Homelessness is getting worse because elected leaders let corporate greed destroy the housing market

By Mark Lipman

Homeless encampments line Park Avenue near the Venice Boardwalk
Photo by Lu Chen / iStock

The author is a board member of Power (People Organized for Westside Renewal) who was displaced from Venice and now lives in Culver City.

As local leaders continue to reel with “shock” at the release of the latest homeless count numbers — 58,936 in L.A. County, 36,300 of them in the city of Los Angeles — nobody else seems surprised by the confirmation of what we see before our eyes every single day.

Writing as someone who was homeless in Venice ten years ago, it wasn’t nearly this bad back then. How could it be that after spending hundreds of millions of dollars on housing and services the problem has gotten substantially worse?

Could it be that city officials allowed developers to drastically increase construction costs after voters approved a $1.2 billion city housing bond? I bet that has something to do with it. Pockets need greasing when there’s a big pot of money on the table. Voters were promised 10,000 new housing units in 10 years. Now we’re being told to hope for 6,000.

Today the going rate to build one unit of affordable housing is nearly $500,000. And the politicians accept that. There are far cheaper ways to house people, but they only consider funding the kind of projects that enrich developers and their lobbyists.

Our local leaders keep telling us that we need to build more housing, but the U.S. Census Bureau’s American Community Survey estimates that more than 230,000 rental housing units sit vacant throughout Los Angeles County. Which raises the question: Why does so much housing sit vacant while people continue to sleep on the street?

Could it be that the owners of many vacant units, often Wall Street investors, can take a market-rate tax break as a “loss of income” on vacant units, while at the same time fueling the scarcity that enables them to rent one-bedroom apartments for $3,000 per month? Could it be that our housing crisis has been artificially created in order to jack up rents and increase investor profits?

Yes, but if you’re going to do that, you have to have customers who can pay those rents. One of the key driving forces to our current homelessness emergency is that existing renters cannot afford the extortion-level rent increases they are facing. For thousands of people, losing their current housing means they will become homeless, even if they still have jobs. What they earn can’t pay what’s being demanded for rent.

Many say the problem is gentrification, but that’s so 2010. Yes, fewer people (whiter people, richer people) are taking up more space — you know, moving into communities and building huge block mansions the size of a multistory apartment complex that only house two people. But that’s only the tip of the iceberg.

Without a massive influx of high-paid workers, you cannot displace enough people to justify the tripling of rents. And thus we have the rise of the corporatization of key locations throughout the Greater Los Angeles region.

It started in earnest in 2010. Google wanted to build out their Southern California headquarters, and the only problem was that Santa Monica wanted them to pay their business tax. So Google was looking for a change of address, and next door in Venice was the new hip place to be.

That same year, then-Los Angeles City Council President Eric Garcetti supported an 80% local business tax break for internet-based companies (like Google), justifying a retroactive $3.4-million tax revenue loss (amid a projected $212-million budget shortfall) by stoking fears that internet companies would otherwise leave the city. “We will lose more than $3.4 million if we don’t do it this year… It’s the right thing to do on dollars and cents,” the Los Angeles Times quoted Garcetti at the time.

And so in 2011 Google moved to Venice, taking advantage of how they could save big by moving a very short distance. That’s when the trouble started.

In order to market themselves as a positive presence in the community, Google sponsored what seemed like every public event in Venice — putting their logo up everywhere, literally handing out cookies, and sponsoring a tiny computer class for a select handful of students as
a so-called “community benefit.”

The single-most important community benefit Google didn’t bring with them was those well-paying jobs that big companies always promise. Instead, Google imported hundreds of high-paid employees and, to promote their eco-friendly image, gave those employees bonuses to ride their bicycles to work.

And that’s when the rent wars started. Almost overnight, paying tenants who had been securely housed for decades — integral members of an existing community — started receiving thousand-dollar increases and eviction notices. Some of those people are the ones who are being stepped over as they sleep on the sidewalks today.

In 2013, Mike Bonin won election to the Los Angeles City Council. After a high-profile inaugural bash sponsored by Google, he went out and championed a five-year extension of that same internet business tax break, which was then due to expire.

Once again, Google and other tech companies displacing longtime residents would pay $1.01 per $1,000 in gross receipts instead of the $5.07 city business tax paid by most other companies. The rest of us got higher rents and more homelessness.

But it doesn’t end there. Pushing thousands of low-income people out of a community while replacing them with high-income tech workers served to establish an isolated voting block of people, all working in the same bubble, with no prior connection to the community, who suddenly see homeless people everywhere and get angry that these people are sleeping right in front of apartments that are now costing upwards of $5,000 a month.

This voting block zeroes in on the 2016 Venice Neighborhood Council election and installs extremists who want to criminalize poor people while creating a gated community for the rich and the white, all coordinated through the local chamber of commerce. The division between rich
and poor has never been greater.

Now we’re at the next phase of the corporatization of our communities. The Venice test project was a huge success, so now all the major corporations, working hand-in-hand with developers, want to carve out their own slice of cool in a neighborhood near you.

It’s no longer about tax breaks — that was just the incentive to get all this started. Now it’s about land grabs, making the cost of land so expensive that only the investment speculators and major corporations (often the same people) can afford to buy it.

For its part, Google is growing, expanding to the former Westside Pavilion, where affordable housing should be built instead, in their never-ending search for growth.

Meanwhile, Culver City is becoming the next test subject with a trifecta of major corporations — HBO, Apple and Amazon, with a combined worth of close to $2.5 trillion — ready to move in come 2021, and surely angling to seize control of the city council in 2022.

Originally we were told that these companies would be bringing 3,000 new employees to Culver City, but recently that number was reported to be climbing upwards of 10,000 people … and this in a city of only 40,000 existing residents.

Local officials know this is coming and state quite openly that there won’t be enough housing for everyone. And while massive construction projects are being built everywhere, like a cookie-cutter operation, each corporation getting their chunk of the city, low-income housing advocates only get a shrug and lip service, as nothing is being done to prepare for what they know is coming in only 18 months.

For too long our politicians have remained tone deaf to calls for taxing major corporations to offset the negative impacts they create, accepting token crumbs in place of civic responsibility. For too long major corporations have paid hardly any taxes anywhere, even when they brag to their stockholders about record profits.

When it comes to raising public money, no one has a problem putting regressive taxes on the ballot that squeeze poor and working people (renter and homeowner alike), but the second anyone suggests taxing billionaires to pay for the mess they created, all the politicians cry foul saying voters will never approve it. Well, I for one call B.S. on that. I think the voters are literally dying from not taxing the rich, and it’s about time that we put something on the ballot.

Now may be the last chance that Culver City and other jurisdictions get to write new rules that will protect our communities. We need both a Major Corporations Tax and a Community Protection Act to establish community standards and housing affordability safeguards built on a solid business tax base, with real oversight and accountability, to protect us from a hostile corporate takeover disguised as a cookie.

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