’s probably overstated because development in low-income communities is not necessarily held back only by strict local zoning. For example, as UCLA scholars Anastasia Loukaitou-Sideris and Tridib Banerjee described in a report examining neighborhoods around the Blue Line light rail from Downtown Los Angeles to Long Beach, low-income areas near the station stops have received virtually no investment in real estate despite sometimes very relaxed local zoning.

The problem in many of these neighborhoods is that demand is not sufficient to attract developers and capital needed to build multistory buildings. These relatively expensive structures must net high rents to justify the higher construction costs. Compounding matters, many low-income neighborhoods often require significant infrastructure upgrades to accompany any new buildings. All of these factors deter developers from investing — not the local zoning codes. Ultimately, capital will flow to the areas that promise the highest return: which means relatively affluent neighborhoods near transit will see the most construction under the SB 827 approach.

Still, those economic dynamics probably won’t by themselves allay the fears of low-income renters and their advocates. Many of the neighborhoods they care about are at risk of gentrification, which means rents could increase, higher-income residents would move in with new construction, and low-income renters forced out.

So what can be done in these situations? There’s a rich literature on the subject, but one of the best ways to mitigate these impacts is to ensure a percentage of the new homes built are available exclusively to people with low incomes. Furthermore, local residents who have been displaced or are at risk of displacement should have priority access to these new homes.

The state already has policies on the books to encourage this type of affordable housing construction, from a now-stricter regional housing needs process (which requires locals to plan and zone for affordable housing in their jurisdiction) to density bonuses for projects that incorporate more affordable units. Local governments are also free to enact their own additional policies to boost affordable housing.

These and other policies may not help all tenants facing displacement, but they would go a long way toward helping many of them — and providing access to better homes for many of them in the process. And overall, new housing near transit will benefit residents of all income levels, including low-income. It will stabilize home prices to allow more residents to live near jobs and save on transportation costs from avoiding long commutes. It will improve public health by reducing regional driving miles. It will provide high-wage construction jobs. It will reduce economic inequality and lack of access to good jobs. And it will unlock the housing that future generations will need to be able to remain in their home communities.

Ultimately, we know we need new housing in California — and lots of it to make up for decades of shortfalls. We should have policies in place to ensure low-income renters gain from this construction. But if we don’t build these homes near our transit- and job-rich areas, then where are we going to build them? SB 827 provides the clearest solution to this decades-long problem in the making. But policy makers should take care to address the concerns of low-income renters who might otherwise stand to lose under this otherwise badly needed legislation.

How Will The Federal Tax Law Affect California? Join Us Tonight On City Visions

With Republicans in Congress passing a last-minute tax bill before the holidays, Californians are still sorting out what the new law will mean for them. With many residents slated to pay more in taxes, given the elimination of some longstanding exemptions, state lawmakers are looking for ways to address the bill’s impact on California.

To discuss the tax law, please join me tonight on City Visions on KALW radio 91.7 FM in the San Francisco Bay Area at 7pm. Guests include:

  • Alan Auerbach – director of the Robert D. Burch Center for Tax Policy and Public Finance at UC Berkeley, where he is also a professor of economics and law;
  • Bob Caplan – a certified public accountant in the Bay Area with 40 years experience preparing for individual, corporate, partnership, and fiduciary tax returns; and
  • State Senator Ben Allen – representative of the 26th district in LA County in the California State Senate.

Please call, email or tweet us with your questions. How will tax reform affect you? What policy response, if any, should California adopt in the face of these federal changes? Tune in or stream tonight!

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KPCC Radio Discussion On SB 827: The Homeowner Backlash

As I blogged yesterday, the proposed SB 827 is the first truly revolutionary approach to boosting housing in the most environmentally and economically friendly places in California.

And this morning on Southern California’s KPCC radio program Airtalk, I discussed the bill with host Larry Mantle, Los Angeles City Councilmember Paul Koretz (5th District), and Mark Ryavec, president of the Venice Stakeholders Association.

The 30-minute discussion surfaced most of the predictable yet flawed objections to the bill, typically raised by homeowners and their allies:

  1. These new residents in housing near transit won’t really ride the transit, they’ll just add to the local congestion. Mostly false: proximity to transit is a major determinant of how likely people are to ride it. However, it is true that lower-income residents are more likely to ride. But even locating middle-income residents near transit is still better than locating them far out of the city, where they’d have long drives leading to more overall traffic and pollution, or encouraging them to gentrify existing neighborhoods due to the lack of new housing supply. And as we’ve seen in urban areas like the San Francisco Bay Area and Washington DC, professionals will ride transit if it’s convenient to their work.
  2. New housing near transit will only add to parking and traffic congestion in my neighborhood. Yes, possibly in the immediate areas. But if the new developments don’t oversupply and under-price parking (and SB 827 relaxes minimum parking requirements) and instead offer better transit, walking and biking access, people will be more likely to choose to avoid the traffic. And overall traffic across the region will decrease with more in-town housing, which means less pollution and regional congestion for everyone. Otherwise, the alternative is more sprawl housing.
  3. Transit isn’t functional in L.A. right now, so there’s no need to build more housing near it. This is to some extent a circular argument. If there’s not sufficient housing (or other development) near transit, then as a result it won’t serve many of the places people want to go. Only by encouraging that development near rail and other high-quality transit — as opposed to waiting decades for rail to go to the right places — can the system be successful. We see this all around the world with well-functioning transit lines.

The discussion and listener comments are worth hearing, because they track the typical objections to the bill’s proposals. As I wrote yesterday, SB 827 will be a huge political effort. But at the same time, it presents an opportunity to discuss the facts with the persuadable part of the electorate.

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