The Brief

By law, the American Hotel in downtown Los Angeles is supposed to be reserved for residents who can’t afford to live anywhere else. For decades, the building was a haven in the city’s sky-high housing market, where artists, musicians and people down on their luck could rent rooms for about $500 a month. At the end of the day, longtime tenants would hang out at Al’s Bar, a legendary punk and alternative rock venue on the ground floor where bands like the Red Hot Chili Peppers played long before they sold out stadiums.

But amid the largest homelessness crisis in the nation, the American’s owner has turned the building into a boutique hotel where tourists can book rooms for as much as $209 a night.

And the city has done nothing to stop him.

Long before Los Angeles Mayor Karen Bass declared a housing emergency last year, city officials recognized that affordable housing was vanishing and sought to address it by making it difficult for developers to scoop up the residential hotels whose single-room dwellings were the only places many people could afford. Residential hotels consist of small, bare-bones rooms, some with shared bathrooms and most with no kitchens, in aging downtown buildings and roadside motels. In 2008, the L.A. City Council passed an ordinance to place strict limits on the conversion of more than 300 such buildings, totaling nearly 19,000 rooms (about 15% of the city’s lowest-cost housing units today).

But seven years later, the American’s new owner, Mark Verge, called the residents to a meeting. He said he planned to remodel the crumbling building and, according to tenants, offered to pay them to move. For months before the meeting, rumors had swirled around the American, said Jomar Giner, a barista who lived there until late 2014. The main topic on everyone’s mind, she said, was: “They’re going to ask us to move, but where are we going to live?”

Many of the American’s residents said they took Verge up on his offer, unaware that his plan to eventually turn the American into a tourist hotel was supposed to be illegal under the residential hotel law. The conversion disrupted a tight-knit community that had lived at the hotel for years — including at least one person who said he ended up sleeping in his car.

Under the law, Verge was required to compensate the city for the loss of affordable housing by either building replacement units or paying into a fund for housing construction. In Verge’s case, that could have cost more than $10 million. But like many landlords, Verge did neither of those things, and the city Housing Department didn’t compel him to, even though the law provides for $250-per-day fines and jail time for violators.

Scouring city records and online advertisements, Capital & Main and ProPublica identified 21 residential hotels, totaling more than 800 dwelling units, that were supposed to be preserved as housing but that have recently been on offer to tourists.

“That is illegal by statute and problematic for several reasons,” because residential hotels are supposed to be for the city’s lowest-income people, said Deepika Sharma, a housing law professor at the University of Southern California. “These are the folks struggling the most.”

It’s a staggering loss considering the severity of L.A.’s affordable housing shortage and what it would cost to replace 800 dwellings: more than $475 million at the current average cost of nearly $600,000 for the construction of a single affordable unit.

Some hotels have done little to hide their boutique transformations, advertising “expertly crafted” cocktails in a lobby bar and “a whimsical home away from home” for $270 a night. The hotels list rooms on their websites, on travel platforms like Expedia and Booking.com and on outdoor signs.

The American says on its website that the hotel in L.A.’s Arts District provides “affordable options for guests who are looking to make the most of their visit to the city of angels without blowing their entire vacation budget.”

Yet none of the 21 hotels, including the American, have received clearances from the city that would indicate they’ve replaced the low-cost housing they’ve taken off the market, Housing Department records show. Nor have the owners taken the other option of paying the fee to the city’s Affordable Housing Trust Fund. And none have been fined or prosecuted for failing to comply.

L.A. Housing Department director Ann Sewill referred questions to her staff. “We need to enforce it better,” said Greg Good, a senior policy adviser at the agency. “We’re working 24/7 to get there, and we’ve got to get better.”

A man pushes his cart filled with aluminum cans past the American Hotel in April. He said he has lived in L.A.’s Arts District for some 40 years and currently stays in a small room inside a gas station.

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Barbara Davidson

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Verge — who founded Southern California’s go-to apartment listing service, Westside Rentals, before selling it to CoStar Group, the parent company of Apartments.com — insisted he was unaware of the residential hotel law and of the American’s inclusion on the city’s residential hotel inventory.

“I don’t know about this magical list,” Verge said, though records show the city informed his lawyer that the American was residential after he bought the hotel in 2013.

Verge said he has been paying the city’s hotel tax for years and noted that he has openly advertised the American as a hotel.

“Do you know how many banners I’ve put on that thing?” he said. “I definitely don’t think I’m violating any law.”

The story of how Verge was able to convert the American into a tourist hotel underlines the city’s failure to preserve affordable housing — and how easily landlords have avoided the law.

One of the most pro-tenant ordinances

Today, more than 1 in 10 unhoused people in the U.S. — some 75,000 people — live in Los Angeles County. Far beyond downtown’s Skid Row neighborhood, tents and tarps are jammed together under bridges alongside overflowing shopping carts, broken-down bicycles and blankets. Men and women wrap themselves in ragged blankets under the overhangs of grocery stores and strip malls. They spread bedrolls in parks and next to the stars of celebrities on Hollywood Boulevard.

A roadside encampment in L.A. in December 2022. Mayor Karen Bass declared a state of emergency over the city’s homelessness crisis on her first full day in office.

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Frederic J. Brown

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AFP via Getty Images

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The human misery on display across the city made homelessness the central issue in the 2022 mayoral race and drove Bass to proclaim a housing emergency on her first day in office.

But in reality, the emergency has been coming for a long time. Nearly two decades ago, L.A. officials foresaw that rapid gentrification would eat away at residents’ ability to live in the city. Residential hotels were rapidly being converted to condos.

So, in 2008, the City Council voted to preserve the hotels with a law. L.A.’s then-housing director Mercedes Márquez — who now leads the mayor’s effort to combat homelessness — called it at the time, “without question, one of the most pro-tenant ordinances to come before the City Council in its entire history.”

City officials drew up a list of 336 hotels, using the state’s legal definition of a residential hotel: a building of six or more units that are the primary residences of their guests. Some were traditional single-room occupancy buildings with shared bathrooms. Others were motels with various claims to fame. One was the hotel where singer Janis Joplin was found dead; another served as the site of Julia Roberts’ apartment in the final scene of “Pretty Woman.”

By the time of the ordinance, the once-grand downtown hotels that served travelers in the early 20th century and the roadside motels that catered to mid-century motorists had fallen out of fashion with tourists. City officials determined they were being used as living spaces for local residents, not tourist accommodations.

The new law strictly limited what residential hotel owners could do with their properties. But Márquez and the city attorney’s office assured councilmembers it would stand up in court: A nearly identical San Francisco law had been upheld by California’s Supreme Court in 2002, and the U.S. Supreme Court had reviewed the case, affirming the state’s power to decide such issues. Márquez signaled that enforcement would be stringent.

City councilmember Bill Rosendahl, who strongly supported the ordinance, asked Márquez somewhat tongue-in-cheek questions about a prime beachfront property in his district that had been designated as a residential hotel.

“My God, I could tear that down and build high-end condos and move in the rich. Does this stop me from doing that?” Rosendahl asked.

“Pretty much,” Márquez replied.

The law “is designed to make it difficult,” although not impossible, for owners to convert their buildings into condos or tourist hotels, Márquez told the City Council. Owners would first have to apply to the Housing Department for approval. They would then have to either replace all the residential housing units or pay a fee, set at the acquisition cost of nearby property plus the cost of constructing 80% of the replacement dwellings.

Márquez referred an interview request to the mayor’s press office, which did not make her available. And she did not respond to emailed questions.

“I would think the owners would find it quite onerous,” Gary Painter, an economist who specializes in housing at USC, said in a recent interview. “Anything that makes it harder for them to fully exercise their options on their real estate, they’re going to be upset about.”

Many hotel owners are indeed unhappy with the residential hotel designations. Ray Patel, who heads the North East Los Angeles Hotel Owners Association, said the law was an unfair attempt to shift the burden of L.A.’s housing problems onto hotel owners.

“The city was trying to avoid the elephant in the room: how difficult it is to build housing,” he said. “There’s too much red tape.”

But in adopting the law with no opposition, the City Council decided that limiting hotel owners’ property rights was in the public interest because the loss of residential hotel rooms had become a housing emergency that affected elderly, disabled and low-income people “who are least able to cope with displacement in the Los Angeles housing market.” The council predicted that “unregulated conversion or demolition of residential hotels would lead to an unacceptable and socially harmful increase in homelessness.”

The ordinance allowed owners to appeal their designations by submitting tax records, housekeeping reports and guest registration records to prove their buildings had operated as traveler hotels. Patel, who owns the Welcome Inn on old Route 66 — Colorado Boulevard in the Eagle Rock neighborhood — said he submitted reams of paperwork, got his motel off the list and helped others to do the same. About 100 properties were removed, though others have since been added. The city’s most recent list contains more than 300 hotels.

Some hotel owners have tried to challenge the ordinance in court, arguing that the city’s designation of the motels as residential amounts to an unconstitutional government taking of private property. But last year, a federal judge dismissed one claim, noting that the ordinance falls within the city’s authority to promote residents’ health and welfare. And in 2015, the U.S. Court of Appeals for the Ninth Circuit rejected another hotel’s claim and upheld the ordinance as a “rational” attempt to preserve low-income housing.

Barbara Schultz, director of housing justice at the Legal Aid Foundation of Los Angeles, said the law is well-settled. Her 2002 lawsuit against the city’s redevelopment agency resulted in a settlement that preserved downtown residential hotels and sparked the city’s interest in an ordinance.

“The city is squandering a great opportunity to have more housing,” Schultz said. Without tight enforcement, she said, “people on the street who could be in housing are not.”

By the time Verge bought the American, the Housing Department had determined it to be a residential hotel in 2008 and again in 2011. City records show Verge’s attorney inquired about the American’s status, and in a 2013 letter, the department confirmed it was subject to the residential hotel law, providing him a copy of the ordinance.

“I don’t even recall anything like that,” Verge said in an interview, asserting that he bought the American because he intended to run it as a tourist hotel.

How Verge turned the American into a tourist hotel

Verge said in an interview that he wanted to buy the American in 2013 because of its rich history and his own memories of hanging out with friends at Al’s Bar.

“We were kids from Santa Monica and liked to go there,” he said. It was, he added, a “different world.”

Al’s Bar, located on the American’s ground floor, rose to fame in the city’s arts and music scene in the 1980s and 1990s as it attracted up-and-coming bands like Nirvana, Hole and Sonic Youth. Some tenants thought of Al’s as their living room where they played pool and drank beer. But it also attracted celebrities. Then-Gov. Jerry Brown and singer Linda Ronstadt once dropped in at Al’s, where graffiti covered the walls and a neon sign near the bar warned, “TIP OR DIE.”

Patrons, including some American Hotel tenants, hang out at Al’s Bar in the late 1990s. The bar closed in 2001.

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Courtesy Sally Mander Howard

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But above all, the American provided cheap housing for people who didn’t have other options. The American, which was originally called the Canadian, was built in 1905 as the one of the only Los Angeles hotels where African Americans were welcome. And ever since, it had been a refuge for people on the margins of society. It was a classic residential hotel that one former tenant dubbed “a flophouse for artists,” offering basic single rooms and shared bathrooms.

At the American, former residents said they needed no application or credit check. A month’s rent would buy a month’s shelter, no questions asked.

When Verge took over, the American was in bad shape. In 2012, a housing inspector had warned the building department that the hotel was in danger of collapsing.

Verge denied offering buyouts to move and said the residents requested relocation payments from him. “I’m not a cash for keys guy,” he said. But seven former residents interviewed by Capital & Main and ProPublica said they had received a buyout offer and knew of others who had as well. A printed notice provided by a former resident says, “the owner of the building would like to offer relocation assistance to anyone already considering a move.” The former residents said Verge also promised that if they were willing to endure the noise and dust of a remodel, he would let them stay. And some did.

Verge said the American had been partially operating as a tourist hotel when he bought it. But five tenants said that wasn’t the case. “They were all residents,” Giner wrote in an email. A photo published in the Los Angeles Times in 2013 shows Verge perched atop a pay phone outside the hotel. Just above him is a sign that reads, “Apartments for Rent,” with the name of his company, Westside Rentals.

Verge had started other hotels, restaurants and bars and seemed to bet that the American’s mystique would lure guests willing to lug suitcases up stairs and share bathrooms for a chance to drink in the hotel’s bohemian past. Graffitied walls, an Al’s sign and a giant mural of L.A. artist Ed Ruscha adorn the building’s façade, though most of the American’s artist residents and the noise and chaos of the hotel’s heyday are long gone.

A guest leaves the American Hotel in April.

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Barbara Davidson

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For Verge, who once owned racehorses and was briefly the CEO of Santa Anita Park, it was a bet that paid off.

Yet Verge never applied to the Housing Department for permission to convert his new purchase, according to department records. And as he remade the American into a tourist hotel, Verge suffered no legal repercussions for failing to build replacement housing or pay the in-lieu housing fee to the city. Either option would have been costly: In addition to site acquisition, the cost of building affordable housing averaged about $450,000 per unit between 2014 and 2016, according to the Terner Center for Housing Innovation at the University of California, Berkeley.

Even when the American remodel began, it slipped undetected through a key enforcement mechanism in the residential hotel law: The Housing Department must approve building permit applications at residential hotels to ensure the owners aren’t converting rooms into tourist accommodations.

Five times between 2014 and 2018, the American applied for building permits. Verge repaired a crack in an exterior wall and put a new roof on the building. He remodeled bathrooms and repaired drywall and stucco. But only one permit was ever reviewed for adherence to the residential hotel law, according to building department records.

In 2016, a housing inspector found 32 rooms had been remodeled and a laundry area had been added, noting “permit required.” Records show the inspector didn’t inquire about whether the rooms were redone for short-term guests and never followed up. Verge wasn’t cited for violations of the residential hotel law.

The Housing Department’s code enforcement director Robert Galardi told Capital & Main and ProPublica that the hotel was inspected last November, resulting in “minimal code violations with compliance obtained in a timely manner.” The inspection made no mention of the hotel’s tourist offerings, which the hotel advertises on a sandwich board sign just outside the front door.

Told of the tourist conversion, Galardi said he’d “conduct further investigation.”

Failure to enforce

The Housing Department has plenty of mechanisms for enforcing the law, yet the city has used hardly any of them — even in the face of what appear to be violations.

The TikTok account of the Hometel Suites in Koreatown features videos of guest rooms and the reception desk as K-pop songs play in the background. Guests can dine on $115 steamed crab dinners at the hotel’s seafood restaurant. Years ago, the Housing Department had determined Hometel — once known as the Hamilton — to be a residential hotel, and in 2008 and in 2011 the department informed the hotel’s then-owners it was subject to the ordinance.

Galardi said his inspectors saw no evidence of short-term rentals at the Hometel when they visited the hotel in May 2019. But at least since March of that year, a three-story-tall banner on the façade has shown a family with suitcases on a luggage cart and the message “Book your stay today.”

General manager Becky Hong said neither she nor the owner would comment on Hometel’s residential hotel status or city enforcement, and she did not respond to emailed questions.

A review of more than 10,000 pages of Housing Department documents obtained under the California Public Records Act, including inspectors’ notes, correspondence and other enforcement records, along with interviews with housing officials, shows hotel owners have little reason to fear fines or prosecution for violating the residential hotel law.

Logan Altman, the former owner of the Ramona Motel in South Los Angeles, said when he bought the property in 2016, the previous owner had assured him he could rent out rooms on a nightly basis without fear of a city crackdown.

“What I heard was enforcement was somewhat lax,” he said. “The seller said he hadn’t had any problems.” And neither did Altman, according to Housing Department records. He sold the motel to a nonprofit housing developer in 2021.

In the past 15 years, L.A. Housing Department data shows, the city has cited just 17 hotels under the law. However, the city’s recordkeeping seems deficient: Capital & Main and ProPublica found two additional hotels it cited by separately looking through enforcement records provided by the department. Only four of the 21 residential hotels that Capital & Main and ProPublica found marketing rooms to tourists have been given warnings by housing inspectors for residential hotel violations.

A block away from Hometel at the H Hotel, a neon H on the building’s brick façade signals the former East West Hotel’s new hip vibe. A Saturday-night stay ranges from $200 to $270, and a crystal chandelier hangs above the lobby near a lounge where guests can order brunch and $115 bottles of champagne.

The H Hotel, formerly known as the East West Hotel, on 8th Street in L.A.’s Koreatown.

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Barbara Davidson

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A vendor sells clothing and kitchen items on 8th Street near the H Hotel.

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Barbara Davidson

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People dine at the H Hotel’s bustling restaurant, the H Cafe.

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Barbara Davidson

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Last year, a housing inspector noted that Nojan Haddadi, the H Hotel’s operations manager, told him that the property is currently being used as a “transient hotel,” using the legal term for hotels that rent rooms to tourists. But the hotel, which is officially designated residential, never applied to convert to a tourist hotel, Housing Department records show. And there’s no evidence in the records that the department took any enforcement action against the hotel for violating the residential hotel law. Haddadi told Capital & Main and ProPublica that the hotel hasn’t accepted long-term residents since 2019. He said he didn’t know if the hotel was violating the law but noted that the hotel’s management has asked the city to remove its residential designation. The H Hotel’s owner, Mike Barry, declined to answer questions, citing advice from his attorney.

When asked why the Housing Department hasn’t enforced the law against the H Hotel, Galardi noted that his inspector was barred from entering without an administrative warrant. Haddadi said the hotel had been instructed by its attorney not to let inspectors in. Galardi wrote, “Moving forward, staff will conduct further investigation regarding tourist units.”

Throughout the inspection records, a pattern emerged: Hotel owners or their attorneys could dodge city regulators simply by refusing to consent to inspections without a court order.

The department could obtain such warrants, but Galardi said that its inspectors have not secured them — to enter either the H Hotel or others whose owners have barred inspectors.

Even when city inspectors have attempted to enforce the law, their efforts have proved futile because they haven’t always followed up to ensure compliance. Between 2016 and 2018, L.A. housing inspectors ordered the owners of the Studio Lodge, Hyland Inn, Central Inn Motel and Top Hat Motel to either return their rooms to residential use or obtain the required clearances to convert them.

But after inspectors said they’d return to ensure the violations were corrected, attorney Frank Weiser, who represented the Hyland, the Central Inn and the Top Hat, sent letters to the Housing Department that said they would not be allowed to reenter without administrative warrants. Housing Department enforcement records show no evidence that inspectors obtained warrants — even though the hotels were also cited for fire safety and electrical issues that inspectors rated as “high severity” violations.

And until recently, travelers could still book rooms online at any of the three hotels.

The owner of the Central Inn and the manager of the Top Hat said they had recently begun providing short-term housing funded by local homelessness programs. But the Top Hat manager said the motel still does nightly rentals when there are vacancies, and both acknowledged they’d been offering daily rates until earlier this year. Neither hotel owner answered written questions about whether the nightly rentals violated the residential hotel law. The owner of the Studio Lodge didn’t return phone calls or emails seeking comment.

Weiser, who still represents the Hyland’s owner, said he thinks the hotel corrected its housing code violations. But he said of the residential hotel violations, “The bottom line: There was never any action taken by the city. I think that speaks for itself.”

Sharma, the law professor, who previously advised former L.A. Mayor Eric Garcetti on housing policy, noted the residential hotel law allows the city attorney to seek court orders to stop building owners from renting to tourists.

“I think by even filing against a few buildings, it sends a message to the rest of the buildings that the city is watching,” she said. “That’s how enforcement works in larger scale.”

The residential hotel ordinance also required the Housing Department to file annual reports to the City Council and mayor, informing them of the total number of residential hotel units, any conversions or demolitions and the department’s enforcement activities. But in response to a public records request, the department told Capital & Main and ProPublica that it didn’t have any of the reports. The city clerk’s office said it has no record of receiving any, and Galardi said he didn’t think the reports were ever compiled.

Good, the Housing Department’s senior policy adviser, said that understaffing is an obstacle to enforcement, pointing out that a single inspector is assigned to all of the city’s residential hotels. “There are significant capacity issues,” he said.

The bleak contrast between the American’s trendy remodel and the city’s homelessness crisis can be seen on the surrounding streets. On one recent day, a man pushed a shopping cart full of plastic bags past the hotel’s sandwich board advertising rooms and suites. On another, a man covered head to toe in dirty blankets stood against a graffitied wall as a tour group admired the art behind him.

Tourists on an arts walk pass a man draped in blankets in the heart of the Arts District in April.

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Barbara Davidson

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As tourists spilled out of the American, many said they were shocked by the seemingly endless tents pitched on downtown sidewalks and were startled to learn that the American was supposed to be reserved for the city’s neediest residents.

“I don’t like to hear that,” said Britt Booram, a real estate agent from Indianapolis as she got into a black van after checking out of the hotel.

Galardi said Capital & Main and ProPublica’s reporting had “gotten the ball rolling” on another potential enforcement tool to shut down short-term rentals in residential hotels: the city’s 2018 Home-Sharing Ordinance, which regulates listings on sites like Airbnb. But it’s rarely been used in the past. The city has fined just two hotels, and the planning department issued warning letters to a third hotel in 2020.

Only one of the three has stopped accepting online bookings. The others continue to advertise residential hotel rooms to tourists.

The Los Angeles County Board of Supervisors voted Tuesday to declare housing insecurity a public health crisis and to develop a policy that gives residents in unincorporated areas priority access to some affordable housing built in their neighborhoods.

The crisis declaration is not an official emergency declaration and does not trigger any emergency powers. But according to Supervisor Hilda Solis, the resolution directs county agencies to get on the same page.

"Unstable housing is not just an economic issue. It is a driver of chronic illness, trauma, family instability and preventable health disparities," Solis said.

The motion instructs the county’s Department of Homeless Services and Housing, the Los Angeles County Development Authority and other departments to develop coordinated plans to preserve existing affordable housing units, keep people in their homes and prioritize the health impacts of housing instability.

Supervisors also approved a separate motion directing departments leaders to develop a local preference policy for L.A. County-funded housing in unincorporated areas.

When county funding is used to build affordable housing in communities like East Los Angeles, Willowbrook or Altadena, residents of those neighborhoods would get priority access to them.

According to the motion, 59% of renters in unincorporated areas spend more than a third of their income on rent.

Housing insecurity

The county uses the term “housing insecure” to describe anyone lacking stable, safe and affordable housing.

That means unhoused Angelenos, as well as tenants who spend more than half of their income on rent, people living in overcrowded or substandard housing conditions, and those at risk for eviction or displacement.

Various studies show that housing instability contributes to chronic disease, emergency room visits and premature death.

The county's Department of Homeless Services and Housing, which launched this year, grew directly out of the Housing for Health program, a health-centered homelessness program formerly within the Department of Health Services.

Budget concerns

The supervisors voted 4-0 Tuesday to approve both motions. Supervisor Kathryn Barger was absent for the vote because she attended the funeral of an L.A. County sheriff's deputy.

Officials warned of major federal cuts coming to Medi-Cal, CalFresh and other services because of the Trump administration’s “One Big Beautiful Bill” signed into law last year.

This story first appeared on The LA Local.

The leadership of the Los Angeles Police Commission experienced a significant shakeup Tuesday during a regularly scheduled meeting, when it was announced that Teresa Sánchez-Gordon had stepped down as president of the police oversight body.

Rasha Gerges Shields was appointed the commission’s new president, and Daniel Tabor was appointed vice president soon after the announcement. Sánchez-Gordon was not present at the meeting.

Shields announced that Sánchez-Gordon would be stepping down and added that she would be playing some continued role on the commission, but did not provide further details before the group went into closed session. A spokesperson for the commission said that Sánchez-Gordon would continue to serve as a commissioner.

“Thank you and I look forward to serving all of you in the community in this role,” Shields said after being appointed president.

The announcement came as a surprise to those present at the meeting. There was no indication on the commission’s agenda or other public forum that the president would be stepping down. The commission’s website was updated with the new titles shortly after the votes.

Sánchez-Gordon had been serving on the commission since 2024, and was appointed president in late 2025. She has shared her experience as an immigrant who settled in East L.A. as a child and has expressed concern about widespread federal immigration enforcement in the city, according to reporting by the Los Angeles Times.

Erroll Southers preceded Sánchez-Gordon as president of the commission before stepping down last October.

Shields was appointed to the commission in 2023. She has worked both as a federal prosecutor and as a lawyer in private practice.

Tabor was appointed to the commission in January and formerly served as the mayor of the City of Inglewood.

The Los Angeles Police Commission did not immediately respond to request for comment. This story will be updated if it does.

LA Documenter Martin Romero contributed reporting for this piece from the LAPD Board of Police Commission meeting. LA Documenters trains and pays LA residents to take notes at local government meetings around Los Angeles. You can find meeting notes and audio at losangeles.documenters.org

As Californians rush to file their taxes before the April 15 deadline, the candidates vying to be California’s next governor have laid out competing visions for the future of taxation in the nation’s largest state.

Leading candidates have proposed eliminating income taxes, cutting taxes for businesses, increasing taxes on corporations and raising taxes on commercial properties.

Not on that list: taxing billionaires.

None of the candidates polling in double digits has embraced the tax proposal, sending shockwaves through California politics: a one-time tax on the wealth of billionaires that a health care union is trying to qualify for the November ballot. But while Gov. Gavin Newsom has spent his final year in office arguing that the state has a spending problem, not a revenue problem, the Democrats most likely to succeed him are eyeing ways to bring new money into the state’s coffers.

Democrats Katie Porter and Tom Steyer have proposed new taxes on large corporations — albeit in different forms — to offset federal health care cuts, boost education funding and help fill structural budget deficits projected to reach $35 billion in the coming years. Porter has also aligned with Republicans Steve Hilton and Chad Bianco in promising to cut taxes for working families and businesses, though the Republicans’ plans would go much further.

None of the leading candidates has indicated which state programs they would cut to make up for lost tax revenue. But in a year when affordability is the dominant voter concern, taxes are top of mind.

“If you’re gonna talk about affordability — and affordability is the main kind of buzzword of the campaign — well, you gotta start with taxes,” said Tim Anaya of the Sacramento-based Pacific Research Institute, a libertarian, free-market think tank.

A tax code ‘frozen in amber’

California’s tax code has been largely frozen in amber for the past century. When voters limited property tax increases through Proposition 13 in 1978, they made the state more dependent on a progressive income tax that relies disproportionately on the high incomes and capital gains of a relatively small number of residents. As a result, California tax revenues fluctuate wildly based on how tech and other large companies perform in the stock market.

Over the past 40 years, efforts to change California’s tax law have largely nibbled around the edges. No one has proposed a wholesale reform of the system, Anaya said.

The governor’s race is playing out against the backdrop of negotiations to shave billions of dollars off state spending next year to close the state’s growing structural deficit. In budget hearings this spring, finance officials in Newsom’s administration have made clear that the governor is not interested in pursuing any new taxes.

Like his predecessor, Jerry Brown, Newsom has bemoaned the annual swings between surpluses and deficits driven by gyrations in personal income tax and capital gains revenue. But he has done little to either broaden the tax base or bring in new forms of revenue, said Chris Hoene, executive director of the left-leaning California Budget & Policy Center.

“He has not done very much on the tax front,” Hoene said. “He’s been more inclined to actually give away new or expanded tax credits — like he became a big proponent of expanding the film tax credit.”

The top Democratic candidates for governor — Porter and Steyer — are vowing to boost state revenues, primarily by honing in on big business.

Hoene said it’s no surprise that their proposals lean into familiar ideas such as raising taxes on corporate profits or property, rather than the relatively novel approach of taxing overall wealth.

“Some of these newer ideas, like taxing wealth … those are things that need to be cooked a bit longer,” Hoene said. “If I were a gubernatorial candidate, I’d be saying, ‘hey, there’s some low-hanging fruit we should be going after first.’”

There’s also some unlikely overlap. Porter and Hilton both propose eliminating state income tax on earnings less than $100,000, a change that would affect more than 70% of California residents who file tax returns. (Porter’s proposal focuses on families, while Hilton said he would extend the exemption to all filers.)

Hilton also proposed reducing the $800 minimum franchise tax that businesses have to pay, regardless of their profits.

Among the lower-polling candidates, San José Mayor Matt Mahan and Superintendent of Public Instruction Tony Thurmond — both Democrats — have offered tax plans on opposite ends of the party’s ideological spectrum.

Thurmond supports the one-time 5% tax on the wealth of billionaires, which could raise up to $100 billion for health care and food assistance. Mahan vows to oppose all tax increases until oversight measures are in place.

The other candidates have not released detailed tax proposals.

Here’s what we know about the leading candidate’s tax plans so far:

Tom Steyer

Steyer argued that while the richest Californians should pay more, the state should focus on taxing corporations. He supports a proposal to close the so-called “water’s edge” loophole that allows multinational corporations to shelter their profits in countries with low tax rates to shield their international profits from state taxes. The proposal would require these corporations to pay taxes based on a share of their global income.

It’s an idea that progressives have floated for years but never managed to pass. This year, ahead of the November governor’s race, Sacramento legislators will debate closing the loophole again.

Steyer also floated a special election in 2027 to pass an increase on commercial property taxes, which were capped by Proposition 13.

Steyer and other progressives have long wanted to split off commercial properties from Proposition 13 protections, an idea known as “split roll.” In 2020, state voters rejected a measure to do just that.

“I am proposing closing a corporate real estate tax loophole that’s existed for over 40 years,” Steyer told KQED’s Political Breakdown. “That brings in more money to the state, that is permanent, that is completely fair.”

Steve Hilton

Hilton argued California’s budget problems are due to overspending, noting that the state budget has nearly doubled since 2017. He also said the state’s affordability problem is tied to how expensive it is to do business in California.

Hilton noted that California, the nation’s most populous state, has more people in poverty than any other state, according to federal government statistics.

“Why?” he said on Political Breakdown. “Because of all these combinations of the spending and the policies that are making it so difficult to start and grow businesses. As a result of that, costs go up. As a result of that, we increase welfare payments because people are struggling. That means taxes go higher. That means it becomes even more expensive. And we’ve got to get out of that cycle.”

Hilton said he will make the state more affordable by eliminating state income tax for Californians earning less than $100,000 and imposing a flat 7.5% tax on earnings over $100,000. Currently, the income tax tops out at 12.3% for individuals making more than $722,000 a year.

He opposed any changes to Proposition 13 and wants to eliminate the minimum franchise tax, which is about $800 annually for all businesses.

Hilton believes the tax cuts will grow California’s economy, which could result in more tax revenue.

Katie Porter

Porter framed her tax plan as key to tackling affordability. At its center: eliminating state income taxes for families who make under $100,000.

“The state takes a chunk of many people’s paychecks,” she said on Political Breakdown. “$100,000 allows people to make ends meet, but also to do the things we need them to do: To save for retirement. To be able to get a house, to be able to put a little money away for college.”

Porter said she would pay for that tax cut by changing California’s corporate tax, which is currently a flat 8.84%, no matter how much a company makes. She wants to increase it gradually, with the highest-earning corporations paying up to 9.75%.

“That would generate enough revenue … to deliver on my promise of free college tuition,” Porter said.

Her free college tuition plan would allow Californians to attend two years of community college for free, then transfer to a University of California or California State University campus, where the state would cover their tuition.

Chad Bianco

Bianco’s campaign said his tax priorities are “straightforward”: he wants to cut them and make up for lost revenue with undefined “wasteful spending” cuts.

Bianco proposed eliminating the state income tax entirely, opposing any new taxes and reducing “cost drivers like the gas tax,” according to a campaign spokesperson.

In a recent interview with KVCR, Bianco accused Democratic leaders of “bilking” the state for billions of dollars, pointing toward state contracts with nonprofits. He estimated annual waste and fraud at up to $50 billion — without providing specifics.

“California government is broken,” he said. “Number one, we absolutely have to stop the waste, the fraud, and the abuse going on in our government … So you eliminate all of the fraud, you become oil independent and use that to fund government, and now we don’t have to pay income taxes.”

He also would “provide targeted relief, including reducing or eliminating state taxes on tips.”

But in a debate with Hilton April 4 at the Lincoln Club of Coachella Valley, Bianco suggested that upending the state’s tax system would be more difficult than repealing regulations enacted by previous governors.

“Regulations are easy, we sign all of those away…all of those boards and commissions can be suspended, the regulations can be suspended,” Bianco said. “The taxes are going to be a different story.”

KVCR’s Madison Aument contributed reporting to this story.

The Rock & Roll Hall of Fame announced its 2026 class of inductees on Monday night, a list of eight performers that includes an R&B legend, a heavy metal band and a drummer-turned-frontman whose music dominated mainstream pop-rock in the 1980s.

In recent years, the Rock Hall has expanded its definition of rock icons to include artists from a wider range of genres and backgrounds. The basic rules for induction have remained the same, though:

Artists become eligible for nomination 25 years after the release of their first commercial recording (in other words, artists whose debuts came out in 2001 are newly eligible this year). There are four different categories of inductees:

• Performers whose music and cultural impact has changed the course of rock and roll. 
• Influential musicians whose innovative styles have propelled cultural change, which this year includes key innovative voices in African and Latin music. 
• A "musical excellence" award designated for writers, producers and session musicians who have played a key role in rock history.
• The Ahmet Ertegun award, honoring industry professionals who are not performers but have made a significant impact on the business of music. 

The official induction ceremony will take place on Nov. 14 at the Peacock Theater in Los Angeles. It will be streamed on ABC and Disney+ in December.

Performer Category

Phil Collins
Even though he was inducted into the Rock Hall as a member of Genesis in 2010, it was Collins' solo career, especially a string of hits in the 1980s, that helped turn him into one of the most commercially successful artists of that decade. The drummer-turned-singer is widely known for popularizing the "gated snare" recording technique — which cut off the lingering reverb from the drums — and resulted in an explosive sound that became a signature sound of the era. Collins' career spans over five decades and has earned him a long list of accolades, including an Academy Award for best original song in 2000 for "You'll Be In My Heart" from Disney's Tarzan.

Billy Idol
The British rocker Billy Idol enters the Rock Hall on his second nomination. Known for hits like "Dancing with Myself," "Rebel Yell" and "White Wedding," the bleach-blonde singer's punk rock attitude continues to reach fans around the world more than four decades since the release of his debut solo album.

Iron Maiden
Heavy metal fans rejoice! Iron Maiden is finally being inducted into the Rock Hall on its third nomination. Since the 1980s, the band has been redefining heavy rock with anthemic storytelling, full-throttle instrumentation and spooky iconography. Different iterations of the band's mascot, Eddie, have appeared on Iron Maiden's album covers and merch for decades, becoming a key fixture of a particular strain of teen rebellion.

Joy Division/New Order
After three nominations, Joy Division and New Order are entering the Rock Hall under a joint induction, recognizing the link between the groups. Both bands featured guitarist Bernard Sumner, bassist Peter Hook and drummer Stephen Morris, who were forced to reimagine their sound after the death of singer and songwriter Ian Curtis in 1980. Joy Division's moody post-punk sound, which featured the baritone vocals of Curtis, gave way to New Order's more electronic, dance-driven rhythms, which proved massively popular in the 1980s.

Oasis
Today is gonna be the day that Oasis gets into the Rock Hall. (Well, November 14 will be the actual day.) The Britpop group, led by brothers Liam and Noel Gallagher, has had a resurgence since their highly-anticipated reunion tour last year (which briefly broke Ticketmaster and had fans on both sides of the Atlantic crying their hearts out).

Sade
The English band named for lead vocalist Sade Adu changed the sonic landscape of the 1980s and '90s with its blend of jazz, soul and R&B. The velvety, intimate quality of Sade's music echoes across generations of artists, from Drake to Adele, and has now earned the group Rock Hall inductee status.

Luther Vandross
After starting his career as a background vocalist for stars including David Bowie, Roberta Flack, Stevie Wonder and many more, Luther Vandross became an R&B and soul legend under his own name, thanks to the sheer power of his voice beginning in the 1980s. (He was also a producer for A-listers like Whitney Houston, Aretha Franklin and Diana Ross.) With over a dozen studio albums, his influence has reached across generations to stars including Beyoncé, Alicia Keys and most recently, Kendrick Lamar, who named one of the biggest hits of 2025 after him. Vandross will be inducted after his first Rock Hall nomination.

Wu-Tang Clan
You can see the Rock Hall's effort to expand the definition of rock icons in past years particularly strongly when it comes to the hip-hop acts it inducts. At least one act from the genre — including the Notorious B.I.G., Missy Elliott, A Tribe Called Quest and Jay-Z — each year since 2020. Considering Wu-Tang Clan's collective and individual output, which spans more than 30 years and expanded the East Coast's mark on the genre with references to vintage kung-fu movies and dark humor, it's no wonder the Rock Hall is finally giving the Staten Island crew its long-deserved flowers.

Early Influence Award

Celia Cruz
The Cuban singer, widely known as The Queen of Salsa, becomes the first primarily Spanish-language artist to be inducted into the Rock Hall. After rising through the ranks of Havana's music scene in the 1950s, Cruz left her home country in exile and eventually landed in New York City, where she became one of the most prominent voices of the legendary salsa label, Fania Records.

Fela Kuti
At the end of the 1960s and into the '70s, the Nigerian singer and political activist helped create the Afrobeat genre by combining West African highlife with elements of jazz and funk. Known for his electrifying, unconventional live performances, the multi-instrumentalist is the Rock Hall's first African pop star.

Queen Latifah
Queen Latifah was only 19 years old when she released her debut album, All Hail the Queen, in 1989. Female empowerment has been at the forefront of her music and image since the beginning of her career. With songs like "Ladies First" and "U.N.I.T.Y.," Queen Latifah changed the landscape of male-dominated rap; alongside her music career, she has found arguably greater success as an actor.

MC Lyte
Another teenage pioneer in the world of hip-hop, the Brooklyn-raised rapper gained popularity with socially-conscious lyricism that tackled issues including street violence and drug addiction.

Gram Parsons
Gram Parsons played with The Byrds and helped spearhead the band's seminal country rock album Sweetheart of the Rodeo, which came out in 1968 — but he was technically considered a "sideman" and not a full member of the band. That's why Parsons was not inducted alongside his bandmates when The Byrds entered the Rock Hall in 1991. Now, the Americana visionary — who recorded a pair of celebrated and influential solo albums that featured duets with Emmylou Harris and also played with the Flying Burrito Brothers and the International Submarine Band — gets his due for melding folk, Southern twang and rock and roll before his death at the age of 26, in 1973.

Musical Excellence Award

Linda Creed
In the 1970s, Linda Creed wrote and produced love songs that would come to define the sound of Philadelphia soul, including the Stylistics' hits "Stop, Look, Listen (To Your Heart)" and "You Are Everything," both of which were later covered by Diana Ross and Marvin Gaye. After being diagnosed with cancer at age 26, Creed wrote the song "The Greatest Love of All." Whitney Houston's rendition of the song would go on to top Billboard's Hot 100 chart shortly after Creed's death in 1986.

Arif Mardin
Arif Mardin's producer credits span more than four decades and dozens of legendary collaborations, including with Aretha Franklin, the Bee Gees, John Prine and Norah Jones. Born in Turkey, Mardin started working at Atlantic Records in the early 1960s and eventually became an executive and one of the label's most reliable hitmakers.

Jimmy Miller
Jimmy Miller signed a recording contract as a singer before finding his true calling behind the console, particularly for his work with the Rolling Stones across five albums: Beggars Banquet, Let It Bleed, Sticky Fingers, Exile on Main St. and Goats Head Soup. Known for encouraging and harnessing a group's raw, live energy in recording sessions, the producer left an indelible mark on the sound of rock and roll in the 1960s and '70s.

Rick Rubin
Rick Rubin co-founded Def Jam Recordings while studying film and television at New York University. He went on to turn the label into a powerhouse of 1980s and '90s hip-hop, producing and releasing albums by acts including LL Cool J, Beastie Boys, Run-DMC and Public Enemy. He later founded the label American Recordings and served as co-president of Columbia Records. Since the founding of American Recordings, and particularly in his work with Johnny Cash, Rubin has become known for his skill in musical subtraction — paring down a recording to its essential elements.

Ahmet Ertegun Award

Ed Sullivan
He began his career as a sports journalist, but in 1948, Sullivan became the host of a television program — originally called Toast of the Town and later renamed The Ed Sullivan Show — that was welcomed into millions of people's living rooms every week. Sullivan's show widely introduced Americans to countless musicians, including Elvis Presley, The Jackson 5, The Supremes and, maybe most famously, The Beatles, whose first appearance on his show, in February 1964, was, at the time, one of the most-watched programs in history.
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