WTF Happened To Los Angeles - Graham Stephan Confronts Nithya Raman

The American Dream in Los Angeles [00:00:00]

• Los Angeles is described as the epitome of the American dream, a place that invites people to dream big and be entrepreneurial.
• A stark contrast is presented by the idea of never investing another dollar in California real estate again.

• "Los Angeles, to me, is the epitome of the American dream."

Political Landscape: Allies to Opponents [00:00:00]

• Councilwoman Nithya Rahman filed to run for mayor just before the deadline.
• She is now positioned as an opponent to Karen Bass, transitioning from allies to adversaries.

• "Councilwoman Nithya Rahman filed to run just hours before the deadline."

Biggest Issues Facing Los Angeles [00:00:00]

• The primary issues facing Los Angeles are identified as homelessness and housing costs.
• These two issues are described as two sides of the same coin.

• "So what do you think of the biggest issues facing Los Angeles? Homelessness and housing costs."

The Scale of Homelessness in California [00:00:00]

• Researchers found that over 171,000 people experience homelessness daily across California.
• This highlights the significant scale of the crisis.

• "Researchers found that more than 171,000 people experience homelessness daily across California."

Earning Trust Through Fiscal Responsibility [00:00:00]

• Rahman emphasizes the need to audit every dollar and monitor performance to ensure accountability.
• She acknowledges that others have made similar promises but highlights her past success in achieving results.

• "Yes, but I already did it in six years."

Prioritizing Spending Control Over Tax Increases [00:00:00]

• A key point of contention is the idea of raising taxes before controlling spending.
• Rahman clarifies her stance, stating the opposite is true: spending must be controlled first.

• "Yeah, but why should we tax first before actually getting the spending under control?"

Addressing Waste, Fraud, and Abuse [00:00:00]

• The conversation touches upon concerns about waste, fraud, and abuse, specifically mentioning Nick Shirley.
• Rahman's hope is to create a system in Los Angeles where such complaints are unfounded.

• "My hope is that we build a system here in Los Angeles where Nick Shirley cannot come and find anything to complain about."

Candidate's Willingness to Engage [00:00:00]

• Nithya Rahman agreed to appear on the podcast, while Karen Bass did not respond.
• The interview with Rahman is described as potentially contentious but open to all questions.

• "We reached out to both her and Karen Bass to come on. Karen Bass never got back to us, but Nithya did."

The Mayor's Power in Los Angeles [00:00:00]

• Los Angeles operates under a weaker mayor system compared to cities like New York or Boston.
• However, a charter reform 25 years ago granted the mayor more executive authority, including hiring/firing department heads and setting departmental priorities.

• "Here in California, we designed a lot of, you know, historically, people designed more decentralized governance structures."

Connecting Homelessness and Housing Costs [00:00:00]

• Rahman reiterates that homelessness and housing costs are the biggest issues and are interconnected.
• While acknowledging complexities like mental health and substance use, she points to the correlation between unaffordable cities and unsheltered homelessness.

• "The two that are, I think, the biggest are homelessness and housing costs. And they're two sides of the same coin."

The Origin of Homelessness in LA [00:00:00]

• Most homeless individuals in the valley areas of LA are from LA, having struggled after coming to work or being born and raised there.
• Some areas, like the beaches and Hollywood, attract outsiders, including LGBTQ youth seeking acceptance.

• "And the people who are on the streets in the valley, living near the river or in encampments, are mostly people who are from L.A."

Building More Housing: The Biggest Obstacle [00:00:00]

• To address housing costs, Rahman stresses the need to build significantly more housing.
• She identifies government processes, including lengthy approval times and high permitting/entitlement costs, as the biggest obstacles.

• "So we need to make it easier, cheaper, faster to build more housing. And the biggest obstacle to building more housing in Los Angeles is often the government."

Rent Control's Impact on New Construction [00:00:00]

• The discussion turns to rent control, with a pushback on whether it hinders new housing.
• Rahman clarifies that California state regulation prevents new construction after 1978 from falling under rent control.

• "So here in L.A., here in California overall, there is a state regulation that prevents new construction from falling under rent stabilization or rent control."

The "Mansion Tax" Debate [00:00:00]

• LA's "mansion tax," implemented on April 1st, aims to fund affordable housing and tenant protection.
• Rahman supported the tax initially for its funding potential but now believes it significantly impacts new apartment construction.

• "I was a supporter of the mansion tax coming in. It created a new source of funding for affordable housing construction that we didn't have after the CRA was dissolved in California."

Reforming the Mansion Tax for Housing Growth [00:00:00]

• Rahman advocates for reforming the mansion tax to exempt new multifamily construction.
• She argues this is a bigger inhibitor to new construction than rent control and is crucial for the city's future resiliency.

• "And for me, as someone who believes that unlocking new housing here in L.A. is the single most important thing to maintaining the city's resiliency into the future..."

Addressing Homelessness to Revitalize Investment [00:00:00]

• Rahman believes that addressing the unsheltered homelessness crisis is key to bringing investment back to Los Angeles.
• She also emphasizes finding common ground on reducing government red tape, which hinders creativity and entrepreneurship.

• "But, you know, I would say that if we can address our unsheltered homelessness crisis and we can get a, we can really wrap our arms around that, I think we can bring investment back into Los Angeles."

Simplifying Processes: Sidewalk Dining Example [00:00:00]

• Rahman uses sidewalk dining as an example of cutting red tape: a straightforward process with occasional audits, rather than lengthy permitting.
• This approach allows businesses to thrive without bureaucratic hurdles.

• "And you come out and audit every once in a while, but that you don't actually need to have an expensive permitting process in order to do something that feels very, very straightforward."

The "Shot Clock" for Housing Permits [00:00:00]

• Rahman proposes a "shot clock" for permit and entitlement requests, setting deadlines for departmental responses.
• This aims to expedite the building process, with potential fee refunds for delays.

• "So a shot clock is a deadline by which departments have to respond to your request for a permit or an entitlement."

The Costly and Lengthy ADU Permitting Process [00:00:00]

• An anecdote details a six-month delay and $40,000 cost to fix a sewer line for an Accessory Dwelling Unit (ADU).
• This included unexpected issues, multiple inspections, and a fine for not planting a tree, leading the landlord to exit the market.

• "And the whole experience made me to say, I'm out of here. It's like, it's not worth it."

Rent Control's Impact on Landlords [00:00:00]

• The current rent control system is described as making it impossible for "mom and pop" landlords to operate.
• Landlords face incentives to do nothing to maintain properties due to low rent control rates, which apply regardless of tenant income.

• "The rent control restrictions make it so that you cannot run as a mom and pop landlord in California at all."

Tenant Abuse and Landlord Struggles [00:00:00]

• Examples are given of tenants refusing access for photography or appraisals, leading to lost buyers and loans.
• Landlords face lengthy court battles and significant financial losses when tenants refuse to leave, even well-off ones.

• "And the appraiser came to measure it. And she wouldn't allow the appraiser access. So we lost that loan. We lost that buyer."

The Imbalance of Power in Rent Control [00:00:00]

• While acknowledging a small minority of bad actors among tenants, the speaker highlights the power imbalance.
• Landlords, even those with high-income tenants paying below market rates, struggle with restrictions and potential financial ruin.

• "But what are you going to do? It takes six months, a year to go through court."

Free Legal Assistance: A One-Sided Approach? [00:00:00]

• The conversation questions whether landlords should also receive free legal assistance.
• It's noted that free legal aid for renters is income-qualified and intended to balance power.

• "It's not, first of all, it's not every renter that gets free legal assistance from the city. It's only renters that meet an income threshold."

The Financial Strain on Multifamily Property Owners [00:00:00]

• Multifamily property values in Los Angeles have decreased significantly (around 30%) in the last four years.
• High interest rates and other factors contribute, making it difficult for landlords to break even, let alone profit.

• "Multifamily in Los Angeles, the value of those properties are down about 30% in the last four years."

Proposed Solutions: Vouchers vs. Rent Control [00:00:00]

• A voucher system is proposed as an alternative to rent control, allowing tenants to afford market rates while society subsidizes the difference.
• This aims to support tenants without destroying property values or disincentivizing investment.

• "Why don't we give vouchers to tenants? Let's let the free market work so that we don't destroy the values and we don't get people wanting to leave from investing in LA."

The Market's Failure to Serve Lower Incomes [00:00:00]

• The private real estate market primarily produces housing for higher-income individuals.
• It fails to create affordable units for those with lower incomes, leading to overcrowding.

• "But as you get into that kind of section of the population that is making lower than, you know, average incomes in an area or significantly lower than that, the market is just not producing units that people can afford."

Austin's Privatization Success and LA's Land Costs [00:00:00]

• Austin, Texas, is cited as an example where privatization and building led to a 30% decrease in housing prices.
• The high cost of land in desirable LA areas like Santa Monica is noted as a factor.

• "Look at Austin, Texas. They built a lot. They privatized everything and housing prices are down about 30% because they built so much."

The High Cost of Government-Funded Housing [00:00:00]

• A parking structure in Santa Monica being converted to low-income housing is estimated to cost $1 million per unit.
• This high cost is attributed to government funding complexities and red tape.

• "And each unit is an estimated cost of a million dollars because it's government-funded."

Addressing Homelessness Spending and Trust [00:00:00]

• Despite significant spending on homelessness, the problem has not improved, and in some areas, worsened.
• Rahman emphasizes auditing every dollar and tracking what works to rebuild public trust.

• "I believe that we do need spending on homelessness to address it. I think we've also lost the trust of the people on this issue."

Successful Homelessness Reduction in Rahman's District [00:00:00]

• Rahman claims a 70% reduction in tents, RVs, and encampments in her district over three years.
• She attributes this success to relentless work, oversight, and accountability in outreach and shelter programs.

• "I've had a 70% reduction in tents, RVs, and encampments over three years."

Effective and Cost-Efficient Homelessness Interventions [00:00:00]

• A time-limited subsidy program (rental voucher) is highlighted as successful and scalable, with 75% of participants remaining housed after the voucher ends.
• This program costs significantly less per person than other interventions like "Inside Safe."

• "The most successful intervention, the one that I think is scalable, is called a time-limited subsidy program, which is a short-term rental voucher..."

The Importance of Management in Service Providers [00:00:00]

• The difference between successful and unsuccessful programs often comes down to management and accountability.
• Rahman stresses the need to monitor performance and invest in service providers that deliver results.

• "And I would say that everyone needs good management, everyone needs transparency, and, you know, you can have the exact same type of non-profit doing the exact same type of work and one will have great outcomes and one will have worse outcomes and the difference is management."

Handling Individuals Who Refuse Shelter [00:00:00]

• The approach depends on the individual; most accept shelter, but those with severe mental illness or substance use issues require different paths.
• Building trust through relentless engagement is crucial for these individuals.

• "With those individuals, you have to follow different paths."

Involuntary Conservatorship and Resource Limitations [00:00:00]

• Senate Bill 43 allows for involuntary conservatorship for those unable to care for themselves, but enforcement is difficult without sufficient beds and services.
• Jails often serve as de facto mental health facilities due to under-resourced mental healthcare systems.

• "It is really hard to enforce that when you don't have beds and services around there that can actually take care of that person because are you going to put them in jail?"

Rebuilding Trust Through Performance and Transparency [00:00:00]

• Rahman pledges to audit every dollar, monitor performance, and ensure results, aiming to rebuild trust in city services.
• She aims to create a responsive homelessness services system where residents don't have to constantly question its effectiveness.

• "I want to make sure that we are tracking every single dollar that we are investing in what works, and we're making sure that every single dollar is actually leading to people moving off the streets."

Addressing Root Causes: Housing Affordability [00:00:00]

• The root cause of homelessness is identified as the lack of affordable housing, exacerbated by mental health and substance use issues.
• When housing was cheaper, more vulnerable individuals could remain housed.

• "What's causing homelessness? It's definitely rooted in affordable housing issues, right?"

The Visible vs. Invisible Homeless Population [00:00:00]

• The most visible homeless individuals often have mental health challenges, while less visible populations (e.g., families in cars) are not seen on the streets.
• This disparity can skew perceptions of the primary causes of homelessness.

• "The most visible people, the people who are, so you'll never see the mother who is living in her car with her children or couch surfing."

Unarmed Mental Health Responders [00:00:00]

• Rahman supports investing in unarmed mental health responders to handle calls currently burdening the LAPD.
• This would allow police to focus on crime while trained responders address mental health crises more effectively.

• "What I want to invest in is making sure that we have unarmed mental health responders that can take so many of those calls for service off of LAPD's plate."

Police Force Size and Deployment [00:00:00]

• Rahman aims to maintain the current size of the police force and improve recruitment processes.
• She advocates for updating deployment plans and shifting non-police calls to appropriate responders.

• "I want to maintain the size of our police force that's what that's where we're at right now."

DSA Policies and Rahman's Stance [00:00:00]

• Rahman clarifies she does not espouse extreme DSA policies like abolishing prisons or owning all private property.
• She believes in a mix of public and private housing and aims to improve the environment for renters, builders, and investors.

• "Well I don't want to do any of that so I just want thank you."

Wealth Tax and Earning Trust [00:00:00]

• Rahman believes wealthier individuals should pay more in taxes to contribute to a stable society.
• However, she emphasizes that trust must be earned before any new taxes are implemented, citing past failures in Los Angeles.

• "I think that wealthier people should pay more in taxes I do believe that."

The Convention Center Project Boondoggle [00:00:00]

• The proposed $2.9 billion convention center expansion, with nearly $3 billion in financing, is criticized as a potential boondoggle.
• It's projected to lose $90 million annually for 30 years, with motives questioned as placating unions and business interests.

• "Mayor Bass pushed for a remodel slash expansion of the downtown convention center $2.9 billion project with another nearly $3 billion in financing so it's going to cost nearly $6 billion…"

Transparency and Accountability in City Spending [00:00:00]

• Rahman stresses the importance of transparency and accountability in public spending, advocating for clear metrics and public accessibility to budget information.
• She criticizes the lack of clear data on how taxpayer money is spent and the results achieved.

• "Let's really show where our taxpayer dollars are going. Let's show where our beds are, how many of them are full on any given night, and how we can actually restore trust in the data that we're putting out there."

Reducing Crime Through Social Services [00:00:00]

• Addressing street homelessness, graffiti, and trash can improve perceptions of safety.
• Studies show that people experiencing homelessness are often victims of crime themselves.

• "And I also think that if we can address graffiti address pick up trash make sure that we're addressing street homelessness bringing people into safety I actually think that people will feel safer."