The NIMBYism is insane. You have people who own $2M houses ($1.9M of which is capital gains) complaining about gentrification and ruined neighborhood character.
The city spends 2600U$S per month household. (11 bil / 360k households). Because the city levies taxes on sales and corporate taxes and business taxes, the ultimate burden of taxes is borne by consumers, workers and business owners.
Thus owning a home is a way to capture the value of all that tax expenditure, possibly with an incredibly reduced prop 13 tax rule. If instead, San Francisco changed its tax structure from corp/sales to land taxes, workers would see their incomes increase, businesses thrive, and real estate residences plummet in value. Think that if every propery had to pay 2600U$S monthly in taxes they would be worth almost nothing.
The most stern nymbism will very desperatly ask developers to nuke his own house if he had to pay that much every month.
SF has lots of properties that sold at $3 million+ at their last sale, and so would be paying about that in basic property taxes before the 2% annual basis value increase allowed under prop 13, Mello-Roos assessments, etc.
Now,if every housing unit (not property) were assessed a $2600/mo tax, would that drive sale prices down? Maybe. Would it drive up incomes and make businesses thrive? Well, it would increase the income of people living in SF (excluding the homeless) by driving lower income people out even more than the status quo does. But it wouldn't cause incomes for the same people to rise. But, also, that's not a land tax.
What you really seem to want,if you want a land tax, is something like a tax not of $2600 on every property or every housing unit, but on every unit of land area equivalent to the average per-household land footprint of existing housing units. And, sure, that might encourage density, but not the income or business effects you claim.
You are correct, incidence is not the same of property vs land. Land is preferrable becuase the 2mill single family hosuehold that takes the same space than the 5 mill 9 unit apt gets more tax benefits.
You also have the added difficulty that prop taxes are capped. But land taxes aren't. In any case, shifting the burden from consumers, workers and businesses to landlords will inevitable drop the propery values enormously, regardless of the tax scheme implemented. They are today tax-positive. Even if you only do half the tax burden, it would be enough change incentives profoundly.
I don't think California allows local governments to raise land taxes (it allows parcel taxes, that are apportioned on a flat per-parcel basis, but that's obviously not the same as a land tax.)
> In any case, shifting the burden from consumers, workers and businesses to landlords
...won't happen. The consumers and businesses that rent property (and the workers employed by businesses and whose sustainable potential pay is limited by other costs the employer has to pay to operate) will still bear the burden of the taxes, even if they are directly levied on property owners.
> ..won't happen. The consumers and businesses that rent property (and the workers employed by businesses and whose sustainable potential pay is limited by other costs the employer has to pay to operate) will still bear the burden of the taxes, even if they are directly levied on property owners.
I disagree, this is not what economic theory implies with tax incidence, LVT, etc.
Unless they make up the difference with a business, working, or consuming enough to offset with sales taxes, they are 26k+ positive.
But now, the homeowner gets a very sweet deal, probably 50k a year in rental per unit he has.
That's it. All taxes are borne by consumers.
https://www.youtube.com/watch?v=hPp3u4Jrdmw "Corporations don't pay taxes, they collect taxes..."
The concept is called tax inciddence.
It's especially absurd since we're talking about a global, dynamic city, not some small rural town. Can you imagine if 1900s NYC had the NIMBY culture of present day SF? It would've severely choked its growth.
SF's saving grace is its VC ecosystem and network effect between existing talent. You can barely even say they have a monopoly on talent pool, since the ivy leagues and many other top schools are nowhere near SF. These factors are gradually growing in other cities, and the bay area will get to a point where the cost of living will turn it into just another city. They've essentially created one of the worlds largest funnels of money into landlords pockets. So much wasted capital.
This isn't like the finance stronghold in NY or entertainment in LA, tech companies are involved in every industry, and don't need to be in SF to thrive.
And pretty much perfect year long weather matched with world class outdoor activities within driving distance. I don't think the cost of housing in the Bay Area is going down anytime soon. People figured out it's a desirable place to live and are willing to spend more to live there.
Hotels -> AirBnb
Taxis -> Uber/Lyft
Automobiles -> Tesla
Video distribution -> Netflix
Tech in the Bay Area is expanding its footprint, not reducing it.
Poor choice of analogy, with proper maintenance this is perfectly reasonable and fairly trivial to achieve.
Is there something obvious I'm missing here? This seems to be a salient point. Why should it cost the same to live by the beach in California vs. being in a rural area in Wyoming?
Things like zoning and regulation can theoretically be fixed, if voters wisen up. But the longer this goes on, the more middle class residents will leave the bay area for good. Once the entire middle class is gone, we'll have no hope of ever building cost effective housing (other than automation) because there won't be anymore cost effective labor left to build it with. We're already seeing pretty large inflation on a local level for services: like eating out and plumbing, etc.
Sunnyvale at least has been doing a good job of adding housing in spite of the NIMBYism. It isn't a popular opinion on Nextdoor but every fora has its taboos.