Investment Policy Changes At California’s Public Pension Funds: Is Internal Reform Enough?
Following the introduction of AB 2337 (the Socially Responsible Investment Act) by Assemblymember Tom Ammiano, CalPERS and CalSTRS recently proposed changes in their real estate investment policies with the goal of avoiding future investments in deals that rely, or result in, the displacement of residents in affordable housing, a practice commonly referred to as “predatory equity”.
Predatory equity is an inherently risky form of real estate speculation in which investors pay more for rent-regulated housing than can be justified by the actual rental income at the time of purchase. The business model is predicated on the eviction and harassment of tenants so that rents can be significantly raised through vacancy decontrol or so that properties can be converted to other uses such as condominiums.
Unfortunately, this practice has become a problem of both statewide and national importance in recent years, and has in many instances used public pension fund money as the primary source of equity. Beyond the ethical concerns raised by such practices, the investments have also proven to be financially unsound, with CalPERS and CalSTRS recently losing more than $700 million in deals in New York City and East Palo Alto.
While CalPERS’ and CalSTRS’ proposed real estate investment policy changes are an important first step, they do not sufficiently guarantee that these types of predatory investments will come to a halt.
California’s Great Recession and the Costs of War 
By Zack KaldveerConsumer Federation of California
California is on life support. Families are reeling from the most severe economic downturn since the Great Depression. The state’s social safety net - and the life sustaining services it provides - is needed now more than ever. But due to massive and ongoing budget deficits, rather than strengthening programs that are in such high demand – from health care to education to assistance to the poor – we are dismantling them.
To adequately and humanely address the economic pain felt by too many Californians and prevent the recession from deepening, new revenues are desperately needed. One
Prop 11 Citizens Redistricting Commission Showing Problems
By Robert CruickshankIt was an ambitious idea that doesn't quite seem to be working out. Prop 11 was based on the concept that informed citizens, representing the state's diversity, would draw better maps for state legislative districts than the legislators themselves. Prop 11 narrowly passed in 2008, and is already the subject of both a repeal initiative and a initiative to create this kind of commission for the Congressional seats.
Whatever you think of the concept, it's not functioning as planned, as Torey Van Oot reports for the SacBee:
But with the supplemental application deadline closed, about 90 percent of initial
