Campaign Finance

Los Angeles Bans Developers From Making Campaign Donations

In the midst of a housing crisis, L.A. politicians have decided to limit their own incentives to allow more housing construction.


In the midst of an affordable housing crisis, Los Angeles politicians have decided to reduce their own incentives to approve more development. On Wednesday, the city council voted unanimously to ban developers from donating to candidates for city offices.

Under the new law, people and companies seeking discretionary city approval for real estate projects would be forbidden from donating to anyone running for mayor, city council, or city attorney while their project application is pending, and up to 12 months after it's approved.

Also barred from making campaign contributions are the corporate executives of development companies and investors who own up to 20 percent of these companies.

"Today, we took a crucial step in rebuilding trust in City Hall. There is nothing more fundamental than building trust in our democracy, and today, we are laying the foundation for a City Hall that works for the people," reads a Wednesday press release from City Councilmember David Ryu (D), for whom banning developer contributions has been a long-running priority.

Critics of the ban say it doesn't go far enough.

Councilmember Mike Bonin labeled the bill a "token & hollow ban" on Twitter, pointing out that while the legislation restricted developers from supporting campaigns, it left equally "insidious" fossil fuel executives and gun manufacturers untouched. Bonin's preferred solution is to publicly finance elections.

The Los Angeles Times editorial board similarly called yesterday's bill a "job half-finished," noting that the measure did nothing to stop subcontractors from donating to campaigns. Nor does it stop developers from hosting fundraisers or helping to bundle donations from other contributors, complains the Times editorial.

Less concerning to these parties is the way that the city's ban on developer donations is tilting the political playing field against people trying to fix the city's housing crisis by building more housing.

"Whenever a developer wants to do something, there's probably someone who lives near the development who probably doesn't want it," says David Keating, president of the Institute for Free Speech. "Essentially, L.A. has passed a law saying people with one interest in a decision by the council can support candidates, but the other side can't. In a sense, it's a form of viewpoint discrimination."

Indeed, there's no shortage of financially self-interested NIMBYs in Los Angeles who stand to gain from city councilmembers blocking new housing development.

That could include everyone from your standard homeowner worried that new development will reduce the value of their homes, to construction unions trying to slow down the planning process until a developer agrees to hire their guys, to activists kvetching about lost sunlight.

The logic behind Los Angeles' ban is that these folks have a greater right to influence the outcomes of elections than people trying to put up apartment buildings.

By allowing donations by people on one side of the issue, but not another, Keating says the Los Angeles ordinance could be vulnerable to a legal challenge on First Amendment grounds. He suggests that the city could achieve the anti-corruption purposes of the bill by issuing reports on which councilmembers are receiving developer contributions.

If the goal is to "get money out of politics," it would be even better to deregulate housing development such that city councilmembers aren't deciding the fates of individual developments. Developers will have fewer reasons to spend money on Los Angeles elections.

For instance, yesterday's legislation lists a number of specific city approvals developers would have to apply for before they'd be barred from donating to campaigns. These include things like density bonuses—where developers are allowed to build taller, denser buildings in exchange for including more affordable units—variances for height restrictions, a zone change for a property, or amendments to the city's general plan to allow for an otherwise prohibited type of development at a site. If developers were allowed to build what they wanted on the land they own, they wouldn't have to beg city officials for approval, thus eliminating any need to influence or corrupt these officials in the first place.

Obviously, that kind of sweeping deregulation of land use in Los Angeles is not going to happen any time soon.

Given that, a second-best option would be to try and strengthen, not weaken, developers' influence over local politics. Los Angeles has some of the highest housing costs in the country. Its residents would benefit immensely from a lot more housing construction. That construction can't happen if developers are shut out of politics.

Throwing money at political problems obviously isn't ideal. That money would be better spent investing in things people want and need rather than filling the campaign chests of people with too much power. But without massive deregulation of L.A.'s housing market, allowing developers to have their say in politics is the city's only hope for easing the housing shortage.

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  1. How long before a court slaps this down? Dumb asses.

    1. Yeah, the article buries the First Amendment considerations nearly at the bottom the article but it was my immediate thought just from the headline. This law has no chance of surviving a challenge. Meanwhile, the taxpayers are going to get stuck paying all the legal bills spent defending the indefensible.

      I’m starting to think that we need some kind of rule requiring legislators to put up a personal bond on legislation they sponsor. If the legislation is found to be unconstitutional within some reasonable time (say, 10 years?), the bond is forfeit. Sponsor enough unconstitutional bills and maybe the financial consequences will convince you to consider another line of work.

  2. SEIU donate all the time, if you are looking for immoral attempts to sway politicians.

  3. while their project application is pending, and up to 12 months after it’s approved


    1. Because of CEQA and EIRs, applications are often pending for 24 months, with 18 months being a conservative estimate.

      Violating a developer’s freedom of speech for one second is a second, too long, and violating it for three years is an eternity.

      1. Well, there’s a difference between direct campaign contributions and speech, it seems to me. Citizens United correctly overturned bans on speech and money used to create speech, but it didn’t overturn limits on campaign contributions, which it didn’t see as restrictions of speech.

        1. Problem I see is they have created a separate class of citizens, people who can donate and people who can’t. I’d think that would run afoul of the equal protection clause.

  4. something something first amendment something

    1. I was gonna say…

  5. I’d normally wonder how the heck they think this can be constitutional, but the Supreme Court has such mixed views on free speech and petitioning the government that I won’t be surprised if courts ultimately approve this. How long did it take to just barely strike down some campaign finance limits? The commercial speech distinction is another weakening, and for all I know, courts may decide this commercial political speech is doubly jinxed.

    1. I’d normally wonder how the heck they think this can be constitutional

      Is a campaign contribution a form of petitioning for redress of grievances?

      The commercial speech distinction is another weakening

      Yes, this is the real bullshit. You have freedom until you try to use it to make money. Then fuck you, all your freedoms are belong to us.

      1. The petitioning aspect is just a wild guess. Seriously, the First Amendment is pretty simple, so are the others, heck, the whole Constitution is mostly pretty simple, but the courts have twisted it so badly that I would not be surprised if the petitioning aspect is relevant somewhere.

  6. Also barred from making campaign contributions are … investors who own up to 20 percent of these companies.

    Oh, FFS! Not “investors who own more than 20 percent”?

  7. Can you believe that not one principle argument against banning campaign donations enters this article.

    One almost wonders if @Reason supports the concept.

    1. Why would an ostensibly libertarian website or organization not support your right to give your money to whomever you choose?

  8. What does the Daily Planet have to do with this?

    1. That looks like the LA City Hall.
      The Daily Planet is in Vancouver, aka The Marine Building (which was also the Baxter Building in the Fantastic Four movies, but no one watched those.)

      1. OK, young whippersnapper.

        LA City Hall was the Daily Planet building in my Superman — the 1952-58 TV Superman (excluding the first season).

        1. Man, you’re old.

          1. And I don’t need any of your malarkey!

  9. But public employee unions are encouraged to give to the Democrat of their choice.

  10. About frigging time. Corporations, businesses, and other non-human entities should have no rights whatsoever. Only individuals should – and they should be accountable for whatever any entity they are a part of does. That said, I also support a stand-alone publicly-funded campaign system like the ones they have in plenty of other developed countries.

    1. OBL, is that you?

      Whomever, that’s pretty good parody. B+

  11. Know Los Angeles developers that you are below the law.

  12. A fairly typical Progressive Left piece of legislation;

    • It massively and obviously violates a Constitutional Right

    • It makes it harder to oppose a Progressive policy that creates serious problems.

    • It is clearly INTENDED to discriminate based on viewpoint.

    • It treats people trying to make money as sinners.

    So, can somebody explain to me again the qualitative difference between a meddling, self-righteous Victorian Christian and a meddling, self-righteous Modern Progressive? The Progressives seem to be sure there is one…..

    1. Glad to know I am not the only one to make the comparison with the modern “progressive” left and the Victorian era.

  13. “Critics of the ban say it doesn’t go far enough.”

    That’s an understatement. Obviously they should ban donations from anyone who has any interest whatsoever in the outcome of any potential legislation. That would really be the only fair thing.

    Just institute a single-payer system of campaign financing. Slap an additional 1% tax on all citizens. Allow TopMen to allocate those campaign funds to candidates who are deemed acceptable. We may finally experience fairness in our lifetimes. YES WE CAN!!!

  14. I’m always so busy drywall repair in Long Beach because we don’t have enough homes here. Everyone is doing what they can to keep their property intact. LA has become a pretty tough place for people to live.

  15. Thank you so much for making this post
    Here is our construction company:

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