CityLab, July 17, 2019: Could public banks help California fund affordable housing?
Consider the way cities bank now: They collect thousands in tax revenue each year, then park that money in commercial banks that choose the projects and industries in which to invest the city’s money in hopes of growing it. By opening local public banks, advocates say cities could decide where to invest those funds instead — and take out loans to finance other public projects for lower interests, from the banks they control. The banks’ priorities would be set by voters, and they’d be run by civil servants and financial experts.
L.A.’s 2018 push for public banking zeroed in on its potential to serve cannabis companies, as many traditional banks won’t while the sale of marijuana is illegal at the federal level. This time around, activists and legislators in California cities are focusing on what public banking could do to help cities finance affordable housing, shrink inequality and bolster climate change resilience efforts.
