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Big, boxy apartment buildings are multiplying faster than ever
Author: Justin Fox, Bloomberg Opinion

Amid the materials shortages, price hikes and other craziness of the housing market last year, something remarkable happened. U.S. builders completed more apartments in large multi-unit buildings than ever before.

Yes, these numbers only go back to 1972, but with other statistics indicating that 1972-1974 marked the all-time peak in overall U.S. apartment construction, it seems safe to say that the 214,000 housing units completed in buildings of 50 units or more in 2021 has never been surpassed.

This news, contained in annual Characteristics of New Housing data that the Census Bureau released with little fanfare earlier this month, may come as something of a surprise amid a pandemic that emptied downtown office buildings and brought real estate bidding wars to outer suburbs and mountain resorts. Big apartment buildings don’t really seem to match the moment.

One explanation for their continued boom is that, to be completed in 2021, large apartment buildings generally had to have been in the works before the pandemic hit. According to the Census Bureau’s Survey of Construction, the average time from permitting to completion for multifamily buildings of 20 units or more that were finished in 2021 was about 19 months.

But that doesn’t explain what’s coming next: After dipping in 2020, the number of new units authorized in multifamily buildings took off, running 37% higher over the past 12 months than in the same period in 2018/2019.

Apartment completions are now down a little, a reflection of that 2020 permitting slowdown, but that should turn around soon. We don’t know for certain how many of these new apartments will be in big buildings, because the permit statistics don’t differentiate between 5-unit buildings and 50-unit ones. But over the past five years, housing units in buildings of 50 units or more accounted for 57% of all multifamily units completed, while those in buildings with 20 units or more accounted for 85%.

During the apartment construction booms of the 1970s and 1980s, smaller buildings predominated. Now, multifamily buildings of four units or fewer are barely being built at all — the Census Bureau estimates that just 4,000 duplex units and 3,000 units in three-or-four-unit buildings were completed in 2021 — and those in the five-to-19-unit range have gone from mainstay of the U.S. new-apartment supply to afterthought.

The disappearance of this “missing middle” between single-family houses and larger multifamily structures has been much lamented, and the boom in big apartment buildings hasn’t been enough to fully make up for it. Still, apartment construction is now at levels not seen since the Tax Reform Act of 1986 wiped out key tax incentives for investment in rental housing. By contrast, overall housing construction — which consists mostly of single-family houses — is still at only about two-thirds its 2006 peak.

A longer, population-adjusted view shows the period from 2008 to 2015 to have been the weakest for U.S. housing starts since World War II, and one of the weakest on record.

That housing-construction bust happened just as the members of the largest U.S. generation, the millennials, were entering adulthood. Not great timing! The current large-apartment-building boom, then, is occurring in the context of a housing supply that’s growing, but not fast enough to meet demand that built up during that bust. And now it has taken new forms with the pandemic-era embrace of remote work.

The ability to cut loose from downtown offices and even large metropolitan areas has to some extent shifted demand away from expensive urban neighborhoods and coastal metropolises in general. But picturesque mountain towns can only accommodate so many newcomers, and physical and political barriers to building a lot more single-family homes are cropping up in large inland metro areas as well as coastal ones. It’s no shock that multifamily units make up the majority of new housing going up in and around New York, Philadelphia, Seattle, Miami and Boston, but a bit surprising to see that the same is now true of the Austin, Denver and Twin Cities metro areas, with Nashville not far off.

Other, smaller, metro areas where the majority of new housing units authorized in 2021 were in buildings of five units or more included Napa, California (86.3%), Missoula, Montana (73.2%), Santa Fe, New Mexico (72.9%); Madison, Wisconsin (72.8%); Boulder, Colorado (62.4%); and Rapid City, South Dakota (53.6%). It’s clearly not just a big-city thing. And while 50-plus-unit apartment buildings are probably a smaller part of the mix in these places than in larger metropolitan areas, the trend toward bigness has been pretty universal. Another way of measuring it is by how tall the buildings are.

Most of those buildings probably aren’t much taller than four stories. According to Characteristics of New Housing data, 77% of the multifamily units completed in 2021 were in wood-framed buildings. While “mass timber” buildings of up to 18 stories are now allowed, “stick” framing similar to that used in single-family houses is the standard in U.S. wood-framed apartment construction, and is subject to stricter height limits. The result is a proliferation of boxy, “five-over-one” apartment buildings with five wood-framed stories over a concrete first floor (or, if you prefer, Type V construction over Type I).

But why the shift from small apartment buildings to big? I don’t think consumer demand really explains it. Yes, a big building or complex can offer amenities such as pools, gyms and concierges — not to mention views, if it’s tall enough — that a smaller one can’t, and there does appear to have been an increase in the number of affluent renters, many of them empty nesters, who demand such amenities. Supply-side factors seem more important, though.

Getting housing built is harder than it used to be, partly because there’s not a lot of developable land left within large metropolitan areas (or even adjacent to them in some coastal metropolises) and partly because the political and regulatory barriers to development have grown. That favors developers with lots of resources and expertise. As industries go, multifamily housing development isn’t all that concentrated — the 25 biggest U.S. developers, as ranked by the National Multifamily Housing Council, accounted for a quarter of the multifamily housing starts in 2021. But even developers well below the top 25 go about their work in an increasingly professionalized and institutionalized manner, with syndicators, real estate investment trusts and even sovereign wealth funds all playing a role. Building some duplexes on a vacant lot in a residential area isn’t really worth these people’s time. Building a 150-unit apartment building in a city or a suburban shopping district often is.

Will it continue to be? The annualized return on U.S. apartment investments has been 9.2% over the past decade, according to the National Council of Real Estate Investment Fiduciaries, with a return for the four quarters ending in March of 24.1%. Rising interest rates and a slowing economy mean 2022 and 2023 won’t be nearly so lucrative — the Standard & Poor’s 500 Residential REITs Sub Industry Index is down 36% since April — and a construction slowdown is almost sure to follow. But the longer-term forces driving investment into big apartment buildings don’t seem to be going away.

Justin Fox is a Bloomberg Opinion columnist covering business. A former editorial director of Harvard Business Review, he has written for Time, Fortune and American Banker. He is author of “The Myth of the Rational Market.”

©2022 Bloomberg L.P. Visit bloomberg.com/opinion. Distributed by Tribune Content Agency, LLC.

As Colorado River reservoirs drop, Western states urged to ‘act now’
Author: Ian James, Los Angeles Times

With the Colorado River’s depleted reservoirs continuing to drop to new lows, the federal government has taken the unprecedented step of telling the seven Western states that rely on the river to find ways of drastically cutting the amount of water they take in the next two months.

The Interior Department is seeking the emergency cuts to reduce the risks of Lake Mead and Lake Powell, the country’s two largest reservoirs, declining to dangerously low levels next year.

“We have urgent needs to act now,” Tanya Trujillo, the Interior Department’s assistant secretary for water and science, said during a speech on Thursday. “We need to be taking action in all states, in all sectors, and in all available ways.”

Trujillo’s virtual remarks to a conference at the University of Colorado Law School in Boulder underscored the dire state of the river under the stresses of climate change, and the urgency of scaling up the region’s response to stop the reservoirs from falling further. She provided details about the federal government’s approach to the crisis two days after Reclamation Commissioner Camille Calimlim Touton announced that major cuts of between 2 million and 4 million acre-feet will be needed next year to keep reservoirs from dropping to “critical levels.”

For comparison, California, Arizona and Nevada used a total of about 7 million acre-feet of Colorado River water last year.

State officials and managers of water agencies have yet to determine how they could accomplish such large reductions in water use. Finding ways of achieving the cutbacks will be the focus of negotiations in the coming weeks between representatives of the seven states and the Biden administration.

“The Colorado River Basin faces greater risks than any other time in our modern history,” Trujillo said.

“There is much more work to be done in the basin because the conditions continue to worsen and deeper shortages are projected,” Trujillo said. “We need to do more than we’ve ever done before.”

After more than 22 years of drought compounded by warmer temperatures with climate change, Lake Mead and Lake Powell have declined to their lowest levels since they were filled. The two reservoirs now sit nearly three-fourths empty, at just 28% of full capacity.

The latest projections from the federal government show that absent large shifts in water use, the reservoirs are expected to continue dropping over the next two years.

Lake Powell, on the Utah-Arizona border, is forecast to decline more than 30 feet by March, putting the water level about 16 feet from the point at which Glen Canyon Dam would no longer generate electricity.

The surface of Lake Mead, the country’s largest reservoir, now stands at 1,045 feet above sea level. It’s forecast to drop more than 26 feet by July 2023. If Lake Mead were to keep dropping, the level would eventually approach a danger zone at 895 feet, below which water would no longer pass through Hoover Dam to supply California, Arizona and Mexico — a level known as “dead pool.”

Trujillo said she remains optimistic “that we can get through this.” But she also said it’s a “very, very sobering situation.”

The Colorado River begins in the Rocky Mountains and is a vital source for about 40 million people and farmlands from Wyoming to Southern California. The Colorado has long been heavily overused, with so much water diverted to supply farms and cities that the river’s delta in Mexico dried up decades ago, leaving only small wetlands.

The flow of the Colorado has declined nearly 20% since 2000. Scientists estimate that about half the decrease in runoff in the watershed has been caused by higher temperatures linked to global warming. And this heat-driven drying, which scientists describe as “aridification,” is projected to worsen as temperatures continue to climb.

The amount of runoff flowing into Lake Powell this year is estimated to be just 59% of average.

“We are facing the growing reality that water supplies for agriculture, fisheries, ecosystems, industry and cities are no longer stable due to climate change,” Trujillo said.

Last year, the federal government declared a shortage on the Colorado River for the first time, triggering cutbacks in water deliveries to Arizona, Nevada and Mexico. Farmers in parts of Arizona have left some fields dry and fallow, and have turned to pumping more groundwater.

The cuts have yet to limit supplies for California, which uses the largest share of Colorado River water. But that could soon change as federal officials push all seven states to participate in diverting less water.

The Interior Department could unilaterally impose cutbacks, but Trujillo said the goal is to work with the states to develop plans for scaling back diversions.

“We have the responsibility and the authority to take the action that we need to take to protect the system,” Trujillo said. “We know we will be served better if we take action collectively.”

Agriculture consumes about 80% of the water that’s diverted from the river, much of it to grow crops like alfalfa, which is used to feed cattle and exported in large quantities.

Because agriculture represents such a large share of water use, farming areas will bear a sizable portion of the water-saving burden. Some previous deals have involved paying growers who volunteer to temporarily leave portions of their land dry.

On average, cities across Southern California that are supplied by the Metropolitan Water District typically get about one-fourth of their water from the Colorado River. But this year, with the drought restricting other supplies from the State Water Project, the region is on track to receive about one-third of its water from the Colorado — an amount that will now be constrained by the order to conserve more.

Trujillo said federal, state and local officials will evaluate options to “develop the additional conservation that we are going to need.”

American officials also met with their Mexican counterparts this week, she said, to discuss how to cooperate.

Trujillo said she wants the region to avoid a chaotic response.

“Our collective goal is to be able to very quickly identify and implement strategies that will stabilize and rebuild the system, so that we don’t find ourselves constantly on the brink of a crisis,” Trujillo said.

Last month, the Interior Department intervened to protect the water level of Lake Powell. The agency announced a plan to release 500,000 acre-feet of water from Flaming Gorge Reservoir upstream and leave an additional 480,000 acre-feet in Lake Powell by reducing the quantity released from Glen Canyon Dam.

Trujillo said the measures aimed to guard Glen Canyon Dam’s ability to generate hydropower, keep water supplies flowing to nearby communities and protect infrastructure at the dam. She said in a recent letter to state officials that if Lake Powell were to drop below its minimum level for producing power, the dam’s facilities would face “unprecedented operational reliability challenges.”

Below that level, water could still be routed through four 8-foot-wide pipes, the dam’s river outlet works. But the capacity to release water would be reduced. And officials aren’t sure how the dam’s infrastructure would fare at those levels.

Trujillo wrote that Glen Canyon Dam “was not envisioned to operate solely through the outlet works for an extended period of time and operating at this low lake level increases risks to water delivery” and infrastructure, issues that “raise profound concerns regarding prudent dam operations, facility reliability, public health and safety.”

Speaking to the conference, Trujillo said extra water is being held in Lake Powell to protect the dam and ensure it can continue to function reliably. Larger water reductions are needed for the same reason, she said, to “protect that basic infrastructure” so it will continue to “operate in the manner that it was designed.”

The river was divided among the states under the 1922 Colorado River Compact, which allocated the water among states in the river’s Upper Basin (Colorado, Wyoming, Utah and New Mexico) and states in the Lower Basin (Arizona, Nevada and California). Separately, a 1944 treaty established how much water Mexico would receive.

The way the compact divided the river, splitting 15 million acre-feet between the Upper Basin and the Lower Basin states, is now colliding with the reality that the river’s average yearly flow since 2000 has been about 12.3 million acre-feet, and in recent years has dwindled further.

While grappling with the immediate crisis, representatives of the seven states are also preparing to negotiate new rules for dealing with shortages after 2026, when the current rules expire.

The federal government will issue a notice this month as it begins accepting input on those post-2026 rules. Trujillo said officials will consider the effects of climate change and the reduced flows in the river.

There are 29 federally recognized tribes in the Colorado River Basin, and tribal leaders have pushed to be included so they can play a larger role in talks on the river. Trujillo said officials have been meeting with tribes and will have a “process that is more inclusive going forward to ensure that our tribal communities are engaged at a greater level than ever before.”

In seeking solutions, Trujillo said Interior Secretary Deb Haaland is involved and “we have the attention and support from the White House.”

Trujillo said substantial funding is available to help under the $1.2-trillion infrastructure law, which included $8.3 billion for the Bureau of Reclamation. She said funds can be used to repair infrastructure, improve water efficiency and bolster the response to shortages by helping local entities develop water-saving programs.

Trujillo said federal officials don’t have any “pre-baked” formula for coming up with the necessary water reductions.

“We’re going to have to be very creative and develop a large list of potential options,” she said. “We’re going to likely be in a situation of doing things we’ve never done before. And we’ll have to have guts to be able to move forward.”

Clark County schools strive to provide comfort, support in wake of school shootings, tragedies
Author: Griffin Reilly

In the days that followed the May 24 mass shooting at Robb Elementary School in Uvalde, Texas, a communal grief washed across the United States.

Perhaps more painful than the news of the attack was the ever-worsening sense of familiarity as mass shootings continue to plague the country. The events are often difficult for adults to process — let alone children.

In addition to evaluating building security and emergency drills, school districts are tasked with another key responsibility: making students aware of the mental health and counseling supports that are available in-house or elsewhere in the community if needed.

As it becomes clear that student mental health is imperative to school safety, the regular deployment of these resources in emergency situations is, too.

Community resources and school response teams

Jana DeCristofaro is a community response program coordinator at the Dougy Center in Portland, one of several programs that provide third-party grief support to school communities in times of local tragedy, such as a death in the community.

“The goal of the program is to decrease isolation, provide community and make people — often children — feel heard in times of confusion and pain,” DeCristofaro said.

Following national events like the Uvalde shooting, school districts in Clark County point students and families in the direction of grief support systems and resources that aid parents in their explanations of major events.

Even though answers often aren’t clear or available at all, kids still ask often tough questions. And when those questions go unanswered — or when they’re tackled by the wrong people — it can make things worse.

“When kids have had deaths or traumatic experiences in their life, they’re more at risk for challenges in school, depression and anxiety,” said DeCristofaro. “The peer group support groups are there to help kids feel a sense of connection. To better understand what grief can look like. To keep ongoing connections.”

Though analyzing national events presents gray areas for counselors and grief support groups, providing a physical space for reflection can only ever help, she said.

In Evergreen Public Schools, School Mobilization Assistance Response Teams — better known as SMART — bring administrators, counselors and teachers together to respond to incidents of crisis or grief in school communities.

Usually, team members come from other schools or communities so they can provide an external view of the situation — just as the Dougy Center or other third parties would. Classrooms or other empty spaces are then identified as safe places for the teams to speak with teachers and students.

“These supports can last a whole day, sometimes they last a couple of days,” said Casey Lyons, Evergreen’s director of social-emotional learning and a SMART leader. “It’s set up so we can be flexible.”

Safe places can also provide creative materials for students to take time to address issues through outlets other than conversation, she said.

Though the Uvalde massacre didn’t demand a localized response of this kind, Evergreen and districts across Clark County sent home letters to families that promoted the availability of similar counseling support services.

“Counselors were well aware of what had happened and ready to bring in individual students or support classroom teachers,” Lyons said.

Threat assessment systems

Between May 26 and May 31, three students across Vancouver were arrested in response to incidents of threatening violence or carrying a firearm into school buildings.

On May 26, Vancouver Police Department officers arrested a student at Heritage High School after finding a handgun in the student’s backpack. Law enforcement reported that the student “had no intention of hurting himself or anyone else.”

On May 31, Clark County Sheriff’s Office deputies arrested a Skyview High School student for bringing a semiautomatic pistol onto school grounds.

Each of the students in the two incidents are facing charges of second-degree unlawful possession a firearm and possessing a dangerous weapon on school facilities.

On May 30, Vancouver police officers arrested an eighth-grader at Wy’east Middle School who had posted a photo on social media of a gun with the caption “everyone is gonna die tomorrow mostly 8th graders.” That student is not facing any charges.

In response to incidents like these in which Clark County schools become aware of a student exhibiting potentially dangerous behavior or making direct references to violence, districts are encouraged to deploy Educational Service District 112’s student threat assessment system.

When threats are reported, a school forms a team of counselors, administrators, classroom teachers and, depending on the level of concern, the student’s parents. The team then seeks to provide a student-specific plan to move forward, whether through in-school counseling visits or a referral to different resources in the community like the Dougy Center.

At the end of the school year, district officials meet with building administrators from various schools to learn how the threat assessments were used in various situations and the frequency of their usage.

Dave Bennett, the director of security and athletics at Vancouver Public Schools, says this year was the first time he’d been a part of such in-person meetings, as they’d been modified in past years due to the COVID-19 pandemic.

“This year was interesting to learn and see the statistics on how many (assessments) were done at each school level and which schools were using them more,” he said. “It was a moment of awareness for us that all of our schools weren’t using them equally, so that’s something we need to work on.”

Bennett said counselors are critical to the assessments, since they are typically the ones who are able to determine the root causes of students’ behavioral issues.

Lyons, of Evergreen Public Schools, is trying to get more classroom teachers involved in not only these specific threat assessments, but the usage of social-emotional learning practices on a wider basis.

“We’ve always been concerned about students’ social-emotional needs, but now after COVID it’s even more so. We’re really concerned,” she said.

Evergreen conducted a “Youth Truth” study this past school year — a survey among its students between third and 12th grades that asked questions about the health of their friendships and relationships, their feeling of belonging and the weight of teacher expectations. Once that data is fully analyzed, Lyons said she is hoping to plan more lessons in social-emotional well-being in classrooms, as opposed to solely in counseling offices or via community referrals.

“We’re trying to ingrain (social-emotional learning) practices in classrooms,” Lyons said. “It can’t all fall on the counselors. So even when you’re learning about math, we can find a way to include these pieces. We need to feel much more connected to our community.”

Olivia Harrison waxes poetic
Author: DAVID BAUDER, Associated Press

NEW YORK — The first line of Olivia Harrison’s book of poetry captures a feeling universal to everyone who has lost a loved one. “All I wanted was another spring,” she writes. “Was it so much to ask?”

Through the verses that follow that question, the widow of former Beatle George Harrison opens up about her husband, and about grieving after he died of lung cancer at the age of 58 on Nov. 29, 2001.

Twenty poems for 20 years, a number that’s not a coincidence.

“Came the Lightening,” a collection published Tuesday, is a first for the 74-year-old Harrison, and a surprise. She has meticulously curated George’s work with the help of their son, Dhani, but has otherwise maintained the privacy the couple kept throughout their marriage.

She was inspired to write by reading Edna St. Vincent Millay’s work about a “wound that never heals,” and her own line about wanting another spring was a turning point. She changed her mind after initially deciding not to release it publicly.

“It was because he was a good guy,” she said in an interview with The Associated Press. “A good guy. And I thought, ‘I want people to know … these things.’ So many people think they know who George is, I thought that he deserves this, from me, to let people know something a little more personal.”

She writes about the mundane moments of a marriage that become more special when they can’t be repeated — the late-night dances to a jukebox in their living room, how her cold feet sought the warmth of his under the covers on a winter night.

George Harrison met the former Olivia Arias in the 1970s when she worked at his record company in Los Angeles. One poem recalls her nervousness in first welcoming him to her Mexican immigrant parents’ humble home. “He said, ‘it’s a mansion compared to my youth,’” she wrote.

She remembers him welcoming her into his Friar Park estate west of London for the first time with the gentle words, “Olivia, welcome home.”

They drove up in “John and Yoko’s long white car.” It was another hint that she wasn’t just marrying anyone, along with her description of the day “the legendary Slowhand dropped in with the ex-Mrs.”

That would be Eric Clapton, with George’s ex-wife Patti.

Awkward!

“It seemed to be this love triangle legend,” Harrison said. “I thought I would try to get it over with in three verses.”

Her husband never talked publicly about losing his first wife to Clapton, and Harrison’s poem indicates it didn’t go well. “Predictable exchanges and yes, they ended badly,” she wrote.

Harrison also writes, at some length, about the harrowing night of Dec. 30, 1999, when a disturbed man with a knife broke into Friar Park. She recalled pleading with George to stay hidden in the bedroom but instead he went down to confront him and was stabbed in the ensuing struggle. Olivia attacked the intruder with a fireplace poker and, against odds, they both survived.

“I wouldn’t say it was a defining moment, but it was such a profound experience that I still can’t believe,” she said. “George nearly died and you think, no, he’s not going to die like that. He was a very defiant person in that sense — I’m not going to die like that. He was thinking that at the time, actually. After everything I’ve been through, I’m going to die like this?”

Nineteen years earlier, she had taken the middle-of-the-night phone call that John Lennon had died, and they huddled under their blankets for hours.

Even though George died not quite two years after the Friar Park attack, she considered it “a victory, not a loss.

“It was a victory because he went out on his own terms in the way that he wanted to,” she said. “It was something that he regretted that John Lennon didn’t have the chance to do.”

Harrison writes tenderly about the day her husband died: “I wanted you to leave without any impediments of care, to float away like you always imagined and prepared. I couldn’t help myself and nuzzled your ear, and whispered final words to leave you with my sound.”

Their son was 23 when George died. Harrison said she’s constantly surprised to hear him talk about things she didn’t know his dad had told him.

“Whether it was something for history’s sake, or a mantra, or some lesson, I thought, he didn’t wait until (Dhani) was 30 or 40,” she said. “That’s a real lesson, too. Why do we hold back? Why are we so constrained by time? George didn’t live like that. Maybe he was prescient. Maybe he knew.”

In the book, she also writes about the final visits of Paul McCartney and Ringo Starr to say goodbye to their former Beatles mate.

Now, she and Dhani sit at the boardroom table with McCartney, Starr and Yoko Ono when Beatles business is discussed. It’s in many ways an ongoing venture, like with last year’s Peter Jackson-produced “Get Back” project.

“Dhani and I are really there to look after George’s legacy,” she said. “On some things, we’re more opinionated. But on other things, I’m like, ‘it’s their music, it’s their images … they know what they want to hear and see. It’s great to shepherd and provide George’s material and help them in any way we can.”

Besides, she said, it’s a lot of fun.

It wasn’t until the anthology project in the 1990s that George became more comfortable with the Beatles legacy, she said.

“He said, ‘I guess it’s not going away.’ I said it’s not. He was so funny. I said, no, it’s not and he said, ‘Good, maybe I’ll get some respect around here,’” she said with a laugh.

Harrison still lives in the Friar Park estate. She’s too old to move, she said, and too much stuff is accumulated. She and her husband were both avid gardeners, and one hint about why she stays comes in a poem that talks about the trees there: “My constant source of comfort, my oldest, tallest friends,” she writes.

Weather Eye: Vancouver gets hot, but at least it’s not a record
Author: Patrick Timm

It was hot Saturday as we recorded our first 90-degree day, with a high as of 5 p.m. in Vancouver of 93 degrees. Today we’ll move upward to 100 degrees, or close to it. But we’ll set no records today; they were made last June in that dreadful heat wave we had.

The east winds were sure blowing strong Saturday, enough to whip your hat off for sure. That east wind made its way clear to the coast, and depending which communities experienced it, the thermometer soared.

Our high Saturday was topped by Tillamook with 96 degrees. Astoria reached 86 degrees, and the Long Beach Peninsula had temperatures along the beaches from the low 80s early in the day to the low 70s in the afternoon as their winds switched around from the north.

This heat wave will continue into Monday, with another 90-degree high temperature locally. Cooler sea breezes will blow our way Tuesday, and highs will drop to more seasonal levels. A strong marine push will be at the beaches, and we might get morning clouds Tuesday, with even some measurable drizzle.

Looking ahead to the long holiday and the Fourth, we’ll likely see highs of 75 to 80, with fair weather. Some models show drizzle or light showers, but that is light-years away, so we’ll chat about it on Tuesday.

OK, before we depart, let’s review May rainfall before June gets away from us: Rob Starr, Cougar, 11.73 inches; Jim Knoll, Five Corners, 5.54 inches; Robin Ruzek, Lakeshore, 4.75 inches; Chuck Houghten, Hockinson Heights, 7.36 inches; Tyler Mode, Battle Ground, 5.22 inches; Bob Mode, Minnehaha, 3.53 inches; Irv St. Germain, Prune Hill, 5.04 inches; Dick Lenahan, Meadow Glade, 4.32 inches; Wiley Lusk, Erickson Farms in Felida, 4.47 inches; John Butler, east Vancouver, 5.00 inches; and Dave Campbell, 1 mile west of Heisson, 5.82 inches. Our friend Roland Derksen in Vancouver, B.C., recorded 5.20 inches.

The official rainfall for Vancouver was 4.06 inches — 1.55 inches above average.

Clark County’s recreation, child care facilities struggle to attract employees
Author: Erin Middlewood

If it seems like you’ve had a tough time getting your kids into day camps and swimming lessons this summer, it’s not just your imagination. Recreation centers are struggling to hire in a tight labor market as demand for their programs rebounds from pandemic lows.

For example, Kids Club for Fun & Fitness in Salmon Creek managed to staff up for its day camps but hasn’t been able to add back special events. The slate of day camps offered by the city of Vancouver’s parks and recreation department doesn’t include the teen programs offered prior to the pandemic. The YMCA in Orchards is open fewer hours than before, as are two pools operated by Vancouver Public Schools.

“It’s a really hard time to be an employer attracting workers,” said Anneliese Vance-Sherman, a regional labor economist for the state Employment Security Department.

Unemployment rates whiplashed from record highs early in the pandemic to record lows in recent months.

The recreational and child care facilities that provide summer programming for kids were hit hard by the pandemic and are “disproportionately scrambling to get the workforce back up to speed,” she said. “It’s an exceptionally deep hole.”

Parents rely on a patchwork of activities to keep their kids occupied over the summer, and it’s not just about summer fun. Day camps, booked by the week for hundreds of dollars, are de facto child care for many school-age children of working parents, while younger children often remain in programs that operate year-round.

“We already knew we had a child care crisis. The pandemic really impacted the field. It’s opened up the conversation of how child care and early learning are part of our economic vitality,” said Debbie Ham, executive director of the nonprofit organization Support for Early Learning & Families.

SELF staffs child care centers operated by Educational Service District 112.

The pandemic shrunk child care capacity, which has yet to rebound. As of this month, Clark County has 187 licensed providers with a combined capacity for 8,110 kids, according to Child Care Aware. That’s down from June 2020 — already several months into the pandemic — when 219 providers had slots for 9,011 children.

ESD 112 would normally have 24 before- and after-school child care centers operating around the Vancouver and Evergreen school districts but had only nine up and running during the academic year that ended earlier this month.

“That absolutely has everything to do with staffing, not because there wasn’t a need,” said Jodi Wall, executive director of ESD 112’s early care and education division. “We are hopeful that we will get enough enrollment and staff to operate all 24 next school year.”

The consortium is operating six school-age centers over the summer, same as before, but with 30 slots each instead of the pre-pandemic 45.

The economics of child care — paying workers more would mean charging more, potentially pricing families out of the market — have always been problematic, Ham said. It’s even more so in a tight labor market where workers can get jobs that pay as well or better at fast food restaurants without the educational requirements or background checks necessary for child care work.

“Many companies start somebody at $20. Our starting pay is $15.60 an hour, and that is up from where it has been,” Ham said. “We don’t have the resources to pay comparable salaries.”

The YMCA had to raise its pay for day camp staff from the state’s $14.49-an-hour minimum wage to $17 to fill all the positions needed to run a full slate of day camps, which take place at schools and other sites around Clark County.

“We saw registrations going up and were nervous we were going to get enough staff, but we did it,” said Eddie White, executive director of Clark County Family YMCA.

Staffing the pool, however, is a different story. The American Lifeguard Association has warned of a nationwide shortage. During the pandemic, lifeguard certification programs shut down along with everything else.

“Anyone with a pool is struggling to find lifeguards,” White said.

Vancouver Public Schools operates two pools — the Propstra and Parsley centers — and still hasn’t returned to pre-pandemic hours of operation.

“We shut down for an entire year, so we lost the lifeguards we had to other positions,” said Pat Nuzzo, spokeswoman for Vancouver schools. “It’s unfortunate that we don’t have the staffing to run at full capacity to keep kids at the safe environment with supervision.”

The district has 25 lifeguards on staff now, when normally it would have double that, Nuzzo said.

Kids Club offers swimming lessons, day camps and an indoor jungle-themed playground. The club has about 80 workers, short of the 100 it had pre-pandemic, said Dawn Hinchy, general manager

“It’s been an uphill battle since coming back from COVID,” Hinchy said.

The club has prioritized summer day camps, which accommodate about 90 kids a week, as well as gymnastics and swimming classes. The tradeoff, Hinchy said, is that the club hasn’t been able to bring back special events and birthday parties to pre-pandemic levels.

“I feel like we’re just playing catch-up,” Hinchy said.

In Our View: Misinformation undermines election system faith
Author: The Columbian

Combating misinformation with the truth is a constant battle.

As Jonathan Swift wrote in 1710, “Falsehood flies, and the truth comes limping after it.” That has morphed over time into a quote typically misattributed to Mark Twain: “A lie can travel halfway around the world while the truth is putting on its shoes.”

It is ironic that a famous quote about the easy spread of misinformation is typically misattributed rather than acknowledged as an evolution of the Swift quote, at least according QuoteInvestigator.com. And it is frightening how the digital age and social media have exacerbated the problem.

As we saw on Jan. 6, 2021, misinformation is hazardous for our democracy. So are cyberthreats to our election systems, with foreign actors repeatedly looking for vulnerabilities.

“The threats are real, and we have to be more proactive,” Washington Secretary of State Steve Hobbs told the Editorial Board last week during a visit to The Columbian.

Hobbs is tasked with overseeing and protecting the vote in Washington. It is a position that has taken on new importance following efforts to overturn the 2020 presidential election.

Lies about widespread fraud during that election undermine public faith in our system, even though Donald Trump’s claims have repeatedly been rebuffed. Then-Attorney General William Barr said in December 2020: “to date, we have not seen fraud on a scale that could have effected a different outcome in the election.” This month, Barr told a congressional committee investigating the 2021 insurrection: “I thought, boy, if he really believes this stuff, he has, you know, lost contact with, become detached from reality.”

Meanwhile, some 60 lawsuits filed on behalf of Trump’s claims were rejected by the courts, usually for a lack of evidence.

But the lies persist, typically driven by claims that, “A lot of people believe …” Such a claim is not proof; a lot of people believe the Earth is flat, despite vast evidence to the contrary.

To combat those beliefs with facts, Hobbs points to the need for educating the public about the election process. Part of that is highlighting the security of voting by mail, which is universal for elections in Washington.

Critics claim that voting by mail invites fraud. As Hobbs points out, collecting ballots at a central location is more secure than having those ballots at dozens of polling places under in-person voting.

He also points to unfounded claims of dead people voting or people being registered to vote at two different addresses.

“Did you know there’s something called the Election Registration Information Center that, if somebody moves to another location, it gets picked up and we can cancel that person’s vote? Or if someone dies, we’ll know about it,” Hobbs said. Washington was among the states that helped create the system in 2012; now, 31 states plus the District of Columbia share information through it.

In Clark County, the elections department has produced a seven-minute video called “Billy the Ballot 2021” that details the security measures in place for the handling of ballots. At the state level, an explanation of the process on the Secretary of State website includes: “All ballots are inspected to make sure the tabulating machine will be able to read all votes. Tabulation equipment is tested before every election to make sure it is working accurately.”

Despite these measures, misinformation lingers. Lies have a habit of traveling quickly.

‘Roe’ ruling could jeopardize other civil liberties, Washington AG says
Author: Megan Burbank, Crosscut.com

On the eve of the Supreme Court’s reversal of Roe v. Wade, Attorney General Bob Ferguson said he has a team of 20 getting ready to tackle its potential ramifications for Washington state.

In addition to the obvious impacts for providers, Washingtonians, and people traveling to the state seeking abortion care, Ferguson told a Civic Cocktail audience on Wednesday evening that attorneys in his office will also be thinking about how to deal with what may come next.

“You name it, there’s a lot of potential legal issues, so we’ve been spending a lot of time preparing for this,” he said at the event presented by Crosscut and Seattle CityClub.

Ferguson expressed concern that rolling back Roe v. Wade could throw other constitutionally protected rights into jeopardy — particularly those rooted, like Roe, in the right to privacy, the basis for legalizing birth control and striking down sodomy laws.

“That is what is so unusual, is [for] the court to roll back a right that’s ingrained in our constitution, in the right to privacy, which so many other rights derive from that right to privacy,” he said. “Once you roll that back, that has implications not just for women’s reproductive rights, which are profound, but for other rights that we frankly take for granted as well.”

In a concurring opinion, Justice Clarence Thomas spoke about those related rights that may face challenges next.

While Roe v. Wade concerns abortion specifically, said Ferguson, “no Supreme Court opinion operates in a vacuum by any stretch of the imagination.” He expected challenges on other issues to follow. Overturning Roe v. Wade is “the first stop on eroding other constitutional rights,” he told the audience in person at Town Hall and online. The Civic Cocktail conversation will be broadcast on KCTS-9 on Wednesday, June 29, at 7 p.m.

Although the erosion of other rights might seem extreme in Washington, which this year passed legislation expanding abortion access, it’s impossible to know what form future legal challenges could take.

Ideology and the political divide have already disrupted access to health care for many, including in Washington state. Ferguson said he has taken an active role in helping other states advocate for these rights by writing briefs in other cases that do not directly affect Washington at this time.

In Washington, hospital mergers between religious and secular institutions already strain Washington’s capacity to provide reproductive health care. And across the country, state legislatures have restricted gender-affirming care, imposing penalties on health-care providers and even caregivers and criminalizing involvement in medically appropriate, standard-of-care treatment for transgender youth.

While Ferguson, along with Gov. Jay Inslee, have previously spoken in support of a state constitutional amendment codifying abortion rights in Washington, Ferguson seemed to distance himself from that idea in Wednesday’s conversation. He still spoke of it in favorable terms, but suggested that it might not even be necessary, depending on one’s reading of the state constitution.

“I’m not convinced that that right [to abortion] in our constitution isn’t already there,” he added. “A state constitution can give you greater rights than the U.S. constitution. It can’t give you fewer rights. And our state constitution… has pretty strong language around privacy.”

Although the concept hasn’t been tested in the courts, Ferguson said the state’s constitutional privacy protections could be interpreted to include abortion rights. Of the proposed constitutional amendment, he said, “I want to be clear: I’m not minimizing that effort… I just think in the short term I’m not sure how practical it is, and No. 2, I think it’s entirely possible that right is in our state constitution,” he said.

In a worst-case scenario, according to Ferguson, Congress could compound the impact of reversing Roe by passing legislation outlawing abortion nationwide, a stated policy goal of anti-abortion activists and Republican members of Congress. If that were to happen, his office would do “everything in our power to uphold the will of the voters” in legal battles pitting state policy against the federal government.

If the balance of power were to change in Congress, said Ferguson, it would open the door to that type of federal policy.

“They will stop at nothing to do that,” he said. “They will stop at nothing and that’s how I view it and that’s how I communicate to my team to prepare for it.”

The next Civic Cocktail event will take place on July 13.

A moneymaking idea during a labor shortage: invent a pizza robot with your friends
Author: Sam Dean, Los Angeles Times

In an office park in Hawthorne, California, a robot built by rocket scientists is making pizza.

Inside the machine, a box roughly the size of a cargo van, a metal claw plucks a ball of premade dough out of its refrigerated chamber. A press then smashes the dough into a 12-inch disc. On a conveyor belt, a nozzle spits out sauce, dispensers shake cheese and toppings on top, then a robotic lift carries the raw pie to one of four 900-degree deck ovens. Cameras and sensors track the progress from step to step, making tiny adjustments along the way. In 45 seconds, a finished pizza pops out.

It tastes pretty good. It costs just $7 to order (or as much as $10, depending on toppings). And with slim labor costs and a chef that never eats, sleeps, or takes a break, the team behind Stellar Pizza think they can take a bite out of the country’s $45-billion pizza market — or at least the part of the pie that’s dominated by high-volume, low-cost chains.

Benson Tsai started the company in 2019, after leaving a job designing batteries for spacecraft and satellites at SpaceX, the Elon Musk-helmed rocket company around the corner from Stellar’s headquarters.

He convinced a couple dozen fellow engineers to join him, raised $9 million in funding and spent the last three years honing the Stellar recipe and building its pizza machine.

Now they’re raising a second round of funding to build out a fleet of finished robots, each of which can fit in the back of a bright red 16-foot box truck to travel to stadiums, college campuses and other customer-dense locations. Orders will be taken via a smartphone app; the few humans involved will be there to drive the truck, assemble the boxes and distribute pies.

Stellar is not alone in the food robot field. A number of restaurant automation companies have been building labor-saving devices in recent years: delivery robots that trundle across sidewalks, waitstaff robots that roomba between tables with dishes on their heads, and robot arms that can operate fryolators are all finding a toehold in the industry.

But pizza has attracted more mechanized attention than most other foods.

“Pizza is a massive opportunity, and so a lot of players are getting into the space,” said Chris Albrecht, an industry expert who writes the food automation newsletter OttOmate. “The universal appeal of pizza is what makes it the tip of the spear for startups looking to get into food automation.”

Because humans — and especially Americans — eat a lot of pizza. The global pizza market is estimated at about $130 billion in sales, according to Pizza Magazine’s 2022 Pizza Power Report, and more than a third of that business is in the U.S., where Americans spent about $45 billion on pizza in 2021.

That demand was met by 75,117 pizza restaurants nationwide in 2021, with Domino’s leading the industry in sales. With franchises and company-owned stores, it has 6,597 locations in the U.S. and more than 19,000 worldwide, according to its latest financial filings.

It takes an army of human workers to make all that dough. Hundreds of thousands of people work at Domino’s locations, and difficulty hiring in the last year has cut into the chain’s delivery business — on a corporate earnings call in April, Domino’s announced that it would continue to offer customers $3 in store credit to pick up their own pizza instead of ordering delivery, a pandemic-era promotion.

This extra-large market facing labor constraints has inspired a few different robot approaches: pizza vending machines, standalone robotic pizza kitchens and robots that slot into existing restaurant kitchens.

None of the categories has a clear winner — yet — though a handful are currently in operation. In the vending market, L.A.’s Basil Street Cafe had deployed 12 vending machines that would cook frozen pizzas before shutting down in April. Wavemaker Labs, the Pasadena, California, parent company of the fry-kitchen Flippy robot, is building a pizza vending machine called Piestro, which cooks pizzas fresh, and has announced a co-branding deal with 800 Degrees Pizza.

A handful of other companies, such as Seattle’s Picnic and the Bay Area’s XRobotics, make machines designed to be installed in standard restaurant kitchens, or just placed on a countertop, that can automatically prep a pizza with sauce and toppings; a human can then pop the assembled pie in the oven.

The best-funded robot-pizza startup to date, Zume Pizza, imploded in early 2020 after absorbing $375 million in funding from Softbank Vision Fund, the same venture capital firm that plowed billions into WeWork before its collapse. But Albrecht argues that calling Zume’s setup a pizza robot was always a stretch.

“Zume wasn’t a robot company,” Albrecht said, but rather a company that pitched a big-data approach to predicting pizza demand to efficiently place its trucks. The process was never fully automated, and used off-the-shelf robotic arms to spread sauce and insert pizzas into the oven while humans applied toppings and shaped the dough.

Stellar’s machine is closer to a miniature factory than a kitchen with robot chefs on the line — and Tsai plans to take a bigger swing at the market than many competitors. Instead of trying to fill the convenience niche of a vending machine or target the restaurant industry with a plug-and-play pizzabot, he wants to turn Stellar into a name brand on par with Domino’s, Papa John’s or Pizza Hut, and win the day through the power of superior economics.

“Our vehicle build cost is on the same order of magnitude as building out a Domino’s store,” Tsai said. He declined to give specifics, but said that the cost was in the low six figures. Domino’s franchise agreement estimates that, minus franchise fees, insurance, supplies and rent, opening a new location costs between $115,000 and $480,000 to build out.

With lower overhead compared with a store staffed by humans, Tsai says Stellar can drop prices but still maintain the fat profit margins enjoyed by pizza chains. Company-owned Domino’s locations had profit margins of 21% in 2021, according to the company’s annual report, even after 30% of revenue was eaten up by labor costs.

Stellar plans to begin rolling out its trucks to events in L.A. later this summer, once it gets its final approval the health department. In the meantime, the company is hosting pop-up events for its newsletter subscribers at its Hawthorne headquarters.

Stellar’s planned price range of $7 to $10 for a 12-inch pie, depending on toppings, is comparable with pricing by Domino’s or Pizza Hut, though the chains often are lower with coupon offers. But if the big incumbents start to go cheaper, Tsai said he’d “welcome a price war.”

But first, he needs customers. The pizza itself is the product of two years of fine-tuning the recipe for both flavor and ease of automation. The final product has a thin crust, a mildly sweet sauce and can be ordered as a plain cheese pie, pepperoni, meatball, or with veggies (diced onions, green peppers, or olives).

Tsai started Stellar as a longtime pizza eater but first-time pizza entrepreneur — he said that the only American food allowed in his Taiwanese-American childhood home in Hacienda Heights, California, was pizza from the local pie shop. “I don’t wanna rag on it, but it was called The World’s Best Pizza,” Tsai said. “I really liked it, but I actually don’t think it’s the world’s best pizza.”

Tsai had started his own company before working at SpaceX, and after five years at the rocket company, he wanted to set out on his own again — and focus on food.

His first thought was a boba robot. “I’m from Taiwan,” Tsai says. “I wanted a boba vending machine.”

But a little market research revealed that most Americans are still unfamiliar with the milk tea-tapioca ball combo. “Going to Missouri and trying to teach people how to drink this like, chewy button nugget” didn’t seem like a good business model for his first startup, Tsai said.

Once he landed on the idea for Stellar, he and his team dove into pizza science, reading academic papers from Italian universities outlining the mathematical models of heat transfer from ovens to pizza dough, and theorizing on the outer limits of pizza cooking speed. “Given my background in chemical engineering, I thought it was amazing,” Tsai said.

Then the company brought in Noel Brohner, the acclaimed pizza consultant behind Slow Rise Pizza Co., who’s worked with elite L.A. chefs such as Evan Funke and Ori Menashe (of Felix Trattoria and Bestia, respectively), bigwigs such as Tom Hanks and Bob Iger who want to perfect their at-home pizza game, and big companies such as Google and Mod Pizza to fine-tune their recipes.

“When I started working with them, they had a warehouse with nothing in it. I have a better kitchen in my apartment in Santa Monica now,” Brohner said. But when he first tried the pie that Tsai and his colleagues had cooked up based on their own research, “I was really impressed, and kind of shocked that a couple of rocket engineers could do so well for themselves even before I got brought in.”

The dough presented the biggest challenges for automation, being a sticky matrix of yeast, water, and flour that shifts with time, temperature and humidity. Stellar makes its dough at its headquarters, then loads dough balls into the machine’s refrigerator for a day’s output. Typically, Brohner said, the mutability of dough requires human expertise to handle, roll out, and troubleshoot. “But if you’ve got lasers and video and photo and thermopens” sensing changes on the fly, as in Stellar’s machine, he said “you can actually do a lot.”

Brohner doesn’t see Stellar as a threat to the high-end handmade pizza market, but a chance to get higher-quality pizza to the masses. “What I love about it is instead of having a labor cost close to 20, 30, even 40%, it’s closer to 10%” Brohner said. “So what they’re able to do is use much higher-quality ingredients” while keeping costs competitive with the big chains.

In an economy defined by a drum-tight labor market and growing inflation, Stellar is betting that combo will be almost as appealing as cheese and tomato sauce.

SEC’s climate rule heats up debate on supply chain emissions
Author: Ellen Meyers, CQ-Roll Call

WASHINGTON — The business world is divided over whether the Securities and Exchange Commission should require emissions data from corporations’ suppliers and customers when the agency finalizes a rule on climate-related financial risk disclosure.

While the SEC sees broad support for its proposed rule to mandate standardized information on companies’ direct emissions and other material risks from climate change, agency staff members reviewing comments face a difficult task in striking a balance in the coming months on emissions from suppliers and other third parties.

A wide range of billion-dollar asset managers, investor coalitions and boutique firms focused on environmental, social and governance investing told the SEC they support the agency’s provisions to include Scope 3 emissions, meaning indirect releases from supply chains. But several trade groups say there is strong opposition.

“The SEC has also taken the correct approach by incorporating many of the elements set forth by the Task Force on Climate-Related Financial Disclosures and by requiring disclosure of [greenhouse gas] emissions, including disclosure (for many companies) of Scope 3 emissions and third-party assurance of Scopes 1 and 2 emissions,” Ceres, a nonprofit organization that works with ESG investors and companies to address climate risk and other sustainability issues in capital markets, said Friday in a letter to the SEC.

Other supporters include BNP Paribas, the California Public Employees’ Retirement System, Sumitomo Mitsui Trust Asset Management, Seventh Generation Interfaith Inc. and Christian Brothers Investment Services Inc.

“As a starting point, the basis for the rulemaking initiative — that climate change poses a significant financial risk — is surely clear and unmistakable,” Ceres said in the letter. “It is likewise reasonable for the Commission to conclude that this risk is, or can be, material to investors. This is not a matter of conjecture; investors have repeatedly and emphatically expressed this view.”

If finalized, the rule would require public companies to report to the SEC on Scope 1 and Scope 2 greenhouse gas emissions, which address direct and indirect emissions from purchased electricity and other forms of energy.

But they would have to report Scope 3 emissions only if they are material or if companies have set reduction goals that include Scope 3. The proposal contains a broad safe harbor for liability for Scope 3 emissions disclosure and exemption for smaller issuers on Scope 3 emissions.

Scope 3 challenge

Scope 3 emissions have been a particularly controversial area in the proposal. During the agency’s information-gathering period, companies and industry coalitions voiced concern about lawsuits over emissions outside of companies’ direct control. Some legal experts have said the proposal’s provisions surrounding Scope 3 emissions would indirectly create disclosure requirements for third-party, nonpublic companies that work with major public corporations.

“For many issuers, it would be extremely difficult to access downstream information on customers’ use of their products,” the National Association of Manufacturers, which represents 14,000 member companies, wrote in a letter to the SEC on June 6. “For others, upstream emissions attributable to commodity production would present the biggest challenge. The unifying theme is that Scope 3 emissions are outside of a company’s control.”

That debate has trickled over to Congress. Eight Democratic senators, led by Brian Schatz of Hawaii, Sheldon Whitehouse of Rhode Island and Elizabeth Warren of Massachusetts, called on the SEC to include a quantitative threshold for Scope 3 reporting to prevent underreporting in sectors that have most of their emissions coming from supply chains.

But 32 Republican senators, including John Hoeven of North Dakota, Tim Scott of South Carolina and Michael D. Crapo of Idaho, told the SEC that such requirements would be overly burdensome for farmers and agricultural producers.

At press time, public comments from some companies that would be affected by the proposal were available. Salesforce, Dell Technologies and Etsy were among the top firms that filed letters with the SEC, largely in support of the proposal. But dozens of major corporations met with SEC Chairman Gary Gensler and Commissioners Caroline Crenshaw, Hester Peirce and Allison Herren Lee, as well as agency staff, in the weeks after the agency announced its proposed rule in March.

According to memos published by the SEC, the agency held more than 50 meetings after it released the proposed rule. The SEC met with General Motors CEO Mary Barra twice to discuss the climate risk disclosure proposal, including Scope 3 emissions and the safe harbor provision.

SEC staff also focused on companies’ concern with Scope 3 emissions with chief accounting officers and controllers from dozens of corporations, including Google parent Alphabet, Bank of America, Mars, Verizon Communications and Wells Fargo in a May 17 meeting. The agency held talks with representatives from Dow, Amazon.com, The Goldman Sachs Group and JPMorgan Chase & Co. throughout the comment period.

Other corporations may have relied on trade associations to advocate on their behalf.

“A large majority of our members believe that the Commission should not require companies to report Scope 3 emissions at this time, because of significant data gaps and the absence of agreed-upon methodologies to measure Scope 3 emissions,” the Investment Company Institute, an association for regulated investment funds representing $29.7 trillion in U.S. assets under management, wrote in a June 16 letter to the SEC.

“These deficiencies seriously undermine the ability of most companies to report consistent, comparable, and verifiably reliable data,” the ICI wrote. “Any company calculating Scope 3 emissions will have to make a number of assumptions that can vary greatly in magnitude and will use different methodologies.”

The ICI and several other groups, including the Committee on Capital Markets Regulation, a nonpartisan research group, suggested that the SEC should put off Scope 3 requirements while the agency works with the private sector to develop better calculations for indirect emissions from suppliers and other third parties.

But several ESG investors are pressuring the SEC to expand the Scope 3 reporting requirement beyond large issuers, arguing that the discretion around Scope 3 emissions being material to a firm may be an easy way out for companies to ignore impacts from their supply chains.

“Many companies fail to fully understand or assess the full impact of their Scope 3 emissions; leaving the determination of materiality up to companies is likely to lead to underreporting of these risks,” said Mercy Investment Services Inc., the asset management arm for the Sisters of Mercy of the Americas.

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