Bay Area Politicians Strangling the Region's Key Industry
reason.com
reason.com
I read a comment like this and I ask what the heck I'm paying taxes for? I'm getting ripped in both state and federal taxes. If the cities aren't getting their fair share of the money then they should take it up with he state, because somebody is sure getting paid!
San Francisco Housing Action Coalition http://www.sfhac.org/
San Francisco Planning and Urban Research Association http://www.spur.org
And there are smaller efforts such as:
GrowSF http://www.growsanfrancisco.org
SF Bay Area Renters’ Federation http://www.sfbarf.org
When I lived in London I thought it was a great city but felt there was "too much money" in it. I.e. finance people could drive up prices for the rest of us. But then again, it was that very money that made the place great.
So while zero-sum leftism is silly, it is still in the interest of San Fransicans to try and grab some of the IT bonanza through taxes. A vindictive one-indsutry only tax is ugly, but property-value taxes would get right to the heart of the problem.
that's the nice thing about the "law" of supply and demand: there are two ways to promote balance.
Tech workers have this Napoleon complex going on where they react as if they're still in the high school cafeteria, being pushed around by the folks at the top of the social hierarchy. Times have changed.
It isn't "NIMBYs" or politicians or rich landowners or anyone else who caused the SF housing crisis: it is, quite objectively, the fault of way too many wealthy workers, crammed into a tiny space, in a few years' time. There's an easy demand-side fix for that problem, but yeah, it isn't going to please people who work in tech.
The way I see it, tech is the only way I can live here independently. Lucky that my brothers and I have the inclination for it. But even we have difficulty finding housing in this market. We look around, and it is the entrenched interests, the old money, that are holding us back, preventing new housing from being built. Despite appearances, techies are actually a small minority, especially in the voting population, and that’s how we still get pushed around.
The market problem is that housing and transit have been growing very slowly, nowhere near what is needed, and not matching the growth in jobs and office space. The problem goes back decades, really taking off when Howard Jarvis passed Proposition 13, followed by Mayor, now Senator, Feinstein passing the rent control ordinance. The problems continue, as every significant housing development requires endless studies and community input before it gets built; in the meanwhile the market has risen again.
When I was growing up, San Francisco was actually very anti-tech. Startups were always fleeing to the Valley when they became successful. Still, housing prices were high and rising; housing was ridiculously difficult to build. I remember the case of somebody buying an empty lot, just a normal-house-size rectangle in a normal-size block. It took many years of studies and litigation and multiple architectural plans before it could get built, and I don’t know if the owner ever succeeded. It’s hard to find the article again when the Google results are packed full of plenty of other, bigger, projects that are facing unfair difficulties.
Likewise, there’s now a lovely new library building at North Beach, but Aaron Peskin (one of the politicians implicated in the Reason piece) used eminent domain to prevent that land from being turned into affordable housing, with the excuse that it should be a park. It lay fallow until he was term-limited out of the way and later supervisors at least built a library there. And then the old North Beach library is still sitting there, retroactively declared to be a historic landmark, so that is a suboptimal use of space.
Tech only sped up an existing, broken process. If even the Huffington Post is posting about the multi-decade housing problem, then maybe, just maybe, it’s not the techies’ fault.
http://www.huffingtonpost.com/entry/san-francisco-housing-cr...
So a new home or a new resident in an old one could pay a tax proportional to the high land value when the transaction happened. Wouldn't that create an incentive to encourage such transactions?
Prior to Proposition 13, the property tax rate throughout California averaged a little less than 3% of market value. Additionally, there were no limits on increases for the tax rate or on individual ad valorem charges. (“Ad valorem” refers to taxes based on the assessed value of property. ) Some properties were reassessed 50% to 100% in just one year and their owners’ property tax bills increased accordingly.
Proposition 13 Tax Reform
Under Proposition 13 tax reform, property tax value was rolled back and frozen at the 1976 assessed value level. Property tax increases on any given property were limited to no more than 2% per year as long as the property was not sold. Once sold, the property was reassessed at 1% of the sale price, and the 2% yearly cap became applicable to future years. This allowed property owners to finally be able to estimate the amount of future property taxes, and determine the maximum amount taxes could increase as long as he or she owned the property.
When the law has become so restrictive that people would rather not engage in commerce at all, then it is broken. This isn't helping anybody.
You might as well call the entire UK rainy Monaco.
On top of that, the finance types have been there for quite a while, but it's only in the recent few decades that have made london extra crazy.
Other regions of the USA have had economic booms, but it hasn't ended up with hyper growth in property prices because they have less supply restrictions in development.
And we know the lack of property tax rule is real.
As a technical matter. Once a property is built on, how do you distinguish between land value and the building value-add without some arbitrary valuation?
Otherwise it's pretty much whatever number the tax man decides. Note that in many jurisdictions property tax values are only assessed periodically.
conceptually, land value is just market price of the property minus building cost. building cost is a little more objective to estimate than market price but it's not an exact science either (i formerly product managed the cost estimator used by most US taxing jurisdictions and many international ones).
This Wikipedia item is on the front page right now: https://news.ycombinator.com/item?id=12372315 i.e. the "traitorous eight" (https://en.wikipedia.org/wiki/Traitorous_eight ); we wouldn't even be here discussing all this if Shockley had been able to keep his dissatisfied employees from working in the brand new field of semiconductors when they could no longer stand working for him, ditto when they left Fairchild Semiconductor to e.g. start Intel, which besides the microprocessors was the first company to commercially sell DRAMs.
On the other hand, Texas Instruments managed to be a leader in all of the early stages of all this while based in Texas, even created the standard TTL logic family used by just about everyone to make computers until microprocessors became capable enough. And in several stages Motorola was competitive without as far as I know having a significant Silicon Valley base.
Moved here from Chicago and I am so done with winter, even with the reduced spending power from the higher cost of living.
The politicians wouldn’t have power without local support. In San Francisco, the power is centered in individual neighborhoods. Especially when you take into account campaign contributions, community organizations, and voter turnout.
The article mentions Campos, Mar, and Peskin, all representatives of majority old, rich, white neighborhoods. When David Chiu left to go to the California Assembly and Ed Lee appointed the business-tolerant Julie Christensen in his place, Peskin managed to out-spend and out-organize her and returned to the Board of Supervisors.
On the other hand, Supervisor Tang represents a district with a lot of Asian families who are discovering that without new housing nearby, their grown children have to stay at home indefinitely or move far away. I’m not sure what motivates Scott Wiener; I don’t interact with his district much. So, there is diversity among the politicians, but the majority are propped up by narrow-minded local interests.
I don't live in the Bay Area, so I'm observing this from the outside. And I don't know much about the Bay Area economy either, so these aren't rhetorical questions, nor necessarily informed ones. But to me, the actions of these politicians, regardless of motivation, on the surface kind of seem rational in a long-term hedging-our-economy kind of way.
Not all of the Bay Area is stuck with regressive development regulation. Caltrain electrification (supposed to be completed in 2020, which is probably realistic now that funding is finally in place), BART expansion (ongoing, not sure final completion date), and other various transportation improvements like bus rapid transit will all also help improve the region.
- Ronald Wilson Reagan, talking about his competition