The other side of paradise

Not everybody’s happy in LA

PHOTOS: JOAN HARRISON

From the South Bay
To the Valley
From the West Side
To the East Side
Everybody’s very happy
Cause the sun is shining all the time
Looks like another perfect day

I love LA (We love it)
I love LA (We love it)

Most residents of Los Angeles know what that is, lyrics from Randy Newman’s 1983 tribute to America’s second-largest city, I Love LA. The song remains the city’s unofficial anthem — We love it — but it left out something important:

Homelessness. (We hate it).

Sure, the popular image of Los Angeles is movie stars, beaches, the Sunset Strip and always “another perfect day”. What the image hides is a record number of homeless people, and you see them everywhere these days, living in tents and makeshift shacks underneath freeways, along commercial streets, some in close proximity to multi-million dollar homes. Public parks have become another site, setting off conflicts with neighbours who want the parks to serve their intended purpose.

A snapshot of the United States would show that a quarter of the nation’s nearly 600,000 homeless on a given day lives in California, and almost half the state total is in LA County, more than 66,000. Some say the persistently high number is a big reason Mayor Eric Garcetti, once expected to become Secretary of Transportation, was not invited to join the Biden administration in any capacity.

As with most big cities, homelessness is one of those enduring community issues that defies resolution. In Los Angeles solutions are more fraught than elsewhere, mixing the chronic causes of homelessness — bad luck, bad choices, racism, unfavourable economic conditions — with the added wrinkles of private developers who resist building low-income units, strong NIMBYism and a housing market that almost never cools, whatever else is going on (even pandemics). Then, of course, there’s year-round balmy weather that makes sidewalk living far more appealing than crowded indoor shelters.

The challenge for government is treading water without drowning in an endless good news/bad news loop that reflects circumstances well beyond the control of organisations working to find permanent housing for the unsheltered.

Heidi Marston, executive director of the Los Angeles Homeless Services Authority, which coordinates housing services for homeless throughout the county, sees the problem as a three-legged stool with two short legs. Eradicating homelessness, she said, requires attacking the root causes of it. This is a near impossible job that means: addressing mental health, unemployment and racial injustice; creating an adequate supply of housing units when developers have no government mandate to include units for low income people; matching homeless people with whatever housing units are available.

As with most big cities, homelessness in Los Angeles is one of those enduring community issues that defies resolution

“That’s our job,” Marston said of the third requirement. “Part of what we’ve been trying to show folks is that we actually need to create a more robust system on those other two legs if we’re ever going to see a true reduction.”

The good news these days in LA, said Marston, is that more permanent housing As with most big cities, homelessness in Los Angeles is one of those enduring community issues that defies resolution than ever is available. The bad news is that at the same time, a greater number are falling into homelessness. Last year, local agencies recorded a sixteen per cent homeless increase in the city of Los Angeles and thirteen per cent in LA County, which includes LA and 87 other cities.

Nationally, the trends are just as alarming. Since 2007, when the National Alliance to End Homelessness began tracking, the overall number of homeless fell twelve per cent through 2019, according to the most recent survey. But 2019 was the third straight year of rising numbers, and the Covid year of 2020 is likely to be the fourth.

LA has some advantages over otherurban centres. Voters in 2017 approved a small sales tax increase to generate $355 million a year for ten years to combat homelessness. Phil Ansell, former head of the agency that administers the money, called it “a game-changer, driving an unprecedented expansion” in homeless services.

At least it was before Covid hit. With businesses shut down and consumers isolating, spending plunged, depriving homeless agencies of money they were counting on.

“When you’re trying to build a system as big as ours, having funding like that that’s so volatile makes it hard to build a sustainable kind of balanced system,” Marston said.

Biden has recognised as much, including $5 billion for homeless programmes in his $1.9 trillion Covid stimulus package, and his proposed $2 trillion infrastructure plan includes $213 billion to build and retrofit more than two million affordable housing units. Garcetti said in his annual State of the City address that new federal funds would be part of a plan to spend $1 billion to fight homelessness.

Meanwhile, Marston’s agency looks for more places to house people. One of the latest is a community of “tiny homes” in North Hollywood, where 39 shed-sized structures are temporary housing for 75 people, an intermediate step toward finding permanent residency. Each unit has a fold-out bed, electricity and storage space with nearby communal bathrooms, showers and eating areas.

“We can build more shelter and temporary housing, and it’s not going to matter unless we’re also building permanent housing on the back end,” Marston said. “For every bed and tiny home you bring on, we need to bring on five permanent housing options, otherwise people will sit there for a year, two years, even three, because there’s no other option.”

A taxing problem for Biden

Nobody likes taxes, and nobody likes a tax increase less than Republicans and big business. Corporations, many of them led by wealthy Republicans, were big winners in 2017 when Donald Trump lowered their rate from 35 per cent.

No surprise, then, that Republicans and their corporate friends are fiercely opposed to President Joe Biden’s push to raise the corporate tax rate to 28 per cent from the current 21 per cent to help pay for his proposed $2 trillion infrastructure bill.

Biden is pitching a package of changes to America’s tax laws that would undo many of the advantages Trump’s plan created for corporations, some of which paid no federal taxes in recent years. Dozens even gained tax rebates through legal deductions and loopholes that Trump left in place.

One big change is aimed at companies who have moved their headquarters to lowtax countries and shifted profits generated in their US operations to the low-tax countries. Those payments are then deducted from US income taxes. A change in that law could raise about $700 billion over ten years, according to government estimates.

“Companies aren’t going to be able to hide their income in places like the Cayman Islands and Bermuda in tax havens,” Biden said.

A new report from the Institute on Taxation and Economic Policy, a progressive research group in Washington, showed just how much America’s big corporations have enjoyed the Trump tax policies. The report found that 55 of America’s largest corporations last year paid no taxes at all on billions of dollars in profit. It also said nearly half the companies paid no federal taxes over the last three years of the Trump presidency.

A few examples of the last fiscal year:

• Archer Daniels Midland, one of the world’s largest food conglomerates, had pretax income of $438 million and received a federal tax rebate of $164 million.

• FedEx, the parcel delivery company, paid no taxes on $1.2 billion of income in 2020 and received a rebate of $230 million.

• Nike paid no taxes on nearly $3 billion of income last year and got a $109 million tax rebate.

The 55 companies “collectively enjoyed almost $40.5 billion in U.S. pre-tax income in 2020” according to their annual financial reports, the Institute found. “They would have paid a collective total of $8.5 billion for the year had they paid the going rate on their 2020 income. Instead, they received $3.5 billion in tax rebates.” That’s a swing of $12 billion.

The 2017 tax cuts left the loopholes intact. “But now,” the report said, “with three years of data published on the effective tax rates paid by publicly traded companies, it is clear that the Trump law has not meaningfully curtailed corporate tax avoidance and may even be encouraging it.”

Rich, richer, richest

While the Covid pandemic crushed small businesses worldwide in 2020, it was a banner year for billionaires. Forbes magazine’s latest list of the world’s richest people found 2,755 of them, a staggering 660 more than in the previous year.

The group’s total net worth: $13.1 trillion, a $5 trillion increase from 2020.

Eight of the richest ten are Americans. Number one is Jeff Bezos, co-founder of the online behemoth Amazon with estimated net worth of $177 billion, a staggering figure to contemplate at a time income disparity has become an animating force in economic policy and the federal minimum wage hasn’t budged for a decade, from $7.25 an hour. Next on the list, at $151 billion, is Elon Musk, whose companies make electric cars (Tesla) and rockets (SpaceX).

The non-Americans in the first ten are third-placed Bernard Arnault ($150 billion), chairman and CEO of LVMH Moët Hennessy – Louis Vuitton SE, the world’s largest luxury-goods company, and tenth-ranked Mukesh Ambani, chairman of Reliance Industries Ltd., India’s most valuable company by market value ($84.5 billion).

The following 35 slots are held by people from China, Germany, Japan, France, Spain, Mexico, India, Canada, Belgium and Hong Kong before we hit number 46, the first from the United Kingdom, Len Blavatnik, a native of Ukraine, whose wealth ($32 billion) derives from oil, finance and entertainment.

The world’s richest woman is twelfth-placed Francoise Bettencourt Meyers of France. Her $73.6 billion reflects her family’s holdings of L’Oreal stock. Former US President Donald Trump came in trailing at 1299, with a net worth of $2.4 billion.

The final 82 slots were held by people worth a paltry $1 billion each.

Michael Janofsky is a writer and editor in Los Angeles. He previously spent 24 years as a correspondent for The New York Times