Sacramento Report: Eleventh-hour Bartering, Elevator Pitches and New Faces

It’s the day after Labor Day, and the California Capitol is humming with slick lobbyists and over-stimulated reporters. It hasn’t been more than 72 hours since I’ve been back in California after living a different life traversing the state of Texas for more than a year.

It’s a reunion – a homecoming of sorts – but an entirely new beginning all at once. To top it off, it’s my first time at the steps of the state Capitol despite being born and raised in the Golden State.

I’m Nadia Lathan, your new newsletter writer, taking over the Sacramento Report from my esteemed colleague Deborah Brennan. I’ll be covering how lawmakers are tackling San Diego issues at the state Capitol in partnership with CalMatters and I’m based in Sacramento.

Prior to Sacramento, I covered the people and politics of Texas for The Associated Press in Austin. There, I reported on the 2024 presidential election, Texas Attorney General Ken Paxton and Sen. John Cornyn’s bitter U.S. Senate primary campaign and chronicled the GOP’s successful scheme to redraw new U.S. House maps for the 2026 election. I also spent several days in Kerr County reporting on the aftermath of the deadly Fourth of July floods in Texas Hill Country.

I’ve lived across and outside of California, but my origins are in San Diego, where I was born and where much of my family currently lives.

To get me up to speed, I’ve been spending the last few weeks meeting the region’s elected officials and familiarizing myself with the state Capitol at its most opportune moment: the 11th hour of a legislative session.

So far, it has not been dissimilar to the outskirts of an NBA stadium during playoffs, with lobbyists crowding outside the chamber doors, hedging bets on various pieces of legislation.

I am elated to join the CalMatters and Voice of San Diego teams. Please feel free to reach out with story ideas or tips at nadia@voiceofsandiego.org.

Now, to this week’s newsletter.

Wins on Housing, Insurance and AI Legislation

San Diego lawmakers pushed an ambitious legislative agenda aimed at housing, wildfire insurance and AI regulation this year. Gov. Gavin Newsom has until Oct. 12 to sign or veto their bills. Here is where several of the San Diego delegation’s most prominent proposals stand: 

Fire Insurance

Democratic Assemblymember David Alvarez’s bill to give more money to the fire insurer of last resort, known as the FAIR Plan, cleared the Legislature with bipartisan support Friday and is on its way to the governor’s desk.

The FAIR Plan provides fire insurance to homeowners who cannot receive coverage from private insurers as companies continue to flee the state due to the growing frequency of wildfires.

Alvarez has said Assembly Bill 226, which would allow the insurer to take funds from the California Infrastructure and Economic Development Bank, will enable the agency to pay its claims after announcing it was running out of money in February.

“If the FAIR Plan runs out of money, it could force insurance companies to take on massive costs and pass those on to other policyholders,” Alvarez wrote in an email to me. “This bill implements safeguards by allowing FAIR Plan to access funds through the state bond market to cushion the immediate blow.”

House Permitting

Assemblymember Chris Ward’s Assembly Bill 253 meant to speed up housing permits for small residential buildings cleared both chambers last week and complements a slew of housing reform legislation heralded this year by pro-housing advocates, such as exempting most new residential developments from environmental review. 

If the governor signs it, it would allow a third party to review housing permits if a local government cannot or does not complete its review in 30 days, in an effort to speed up overall housing production.

Companion Chatbots

Lawmakers’ more ambitious efforts to regulate the use of AI in consequential decisions such as school admissions and hiring decisions failed again for a third year.

However, Democratic state Sen. Steve Padilla’s bill to put safety guardrails around companion chatbots passed both chambers. Chatbots such as ChatGPT would be required to tell users that they are not human and establish protocols to stop suicidal ideation.

Closing Housing Loopholes

Lawmakers unanimously approved a bill aimed at closing a loophole in a law meant to incentivize affordable housing that they say has allowed a controversial high-rise luxury development in Pacific Beach to be built.

The bill, authored by Democratic state Sen. Catherine Blakespear would stop commercial developers from circumventing zoning regulations meant to boost the development of affordable housing.

Blakespear’s bill, Senate Bill 92, was introduced in response to protests against a commercial development project by Kalonymus LLC submitting a permit application last year for a more than 239-foot tall building in Pacific Beach, far exceeding the local 30-foot height maximum.

The bill received buy-in from pro-housing lawmakers such as Sen. Scott Wiener of San Francisco and Democratic Assemblymember Buffy Wicks of Oakland. Several Southern California housing advocacy groups initially opposed it but moved to neutral after the bill was amended to become more narrow.

“I think a lot of the concern when it came out was that it messed with the definition of housing development,” said Azeen Khanmalek, executive director of nonprofit organization Abundant Housing LA. “Given the narrow focus, and tailored language in the bill, we shifted to neutral.” 

What Happened to Efforts to Curb Surveillance Pricing?

Assembly Bill 446, aimed at banning companies from using a customer’s location, browsing history and other information to set different prices for the same goods, died over irreconcilable changes made in the Senate Appropriations Committee, according to its author, Ward.

The legislation initially targeted large retailers and corporations who use surveillance technology to offer customized, higher prices but was amended to only apply to grocery stores. Consumer protection groups and other proponents argued that these tactics unfairly discriminate against shoppers with lower incomes. Industry groups have said that consumers’ personal information is not being used when their data is aggregated.

This came as a surprise to both proponents and opponents, Ward said, who had negotiated with opposing industry sectors, such as the California Retailers Association, over the summer to reach a compromise they were comfortable with.

“We thought we had a workable agreement and amendment and proposed law,” Ward said, but the appropriations committee “spit back out something we did not agree with.”

Deep-pocketed industry groups that have given more than $11.3 million to lawmakers in the last decade opposed the legislation, including the New Car Dealers Association, according to CalMatters’ Digital Democracy database. More than a dozen labor and consumer groups, which have contributed more than $36.7 million to lawmakers since 2015, lobbied in favor of the bill, including the Service Employees International Union.

Ward said he plans to revive the bill when session resumes in January. “Unfortunately until we have a law on the books, we have to tell people this practice exists,” he said.

What I’m Reading

• The limits of political neutrality in a divided nation from The New York Times
• How new San Diego homes intended for residents became vacation rentals from inewsource
• University of California students, professors and staff sue Trump administration from AP News

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