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How the $15 Minimum Wage Was Won in Berkeley – the Details & Back Story

Faced with a citizen ballot measure on November’s ballot, on August 31, the Berkeley City Council unanimously voted for to increase the minimum wage in Berkeley to $15 an hour on October 1, 2018.

Progressive Councilmember and mayoral candidate Jesse Arreguin has been a leader in the effort to raise the minimum wage. In 2013, he was one of the sponsors of the Council item referring an increased minimum wage to the Labor Commission.

Jesse’s opponent for mayor, Laurie Capitelli, delayed action to achieve the $15 wage. In May 2014, he reneged on promises made to community members who have worked tirelessly for a higher minimum wage.  In September, 2015 he again voted against a proposal to raise the minimum wage to $15 in 2018, while Jesse Arreguin and Council progressives voted for it. This year, he supported an alternative ballot measure that would have delayed the increase to $15 and added loopholes and exceptions. Finally, when it was too late to take the competing measures off the ballot, he and his council allies decided to join progressives on the council and action was finally taken to bring the minimum wage to $15.  Only with extensive citizen pressure and lobbying did he (and his Council allies) do so.

Berkeley is now one of four Bay Area cities that will achieve the $15 minimum wage for all employees, regardless of the size of the business, in 2018.

City When $15 takes effect
Mountain View January 1, 2018
San Francisco and Emeryville July 1, 2018
Berkeley October 1, 2018
El Cerrito January 1, 2019

Berkeley’s minimum wage will be $12.53 effective October 1 this year, rise to $13.75 on in October, 2017 and then to $15 in October, 2018. The ordinance mandates sick leave, with a cap of 48 hours for employers of fewer than 25 workers and 72 hours from larger employers, starting right away.

As a result of this compromise, the Berkeley Progressive Alliance has withdrawn its support for Measure CC, the citizen measure.

 

San Francisco Leads the Way

In 2003, San Francisco voters approved Proposition L, establishing an indexed minimum wage beginning at $8.50 an hour.  By 2014, San Francisco’s minimum wage was $10.74 an hour, the highest in the United States. In 2014, faced with a ballot initiative backed by unions and activists to raise the minimum wage to $15 by 2017, a compromise initiative was placed on the ballot to raise it to $15 in 2018, with future inflation increases. The measure passed with 77% of the vote.

 

Berkeley: First Steps 

Councilmember Worthington first referred a Berkeley minimum wage to the Labor Commission in 2004. The Commission created a Minimum Wage and Living Wage subcommittee, but no proposal emerged and the Council took no further action.

Efforts to enact a minimum wage were revived in 2013 by advocates, including Nicky Gonzalez Yuen, Wendy Bloom and Ellen Widess. In April, 2013 Mayor Bates and progressive council members Arreguin and Worthington asked city staff and the Labor Commission to draft an ordinance similar to San Francisco’s.[1]

 

The Labor Commission proposal

In April, 2014, the Labor Commission proposed, effective June, 2014, a $10.74/hour minimum wage for most employers and $13.34/hour for large employers,[2]  essentially adopting San Francisco’s minimum wage . Annual increases based on the Consumer Price Index[3]  would continue until the minimum wage equaled the living wage. Beginning June, 2015, a health care requirement would have been in place.

The proposal would have established the highest minimum wage in the country.

At a May 1, 2014 Council meeting, Councilmember Capitelli proposed slowing the Labor Commission proposal; only in 2020, would the minimum wage equal Berkeley’s living wage, estimated at a bit higher than $15.00 an hour.

 

Capitelli Reneges

At a May 6 Council meeting, Capitelli outraged minimum wage supporters by reneging on his proposal. The Council instead passed the first reading of an ordinance increasing the minimum wage to $10 in January, 2015 and $10.75 in January, 2016. A Council task force would be formed to consider what should happen after that. Effectively, had this been adopted, Berkeley would have been two years behind San Francisco and Oakland.

Capitelli’s broken promise and the Council’s vote on May 6 provoked a firestorm of protest from citizens. Berkeley Citizens for a Fair Minimum Wage announced their intention to place a $15 minimum wage on the ballot. Former city councilmembers Carla Woodworth and Ying Lee and activists Margot Smith, Marty Schiffenbauer and David Fielder signed a letter to the City Clerk indicating their support.

 

Efforts by Councilmembers Anderson, Arreguin, Moore and Worthington to increase the minimum wage further after 2016 were rejected by Councilmember Capitelli and a majority of his colleagues. Instead, the Council decided to raise the minimum wage to $12.53 an hour by October 2016 with a one-year exemption for non-profits and a permanent exemption for youth in job training.

 

Stalling and Delays Continue – Activists Keep Pushing

In June 2014, the Council discussed but dropped the idea of having a Minimum Wage Task Force. In September 2014, the Council directed the Labor Commission to come back with additional minimum wage and sick leave recommendations.

After a year spent drafting a new ordinance with business, labor, community and Council member input, on September 15, 2015, the Labor Commission presented a new proposal to the Council. It included bringing the minimum wage to a living wage; cost of living increases; paid sick leave; service charge rules, and clarification/ removal of exemptions.

Progressive Councilmembers Worthington and Anderson made a series of motions, all of which failed, to increase the minimum wage. One would have raised the minimum wage to $15 on October 1, 2018, the same amount that the Council ultimately agreed to. It was supported by Councilmembers Anderson, Arreguin, Moore and Worthington, but opposed by Mayor Bates, Councilmembers Capitelli, Droste, Maio and Wengraf.

The Council majority then voted to delay any action until a special meeting on November 10, 2015.  There, instead of discussing the Commission’s proposal, Capitelli presented a totally new, much weaker proposal after public comment was closed. This proposal would have delayed the $15 minimum wage for all employees in Berkeley until 2020.  The Labor Commission proposal was abandoned and Capitelli’s proposal later just faded away as well.

During that year activists were not sitting on their hands.  They had seen how delays had effectively led to missing the deadline for taking an initiative to the voters.

A community-labor coalition, the core of Berkeley for Working Families, had early-on formed to work in parallel to craft a citizen’s initiative.  Encouraged by the powerful national fight for $15 and the support from local low wage workers, Berkeley activists persisted in crafting a ballot measure.  Wendy Bloom, Mike Donaldson, David Fielder, Steve Gilbert, Matt Lewis, Ned Pearlstein, Judy Shattuck and others, with funding and legal support from SEIU 1021, drafted the measure and tried to negotiate with each of the City Council majority members.   In November 2015, when the Council refused even to discuss the Commission’s proposal, they were ready.  The coalition filed an initiative and gathered 4,400 signatures to qualify what is now officially named measure CC.

Dueling Ballot Initiatives

Measure CC would have raised the minimum wage to $15 in 2017 and, through modest annual increases, gradually caught up with the city’s official Living Wage ($16.81 in today’s dollars). It would also improve sick leave requirements, enhance enforcement, and phase out any exemptions – so all workers would be protected

The Council majority placed its own initiative on the ballot, delaying the increase to $15 to October 2019, well behind San Francisco, Emeryville, Mountain View and El Cerrito. Their measure, Measure BB, would also allow employers who provide health benefits to pay only $13.50 an hour, mandate less sick leave than what other cities require, and allow private employers to pay a sub-minimum “training” wage to those under 22. And BB contained a poison pill: it required a two thirds super majority of the Council to enact further increases or make other improvements.

Despite this negative response, Berkeley for Working Families exhausted all efforts to secure a better deal for working families.  After weeks of frustrating negotiations, they thought an acceptable solution was at hand. Capitelli agreed to call a special meeting of the City Council on August 11 but at the very last minute again reneged, issued a statement through the Downtown Business Association and did not show up to his own meeting.

That would have been the end of it but other elected officials, notably EBMUD director Andy Katz and former Assembly member Nancy Skinner, made a final effort resulting in an agreement not very different from the one rejected several weeks earlier, including a $15 minimum wage in 2018.

After Council passed the ordinance, Berkeley for Working Families issued the following statements. The proponents of both initiatives have agreed to call for a “No” vote on both as it is too late to remove them from the ballot:

As the coalition that drafted Measure CC and gathered 4,400 signatures to get it on the Ballot, we are pleased with the agreement passed by Council today … We would not have gotten to this point without the powerful national fight by fast food and other low wage workers for $15 an hour … [and] the years of effort from community activists, Labor and of course Council members Jesse Arreguin, Max Anderson and Kriss Worthington, who have been consistent champions for working families in Berkeley… the ordinance passed today … will help thousands of low wage workers immediately [and] be one of the most progressive minimum wage laws in the nation …  This November we will be asking voters to support this legislation by voting No on Measures BB and CC. [4]

Prepared by Rob Wrenn & Kate Harrison

Berkeley Progressive Alliance  –  PO Box 2961, Berkeley, CA 94702  – http://berkeleyprogressivealliance.org

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More on the Minimum Wage

For research related to impacts of raising the minimum wage in San Francisco and Oakland, check out:

 Impact of Minimum Wage on Three Cities

San Francisco Proposed City Minimum Wage Law – A Prospective Impact Study

The Impact of Oakland’s Proposed Minimum Wage Law- A Prospective Study

[1] http://www.ci.berkeley.ca.us/Clerk/City_Council/2013/04Apr/City_Council__04-30-2013_-__Regular_Meeting_Annotated_Agenda.aspx

[2] Larger businesses employing 50 or more employees or franchises would pay the city’s living wage.

[3] With increases of 55 cents an hour for small business on top of the CPI-based inflation adjustments.

[4] The language opposing BB and CC is signed by the Labor Council, the Chamber of Commerce, Berkeley for Working Families, and mayoral candidates Jesse Arreguin and Laurie Capitelli. See:

http://www.ci.berkeley.ca.us/Clerk/Elections/Election__2016_Ballot_Measures_Page.aspx.

 

 

 

 

Affordable Housing Platform

Background

Since 2011, rents for vacant rent controlled apartments have soared by an average of 47% and are unaffordable to many of the people who live and work here. Housing costs impact our city’s vitality and diversity by contributing to the decline of the African American population and fewer lower-income residents and creative people. Berkeley has fallen short of building the new housing called for under regional housing goals and falls woefully short of housing affordable by moderate and low income households. This problem is not unique to Berkeley: Oakland, San Francisco and most of the Bay Area face a housing affordability crisis. We need a comprehensive approach in Berkeley.

Build More Affordable Housing

More housing is needed for people at all income levels with the greatest need for housing affordable to low and moderate income households:

  1. Prioritize affordable housing by streamlining permitting process for projects with at least 50% affordable units.
  2. Use some Housing Trust Fund money to purchase existing rental housing to keep it affordable and develop ownership opportunities through limited equity coops.
  3. Evaluate publicly owned sites for suitability for housing. Develop the Berkeley Way parking lot and North Berkeley BART air rights for affordable housing.
  4. Build more housing for students at locations close to the UC campus as called for in the Southside Plan. Work with the Berkeley Student Cooperative to expand relatively affordable co-op housing.

Increase Funding

Every dollar in the Trust Fund can leverage about $3 in federal or other public funds to build affordable housing. There are four actions the City Council should take to generate more funds for the City’s Housing Trust Fund to pay for additional affordable housing:

  1. Ask voters to increase the business license tax on large landlords in Berkeley; each 1% increase in the tax would bring in $2 to $3 million annually, a small proportion of the estimated $66 million that rents have increased in Berkeley since 2011.
  2. Increase Housing Impact fees to at least $34,000 as recommended by a City-commissioned study and make funds available earlier by requiring developers to pay the fee when the first construction document is issued. If a developer chooses to build housing on site instead of paying the fee, require it to provide 20% affordable units (5 affordable units for every 20 market rate units).
  3. Tax short term rentals like AirBnB and place the money in the Housing Trust Fund.
  4. Allocate 25% of excess Property Transfer Tax Funds to the Housing Trust Fund.

Together, these actions could generate $10 million or more and fund creation of around 100 or more affordable units each year through both new construction and acquisition of existing housing. Some of these funds could also be used to create affordable home ownership via limited equity coops and other resident-controlled cooperative housing.

Maintain the Supply of Existing Rental Housing

We also need to insure that currently affordable housing is not taken off market. Ask the Council to:

  1. Strengthen our Demolition Ordinance. Require that each rent controlled unit be replaced one for one with housing permanently affordable to low wage people.
  2. Prohibit conversion of rent controlled units to short term rentals.
  3. Create a City-maintained waiting list for affordable housing units and work to give priority for these units to those who currently live or work in Berkeley.
  4. Continue to limit conversion of rental units to condominiums and increase the conversion fee.
  5. Continue Support for Rent and Eviction Controls.
  6. Lobby for changes to state law to allow rent control for new housing beginning ten years after it’s built.
  7. Monitor Ellis Act evictions after they happen to insure evictions were legal and increase relocation fees for owner move-in evictions.
  8. Regularly monitor habitability of affordable and rent controlled units to insure they are retained in the housing stock, with inspections paid for by the owners.

Build Green, Sustainable Buildings

Reduce the generation of greenhouse gases and water use by residential buildings in Berkeley:

  1. Require new multi-family housing in Berkeley to meet a Zero Net Energy standard by 2020. Solar electric and solar thermal systems should become commonplace.
  2. Require best-practice water conservation measures in new buildings.
  3. Require all developers including in the downtown to pay open space impact fees to create and maintain parks, plazas, community gardens, etc.
  4. Require developers to pay transportation service fees to support pedestrian, bicycle and transit improvements and incentives.
  5. Encourage developers to seek GreenTRIP certification from Transform through car-sharing, transit passes for residents, and ample bicycle parking and storage.
  6. Give incentives to homeowners and owners of existing multi-family housing to make energy efficiency and water conservation improvements.

Background

In 2010, Berkeley had about 27,183 rental housing units, an increase from 24,512 units in 1990. Of these, about 19,000 are rent-controlled housing units. State law in 1995 replaced Berkeley’s system of strong rent control with vacancy decontrol, which means that landlords can raise their rent to market rate whenever a unit becomes vacant.

Rents are soaring

In the last few years, rents for new tenancies in rent controlled units have risen sharply:

New tenancies                       2011                    2015 Jan-Sept                          change

Studio                                     $ 970                         $1,450                                    + 49.5%

One bedroom                     $1,250                          $1,800                                    + 44.0%

Two-bedroom                      $1,700                       $2,600                                    + 52.9%

Source: Data in Berkeley Rent Stabilization Board, December 14, 2015 Memorandum, Market Medians: January 1999 through September 2015 http:// www.ci.berkeley.ca.us/uploadedFiles/ Rent_Stabilization_Board/Level_3_-_General/3q2015_Market_Medians.pdf

Average rents in new apartment are now much higher than rents in older rent controlled housing. Average rents in new apartment buildings in Berkeley as of 2014 were:

One-bedroom:     $2,537

Two-bedrooms: $3,434

Source: bae urban economics, City of Berkeley Affordable Housing Nexus Study, March 25, 2015, p. 4. 

What is affordable?

Federal guidelines set 30% of household income spent on housing as the limit for determining whether housing is affordable. If more than 30% goes for housing and utilities, then it’s not affordable.

Many tenant households in Berkeley have modest incomes. 82% of renter households have income below $100,000 a year, making area rents for even a studio unaffordable:

Median household income, renters:  $ 38,539          Affordable monthly rent: $963

Median income of renters is even lower in South and West Berkeley. In South Berkeley, median tenant household incomes are under $38,000 a year.

Source: 2010-2014 American Community Survey 5-Year Estimates, S2503, Financial Characteristics, data by Census tracts and for the city as a whole. South Berkeley defined as Census tracts 4233, 4234, and 4240.

What kind of housing is currently being built in Berkeley?

Berkeley’s General Plan calls for the City to create 6,400 permanently affordable units for low- and very-low-income households. Between 2007 and 2014, only 22 units were produced for people with moderate incomes, achieving only 4% of Regional Fair Share Goal. Only 87 low income units and 76 very low income units were built in Berkeley, achieving only 21% and 23% respectively of Berkeley’s regional fair share goal.

More than 1,000, or 84%, of housing units produced in Berkeley were affordable only to people with above moderate incomes (income greater than 120% of the area median income, or income in excess of $112,200 in 2015 in Alameda County).

Source: City of Berkeley 2015-2023 Housing Element. For area median income: California Department of Housing and Community Development Division of Housing Policy Development, “State Income Limits for 2015”, April 15, 2015.

Many families pay more rent than they can afford 

Only a fraction of low income families in Berkeley receive Section 8 housing vouchers or live in permanently affordable housing. Of Berkeley’s nearly 50,000 housing units, only about 2,000 are subsidized or inclusionary units. Up to 2,000 people in Berkeley have Section 8 or Shelter Plus Care vouchers.

Now, 53.5% of Berkeley’s renters are currently paying 30% or more or their income in rent. A City’s Rent Board survey of tenants in rent-controlled housing in 2009 found that 26% of non-student tenants were paying more than 50% of their income in rent, up from 20% in 1998. About 3,400 Berkeley households are considered “extremely rent burdened”. Rents have soared since 2009; those paying over 50% of income in rent have also increased.

Students, who make up about one-third of the City’s tenant population also face a difficult situation. Even with a big jump in UC fees, many students’ housing costs are still higher than their fees. This contributes to their debt when they leave school. Even though many students double up, they still pay high rent even when they share rooms.

Sources: U.S. Census Bureau, 2010-2014 American Community Survey 5-Year Estimates; Berkeley Rent Stabilization Board, Rent Stabilization and the Berkeley Rental Housing Market 15 Years after Vacancy Decontrol, January 28,2013; Stephen Barton, Ph.D., and former City of Berkeley Housing director, “Berkeley’s Affordable Housing Crisis and What We Can Do About It”, PowerPoint presentation for November 22 teach-in].

What is the City Council doing to address the housing affordability crisis?

At the moment, not much.

The Council Rejected a Modest Budget Request

In April, 2015, the City Council rejected a proposal from Councilmembers Anderson, Arreguin and Worthington to add $1 million to the Housing Trust Fund as part of the current budget. Funds are available: the City collected close to $164 million in discretionary revenue in 2015, up from $140 million five years earlier.

… and Discounted the Housing Fee to Benefit a Big Developer

In April 2015, the City Council continued discounting the housing impact fee to $20,000, down from the $28,000 approved in 2012. They took this action just as the largest housing project ever proposed in Berkeley was being considered and despite clear evidence that rents, and developer revenues, are soaring. Councilmembers Anderson, Arreguin and Worthington dissented. The City Council still has not acted to update the fee based on a March 2015 study recommending a $34,000 per unit fee and noting that construction of 100 market rate units creates demand for 25 additional low and moderate income units.

Source (revenue) City of Berkeley Adopted Biennial Budget, Fiscal Years 2016 & 2017, p. 40; for HTF budget referral: April 7 City Council Agenda, item 33, “Budget Referral: Housing Trust Fund”; for Council vote on impact fees: http://www.contracostatimes.com/breaking-news/ci_27918486/berkeley-council-extends-discount-affordable-housing-impact-fee http:// www.ci.berkeley.ca.us/ Clerk/City_Council/2015/04_Apr/City_Council__04-07-2015_-_Regular_Meeting_Annotated_Agenda.aspx; sources: http://www.fundaffordablehousing.org [site under construction]; bae urban economics, City of Berkeley Affordable Housing Nexus Study, March 25, 2015

Housing Trust Fund: Running Near Empty

The amount needed to complete projects already identified by affordable housing developers by 2018 is as much as $ 36.8 million. As a result of the Council’s failure to act, the City has relatively little money available in the Housing Trust Fund. As of November 5, 2015, the Trust Fund had a balance of only $3,067,578.

Source: “Below Market Rate Housing and Housing Trust Fund Program Status” prepared by city staff for City Council Work Session, December 1, 2015 (item 03). Funding Strategies: http://www.fundaffordablehousing.org

Building it Green

The California Public Utilities Commission (CPUC) adopted the California Long Term Energy Efficiency Strategic Plan, calling for all new residential construction in California to be Zero Net Energy (ZNE) by 2020. A ZNE building produces as much energy as it consumes during a year through energy efficiency and clean, on-site renewable power generation, typically solar photovoltaics.

The CPUC and at the California Energy Commission staff’s New Residential Zero Net Energy Action Plan 2015-2020 makes the state’s 2020 ZNE goal possible. Berkeley requires new buildings downtown to be LEED gold, but this can be achieved without any on-site energy generation and does not necessarily lead to much reduction in the building’s carbon footprint. Very few new Berkeley buildings have any significant solar energy component (Oxford Plaza downtown and Helios Corner on University are notable exceptions).

New development can also help achieve the City’s Climate Action Plan goals if buildings are located near transit and residents received encouragement and incentives to take transit, walk and bike; Transform’s Green Trip certification can help with that.

Sources:

http://www.californiaznehomes.com http://www.sahahomes.org/properties/helios-corner

http://www.rcdev.org/documents/OxfordProjectFactSheetApril2009Final.pdf

http://www.transformca.org/landing-page/greentrip

Drafted for the BPA by Rob Wrenn and Kate Harrison

 

Berkeley Progressive Alliance Newsletter #1

Newsletter #1, February 2016

Dear Affordable Housing Activist,

This is the inaugural newsletter of the Berkeley Progressive Alliance (BPA). You are receiving it because you attended the affordable housing TEACH-IN on November 22, 2015, or are part of the Sustainable Berkeley Coalition.

Mission Statement

The Berkeley Progressive Alliance works for open, transparent, and fair governance that supports our diverse community with appropriate development projects, reasonably priced housing, policies that protect the environment and equitable public education. Individuals, neighborhood groups, social justice and environmental justice organizations are invited to join us.

As we all are acutely aware, this is an election year both nationally and locally. For the past 12 years we have seen Berkeley transformed into Speculation City, with such amenities as the Shattuck Cinemas, Habitot, and treasured local businesses threatened with demolition, and the cost of housing soaring. While there are new apartment buildings constructed all over Berkeley, they are renting at exorbitant market rates and include few low-income or family units. They are not built to high energy-efficiency and water conservation standards.

All of these changes have been presided over by Mayor Tom Bates and his City Council majority, who seem to represent the interests of speculative developers and investors rather than those of Berkeley residents.

BPA is committed to electing a   progressive mayor and a City Council majority that will be accountable to the residents of Berkeley, not to a handful of large real estate speculators, such as the Blackstone Private Equity Corporation, owner of the now infamous Library Gardens.

We need you to be a part of our efforts. Specifically, we are establishing working committees of the alliance, and we welcome your participation in one or more of them.

1. Voter Registration: To be successful, we need to register new voters and those who have given up on voting. We know that when there is greater voter turnout, there is a greater likelihood of progressive issues and candidates winning. If you would like to be part of this effort, please join our voter engagement/outreach committee.

2. Outreach:  The ability to reach our progressive base depends in part on our ability to produce all sorts of media and communications that will engage our voter base. They include the use of social media on the Internet, producing and distributing leaflets and flyers at community events and distribution at popular locations in the city, and creating short videos that can be used for house parties as well as on the Internet. If you have media experience, we welcome your participation in our media committee.

3.  Fundraising: To compete successfully in elections requires having adequate funds to produce flyers, pay for phone banks, produce campaign literature, etc. We are creating a fund-raising committee that will work to sponsor house parties where people can donate to the alliance. We need to encourage individuals to donate through our forthcoming website. Using house parties to raise money and educate voters in Berkeley requires organizers and speakers. Successful house parties not only produce funds to help in our efforts, but galvanize new people to participate in the democratic process.

If you feel as we do, that the local elections in Berkeley are critical in determining the future direction of our city, we invite you to participate in our growing organization and help move this city in a more progressive, sustainable direction. The future of our families, our children and grandchildren may well be determined by this year’s election.

Please tell us which of the above committee or committees you would like to participate in and email us at: Berkeleyprogressivealliance@gmail.com. It would also be helpful if you indicate your relevant skill sets or experience.

Follow us on Facebook at Berkeley Progressive Alliance. https://www.facebook.com/groups/172758219757361/

Membership in BPA is $10 per year, and can be waived if necessary.

In Solidarity,

Interim Coordinating Committee of the Berkeley Progressive Alliance

Don Goldmacher and Kate Harrison, Co-Chairs.
berkeleyprogressivealliance@gmail.com