Council proposes solutions to city’s budget challenges

Community urges county to move forward on Coliseum development

By Ken Epstein

The Oakland City Council has identified proposals for stronger fiscal solutions and will be able to avoid declaring a fiscal emergency in Oakland, according to Vice-Mayor and Councilmember-at Large Rebecca Kaplan.

“The Oakland City Council is prioritizing community safety, housing security, essential services to keep our city safe, healthy and vibrant, and collecting outstanding revenue that are owed – as well as transparency in making fiscally sound decisions based on real financial data,” Kaplan said in a written statement to the Oakland Post discussing the City Council budget discussion.

With a new report brought to Council at its Dec. 9 special budget meeting, there are now several important improvements. The recommendation for declaring a fiscal emergency has been removed, clarifying that Oakland is NOT at risk of insolvency, she said.

Additionally, extra funds from special fund sources and enterprise funds, have been identified that are available to be used to ensure fiscal solvency.

“Yesterday, the City Council discussed a ‘Back to Basics’ approach to our budget and city services,” said Council President Nikki Fortunato-Bas.  “While our financial situation requires action, the Council has previously provided direction to the City Administrator through the contingency budget, and we discussed the City Administrator’s further proposals for how to rebalance our Midcycle Budget to close our current fiscal year projected deficit.”

“Importantly, we are ensuring our reserve is at the required level, and we do not need to declare a fiscal emergency under our Consolidated Fiscal Policy,” she said.

Kaplan said, “It is vital to protect core public services and the long-term fiscal solvency of our city.”

Continuing, she said, “I am honored that extra available funds I had previously identified have been confirmed and are being incorporated into budget strategies, allowing Oakland to reduce cuts and restore reserves.”

In addition, she said, Important public-serving and revenue-generating functions are being strengthened, including to reduce blight and provide safer, cleaner streets.”

Councilmember Carroll Fife said she appreciated the leadership of Bas’s new budget team who worked with the City Administrator and the Finance Department “to get us on the right track through exploration of all available options for fiscal stability.”

“No doubt we are facing challenges, but I am confident that the decisions we are making will set us up for long-term success,” Fife said.  “I am particularly grateful for the institutional memory and fiscal acumen of Councilmember Rebecca Kaplan, who weeks ago suggested some of the steps now being taken that averts the crisis previously communicated to the public. This is a better deal for Oakland.”

‘The safety of the community is front-of-mind,” said Kaplan. “It is vital to protect the public from dangerous hazards, including crime and violence, fires, traffic dangers, and more.”

This new balanced and comprehensive approach protects and strengthens these vital investments in our safety, she said.  The Fire Department, which had been preserved from cuts in July, was able to rapidly stop the Keller Fire from growing out of control, preventing a repeat of the horrific loss of life and homes during the 1991 Oakland Hills Fire.

Investments in the Oakland Police Department and the Department of Violence Prevention have yielded the fastest and most dramatic reduction in homicides in our city’s history, with levels now far below those of the prior several years, said Kaplan.

“The City’s deep investments in public safety over the past year continue to pay off, with homicides down 34% year-to-date and overall crime down by 33% since last year,” she said.

“Our Public Safety Leadership team is very strong with OPD Chief Floyd Mitchell, Department of Violence Prevention (DVP) Chief Dr. Holly Joshi, OFD Chief Damon Covington, and their deputy chiefs having over a century of collective experience in Oakland,” Bas said.

The budget proposals preserve Oakland’s Ceasefire violence intervention strategy, prioritize OPD patrol and investigations, and continue services to improve 911 response times, with 71% of calls answered within 15 seconds or less – a dramatic improvement over the prior year, Kaplan added.

“Oakland’s investments in sidewalk repair, street paving, clearing abandoned autos, and safer conditions on our roadways are improving both safety and quality of life,” she said. “The proposals restore funding for important and needed bicycle and pedestrian safety projects, street paving, parking enforcement, and more.”

Along with budget balancing actions in the immediate term, city leaders continue to urge the County to act on the Coliseum land sale, which will strengthen development and bring in revenue to support City and County needs, she said.

Bas said that over 90 speakers at the budget meeting spoke passionately about the city’s cultural arts, senior services, safety, parks and recreation, wage theft enforcement, community well-being, and calling on the County to move forward on Coliseum development.

Speakers also expressed appreciation for the thousands of dedicated city workers – including those who made recommendations for a more sustainable budget and identified efficient and effective strategies.

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By Post News Group

Post News Group Global Features Journalist Carla Thomas recently hosted a second Virtual Town Hall on Racism, with guests including community builders Trevor Parham of Oakstop and Chien Nguyen of Oakland Trybe.

Thomas opened the town hall by paying homage to the ancestral losses of the African diaspora and to the Indigenous tribes, the enslaved, the freed, and the trailblazers of the Civil Rights Movement, Black Lives Matter Movement, and those more recently victimized by police brutality.

After thanking Bay Area non-profits for their work, Thomas led a thoughtful discussion on the importance of acknowledging racism as the first form of hate that built America.

“While our society tends to rebrand over the decades, we find hate as the new word, broadening its arch of issues in society,” she said. “However, the very first form of hate, which is racism, built this country,” she said.

“That act of othering, creating a narrative that made African people, indigenous people, and ultimately melanated people, labeled as less than human justified the colonizers act of subjugating our ancestors to inhumane, incomprehensible treatment for over 400 years,” said Thomas.

Parham of Oakstop, located at 1721 Broadway, explained that Nazi Germany patterned its mistreatment and extinction of Jews in the Holocaust after chattel slavery in America and the Jim Crow apartheid system that followed it.

“Nazi Germany found America’s treatment of Blacks so inhumane and denigrating that they (decided) it would actually be the perfect ingredient to undermine another group of people,” said Parham. “So, they essentially borrowed from what Americans did to Black people.”

Thomas pivoted the discussion to the limitations placed on Black America’s generational wealth through policies of red-lining, redevelopment, and title deeds to this day, based on the idea that no Black or indigenous person is allowed to purchase property or land.

“For this reason, there continue to be impoverished Black communities throughout the nation,” she said.

“The structures of racism from red-lining to lack of access to capital continue to restrict Black (people) in America; this structural racism kind of finishes you before you even start,” added Parham. “The lack of generational wealth has left our communities at a disadvantage because with generational wealth we’d have the resources to police our own communities and build further.”

Nguyen, Clinton Park site director for Oakland Trybe, spoke about his parents’ journey as immigrants from Vietnam, the challenges of being teased in school, and how his troubled brother was murdered.

Nguyen has turned his personal tragedies into triumph, pivoting from a career as  an eight-year business owner in the Little Saigon community of East Oakland, to now a non-profit leader transforming and reclaiming the community’s Clinton Park at International Boulevard and Sixth Street..

“A park represents community, and between the pandemic, illegal activities, and homelessness, the park needed to be re-established, and we now offer programming for the youth and extended community,” he said.

“Between Oakstop’s business model of purchasing commercial properties and transforming them into beautiful spaces for community ownership, business space, and special event hubs, and Oakland Trybe’s ability to transform public spaces central to a community and empower our communities, we have solutions,” Thomas said.

Throughout the conversation, Parham referred to a press conference hosted at Oakstop in August where NBA icons Jason Kidd and Jaylen Brown pledged to raise $5 billion for Black businesses in the nation.

“Inspired by Black Wall Street, Jaylen began with Boston and created the Boston Xchange because he became aware of a statistic noting that white households in Boston average $250,000 and Black households averaged a mere $8 in wealth,” Parham said.

In Oakland, he established the Oakland Xchange to expand the movement right at Oakstop, he said.

Thomas encouraged viewers to connect with her guests and tap into the dozens of organizations making a change. “I encourage you to join your chambers of commerce, your community-based organizations, non-profits, and churches to uplift and rebuild the community,” she said.

Thomas also suggested that the NAACP as a great start. “The Oakland chapter’s resolution developed around racism was adopted by the national NAACP, and at the Afrotech Conference, national NAACP leader Derrick Johnson announced a $200 million fund to support Black funders.”

Thomas informed viewers of the California vs. Hate,  initiative, a non-emergency hate incident and hate-crime reporting system to support individuals and communities targeted for hate.

“Your reports inform the state of where to designate resources and extra support,” said Thomas.

For more information, visit PostNewsGroup.com, CAvsHATE.ORG or call 1-833-8-NO-HATE.

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By Wendy Fry, CalMatters

If you’ve hunted for apartments recently and felt like all the rents were equally high, you’re not crazy: Many landlords now use a single company’s software — which uses an algorithm based on proprietary lease information — to help set rent prices.

Federal prosecutors say the practice amounts to “an unlawful information-sharing scheme” and some lawmakers throughout California are moving to curb it. San Diego’s City Council president is the latest to do so, proposing to prevent local apartment owners from using the pricing software, which he maintains is driving up housing costs.

San Diego’s proposed ordinance, now being drafted by the city attorney, comes after San Francisco supervisors in July enacted a similar, first-in-the-nation ban on “the sale or use of algorithmic devices to set rents or manage occupancy levels” for residences. San Jose is considering a similar approach.

And California and seven other states have also joined the federal prosecutors’ antitrust suit, which targets the leading rent-pricing platform, Texas-based RealPage. The complaint alleges that “RealPage is an algorithmic intermediary that collects, combines, and exploits landlords’ competitively sensitive information. And in so doing, it enriches itself and compliant landlords at the expense of renters who pay inflated prices…”

But state lawmakers this year failed to advance legislation by Bakersfield Democratic Sen. Melissa Hurtado that would have banned the use of any pricing algorithms based on nonpublic data provided by competing companies. She said she plans to bring the bill back during the next legislative session because of what she described as ongoing harms from such algorithms.

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“We’ve got to make sure the economy is fair and … that every individual who wants a shot at creating a business has a shot without being destroyed along the way, and that we’re also protecting consumers because it is hurting the pocketbooks of everybody in one way or another,” said Hurtado.

RealPage has been a major impetus for all of the actions. The company counts as its customers landlords with thousands of apartment units across California. Some officials accuse the company of thwarting competition that would otherwise drive rents down, exacerbating the state’s housing shortage and driving up rents in the process.

“Every day, millions of Californians worry about keeping a roof over their head and RealPage has directly made it more difficult to do so,” said California Attorney General Rob Bonta in a written statement.

A RealPage spokesperson, Jennifer Bowcock, told CalMatters that a lack of housing supply, not the company’s technology, is the real problem — and that its technology benefits residents, property managers, and others associated with the rental market. The spokesperson later wrote that a “misplaced focus on nonpublic information is a distraction… that will only make San Francisco and San Diego’s historical problems worse.”

As for the federal lawsuit, the company called the claims in it “devoid of merit” and said it plans to “vigorously defend ourselves against these accusations.”

“We are disappointed that, after multiple years of education and cooperation on the antitrust matters concerning RealPage, the (Justice Department) has chosen this moment to pursue a lawsuit that seeks to scapegoat pro-competitive technology that has been used responsibly for years,” the company’s statement read in part. “RealPage’s revenue management software is purposely built to be legally compliant, and we have a long history of working constructively with the (department) to show that.””

The company’s challenges will only grow if pricing software becomes another instance in which California lawmakers lead the nation. Following San Francisco’s ban, the Philadelphia City Council passed a ban on algorithmic rental price-fixing with a veto-proof vote last month. New Jersey has been considering its own ban.

Is It Price-fixing — or Coaching Landlords?

According to federal prosecutors, RealPage controls 80% of the market for commercial revenue management software. Its product is called YieldStar, and its successor is AI Revenue Management, which uses much of the same codebase as YieldStar, but has more precise forecasting. RealPage told CalMatters it serves only 10% of the rental markets in both San Francisco and San Diego, across its three revenue management software products.

Here’s how it works:

In order to use YieldStar and AIRM, landlords have historically provided RealPage with their own private data from their rental applications, rent prices, executed new leases, renewal offers and acceptances, and estimates of future occupancy, although a recent change allows landlords to choose to share only public data.

This information from all participating landlords in an area is then pooled and run through mathematical forecasting to generate pricing recommendations for the landlords and for their competitors.

San Diego City Council President Sean Elo-Rivera, explained it like this:

“In the simplest terms, what this platform is doing is providing what we think of as that dark, smoky room for big companies to get together and set prices,” he said. “The technology is being used as a way of keeping an arm’s length from one big company to the other. But that’s an illusion.”

In the company’s own words, from company documents included in the lawsuit, RealPage “ensures that (landlords) are driving every possible opportunity to increase price even in the most downward trending or unexpected conditions.” The company also said in the documents that it “helps curb (landlords’) instincts to respond to down-market conditions by either dramatically lowering price or by holding price.”

Providing rent guidance isn’t the only service RealPage has offered landlords. In 2020, a Markup and New York Times investigation found that RealPage, alongside other companies, used faulty computer algorithms to do automated background checks on tenants. As a result, tenants were associated with criminal charges they never faced, and denied homes.

Impact on Tenants

The attorneys general of eight states, including California, joined the Justice Department’s antitrust suit, filed in U.S. District Court for the Middle District of North Carolina.

The California Justice Department contends RealPage artificially inflated prices to keep them above a certain minimum level, said department spokesperson Elissa Perez. This was particularly harmful given the high cost of housing in the state, she added. “The illegally maintained profits that result from these price alignment schemes come out of the pockets of the people that can least afford it.”

Renters make up a larger share of households in California than in the rest of the country —  44% here compared to 35% nationwide. The Golden State also has a higher percentage of renters than any state other than New York, according to the latest U.S. Census data.

The recent ranks of California legislators, however, have included few renters: As of 2019, CalMatters could find only one state lawmaker who did not own a home — and found that more than a quarter of legislators at the time were landlords.

The State Has Invested in RealPage

Private equity giant Thoma Bravo acquired RealPage in January 2021 through two funds that have hundreds of millions of dollars in investments from California public pension funds, including the California Public Employees’ Retirement System, the California State Teachers’ Retirement System, the Regents of the University of California and the Los Angeles police and fire pension funds, according to Private Equity Stakeholder Project.

“They’re invested in things that are directly hurting their pensioners,” said K Agbebiyi, a senior housing campaign coordinator with the Private Equity Stakeholder Project, a nonprofit private equity watchdog that produced a report about corporate landlords’ impact on rental hikes in San Diego.

RealPage argues that landlords are free to reject the price recommendations generated by its software.

RealPage argues that landlords are free to reject the price recommendations generated by its software. But the U.S. Justice Department alleges that trying to do so requires a series of steps, including a conversation with a RealPage pricing adviser. The advisers try to “stop property managers from acting on emotions,” according to the department’s lawsuit.

If a property manager disagrees with the price the algorithm suggests and wants to decrease rent rather than increase it, a pricing advisor will “escalate the dispute to the manager’s superior,” prosecutors allege in the suit.

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