Apple commits $2.5B to combat housing crisis in California
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It's a very dysfunctional society to arrive at such a crisis, only to realise that the state is incapable of solving it, enough that a private corporation feels that it is necessary and appropriate to step in.
What are you talking about?
It was the Californian governing body that isn't allowing developers to build new cheap homes and apartments, because of NIMBY.
And at the same time, everyone is talking about the evil tech giants, so they are trying to look good. If they would just be left alone, they might spend their resources on - oh, I dont know - making cheaper and better phones so that more people around them world could afford them?
If California allow Apple and other companies to step in, take control and solve the various crises, that is a vast step backward for democracy as you loose your ability to hold the those with power accountable. For now companies are aiming to fix housing, fairly benign but in the future will they attempt to tackle education? Crime? Even without jumping straight to private police forces run by companies without accountability, think about how a large donation of grant could influence the police force.
I have read stories of how Steve Jobs was an asshole and blocked handicap parking spaces because he wanted to and the reaction by the authorities was that he brings in jobs so it was acceptable. Even if the story is false it show the power the companies already wield in the area and it can be abused even further.
I for one do NOT welcome corporate overlords.
As a comparison, you have councils (or soviets) deciding for people, how they conduct their economic activity - in this case, not allowing them to build apartments on land they own.
If you are hoping for a top-down control AND it be enlightened for-the-people AND democratically given this control, then you are looking at the wrong governing model. Especially, if you don't believe that top-down won't benefit at some point tiny interest groups.
1. Apple's 'job' is to do what it needs to do to ensure that its business prospers. If the housing 'crisis' in the Bay area is a risk to how it wants to conduct its business, isn't it reasonable that it invests to mitigate that risk? (This is barely different to Apple making large investments in manufacturers, to support them in turn being able to supply what Apple needs to buy from them.)
2. From what I read and see when I visit SF, and also more broadly in the US, the government (be that national, state, or city?) is doing a pretty poor job of tackling housing-related issues - from affordability to homelessness. Can you directly attribute this widespread failure to a lack of funding, due to insufficient taxation of Apple and others?
3. Isn't $2.5bn (+/- new approaches?) to try to combat these issues better than $0, irrespective of where it comes from?
Could you specify what you are implying here?
The keyword here is _loans_.
There's this fantasy that corporations are somehow much more efficient than government, and I haven't found that to be the case. The major difference is that corporate spending isn't transparent to the public, so it's subject to decreased criticism.
> San francisco spent 2 bill on a bus station alone.
I assume you're referring to Salesforces Transit Center[1]. "Bus station" is a misleading way to describe it. It's huge (~235,000 sqft), includes a large public park, and will connect to high-speed rail.
There are public benefits to having a large transit station with green space in a central urban location.
1. Agree
2. Good question
3. I see what you mean but I can't help but think "isn't Facebook's internet better than no internet?" The corporate social responsibility of companies isn't all that great IMO. And even if it is, when you have a new king, oh I mean CEO, that can change. Well, at least the CEO position is based on merit, some of the time, sort of, hopefully.
I think Corporate "Tithing" is a good thing and should be encouraged. The Government of California has repeatedly shown that they are slow to develop housing so why should we think this time should be any different?
Similar to someone that votes to decrease assistance programs from the government available to everyone in order to “donate” to their personal causes (or tribes).
Do you think that's an accurate description of how tax rates get set?
> The tax cuts from last year
You mean the set of tax cuts that have never had a positive approval rating[1]. Wouldn't they be a perfect example that actually no, you can't get higher taxes by convincing the majority of people?
[1]:https://www.realclearpolitics.com/epolls/other/trump_republi...
1) are they getting tax breaks because they are giving money towards affordable housing; or
2) are they getting tax breaks anyway and then choosing to give this money towards affordable housing?
You don't need money for that. Rather, you may even get more bang for your buck since higher density should be more efficient.
When you have demand and you legislate to prevent supply from meeting that demand, prices inflate and potential buyers get priced out of the market.
Let them build!
Not without downsides but frankly the current situation is untenable.
But also, I doubt you wouldn't want to sell your chicken farm to someone who wants to build a set of 12-story condo buildings. I bet they'll pay wonderful money for your chicken farm, and you could build a far far bigger chicken farm outside of the city.
The whole point of this is to allocate resources effectively.
The trick is there’s nothing in particular stopping someone obtaining planning permission to open a cafe or shop or pub or barber or gambling establishment near people’s homes, as long as there’s an argument it’s good for the community.
The result of this is that I live within 10 minutes’ walk of nearly everything I need, from a supermarket to my doctor.
This is how things should work, as people leave and/or are not willing to live in California, employers will start opening offices in other parts of the US.
If cities in California find that they can’t hire enough qualified teachers, policemen, firefighters, etc., they will have to pay more.
The one that is getting a relatively bad deal is the foreign population, that has higher tax rates, lower benefits, no political power and comprise 25% of Cali pop.
[0]https://www.bizjournals.com/bizjournals/news/2018/11/21/publ...
Also Glassdoor doesn't count benefits which are almost half the salary.
In NYC, there are thousands of public employees at MTA and NYPD collecting over $150K annually just a few years in service and I'm not talking managerial or chief positions. Some corrupt safety inspectors were reportedly collecting over $400K at the Long Island Railway years back and the governor promised to fix that (didn't), but those are still outliers.
In China, all and every large company is a real estate company. Baidu has real estate, Tencent has real estate, Ping An has real estate. Pretty much any large conglomerate is.
It is almost scary to see how much businesses in China are, in reality, just front covers for their real estate investments operation.
It remind me a bit the situation in mid-200X America, when every big company was a bank in disguise
If their first-time home buyer assistance eliminates all down payments it would be helpful. This is what got me into my house as an owner, but then the total value of my house where I live is the equivalent to half a garage in San Jose.
It’s a nice way to keep people treading water for their whole lives.
To assume home loans are simply given away to everybody because the down payment is absent is ignoring how the process actually works.
There are other differences in zero down payment situations. Having (or wanting) to sell the house in a few years makes it more likely the seller will need to bring cash to closing (as the lack of down payment makes it likely that the sales proceeds after commission won’t cover the loan balance). This can “trap” people in their home, desiring to sell to improve their life in some other way but forced to choose between doing that with the 7 year short-sale black mark on their credit report or staying put.
This same phenomenon makes a zero down loan more risky to the note holder, making it more likely that the effective interest rate will be higher.
Interest rate, on the other hand, is determined by all manners of risk factors, but not so much the down payment. Typically the bank assesses the risk of the applying borrower using things like employment history, financial factors, credit history, and other factors allowed by law.
Fortunately, my 0 down situation comes with no PMI and a low interest rate.
That is how the mortgage industry works.
> The increased risk that you speak of does exist and is an additional charge on the note called Private Mortgage Insurance (PMI). It is a percentage fee the note holder pays to the mortgage company for an insecure transaction, such as low down payment. It is automatic and at set rates and the note holder doesn't get a voice. Either way the mortgage holder is financially secured.
PS: The mortgage "note holder" is the lender, not the borrower. In the quoted paragraph, you should replace the first two uses of "note holder" with "borrower". That "percentage fee" is exactly what makes the effective interest rate higher.
If prices are too low, then supply must be decreased, and/or demand increased.
Any other attempt at manipulating prices will result in distorting the market and price obfuscation will lead to a suboptimal allocation of resources (usually to the benefit of sellers).
For examples of problems with manipulating prices outside of supply/demand, see higher education costs, home costs, taxi medallions, and traffic jams.
Also, the supply of dwellings in a given land area can be increased by building up. However, you are correct that the supply of land for single family homes with garages, driveways, and yards, within commuting distance to a major city is supply constrained.
But the solution is still to shift supply and demand curves.
The largest problem is pricing. This is true even in economically depressed areas of California. The state of taxes in California encourage price inflation: high income taxes and low property taxes. That is a property owner's and land lords dream.
On the contrary if income taxes were sacrificed for increase in property taxes real estate holdings and value both become cost prohibitive. In this case increase value only benefits an owner when selling, but otherwise is prohibitive. This causes people to seek lower value properties, without regard for selling price, and for people to petition the tax assessor for value depletion of their property holdings. Without realistic pricing controls it only makes sense for a property owner to continuously increase the value of their property.
Yes, some of CA's tax laws helps contribute to higher prices, but at the end of the day, the low supply of available houses is compared to the large number of prospective buyer is what makes it so high. Nebraska could adopt all the same taxes as CA, and prices might barely budge, because there's lots of supply compared to demand.
Tackling CAs idiotic property tax restrictions is important, but the elephant in the room is the widening gap in economic opportunity in a handful of urban areas (globally) versus non urban areas.
One can help lower price by increasing the supply of regions with more economic opportunity, and one can increase the supply of dwellings in regions with economic opportunity. Other solutions will just paper over the problem temporarily.
As a vaguely related example the 2008 housing crash was the result of artificially adjusted supply without regard for demand or prices.
Pricing is also directly adjusted when the FED changes interest rates.
Additional supply of housing would not?