Category: Regulations

“These Guys Are Selling Things to Better Their Lives”

(p. A20) The colorful bottles have popped up every summer in black and Hispanic communities — from the bodegas of Washington Heights to the stoops of Fort Greene — since the early 1990s. On beach boardwalks, at neighborhood basketball courts and block parties, New Yorkers are drinking nutcrackers, boozy homespun cocktails made from a blend of alcohol and fruit juices.

But this year, the New York Police Department is cracking down on the illegal drinks and the vendors who sell them, vendors and customers said.

. . .

But sellers and customers who believe there is a crackdown are alarmed, saying vital financial lifelines are threatened and raising the issue of which infractions police choose to focus on and which communities are scrutinized.

“It’s just another way to target us,” Dee said. “If I don’t sell nutcrackers, I can’t make my rent. I don’t have a choice.”

Most every Thursday in the summer, Dee clocks out from her job as an exterminator with the city and begins work on her illegal private enterprise.

After spending $600 or so at the liquor store nearby, she will lug her ingredients — cases of vodkas, rums, tequilas and cognacs — to her two-bedroom public housing apartment and into a dim, cramped back room where she will get to work making batches of her best sellers like Tropical Punch, Henny Colada and the Fort Greene Lean.

Dee’s concoctions will be poured into dozens, sometimes hundreds, of stubby plastic bottles and peddled all weekend to her longtime customers: old-timers playing dominoes in Bedford-Stuyvesant, basketball tournament crowds at Gersh Park in East New York, neighbors and friends in her old Flatbush neighborhood. They will all be waiting for her, she said.

On a good weekend, Dee will earn around $1,400 from nutcracker sales, enough to cover her rent, which has risen nearly $700 since 2015, she said.

. . .

“They always trying to beat us down,” said Jay, another nutcracker seller who preferred that his last name be withheld. Jay said he decided to venture into the business this summer as a way to get his music management business off the ground.

“This is going to buy studio time for my artist,” he said, nodding to the cooler he wheeled down the Coney Island boardwalk at sunset. “Ice-cold water,” he said loudly to passers-by, followed by a softer, more subtle “(Nutcrackers.)”

“Ice cold water!”

“(Nutcrackers).”

“These guys are selling things to better their lives,” said Sandra Anguiz, 30, after buying a cream-soda-flavored nutcracker from Jay. “Why are police worried about that?”

For the full story, see:

Aaron Randle. “Cracking Down on the Sweet, Boozy Staple of a City Summer.” The New York Times (Saturday, August 17, 2019): A20.

(Note: ellipses added.)

(Note: the online version of the story has the same date as the print version, and has the title “Banned on the Beach? It’s Still Nutcracker Summer.” In the passages quoted above, the sometimes slightly longer online version is followed.)

Rent Control Reduces Landlord Investment in Apartments

(p. A11) New York Gov. Andrew Cuomo signed a law in June expanding the state’s damaging and counterproductive rent regulations.

. . .

In response to the new law, New York property owners immediately began making decisions that, when played out across tens of thousands of apartments, will add up to a disaster for everyone—not only landlords.

I spoke with one of those landlords over breakfast not long ago. He owns a medium-size portfolio of older buildings in middle- and lower-middle-class New York neighborhoods. Among his properties is a large building in northern Manhattan. For more than 40 years, one of the building’s apartments—a two-bedroom—was occupied by a tenant paying about $800 a month.

. . .

The tenant recently died. After four decades of wear and tear, the apartment needs some work.

. . .

A bathroom upgrade costs about $10,000 and a kitchen about $15,000. My friend could have invested another $10,000 or so to repair damage, replace doors and finishes, and upgrade electrical circuits. Those investments could have brought the rent to about $1,700. The apartment’s next tenant could have moved into an improved, not fancy, two-bedroom with a somewhat below-market lease, still protected from increases by rent stabilization.

The new law ensures that won’t happen. It gives property owners no vacancy-bonus increase. For every $15,000 my friend spends on improvements, he can raise the rent by only $83.33 a month. Even that shrunken rent increase will go away after 30 years. If he makes any investment in the apartment exceeding $15,000 in any 15-year period, it will be money he isn’t legally allowed to recoup. He won’t be allowed to raise the rent further. Whoever lucks into that apartment will pay only about $900 a month, half the market rate.

. . .

Here come the unintended consequences: My friend now says he won’t invest a penny in the apartment, because doing so makes no economic sense. Instead, he plans to hold it vacant and wait for better days. Maybe Albany will figure out it made a huge mistake and reverse course. Maybe the courts will recognize that rent regulation represents a taking of private property without compensation and violates the Constitution. Maybe my landlord friend will accumulate adjacent vacant apartments and combine or reconfigure them.

For the full commentary, see:

Joshua Stein. “CROSS COUNTRY; How to Kill a Housing Market.” The Wall Street Journal (Saturday, Sept. 28, 2019): A11.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Sept. 27, 2019, and has the same title as the print version.)

Elizabeth Warren Started Out as a Student of Henry Manne’s Libertarian Law and Economics Ideas

(p. A1) Never one to shy away from a fight, Elizabeth Warren had found a new sparring partner. She had only recently started teaching at the University of Texas School of Law, but her colleague Calvin H. Johnson already knew her well enough to brace for a lively exchange as they commuted to work.

Indeed, on this morning in 1981, Ms. Warren again wanted to debate, this time arguing on the side of giant utilities over their customers.

Her position was “savagely anti-consumer,” Mr. Johnson recalled recently, adding that it wasn’t unusual for her to espouse similar pro-business views on technical legal issues.

Then something changed. He calls it Ms. Warren’s “road to Damascus” moment.

“She started flipping — ‘I’m pro-consumer,’” Mr. Johnson said.

That something, as Ms. Warren often tells the story, was her deepening academic research into consumer bankruptcy, its causes, and lenders’ efforts to restrict it. Through the 1980s, the work took her to courthouses across the country. There, she said in a recent interview, she found not only the dusty bankruptcy files she had gone looking for but heart-wrenching scenes she hadn’t imagined — average working Americans, tearful and humiliated, admitting they were failures:

(p. A10) “People dressed in their Sunday best, hands shaking, women clutching a handful of tissues, trying to stay under control. Big beefy men whose faces were red and kept wiping their eyes, who showed up in court to declare themselves losers in the great American game of life.”

. . .

The revelations from her bankruptcy research, by her account, became the seeds of her worldview, laid out in her campaign plans for everything from a new tax on the wealthiest Americans to a breakup of the big technology companies.

. . .

In 1979, Ms. Warren recruited her parents from her native Oklahoma to her home in the Houston suburbs to help babysit her two young children.

Then a professor at the University of Houston, she would be spending several weeks at a luxury resort near Miami, one of 22 law professors selected to study an increasingly popular discipline known as “law and economics.’’ One of its central ideas is that markets perform more efficiently than courts.

Mr. Johnson, Ms. Warren’s former Texas commuting partner, believes that it was an important influence on her early thinking.

“Before Liz converted, she came to us from the decidedly anti-government side of law and economics,” he said.

The summer retreat was colloquially known as a “Manne camp,” after its organizer, the libertarian legal scholar Henry G. Manne. With financial support from industry and conservative foundations, Mr. Manne had formed a Law and Economics Center at the University of Miami. (He would later move operations to Emory University and then to George Mason University.)

The mission of the retreat was to spread the gospel of free-market microeconomics among law professors. One participant, John Price, a former dean of the law school at the University of Washington, described it as “sort of pure proselytizing on the part of dedicated, very conservative law and economics folks,” with an emphasis on an anti-regulatory agenda. One faculty member, he recalled, suggested eliminating the Consumer Product Safety Commission.

. . .

While some in the group have said Ms. Warren expressed skepticism at the libertarian ideology, Ms. Blumberg remembers someone very much developing the early stages of her career, who was “far more captivated than I” with the theories.

. . .

Ms. Warren . . . wrote to Mr. Manne in 1981, attaching a copy of her latest published article. She was sending him one article a summer, she wrote, and each “increasingly reflects my time at LEC.”

. . .

“This is really hard-core law & econ analysis,” Todd J. Zywicki, a law professor at George Mason who formerly served as executive director of the Manne Center, wrote in an email. “If you had given me this article with the author anonymized and asked me who wrote it, I would have answered that it was one of the leading scholars in the law & economics of commercial and contract law. Never, in a million years, would I have thought this article was written by EW.”

For the full story, see:

Stephanie Saul. “THE LONG RUN; Warren’s Awakening to a World of Desperation.” The New York Times (Monday, Aug. 26, 2019): A1 & A10.

(Note: ellipses added.)

(Note: the online version of the story has the same date as the print version, and has the title “THE LONG RUN; The Education of Elizabeth Warren.”)

Regulators Threaten App Startups That “Give People Access to Their Pay as They Earn It”

(p. B5) WASHINGTON—A growing industry of financial apps that allow workers to access their pay early is drawing scrutiny from regulators to prove they are different from payday lenders.

. . .

Last month, regulators from New York and 10 other states said they were investigating whether some payroll-advance firms violated payday-lending laws. In California, state lawmakers are debating a law that aims to set the legal foundation for the industry and provide consumer protections, the first such attempt in the country.

The moves by state officials come as the industry is growing. Leslie Parrish, an analyst for research firm Aite Group, said the industry is “poised for exponential growth.” Aite Group estimated the app companies handled 18.6 million early U.S. payroll transactions valued at more than $3.15 billion in 2018.

. . .

Industry executives and some consumer advocates say the services offer the potential to help lower- and moderate-income workers by providing low-cost tools, though they disagree on how businesses should be structured and regulated.

“It hasn’t solved the income inequality problem,” Todd Baker, a senior fellow at Columbia Business School, said. “What it does is replace, for a nominal cost, the $30, $40 people pay today for a single overdraft or a $200 payday loan.”

. . .

“In the U.S., we have this pay cycle that holds back people’s pay,” said Ram Palaniappan, chief executive of Earnin. “What we have been able to do is to give people access to their pay as they earn it.”

Earnin tracks users’ work and pay schedules using time sheets or location services and will deposit up to $500 per pay period in their bank accounts. Rather than charging fees for its service, Earnin asks users to consider voluntary tips of up to $14.

For the full story, see:

Yuka Hayashi. “Pay-App Startups Draw Scrutiny.” The Wall Street Journal (Tuesday, Sept. 3, 2019): B5.

(Note: ellipses added.)

(Note: the online version of the story has the date Sept. 2, 2019, and has the title “Pay-Access Apps Face Regulatory Test.”)

Lyft Driver Fears California Law Will Destroy Her Work Flexibility

(p. B4) California lawmakers have hailed the law signed by Gov. Gavin Newsom this week that could require drivers of ride-hailing companies to be labeled as employees rather than independent contractors, saying the measure could raise wages and provide new workplace benefits.

But the drivers are divided about how it will affect them.

For Rachel Hudson, a 43-year-old driver for Lyft Inc. who struggles with arthritis and an anxiety disorder, the bill’s passage is unwelcome. Ms. Hudson has driven for Lyft for about five years and fears employment status could mean having to work in scheduled shifts that would wipe out the flexibility she needs.

“Sometimes, I need a two- to three-hour break. I can’t always be relied upon to be at work at specific times,” Ms. Hudson said. Driving for Lyft “is the only way I can afford a car. It makes a huge impact on my life.”

Ms. Hudson, who lives alone in Stockton, Calif., said that besides federal disability benefits, the earnings from Lyft are her only income.

For the full story, see:

Sebastian Herrera. “Uber, Lyft Drivers Torn Over Law Meant to Protect Them.” The Wall Street Journal (Monday, Sept. 23, 2019): B4.

(Note: the online version of the story has the date Sept. 21, 2019, and has the title “Uber, Lyft Drivers Torn as California Law Could Reclassify Them.”)

New York City Regs Force Arthritic Woman to Push Cart to Laundromat Instead of Using Her Laundry Room

(p. A1) When Jean Harrow got a ticket in 2016 for unauthorized renovations to her Queens home, she thought it was a misunderstanding. Yes, she had put a powder room in her basement without realizing she needed a permit. But surely, she said, she wasn’t responsible for the washer and dryer a previous owner had installed downstairs — illegally, according to the $1,600 citation. She would simply explain that at her hearing.

As she waited to do just that, Ms. Harrow got a second ticket — for “failure to comply” with the first. In the 14 months after the original citation, she received five others for the same issue: $15,600 in additional fines. Each meant another hearing, and although she never missed a court date, the tickets kept coming.

Thousands of small property owners in New York City have been hit with a similar pileup of fines, an unintended result of a decade-long crackdown set off by fatal construction accidents. In recent years, the city’s Buildings Department has hired hundreds of new inspectors and doled out harsher penalties for violators. But rules introduced as a safeguard have become a costly trap for ordinary people, The New York Times found.

. . .

(p. A23) Ms. Harrow admits she made a mistake: She should have sought a permit to install the toilet and sink that piggybacked on plumbing already in her laundry room. But, she said she told the inspector, “I didn’t run those pipes — I bought it like this.”

To correct the violation, Ms. Harrow needed to have the unauthorized plumbing removed. Before she could get the permit, however, she had to pay a $1,500 civil penalty.

Pulling the money together took months. The receipt for the payment was lost, then found. Her permit request was rejected several times, because of errors a plumber had made on the application. She received another fine during this period.

At Ms. Harrow’s final hearing, the agency lawyer reduced two fines imposed after the permit came through. But Ms. Harrow was on the hook for the rest. Besides losing the bathroom, she would be out $13,100 in fines plus interest, as well as permit costs, plumbers’ fees, two taxi fares, and a washer and dryer. A different permit would have allowed her to keep the laundry room, but the process would have been even more expensive.

“Now I have to be pushing a cart to go to the wash,” she said. “I have rheumatoid arthritis.”

Ms. Harrow said she tried to put $50 a month toward the fines. “But sometimes, to tell you the truth, I can’t make it.”

For the full story, see:

Grace Ashford. “Snowballing Tickets Bury Homeowners in Debt.” The New York Times (Monday, September 9, 2019): A1 & A22-A23.

(Note: ellipsis added.)

(Note: the online version of the story has the same date as the print version, and has the title “The Law Was Aimed at Deadly Machinery. It Hit Her Washer.”)

California Anti-Gig-Worker Regulations Have “Unintended Victims”

(p. B1) SAN FRANCISCO — After months of bickering over who would be covered by a landmark bill meant to protect workers, California legislators passed legislation on Wednesday [Sept. 11, 2019] that could help hundreds of thousands of independent contractors become employees and earn a minimum wage, overtime pay and other benefits.

. . .

In California, religious groups said they feared that small churches and synagogues would not be able to afford making pastors and rabbis employees. Winemakers and franchise owners said they were worried they could be ensnared by the law, too. Even some of the contractors for the app-based businesses that have been at the center of this debate said the change could hurt them if companies like Uber, Lyft and DoorDash decided to restrict how often they could work or cut them off entirely.

. . .

(p. B4) Small vineyard owners are concerned that they could be forced to directly employ the independent truckers they use to haul their harvests and become responsible for providing insurance and workers’ compensation. Currently, truckers operate as contractors, with their own rigs and insurance, and serve several vineyards, said Michael Miiller, director of government relations at the California Association of Winegrape Growers.

“Our members are growers, not trucking companies,” Mr. Miiller said. “The target of legislators is Uber and Lyft, but the unintended victims are small, independent vineyards on the coast of California.”

Saunda Kitchen owns a Mr. Rooter plumbing business in Sonoma County that has 30 employees, for whom she pays payroll taxes and provides the various mandated benefits. But Ms. Kitchen said she believed that she herself would have to become an employee of Mr. Rooter under the new law, which could cause the parent company to pull out of the state.

“I wouldn’t have access to new technology, training, help with marketing,” said Ms. Kitchen, who planned to talk with Mr. Rooter officials on Thursday [Sept. 12, 2019] about how to proceed.

For the full story, see:

Kate Conger and Noam Scheiber. “Gig-Worker Law Sows Confusion and Defiance.” The New York Times (Thursday, September 12, 2019): B1 & B4.

(Note: ellipses, and bracketed dates, added.)

(Note: the online version of the story has the date Sept. 11, 2019, and has the title “California’s Contractor Law Stirs Confusion Beyond the Gig Economy.”)

Consumers May Again Be Free to Choose an Incandescent Bulb

(p. A1) The Trump administration plans to significantly weaken federal rules that would have forced Americans to use much more energy-efficient light bulbs, a move that could contribute to greenhouse gas emissions that cause global warming.

The proposed changes would eliminate requirements that effectively meant that most light bulbs sold in the United States — not only the familiar, pear-shaped ones, but several other styles as well — must be either LEDs or fluorescent to meet new efficiency standards.

The rules being weakened, which dated from 2007 and the administration of President George W. Bush and slated to start in the new year, would have all but ended the era of the incandescent bulb invented more than a century ago.

. . .

The Trump administration said the changes would benefit consumers by keeping prices low and eliminating government regulation.

For the full story, see:

John Schwartz. “New Rollback To Ease a Ban On Old Bulbs.” The New York Times (Thursday, September 5, 2019): A1 & A15.

(Note: ellipsis added.)

(Note: the online version of the story was last updated Sept. 6 [sic], 2019, and has the title “White House to Relax Energy Efficiency Rules for Light Bulbs.”)

U.S. Forest Service Regulations Delay Monitoring Signs of Volcanic Eruptions

(p. D1) On Mount Hood, “any little thing that happens could have a big consequence,” said Dr. Moran, scientist-in-charge at the federal Cascades Volcano Observatory.

And yet the volcano is hardly monitored. If scientists miss early warning signs of an eruption, they might not know the volcano is about to blow until it’s too late.

Determined to avoid such a tragedy, Dr. Moran and his colleagues proposed installing new instruments on the flanks of Mount Hood in 2014. Those include three seismometers to measure earthquakes, three GPS instruments to chart ground deformation and one instrument to monitor gas emissions at four different locations on the mountain.

But they quickly hit a major hiccup: The monitoring sites are in wilderness areas, meaning that the use of the land is tightly restricted. It took five years before the Forest Service granted the team approval in August.

The approval is a promising step forward, but Dr. Moran and his colleagues still face limitations, including potential legal action that may block their work.

Such obstacles are a problem across the United States where most volcanoes lack adequate monitoring. Although federal legislation passed in March could help improve the monitoring of volcanoes like Mount Hood, scientists remain concerned that red tape could continue to leave them blind to future eruptions, with deadly consequences.

For the full story, see:

Shannon Hall. “Eruptions of Red Tape.” The New York Times (Tuesday, September 10, 2019): D1 & D6.

(Note: the online version of the story has the date Sept. 9, 2019, and has the title “We’re Barely Listening to the U.S.’s Most Dangerous Volcanoes.”)

California Passes Statewide Rent Control

(p. A20) California lawmakers approved a statewide rent cap on Wednesday [Sept. 11, 2019] covering millions of tenants, the biggest step yet in a surge of initiatives to address an affordable-housing crunch nationwide.

The bill limits annual rent increases to 5 percent after inflation and offers new barriers to eviction, providing a bit of housing security in a state with the nation’s highest housing prices and a swelling homeless population.

. . .

“Caps on rent increases, like the one proposed in California or the one recently passed in Oregon, are part of a new generation of rent-regulation policies that are trying to thread the needle by offering some form of protection against egregious rent hikes for vulnerable renters without stymieing much-needed new housing construction,” said Elizabeth Kneebone, research director at the Terner Center for Housing Innovation at the University of California.

. . .

Even as more states begin to experiment with rent control, it has long existed in places like New York City, which intervened to address a housing shortage post-World War II, and San Francisco, where it was adopted in 1979.

Today it is common in many towns across New Jersey and in several cities in California, including Berkeley and Oakland, although the form differs by jurisdiction. Regulated apartments in New York City are mostly subject to rent caps even after a change in tenants, for example, while rent control in the Bay Area has no such provision.

In New York City, where almost half of the rental stock is regulated, a board determines the maximum rent increases each year; this year it approved a 1.5 percent cap on one-year leases, considerably lower than the limits passed in Oregon and California.

For the full story, see:

Conor Dougherty and Luis Ferré-Sadurní. “California Passes Statewide Rent Control in Effort to Ease Housing Crisis.” The New York Times (Thursday, September 12, 2019): A15.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the story has the same date Sept. 11, 2019, and has the title “California Approves Statewide Rent Control to Ease Housing Crisis.” The online version says that the page of the New York print edition was A16. The page number in my National edition was A15.)

Medical Paperwork Wastes Resources and Burns Out Physicians

(p. A23) Consider the use of medical scribes, who complete doctors’ electronic paperwork in real time during patient visits. The American College of Medical Scribe Specialists reported that 20,000 scribes were working in 2014, and expects that number to climb to 100,000 in 2020.

I have heard doctors say they need a scribe to keep up with electronic medical records, the mounting demand of which is driving a burnout epidemic among physicians. Scribes allow doctors to talk with and examine patients without having a computer come between them, but at base they are a workaround for the well-known design flaws of electronic medical records.

As a nurse, when I first learned about scribes, I was outraged. On the job, nurses hear repeatedly how health care companies can’t afford to have more nurses or aides to work with patients on hospital floors — and yet, money is available to pay people to manage medical records. Doctors who use scribes tend to see their productivity and work satisfaction increase, but the trade-off is still there: Scribes demonstrate the extent to which paperwork has become more important than patients in American health care.

For the full commentary, see:

Theresa Brown. “Our Jury-Rigged Health Care.” The New York Times (Friday, September 6, 2019): A23.

(Note: the online version of the commentary has the date September 5, 2019, and has the title “The American Medical System Is One Giant Workaround.”)