7. How will a public bank help with economic redevelopment, including affordable housing?

Los Angeles currently faces a housing crisis with more than 400,000 households living in substandard housing conditions. Many Angelenos are forced to pay over 50 percent of their paycheck towards rent and utilities. L.A. has the highest national homelessness with 58,000 people living in the streets in 2017. It has been estimated that a 5% increase in rent would leave an additional 2,000 people homeless. Statewide in California, the median home price is more than 2.5 times higher than the median national home.

In his report, "Establishing the. Municipal Bank of Los Angeles: Conceptual Framework Los Angeles," public banking expert Karl Beitel believes public banks can help alleviate this crisis by making "loans to support affordable housing development, in the form of both construction loans and long-term bond and mortgage loans for multi-unit housing developments. A Municipal Bank could, over time, be expanded to become a significant supplier of long-term affordable housing credit . . . and fund a property acquisition program that would acquire existing rental properties and place them into permanently affordable cooperative housing arrangements and land trusts."

Beitel notes, "The primary advantage offered by a Municipal Bank is the creation of a dedicated, multi-purpose entity that combines a multitude of capacities required to identify, underwrite, and originate low-cost, high-impact credit, enabling the City to pursue more socially beneficial and economically just forms of economic development.”

Public banks offer a smooth pathway to funding, as well as an alternative to reliance on private investors and the private, for-profit housing market. They can help ensure that future housing development linked to publicly funded transit investments does not result in widespread displacement of residents that almost always occurs in predominantly African-American, Asian, and Latino working-class neighborhoods. This could also be done by co-lending with local private banks, as well as encouraging and back-stopping their investments in local housing initiatives

Workers

  • Strengthens local economies by supporting local businesses and the creation of jobs.
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In June 2022, the Los Angeles City Office of the Chief Legislative Analyst (CLA) released a Request for Proposal (RFP) seeking consultants to author a viability study and business plan for a proposed Los Angeles public bank. This RFP issuance represents the culmination of a historic effort to realign the city’s financial infrastructure with its values and the pressing needs of its nearly four million residents. Once complete, this plan will outline next steps for Los Angeles to establish a public bank via a state-issued charter.

After the historic Measure B campaign that saw over 430,000 Angelenos voting yes on a Los Angeles public bank, Public Bank LA became a founding a member of the California Public Banking Alliance which sponsored and spearheaded the landmark Public Banking Act, Assembly Bill 857, empowering California cities, counties and regions to form their own public bank. Such banks will be wholly accountable to local communities and state regulations, not Wall Street profit mandates. AB 857 was made law and cleared the way for Los Angeles to start a bank without a ballot measure. Public Bank LA’s work focuses on the City of Los Angeles and the broader LA area.

Public Bank Los Angeles followed our first victory by helping pass California's second public banking bill, the Public Banking Option Act (AB 1177), signed into law by Governor Gavin Newsom in October 2021. AB 1177 creates the CalAccount Blue Ribbon Commission tasked with producing a market analysis of the CalAccount program. Upon implementation, CalAccount will provide free, universal financial services to unbanked and underbanked Californians. The CalAccount Blue Ribbon Commission convened in September 2022 and is chaired by California State Treasurer Fiona Ma. 

These legislative victories will bring responsible banking services to municipalities and the general public, ensuring that cities can reroute scarce public dollars to fund essential services while enabling people to determine the future economic development of their communities. Additionally, these measures will aid in removing racial and economic inequities by making essential banking services accessible to all.

Public Bank Los Angeles is endorsed by a broad intersection of over 100 community organizations including labor, social justice, environmental, democratic clubs, and leaders including: Los Angeles County Democratic Party, United Teachers Los Angeles (UTLA), Communication Workers of America (CWA), American Postal Workers Union (APWU), SEIU 721, UFCW Local 770, UNITE HERE 11, Labor Council For Latin American Advancement (LCLAA), Alliance of Californians for Community Empowerment (ACCE), Democratic Socialists of America (DSA) LA, Alliance for Community Transit Los Angeles (ACT-LA), SoCal 350 Climate Action, Coalition for Humane Immigrant Rights of Los Angeles (CHIRLA), Clergy and Laity United for Economic Justice (CLUE), Governor Gavin Newsom, Mayor Eric Garcetti, Assemblymember Miguel Santiago, Former LA City Council President Herb Wesson, Congresswoman Maxine Waters, Bill McKibben-Co-Founder of 350.org and Our Revolution.  

Socially and environmentally responsible municipal public banks are endorsed by both the Los Angeles County Democratic Party, representing 2.4 million registered Democrats, and the California Democratic Party, representing 8.7 million registered Democrats in California.

View our full list of endorsements.

Passed in 2019, the California Public Banking Act (AB 857), is the law that permits cities and counties to form their own banks. The three key elements for municipalities seeking to establish public banks are:

1. A local agency must conduct a study to assess viability and develop a business plan for the proposed public bank;
2. The business plan and governance proposal requires approval from the local government agency;
3. Approval of an application from the California Department of Financial Protection and Innovation (DFPI).

With the legal framework for public banks now established in California, various regional authorities including the Los Angeles City Council are working to complete the key elements above to implement the law.

We're an all-volunteer team. Lend your skills and expertise to build new public financial infrastructure that puts our communities first and an end to Wall Street greed. Join the historic efforts to create the Public Bank of Los Angeles—the first and largest municipal public bank in the nation! 

Fill out our Organizer Form or reach out to us to learn more.