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Comment by btilly | Hacker News Reader

I have suggested this before, and I'll suggest this again.

The whole problem could be solved if we gave people the choice of voting where they work rather than where they live.

Currently every city wants all the businesses that they can get because businesses generate lots of tax revenues. Cities do not want apartments because that doesn't generate revenue, and locals object on the basis of NIMBYism. But when everyone adds businesses and nobody adds homes, we get horrible commutes.

With my proposed change, housing developments in cities that have major businesses will get lots of support from people who work there and want shorter commutes. And it seems reasonable to me that someone who spends their waking hours in a city and wants to live there should get the opportunity to have political power there.

This would therefore undo the political log jam. And once you start letting people live close to where they work, commutes go down, traffic gets better, and everyone winds up happier.

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I'd rather see the repeal of Prop 13:

• more municipal revenue means better schools and infrastructure

• better schools and infrastructure would support more development

• higher property taxes would remove the incentive to hang on to property forever making it easier to buy and develop property

• removing the disincentive to sell property also reduces the NIMBY imperative, since home owner can move to another area if they don't like how their neighborhood is developing

It's not a silver bullet; we'd still have to tackle zoning issues, remaining (and still powerful) NIMBYs, and the everyone-has-a-veto problem, but it's a good start.

Expenditures correlate very poorly with school performance. The evidence seems quite overwhelming.

Which isn't to say funding doesn't matter. Just that it's clear that "investing in our children" through school funding was a dead-end, sort of like expecting increased traffic light expenditures to improve school performance. The primary determinants are economic and sociologic factors in the home.

We need decent schools just like we need decent water & sewage, but we're long past the point where such civic infrastructure is capable of transforming our society. Focusing on these things as agents of change is counter-productive if not destructive.

I'd settle for the same performance without constant hysterical fundraising by the PTA, parents being asked to buy and donate basic classroom supplies and teachers buying stuff out of their own pockets just to be able to do their job.

But really, I just mean "neighborhoods more friendly to kids and parents." School quality is a big part of that, but it's also a matter of finding a good school near your home, public spaces where kids can play etc. SF isn't completely devoid of that stuff, but there's a reason new parents move out to the suburbs. The point is that if we want higher density we need more homes, but we also need more of all the other stuff that people want and need nearby.

When I was growing up in the 80s and 90s (Illinois, Florida, Alabama) I remember teachers buying supplies out of their own pocket. I suspect it's a perennial issue. Expenditure increases usually go straight to salaries--ideally to teachers but these days increasingly to administrative staff.

Living in California and observing (but soon to be participant) in how parent participation works here it seems to me, pretense and motivations notwithstanding, that the sociologic function is really about keeping parents engaged with their children's school. Private schools are even worse in this regard, both the cheaper Catholic ones and the expensive ones drowning in cash.

My point is that we should stop looking to these things as agents of change. Among other things, it causes us to cyclically attempt to disrupt and revolutionize the system, when what such systems need most are stability and consistency. But education in particular sits at this wierd nexus of public policy where everybody thinks they're an expert, everybody has direct experience with the system, everybody thinks it can do more than it can, and it's a politically neutral subject. And for all our supposed expertise and concern, we invariably have the same ideas--more money, more accountability, etc. Given what we know empirically, the feverish focus seems very counter productive.

I'm not suggesting that we should fund schools because better education will create a better society. I'm suggesting we should fund schools so that people don't have to live far from their jobs in order to send their kids to public school. Fixing the housing crisis implies higher density and higher population in the city, which implies more need for public infrastructure including schools and transit.

> Expenditures correlate very poorly with school performance.

Well yeah, because there's a huge amount of noise combined with active efforts to spend more on worse schools in the past few decades. I'd like to see an example study with "overwhelming" evidence that expenditures doesn't help.

I don't understand this pessimism re: the role of schools. The science isn't anywhere nearly as settled on "schools do not create change" as this comment seems to imply.

More importantly, more revenues could mean more school places, period. If you want all those young freshly minted grads to stay in the area in their new upzoned apartments and condos, eventually they will want to raise kids.

Most cities develop a budget, then set property tax rates to generate revenue. This is why cities with $200k homes have similar per capita budgets as cities with $800k homes.

So if you repealed prop 13, the result would likely be a more equitable approach to property taxes, with those protected by prop 13 paying more and everyone else paying less.

The problem we had in California before Proposition 13 is that city budgets were increasing without bound due to demands by public employee unions. The only way I would support a repeal of Proposition 13 is if some other mechanism is put in place to give voters more direct control over city budget growth.

Was that really the problem? We're grannies really losing their homes to property tax?

There's been so much mythology built up around a common anti-tax movement that I'm not sure what to believe. There is plenty of economic reason to vote for capped taxes even without excessive spending.

Or just pass SB 50...

Hell yeah. But also get rid of Prop 13.

I don't know if this would work as well as you might think it does.

1. People don't necessarily want to live immediately next door to where they work. Maybe someone who works in Mountain View wants to live in Palo Alto, but this doesn't help them.

2. A lot of highways bulldozing inner cities were stopped by residents protesting. Under your proposal office workers could just vote in a highway that gets them from A to B quickly while screwing over everyone who lives next to it. I don't know that going back to this model is a good idea.

3. Mixed use housing does not really 'solve' traffic in that people don't actually live close to work even when it is available. Especially if you consider multiple income households. Tokyo is pretty much all mixed use and still people suffer from long commutes.

To address 1, I think many of the municipalities between at least Palo Alto and Sunnyvale should be consolidated (and give Santa Clara to San Jose).

Honestly, the Bay Area shouldn't have municipalities smaller than counties.

This is kind of like what New York did in the 1800s by consolidating all the towns around it into a giant metropolis. And that's clearly what many people wish the Bay Area were today - a giant megalopolis from San Jose to Petaluma. The problem with that is that while it would be a great idea for getting one's way on a given issue, there are a lot of people that don't want to live in that kind of place, and are fighting to maintain their towns as the small towns they want them to be.

You think everything from Berkeley to Patterson should be under unified government? Everything from Palo Alto to Los Banos? That's not obviously wrong but it's not obviously desirable either.

> You think everything from Berkeley to Patterson should be under unified government? Everything from Palo Alto to Los Banos?

Berkeley is in Alameda County, while Patterson is in Stanislaus County, so no.

Palo Alto is in Santa Clara County, while Los Banos is in Merced County, so no.

I don't know if that level of consolidation is necessary but the core area could definitely be consolidated into like 6-8 municipalities or even boroughs:

San Rafael-Sausalito

SF + Daly City + Colma + Brisbane + South SF

San Bruno - RWC

Palo Alto - SV

San Jose + Santa Clara and assorted surrounded munis like los gatos. Honestly you could probably include the Palo Alto-SV area with this one if you wanted.

No idea how to split up the east bay, guessing you will run into issues with nobody wanting to absorb the poor munis.

Anyway, the benefits of this is that it would be easier to align incentives at a regional level rather than creating adversarial, counter productive squabbling fiefs that keep acting optimally at a local level, but very sub-optimally at a regional level. The regions are also big enough that a much larger portion of people would actually live and work in the same area

> I don't know if that level of consolidation is necessary but the core area could definitely be consolidated into like 6-8 municipalities

There are 9 Bay Area counties, so we agree?

Note I said core area, I didn't mean to include most of the east bay. The areas I was thinking were only in 5 (SF, Marin, San Mateo, Santa Clara, Alameda) of the 9 counties

You counted Marin but not Fremont as part of the “core” Bay Area?

That is in alameda county which I listed

Put Menlo, Mountain View & Atherton with Palo Alto and keep it separate as the "mid-peninsula" entity.

Move Sunnyvale, Los Gatos, Monte Sereno and Campbell into the San Jose / Santa Clara group as the "south bay" entity.

Then you have your RWC through San Bruno entity for "north peninsula", and everything from South City through SF get lumped into the "SF" entity. That keeps it relatively simple and puts similar NIMBY categories into like groups (I'm mostly looking at the PA / Menlo / Atherton / Los Altos folks here).

> Cities do not want apartments because that doesn't generate revenue

The property owners still pay tax on it don't they? I'm sure it is less lucrative per square foot than commercial development, but I assume it is still better than the revenue from the closed furniture store and parking lot, and after all you need people to patronize businesses.

Perhaps it's something to do with how California has lower property taxes (partially due to Prop. 13) and higher income taxes-- but those income taxes go to Sacramento, not to municipalities.

In other parts of the country, municipal treasuries grow as volume and prices of residential units grow.

California does not have low property taxes. Tax = rate * assessed_value. assessed_value is huge if you purchased during last 7 years and goes up 2% every year

Purchased in the last 7 years is pretty recent. Most home owners bought 15+ years ago. If you're buying within the last decade you're probably paying a transplant premium.

From 1985 to 2008 the median tenure of a family in a home was 6 years. This figure only started going up in recent years, due to housing crisis. Americans have traditionally expected to move house 8-9 times in their adult life. It is certainly not true that "most" people have tenure of 15 years or more. That is the 90th percentile tenure.

AFAICT those are the national figures from a National Association of Realtors (NAR) report. I can't find figures for California.

EDIT: The closest I could find was an ambiguous stat in a CNN article, https://money.cnn.com/2017/04/27/real_estate/home-prices-sel..., which cites an average of a little over 4 years (2000-20007) that might be for San Jose. However, there's wording that suggests such figures are computed from the tenure of sellers, not across all homeowners, in which case the statistic seem useless (imagine one guy selling every two years and nobody else--that would be a 2-year tenture average but in fact nobody but him is moving). Would nice if the NAR report was freely available.

California does feedback some income tax revenue to localities (mostly to schools).

Can you elaborate on what you mean by "those income taxes go to Scaramento"? I mean the state has to coordinate the money it collects, but doesn't it use that money for state-wide projects like roads, dams, and other infrastructure? I live in Los Angeles and pay CA income tax. I'm perfectly fine with the state using some of that money outside of Los Angeles. I often travel outside of Los Angeles, so I'm getting use out of whatever they make with it (assuming it's not just put into politicians' pockets). What is Sacramento doing with the income tax revenue that you don't like?

The difference between paying $9000 to Sacramento and $1000 to LA or paying $5000 to Sacramento and $5000 to LA.

In the latter system, the local government gets direct control over the spending, as opposed to needing to lobby the state government for funds for road improvements, schools, etc.

For instance, in California, the majority of K-12 funding comes from Sacramento. In most of the rest of the country, the majority of K-12 funding comes from local, largely property, taxes-- exceptions being low-performing schools targeted for improvement with state funds.

The big issue is that cities and counties don't typically collect taxes in California. There are a few statewide organizations (Franchise Tax Board, Board of Equalization) that do instead. There are also tight limits on sales tax (cities can levy up to ~2% beyond the base rate for specific things). Essentially what happens is that the state collects taxes and doles the monies out to cities and counties at their discretion.

From what I've read municipalities dislike residential because of the increased costs, not because of the poor tax revenue. Both commercial and residential can bring it windfall revenues at today's market prices, and Prop 13 applies to commercial property, anyhow. Residential simply has higher infrastructure costs--schools, heavier water & sewage usage, etc.

Plus office complexes don't enrage NIMBYs the way residential projects do. Dense office space equates with rich commuters; dense residential space equates with young and poor people. So commercial pencils out better fiscally, and politically there's less pushback.

Retail generates sales tax. Residential doesn't.

California's property tax rate is too low to cover the services that residents use. That's the rotten pistachio right there.

correct, however the city now has to support these residents with police, firefighters, hospitals, and the like. everyone who works in an office goes home and a different city has to worry about it.

Schools are more expensive than residential property tax raises — this is due to state-mandated limits on property tax rates, rate increases and such (prop 13 related.)

Prop 13 makes it so that revenue from residential doesn't keep pace with costs over time. Parking lots don't really add much in terms of city services costs - no schools, parks, water treatment, etc.

Not in CA - Prop13 + corporate shell board of director transfers means the tax rate never increases, and after 40+ years, that means a lot of properties essentially pay a fraction of the taxes they should.

Prop13 has had a LOT of unintended consequences.

Prop13 has had a LOT of unintended consequences.

No, those were intended consequences.

Right. Howard Jarvis, the face of Prop 13, was a lobbyist for the Apartment Owners' Association. Prop. 13 was for landlords by landlords.

Yes, true. But it had a lot of hidden consequences that most actual voters didn't think of. The spirit of the law could be sustainably maintained by closing up applicability to businesses, only letting it apply to primary residences, and reassessing on inheritance

I don’t think anyone back then could have imagined property values going from say, 30,000 to 3,000,000.

Can you imagine it now? Could we ever reach the $10 million mark for a single family Bay Area home?

That’s the kind of leap you’d be asking them to make if you went back 40 years or so.

I don’t think anyone back then could have imagined property values going from say, 30,000 to 3,000,000.

Prop 13 was sold to the voters on a "granny is losing her home because of skyrocketing property taxes" argument. So, yes, I think that a 100x increase in value was predictable.

And, yes, I could see $10 million homes becoming the norm within my lifetime.

  the tax rate never increases

But assessed values do. My property tax bill is 50% greater now than 17 years ago.

In the past 17 years, inflation is about 42%, because we've had ridiculously low inflation.

2% isusually going to be sub-inflationary.

The "City Of London" (a small part of central London) has something like this. They have a resident population of <10,000 people, but somewhere between 500,000 and 1 million people commute there for work. Companies get to nominate some of their workforce as voters for the council (called "The Corporation Of London").

For historical reasons ("The City" is much older than the UK itself), things are much more complicated than simply "People who work there get to vote", so I'm not sure it's a very comparable situation. The best explanation I've found is https://www.youtube.com/watch?v=LrObZ_HZZUc

> Cities do not want apartments because that doesn't generate revenue

Solved: https://www.investopedia.com/terms/l/land-value-tax.asp

I think everyone agrees that if it were practical to amend the California tax system then we would just do that.

Either the Legislature or an initiative petition drive could put whatever property tax changes you like onto the ballot.

Then, you just need a simple majority vote.

That's what Proposition 13 was in the first place.

For example, you could exclude commercial property from Prop 13 protections altogether.

Yes, there is already a "split roll" initiative on the 2020 ballot. But I guess my point is tautological: those things which are not impossible are being attempted; most of the things are considered impossible.

Land value tax does not solve this issue. The vast, vast majority of property value in the impacted areas of California is land value, nothing would change.

Are you sure you understand land value taxes?

If land is taxed based on value, many homeowners would be forced to sell or replace their houses with apartment blocks that can earn enough revenue to pay the land value taxes.

For this to even be remotely viable you also probably want to touch the third rail of Prop 13.

One day, Prop 13 will not be third rail of politics mostly because home ownership has plummeted among young people, and the older generation is dying off. Younger people are more likely to be renters and get 0 benefit from Prop 13.

We are two whole generations of people into Prop 13. And guess what? Support for it largely stays the same because people still age into their homes, or people pass their homes down to their children who also benefit. Young people are less likely to vote and more able to move to states with better CoL as well.

Hrm, but then how does someone vote about stuff that directly impacts where they live?

Maybe if people would get one vote in each area, or a double-vote if both were the same place...

> Cities do not want apartments because that doesn't generate revenue

Apartments absolutely generate property tax revenue.

Under Prop 13, less than they cost.

How about putting this ("let workers vote") to the ballot?

https://en.wikipedia.org/wiki/California_ballot_proposition

Assuming this would be mainly applicable to non property owners? Can't see why any property owner would take that offer.

<edit> missing word

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