Apple Commits $2.5B to Ease California Housing Crunch
nytimes.com
nytimes.com
Continental US is full of dying cities that need a stead source of income that big companies like Apple, google could supply. In the day and age of remote work and comunication, there`s no more escuses to concentrate resources in places like California, NY, etc.
What about infrastructure and clients?
Infrastructure can always be build, and cities are willing ti give fat tax cut to companies that bring this kind of infra and jobs to it.
Lets be honest: is cheapper to build an data center in a more distant citie than spend time, money and energie trying to covince San Francisco buroucrats to change its zonning laws.
Google tried that: Google Fiber. Apparently it wasn't economical.
> In October 2016, all expansion plans were put on hold and some jobs were cut.
It's that overbuilding a fiber network when there's already a telco and a cable network isn't very economical. It is a pretty good way to convince the incumbents to upgrade to gigabit available speeds though, which makes overbuilding even less economical, but does solve the original problem of slow last mile connections.
I can't stop remembering all those dark fiber stories from a bunch of years ago... All these dotcom dark fiber bundles must have just worn out from throwing off all that competitive white light/white heat in the last 20 years.
Dark fiber is great, but it solves long distance access issues, not last mile residential access issues. Long distance networking is actually subject to pretty healthy competition, if you can get to your local internet exchange, you'll have a wide variety of carriers that can get you anywhere else.
Telco talk makes me grouchy and of course I cannot resist :)
You're right about that dark fiber doing nothing for connecting end users, as you mentioned. As soon as a WISP or municipality lights up the fiber, out come the steep conversion discounts and carpet-bombing PR and if at all possible, the lawyers.
Thanks again, I'll try to ensure I'm not wasting time with grousing in the future.
Also the lower cost of living will problably incentive liberals couples to have more children and maay tip the tendency and help ewnew american population.
[0] https://pagetwo.completecolorado.com/2017/12/15/colorado-has...
In California today, we have a crusading mentality, trying to save the world from itself but neglecting administration of our own affairs, and our politicians reflect that. For example, consider that PG&E has been left unsupervised to a point where their neglect is burning down the state, while California politicians have vigorously maintained separate emissions standards for cars — something which ends up affecting the whole country — for decades. This outward, crusading focus is also reflected in actions like the SF city council’s recent declaration of the NRA as a terrorist organization.
If McDonalds starts doing it then maybe I'll feel a bit more outraged.
I would support that, but however, there is a vocal minority that complains that it's 'gentrification', since it has the side effect of raising the cost of living.
You would have to pay me an absurd amount of money to move back to the midwest.
Not everyone has the same priorities as me, but I think it's a mistake to think people are only moving to those places because of jobs.
Amazon, Facebook, Microsoft, Google, and Twitter all have offices in the Detroit metro area.
Any medium sized city will have at least a few insurance companies looking for developers. Not to mention other random tech jobs and startups, especially if it's a college town. I worked in Lansing MI for 3 years after college and it was one of my favorite jobs I've ever had.
Madison Wisconsin, Omaha Nebraska, Minneapolis Minnesota, St. Louis Missouri, are all places in the Midwest that are going to have plenty of tech jobs.
Then of course, there's Chicago, which is a bit less affordable than the rest of the Midwest, but still better than San Francisco or NYC. They have a huge tech scene.
Sv isn't special anymore. You might not want to live in the Midwest. But plenty of talented people do. I would want a 7 figure salary to live in sv for many obvious reasons
They are not the only nice places to live though? Theres plenty of other states that have nice areas and probably a lower crime rate altogether.
> You would have to pay me an absurd amount of money to move back to the midwest.
Or you benefit from the talen pools elsewhere... You can recruit local and not necessarily just people from one state. Lots of very capable developers across the country.
Proximity to jobs, proximity to family, cost of living, whether you can legally work there, and safety all trump “niceness of place” for a majority of buyers/renters.
Adding more money to the supply while leaving demand frozen will only raise housing prices.
I'm sure everyone making this decision already owns a house, and will enjoy the benefits.
The addition of loans by Apple also seems odd to me. We've seen repeatedly that gov backed 'affordable housing' is not a sufficient solution to supply problems. It's just going to further create a two-tier market, with the lucky few getting 'affordable' houses and everyone else stuck paying millions for tiny houses using gov/company incentivized loans.
Not to mention this continues the trend of incentivizing and redirecting increasing amounts of middle class capital into low-value housing instead of into job creation and other net-gain investments.
Question the efficacy if you like, but here's how they're addressing the other side.
We need more housing supply, which in a lot of cases means we will need more housing density.
> $1 billion affordable housing investment fund: The $1 billion commitment to the state of California is a first-of-its-kind affordable housing fund that will provide the state and others with an open line of credit to develop and build additional new, very low- to moderate-income housing faster and at a lower cost.
> $300 million Apple-owned land will be available for affordable housing: Apple intends to make available land it owns in San Jose worth approximately $300 million for the development of new affordable housing.
Also, the reason why for example Spain is so exciting visually is precisely because it mixed styles and influences over time. It's completely natural. Have you seen the Mosque–Cathedral of Córdoba? It's mind blowing, so cool.
There's only one thing that people really want to preserve, and that is the current price of their homes. US government is complicit in running this ridiculous policy of forever home price appreciation, be it via Fannie Mae or the FED or mortgage incentives or zoning restrictions.
Americans, well lets say those in the Bay Area, should be absolutely ashamed at the state of the place. There are poor regions in other countries that have life, verve, some sense of activity that "cities" all in the BA desperately need. Americans should hang their heads in shame at how uncultured and depressing the copy-paste strip malls, parking lots, shitty roads and shitty colonial Spanish architecture that screams "drought and death" just pales in comparison to Europe or Asia.
I hate living here so much.
Apple on Monday announced a $2.5 billion plan to help address the housing crisis in California, becoming the latest tech giant in the state to address a problem that it helped cause.
Apple makes computers! They don’t write tax laws or run housing associations. Policymakers and older Californians have managed to shift blame to a younger generation of working people.
https://www.opensecrets.org/federal-lobbying/clients/summary...
While your statement is true, it makes no sense in the context of this topic.
These large salaries are affecting inflation in the areas the employees live, driving up the demand for large homes that the typical non-techie could never hope to afford.
It's indirect, and it's not fair to lay everything at the feet of the companies, but there are consequences to them growing so quickly.
That said, this is a systemic issue that needs to be solved at a higher level, not at the level of individual companies or people.
Labor is finally being compensated (somewhat) fairly is what you mean, I think.
Tech employees offer unprecedented leveraged effort -> work put in affects so many people, and has huge effects. In terms of return to capital, right now employees, especially for startups, are getting shafted beyond belief.
Thanks for attending my TED talk on "why I will never work for another startup again".
Developers might be compensated fairly, or at least somewhat fairly, but that value isn't pulled from nowhere.
Too often people who critique the economy are focused on the individual view. Economies are large systems, and any good developer knows that a system with weak spots quickly turns into a sinking ship.
Without modifying the system, we're going to see this gap between the skilled-in-IT and the not-skilled-in-IT get wider and wider until anyone not doing IT might as well sign their lives away to unending dept and poverty.
Literally any country in the world would accept Apple's headquarters and not demand a cent in donations for anything.
I wish American companies would put more pressure on the government to solve public problems, this would include threatening to leave to other jurisdictions if necessary.
I'm happy for it, but would be happier still to see Apple paying taxes to fund similar programs rather than privatizing something that I agree should be done through the government.
I guess they could do both, but what should the standard be?
They don't want affordable housing. If they do start wanting it then relief funding won't be necessary.
Taxes and their distribution are controlled by elected representatives who are ultimately beholden to democratic voters.
Companies and philanthropists are beholden to nothing but their personal whims.
Can we at least have Swedes decide “what constitutes incompetence and corruption?” Like democracy, except only Swedes in Sweden get to vote in US local elections. Once a year, a committee of Swedes will have to come over here and ride BART/the NYC Subway/Metro and report back before voting.
This sounds like a great way of only diverting resources to those who already have it, and also of creating company towns that have historically been bad for workers.
Do you think the government officials would create better iPhones?
Government suffers from bureaucratic overhead and tyranny of the masses. But most of the other things it suffers from — control by special interests, regulatory capture, buying elections and politicians, are caused by billionaires and rich corporations. At least going through taxes and government has some amount of public influence instead of just abdicating the whole thing and submitting to becoming an complete oligogarchy.
Billionaires and rich corporations caused WMATA and MTA to completely neglect maintenance for decades and let their systems literally catch on fire (despite being just as well funded as European systems?) Billionaires and rich corporations cause our education system to underperform (while being among the most well funded?) Billionaires and corporations cause our intractable housing issues?
I just don’t buy this. European countries have billionaires and big corporations, regulatory systems that can be captured, etc. In fact they’re often the ones more overtly pushing pro-corporate policies. (Trump’s corporate tax cuts, for example, came long after similar cuts in Sweden, France, Ireland, and the U.K. Trump is fighting to cut the capital gains tax, for example, while many OECD countries don’t even have one.) Yet their trains somehow run on time, their schools are good, their crime rates are low, and their cities are generally nice and orderly.
Apple is also one of the most notorious tax avoiders in world history. They've taken extreme efforts to avoid paying taxes in every jurisdiction in which they do business, to the extent that a number of their tax structurings have been deemed illegal.
On the one hand, it's good that Apple is finally putting its money where its marketing is. On the other hand, if they hadn't spent 40 years avoiding taxes, they wouldn't have driven the development of an entire cottage industry of multinationals avoiding taxes.
If we increase teacher pay will the bad teachers become good teachers?
https://www.vox.com/policy-and-politics/2018/4/4/17164718/te...
https://www.brookings.edu/blog/brown-center-chalkboard/2018/...
> To begin, how do we know who works a second job? The Bureau of Labor Statistics (BLS) conducts a year-round survey, called the American Time Use Survey, in which it asks individuals how they have spent their time both on the day of the survey and in the very recent past. In addition to asking about a person’s main occupation, the BLS asks if they worked another job in the last seven days. Our sample is made up of individuals with a college education who report being employed full-time from 2003 through 2016, giving us just over 36,000 observations.
> Overall, teachers (defined as elementary and secondary teachers, excluding special ed) are about 30 percent more likely than non-teachers to work a second job based on survey responses. That comes down to about 11 percent of non-teachers and 14 percent of teachers.
Now possibly this difference is due to having summers off and time to take on a job and that job doesn't affect their main seasonal work of teaching. However, we don't know as these studies didn't look into that. Wait, or do they?!?
> What time of year would you expect to find that teachers are most likely to hold second jobs? Like me, you may have guessed summer, but it turns out that’s not what the data says. First, teachers are more likely than non-teachers to have a second job all year, except in the October and November run-up to the holiday season. For teachers, the big months for second jobs are January and February. I would have thought that teachers are more likely to pick up outside work when school is not in session. But you can see from the chart that that’s not what’s going on.
If you pay people whatever, then they're gonna start competing against each others for the same finite resources (housing), driving up prices to artificially high levels. You see this is cities with tech, oil & gas, finance, or other high-paying industries.
This is quite a stretch. Apple's effective tax rate is somewhere near 24-26%, which is far above many of its peers.
However when the tax conversation comes up, every level and every jurisdiction has self-serving ideas about how much of that tax should be payable to them. e.g. "Apple made $X worldwide, therefore they owe Cupertino/California/United States N% of $X", etc.
As far as I'm aware, Apple (as do most large corporations) follows various tax laws in the various jurisdictions they operate in. If you feel those laws are unfair then you should lobby your government to change the laws. IMO, blaming companies for the laws they follow is not a good way to fix the problem you see.
They're doing this because it's what US tax law allows. People can whine about Apple being a "tax avoider" but that's just a fig leaf to cover the truth, which is that you can't call Apple a "tax evader" because it's untrue.
Want Apple to repatriate all that income? Great. Change the tax law, which means, get rich Republicans to change it.
Til then? Stop blaming the companies for working within the system that we, the voters, have set up.
Causing a mass of people to arrive at a location that previously did not have that.
Over time, of course.
People who, due to the nature of their job and their employer, earn way more money than the average working person.
And when 10 people like this go for the 1 available house on the market, guess what happens? The price of the house goes up. Up to a point where only 1 of the bidder is willing to pay that price. Or rent.
Notice that I said "willing to pay" as opposed to "what that person can afford".
Supply and Demand is nice in theory, but really, pricing is more a game of "ask the maximum amount you can get away with".
And of course, owners of property in the same region can't let their property sit at a value much lower than the property around them. If the property around them can go for a certain amount, then so can they.
And this process repeats unendingly. Making it impossible for people with non-tech jobs to get affordable housing. And if not for the big tech company, it never would have happened.
So yeah, it is 100% correct to put the blame on tech companies. If not for them, this would not have occured in the first place.
> Causing a mass of people to arrive at a location that previously did not have that.
Do you think this is more true of tech than other industries?
This is true of almost every company. I would say that tech companies have a higher % of remote employees than most; our frustration is only that it can be higher.
Why do you think that what you are describing is not precisely "supply and demand"?
And in most other locations with land and/or lax building policies, this isn't a problem. This is a feature. But in California (and NYC to some extent too, back to the HQ2 example), developers can't soak up the demand. There's no land left, and upzoning isn't an option.
So yes, it IS California's fault. The money is there -- the article being the most absurd example of it, but the land use policies aren't. Free up the land, let people build up, and you'll have 5x the housing in a matter of years.
California can't even build an In-N-Out, let alone multi-story dense housing.
https://reason.com/2019/11/01/california-nimbys-sue-to-stop-...
The city has had a literal generation to respond to housing pressure. How much housing has been built in Beijing, or even in New York, over that same time period?
Most relevant point, well said. Is there any academic term for this?
That's exactly what the theory of supply and demand is premised on.
This doesn't mean they necessarily have an obligation to do anything about it and again, it also doesn't mean it's a bad thing. It's an inevitable side effect of their success. They did business, made a ton of money, spread it around, and one of the myriad indirect consequences is social inequality which contributes to the housing problem. Again, it's not a bad thing per se, but it's a real thing. The fact that it wasn't a bad thing doesn't mean there is no moral responsibility attached.
It's nice to see a company trying to deal with the consequences of their actions without being forced to.
Because it isn’t really a consequence of their actions, what Apple is doing here is not really the kind of action that we want to see. It’s not like a company coming and cleaning up an oil spill that they made — it’s like a company coming in and cleaning up the government’s oil spill, and it represents an extension of corporate involvement in public life that dealing with the consequences of their actions wouldn’t. They are dealing with the government’s consequences.
1. Housing market collapses as boomers realize they need to retire and neither Gen X or Millenials have the money to afford the current stock at their expected price.
2. Alt-outcome #1: Government bails out boomers once #1 occurs (wouldn't surprise me because the Baby Boomer generation is one of the most selfish groups in existence and they actually vote so they tend to be angry, loud, and in control.
3. Alt-outcome #2: Foreign money scoops up all the boomer housing and we have whole new problem.
Your average Software Engineer in Atlanta for instance is definitely not struggling to find a nice (3000 square foot) brand new house in the burbs in a great school system with a mortgage that doesn’t leave them house poor.
There's enough prejudice in the world to go around without misconstruing class warfare as generational warfare.
The level of distress many of my peers are experiencing due to the cost of housing is horrible, and I'd be happy for the value of my house to be cut in half if it would reduce the misery.
California raises hundreds of millions or billions of dollars for affordable housing, then restricts the ability of organizations to build that housing.
The Westerly Condominium 2800 Sloat Blvd, San Francisco, CA 94116 https://goo.gl/maps/vmBTAKoN4grP5GfE7
It's ugly as sin. It's almost Brutalist but without any of the exciting style (which, I say as a fan of Brutalist architecture, is it's only saving grace.)
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It's very easy to see that, if you replaced all those blocks and blocks of single-family homes around it, that make up the Outer Sunset district today, with similar condo-monsters you could fit another 100,000-200,000 people out there.
One huge problem with that is that there's no infrastructure for those people. Nevermind that the nearest grocery store is over a mile away (in a city that is 7x7 miles square), we could build more grocery stores.
Consider the roads. The only way out of there is East on Sloat or Lincoln, or South on 19th Ave which becomes 280. The Great Highway extension to Lake Merced and Skyline Blvd is closing soon due to the beach reclaiming the area (hello climate change.)
Which reminds me, the Westerly will be beachfront property in a few years. I mean the beach will reach it. Talk about underwater real estate. The whole of the Sunset is going to need a big dike. (Because that worked out so well for New Orleans.)
Anyhow, I had a friend who moved from Outer Sunset to Oakland and his commute time (to downtown SF) was reduced by half. In a lot of ways it makes much more sense to build in the East bay than on the SF peninsula.
(If I were starting a startup I would do it in Davis CA!)
I'm just ranting now...
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Just converting the existing blocks to e.g. Westerly-style condos isn't the way forward that I personally want to see. The thing is so fucking ugly it makes me sad. It doesn't even try to take advantage of the incredible view. The ocean-facing side ignores the ocean. The ground floor is hostile, it looks and feels like a fortress. "There's no organic flow through. It's like an ant farm." It somehow looms over the Sloat Nursery next door despite the distance. Tiny inner courtyards that are doomed to eternal gloom. I just hate this building so much, especially compared to what it could have been.
I live in the Outer Sunset, and it is not by any stretch of the imagination a food desert. There's many grocery options with easy parking or by train, just not in walking distance.
1. Well, maybe said by him: https://quoteinvestigator.com/2014/08/29/too-crowded/
It is not brandead for the people who live in a place to decide they want to keep it as when they bought it. It produces a lot of issues and problems, sure.
Not enough though. I've worked at so many companies that fled the midwest due to lack of a technical talent pool and an inability to attract remote talent, even with generous relocation benefits.
The appeal of Silicon Valley, NYC, or Seattle is the abundance of high paying, prestigious tech companies to work for. While it may be cheaper to live in Pittsburgh or Columbus, there's still the issue that you can't find nearly as many comparable jobs in the same market. Currently, if you work for Google in Pittsburgh, you're stuck there unless you're willing to take a paycut. This isn't a problem if you're in Seattle.
Meanwhile, there are plenty of cities in the south that are rapidly gaining population, especially from people with education, and would be excellent places for companies looking to expand. Atlanta, Nashville, Austin, Dallas, Raleigh, Durham, and Charlotte are all far cheaper than SV, and are much easier to recruit talent to than Pittsburgh or Columbus.
Austin has minimal mass transit - some train, some bus. For Texas in general, it's better than average. However, this popped up: https://cbsaustin.com/news/local/austin-named-one-of-the-mos...
I'm pretty skeptical of 'in the world' claim, but I have heard that the north-south arterial axis of the city build out makes getting around challenging at times.
My overall point is, 'fast growing tech hubs' have growth related problems. Only in an extreme anti-tax state like TX, you may never have any infrastructure build up, except for maybe more interstates.
Ultimately, municipal elections draw only the most engaged voters, and outside of those times, officials have broad authority to control how things are built. Getting re-elected is always a concern, so we end up with a general slow-to-change civic pattern that appears to be repeating all across the US. Even in much-lauded NYC, people complain about (a) underinvestment in subways (b) many manhattan buildings are illegal under current planning code. Building code is a primary challenge to reducing change, and I hardly see anyone, except CA state authorities, attacking overly restrictive planning code.
It seems like they are using older technology and some stacks people hate on like Java... Actual Java, not Javascript... Sure I could probably learn those stacks too though if I wanted to, but got my mindset on certain technologies I like.
I know they are working on developing drones though, but not sure if that's a contractor or Airforce itself as seen on the news. Trump wants to take money away from the military to fund the wall, which is going to have a big impact on the base funding for local jobs was reported here. But coding stuff for drones sounds fun and exciting, but knowing your tech could just as well be killing innocent people instead of only bad guys is also a conflict. Or even the possibility you screwed up something that got your own people killed, would hate to have that burden doing critical life related software. Speaking of life, I was looking up startup incubators a few years ago, but it seemed like the only one focused on medical and biotech instead of more consumer tech. Sure there's probably programming involved in those too, but probably more developing chemistry and stuff that isn't my field either, but it'd be fun to be part of a startup that could cure cancer!
I wish they could attract more tech though, but I don't think it's going to happen. I think the people at large tech companies don't even have the area on the map either, and even if I got lucky with a startup and funded, I doubt I'd even consider the area either. Some of the conditions of getting seed funding, is relocating anyways. One of the cities was trying to persuade for the Amazon HQ 2 project like many others, but of course that didn't happen. I ran into one guy involved with the local tech community randomly chatting, basically was telling me that life isn't all about social and gaming apps. Sure it's probably a great paying job, but very corporate I'd imagine, and being government related probably super slow to get anything done. Meetings just to decide about your other meetings.
I know some people really love startups, but then after they become more corporate they cash out and move onto something new and exciting. Plus some investors don't want founders to be CEOs and want to put someone in with more experience and adult supervision, Be nice to be able to run a large company but still have it feel like a startup. I'd imagine companies like Google is better at this than other companies. I'd imagine since Google has so many different things, different parts like Chrome, cloud, YouTube and other projects would be run like mini-companies within the bigger company, with a bunch of smaller teams since something as large as the cloud can be split up into even more smaller parts for each tech solution/products.
Then some people even told me that programming isn't real work, the only real jobs are the people who put in the hours doing hard work at factories in the heat, with their hands and muscle. Sure they do valuable work too, even programmers need a computer to program on and people wanting to buy the computers to play games and chat put money in both the factory workers and programmer's pockets. However I doubt any computer factories here, but steel factories sure. I know I hear some things about factories though, and I'm surprised they don't even have heat or AC, and no mandates legally for them to do either. It seems like a form of slave labor.
I feel like if I had a huge company with the resources, I'd visit the factory personally and put investments to improve life there. However if ever starting a new product, maybe at some point build your own factory instead of contracting it out, so could design everything from the ground up. I know some CEOs visit factories anyways though, but I feel like it's more of a PR stunt more than anything else when they do these events, then the mayor, state senators and others come too with the media cameras. Wouldn't surprise me though some CEOs care though, but boards and investors put profits first, I really like the idea of having a company that's profitable but also doing good and treating everyone well too. Care about customers all the way down to the employees. Even warehouse businesses look bad if you read and watch some news on it, even one warehouse had someone drop dead and management told people to keep working. I know some CEO even raised prices of life saving drugs, and said it was his fiduciary duty by law when defending himself to the media. So I guess that's a excuse to be a jerk to everyone and stretching the intent, but I think you can be profitable, while treating people good and making quality products if you really wanted to instead of being greedy. I know some companies try to not have shareholders or as many, and even pay a part of the profits back as a bonus to employees which seems like a nice incentive.
However, I think people who aren't really into computers much or thought about programming imagine that programming on a computer is the same as relaxing playing video games or creating a document in Microsoft Word. People view a webpage thinking they are simple but don't know that there's HTML, CSS, Javascript just to display the page, then the backend is a whole other mess, server logic, databases, file, queuing, caching and as you get larger that gets even more complex and messy as you grow. But then again this is the rust belt. It's easier to think about doing things are easy from the 10,000 feet view, then actually getting anything done when you peel back the layers, then layers have even more of their layers to peel back. It's a never ending quest of things you can do, learn, problems come up, etc. Sure it looks easy when you watch TV and movies, especially when the CSI agents build an application in visual basic to trace an IP address and magically enhance pixels.
Then also some places don't like tech, they don't trust it with all the news of breaches. Then some people also really like their town being small, and quiet. They don't want the tech money to come and increase values of housing but also increasing other things too.
Heroin is a huge epidemic here too sadly. Then some towns rely mostly on one employer and they then decide to relocate can be a huge hit to a local economy. My dream is to get something going that I can manage remotely and move somewhere warmer or retire early to travel full time. However, I think some of the skills I've been studying myself like Typescript and React probably could get hired at a startup in Miami or Austin as a backup plan. However, I'm pretty much done with this area other than family. I don't see any opportunity for tech, it's cold, higher taxes than any others.
I also was interested in the bay area, since that's where a majority of the tech industry started, but as I got older I realized I didn't like the politics of California as it seems like almost everything they do is backwards, then crime and affordability too. I see others are realizing this so other tech hubs are expanding and popping up too thankfully.
I think the weather has a lot to do with things as people hate cold, but I think cities or the state could be doing more to attract tech. There's also the brain drain problem, people get massive amounts of student loan debts to go to schools in better places and never return home, as they get a job and fit in better in the community where their college is. There used to be a huge cash register company here, so I'd assume you could write a point of sale system software which might be fun! But Georgia gave them millions of dollars to leave for their state instead...
However, I feel like my opinions don't matter, even had a teacher told me these tech people just got lucky... Sure some luck, being at the right place at the right time but also a lot of hard work and effort put in. So I feel like voting with my feet is the best option at some point. I'm sure a lot of people feel this way though, but not everyone talks about it. They just take their student loan money, hop on a plane to better cities with top schools and wave bye after being dropped off at the airport. Then also it a shame for their families, can't help out and I know some families shame their children for wanting to leave and better themselves.
I have turned down no less than FOUR positions in the last few years for one reason: they were in Sunnyvale, and there was no way I would move back to Sunnyvale, and there is no way to commute to Sunnyvale on any semblance of efficient public transportation.
Fuck Sunnyvale.
But more largely; fuck the state of transportation in silicon valley as a whole. BART is a joke, cal-train is a joke, Amtrak is a joke, buses are a joke.
Not everyone is a Tesla driving google employee who could give a shit about how people actually need to move about to make the whole economy work here.
If tech companies actually had the best interests of the long term viability of silicon valley in mind, housing is nothing without the ability to get around efficiently. And cars ain't it.
It puzzles me why housing of any kind be expensive in bay area. There is like ton of free land there.
However, In today's wildfire-prone climate, it is extremely unlikely insurers would ever offer policies for residences built there as the mountains are heavily forested and quite rugged.
It's as simple as that. Keep voting these people into office from the local to the State level and you will not solve any problems, you'll create more and more.
I know so many people, both families and business owners who are planning to leave California. It isn't easy, you can't uproot your life and business just like that. One company where a friend works moved the entire operation to Arizona. Large company. They service multi-million dollar contracts and support hundreds of families with the jobs they create. They had enough and moved camp. Everyone I know from that one company could not be happier with the move. This is not an isolated example.
If Californians truly understood the financial state of this State, the abject failure of the government they have supported for so long, they would be horrified.
I have done lots of construction in CA, and so have friends and family. It's a nightmare, even for the simplest things.
Want to improve housing and the overall economic environment here? Stop voting for the same ideologies that have created and maintained the problems in the first place.
A friend of mine has a company that installs holiday decorations, mostly for large businesses. Think everything from CNN to Disneyland.
The other day he was telling me that for years doing any fabrication work on site has had so much red tape that it is incredibly expensive in time and money.
If, for example, they have an aluminum rod that needs to be cut a little shorter, they are REQUIRED to get the Fire Department, Fire Marshall, Security and other groups involved. I asked what the theory might be. He said sparks and fire. To which I replied: "Aluminum doesn't spark, even steel won't spark unless you are using a grinder. Even at that, the sparks have virtually no energy and only fly a few inches." It doesn't matter, he said, that's the rules and we have to abide by them or we can't do business.
He explained that one of the consequences of this is that the cost of some of these projects is massive. They have to do a ton more planning and work in order to avoid any fabrication work on site. Even worse, because you can't plan everything perfectly, any fabrication requires taking things down, bringing them to the shop and then back to the site. It ends-up being cheaper than getting a small army involved to make a small cut on a a 1/4 inch piece of aluminum rod.
This is a drop in the ocean when compared to totality of the California "experience" if you are in business here.
As for the economic balance sheet, you are not well informed. For starters, check this out:
https://www.usdebtclock.org/state-debt-clocks/state-of-calif...
That said, this isn't the entire story. California liabilities are in a range between 1.5 and 3 TRILLION dollars. It's massive and not something that leads to good outcomes. The nature of a Ponzi scheme is that it feels great until the music stops.
https://californiapolicycenter.org/californias-state-and-loc...
Not sure what "Trumpian politics" might be (Is that actually a thing?).
> California population is actually going up (up 2 million over the decade)
You are falling for using very shallow analysis. Did you stop to ask how much of what you claim might be due to birth? And how much might be due to net international migration?
The fact is exactly opposite what you think it is. Here, check this out. Nice charts too:
https://qz.com/1599150/californias-population-could-start-sh...
From the article (emphasis mine):
"Besides births, the main reason California’s population hasn’t already started falling has been international migration into the state. Every year since 2011, net domestic migration has been negative—i.e., MORE PEOPLE LEAVE CALIFORNIA THAN MOVE IN FROM OTHER STATES. But from 2011 to 2016, the number of international migrants moving into California was larger than the number of locals who were moving out.
Since then, however, domestic departures have outstripped international arrivals. In 2018, 156,000 locals left the state, compared to 118,000 international who came."
Yet, that doesn't tell the entire story. Businesses are leaving California, and with them job creation and more:
https://chiefexecutive.net/business-exodus-california-troubl...
From the article:
"What is more serious is the number of California-based companies that have left or signaled their intention to leave the state. Last year marks the first anniversary of the announcement that Carl’s Jr., a California burger icon for more than six decades, was relocating its headquarters to Nashville. It’s a symbol for what’s become a stream of businesses that have quit California. What was once an almost quiet exodus of companies now looks more like a stampede."
There's also a bit of bigotry in a comment like "conservatives are getting replaced by wealthy residents". I won't even go into the assumptions this makes. One thing is clear: Democrats have become a party that is for the poor, so long as they vote Democrat and don't bitch about the fact that the people they vote for somehow magically never seem to do anything for them. The proof, as they say, is in the pudding. People who earn $55,000 and less are leaving CA if they can because things have become unsustainable. So, yeah, if the assumption is that all of those are conservatives and are being replaced by "wealthy residents" --the implication being that they are good people because they are not conservatives-- sure, yeah, Democrats want to help the poor so much they multiply them.
https://www.dailysignal.com/2018/04/17/the-changes-that-made...
The irony here is that CA has been under leftist control for decades now and it is still a mess and getting worse. This is a case just like that of Chicago, where nobody wants to talk about the thousands of black kids getting shot there every year, dozens per week, because the inconvenient truth is they've been under Democrat control for somewhere close to a century and the place is a mess.
This is a website that should inspire deep introspection about how this ideology has derailed, to the detriment of all:
Apple is currently supporting the plans of a developer in Cupertino who wants to build 3M sq ft of office space for them and then not build enough housing to offset that space.
If Apple really cared, they would tell the developer that they won't rent any of that office space unless the development is more housing than office, and use their leverage and clout to make that happen.
But that might not be in their best interest, because then a lot of local residents would be pissed at them.
This is the city's job, and it's the city that is actively pushing the office/housing ratio way out of wack like this.
No it's not. The city is trying to make them build only housing and no office, but they are using SB35 to go around the city. The city has approved a ton of housing but the developers aren't building it because the city won't approve the office space the developers want to go with it.
The city is trying to improve the housing ratio and the developers are trying to make it worse.
Apple could push the developers to make the housing ratio better if they actually cared.
Are workers going to live there, or will the properties be endlessly flipped by all kinds of investors as prices rise ?
https://data.oecd.org/pinboard/4sxE
Prices doubled,while real income rose 66% in that period. Household size shrunk from 3.14 to 2.53 during that time.
Sources: https://www.multpl.com/us-average-real-income https://www.statista.com/statistics/183648/average-size-of-h...
Any fines however, is administered quickly and efficiently.
And most importantly, the campus is closed to the public. The original proposal was to make the center of a spaceship a public park, but somehow they managed to get it approved as a private space.
Home resales forecast for 2020: 393,500
Median forecast price: $608,000
Total resale market size: $235,800,000,000
235 billion dollars.
I don't see Apple making much of a difference on their own.
For example, if silicon valley could hire more remote people, that could help relieve some bay area home pricing pressure. I would love to work for Apple to improve their SDK/API documentation, and that probably isn't a job that would require feet on the ground in cupertino to be effective.
Have we? California's marginal tax rate is over 50%, higher than many European countries. The Internet suggests that someone making $260,000 (200,000 pounds) will pay about 41.5% of their income in taxes in the U.K. https://www.thesalarycalculator.co.uk/salary.php. Using a similar tax calculator for California suggests that they'd pay about 39%. I assume the U.K. is also in a post-Reagan, post-tax world?
Must be Reagan. Couldn't be total mismanagement at all levels of California government.
Is that really true? This official calculator [1] says I'd have to pay only 16k on 200k income.
And this source [2] says income tax tops out at 13.3%.
[1] = https://webapp.ftb.ca.gov/TaxCalc/Home/Results
[2] = https://www.communitytax.com/state-taxes/california-taxes/
Tax is comparable to Europe and yet services are not. The problem is therefore the government.
Top federal rate is 37%, top state rate is 13.3%. Total top marginal rate is 50.3%.
The figure I cited above is from a tax calculator that I’ve found to be pretty accurate. Note that the various deductions are much less valuable for high income earners under Trump’s new tax plan due to the limit on SALT deductions. Finally, while the calculator I used excludes US credits for healthcare, children, etc., the calculator I used for the U.K. also does that. The hypothetical is basically a single Google programmer who rents and has no kids.
CA's top marginal tax rate is 12.3%. If it were >50% no rich person would live in the state.
The combined state and federal rate is not >50% either, and any calculator that claims otherwise is lying. And that's before you even take deductions into account.
If you're paying >50% marginal tax rate in CA, your accountant should be fired. And possibly investigated for embezzling funds from you in the form of "tax payments."
As to the combined marginal rate, it’s 50.75% on labor income above $576,000 (12.3% state, 37% federal, 1.45% Medicare). Then there is a 1% surcharge on incomes over $1 million. I’m not sure why you’re talking about dedications because that won’t affect the top marginal rate.
Why are you so confident here? The top CA marginal rate is 13.3%. Top federal marginal rate is 37%. Medicare tax is 1.45%. simple addition gives a top marginal rate for wage income of 51.75%. I have no idea how your accountant can get that lower.
And then you find that your tax burden in Texas ends up being close to the same as it was in California, but your taxes in Texas don't get you any public services.
That 2.5% extra in the UK (so about £5k/$8k a year) includes free healthcare too (plus at £200k you'd almost certainly be in a job that also has excellent private health care for you and your family with no extra payments as well as the free NHS). I understand that this can cost many tens of thousand in the US even before you use it.
I just don't get the US system sometimes I really don't. Perhaps instead of calling for SV companies to move elsewhere in the US, why not just come to London or Zurich or Berlin?
The combined state and federal marginal tax rate does not exceed 50% either.
Medicare adds another 1.45% as well.
It is not. The top tax bracket (income $1m+) is 13.3%[1]. Where are you getting this number from?
2. It's slightly disingenuous to call it "California's marginal tax rate" when 2/3 of that figure comes from federal taxes. It's like saying "Texas's marginal tax rate is 37%".
3. The SALT deduction changes have made it so that residents of states with high taxes are effectively double-taxed. California isn't responsible for this state of affairs.
You could say california has given up on building cities.
Within 10 blocks of where I live more than 30,000 new units are being constructed (or have finished construction) in a 3 year window.
That doesn't include the dozen residential buildings of 100+ units I see on my daily commute, or the other dozens of buildings being built along public transportation routes in LA.
Long Beach and San Diego have also experienced residential building sprees.
The problem is that California is such a desirable place to live that even with all the undesirables leaving the state for the South, we still can't keep up with the growing demand for new housing.
This WSJ piece is instructive. Tokyo has seen flat housing prices despite population growth. The secret? Tokyo had a lot more housing starts than NYC or SF.
Yes, california attracts new people. A sensible housing market would build more houses to build them. It is not clear how higher taxes would help, unless you think higher japanese tax rates cause their private sector to build more.
https://mobile.twitter.com/wsj/status/1113274956765331456?la...
Perhaps, you meant, we've given up on the ability of government to use those taxes for the greater good. I'd agree with that. for the last 50 years, If even a tiny fraction of those taxes were used to solve all the zoning and building regulations, we'd be in great shape right now.
Only the homes that have been sold in the last ~5 years are actually paying 1% of property value in yearly taxes. Many homes are paying much, much less because they haven't been sold in 20 years and/or were passed down within the family. Or, the owners move out and rent the home and continue to get artificially low property taxes (while increasing rent higher and higher reach year).
console.log(document.querySelector('article').innerText.replace(/(.{80}\w*)\s*/g, '$1\n'))We can't do anything. We're helpless! Please rain money on us from DC to spare us having to reform our zoning and permitting processes!
All of the policies that drove this mess are local. Which means solving the mess can also be done locally.
We're not helpless. We just cosplay as helpless because it means we can avoid discussing the hard changes to popular policies that might be needed. I am so, so sick of seeing this canard given serious credibility.
Right. But what's a "housing crisis" for society at large is a huge money source for local home owners, who are the demographic setting the local policies.
Don't expect them to vote away their source of riches.
And why do you think this? A home is one of the least liquid assets one can own. It’s not a huge money source. It’s not even a money source home owners at all.
Further, any countering increase in property taxes is dampened by Prop 13. So there is very little reason to sell and cash-in vs just holding on for longer as the problem worsens.
When you are a homeowner with an expensive house, you don't want more homes built. That will increase supply and lower price.
The only visible effect of increasing home prices in my neighborhood is a slight increase in my tax bill every year. It's arguably unfair that Prop 13 means my tax bill doesn't go up more proportionally, and that people who bought 20 years ago pay a tiny fraction of what I pay, but that's a topic for a different thread.
I don't even know how much my house is worth anymore. I don't care. It doesn't affect my life at all. I'd oppose a 100 unit high-rise apartment being built next door to me not because of housing prices, but because there'd be 100 more cars on my street which is made for far fewer. There'd be 100 more noisy neighbors partying at all hours. There'd be 100 more kids in my daughter's already overcrowded school. I'm not a real estate investor. I don't care about supply and demand and market prices and all that crap.
Most people buy a larger house while raising a family, then sell it for a smaller one after the kids grow up. The increase in price funds much of their retirement. (This is basically a pyramid scheme, but when the population actually looked more like a pyramid than it does now, it mostly worked. This is now breaking down but a lot of people haven't accepted that yet.)
Moreover, even while you continue to live in your house, having more equity allows you to take out a home equity loan to e.g. send your kids to college.
> I'd oppose a 100 unit high-rise apartment being built next door to me not because of housing prices, but because there'd be 100 more cars on my street which is made for far fewer. There'd be 100 more noisy neighbors partying at all hours. There'd be 100 more kids in my daughter's already overcrowded school. I'm not a real estate investor. I don't care about supply and demand and market prices and all that crap.
Nobody is saying that there shouldn't exist single family homes. The problem is that the landscape is covered in them and we need to convert some percentage of that land into higher density housing. You may not like that to be your house, but take consolation in the fact that if it is, the value of your land will increase significantly (because someone will want to buy it and put up a high rise), and then you can take the money and buy a different single family home in an area still zoned for lower density. And have hundreds of thousands of dollars left over to use for whatever you want as compensation for your trouble, because a single family home in the area still zoned for lower density won't cost you as much as you got for your existing one which is now zoned for higher density.
What increase in price? Your “profits” were simply transferred to the other home owners profits. To extract real benefit you need to move out of state which is not what a lot of people want to do.
The increase in the value of the land when it's rezoned.
Suppose you have a house currently worth $500K because it's only zoned for single family homes. Rezone that area for higher density and developers could be willing to pay you $700K or more for the land so that they can build a dozen condos on it, sell them for $300K each and get back $3.6M. It's worth more after the rezoning because they weren't allowed to do that with the land before.
Then you take your $700K, buy a $500K home similar to your original one in an area still zoned for single family homes and have $200K left over for whatever you like. Or maybe you have $300K left over because you only have to pay $400K for that single family home once there is less housing scarcity because there are now lots of new condos ten miles down the road where you used to live.
That’s the point I’m trying to make. A home’s value is NOT liquid. You can’t extract any portion of it until you move. And you have to move AWAY to get that value.
The best you get is a relatively low interest HELOC but that’s hardly a money maker.
In fact a lot of people are stuck in their homes for that reason. Any move would be a 5x or 10x change in property tax bill.
When your home is appreciating faster than the interest rate combined with property tax rate, it definitely can be a money maker.
What you've perhaps missed, I think, is that property tax rates in CA don't scale with appreciation.
Nope. Prop 13 allows moves in the same county with no change as long as the new places is of equal or lesser value.
...At insanely favorable rates. A person in SF could build quite the nest egg by doing a cash-out refi every year and investing the proceeds.
IF you're from around here and didn't notice this pattern then you need to be paying a little more attention.
Opposition to density is about protecting a specific lifestyle, not money.
And it definitely doesn't make rents go down, which if you're a landowner in the bay area is a huge source of revenue.
Yes it does.
If I live in suburbia surrounded by suburbia, my house is worth X, because it's a house in a quiet area. I have to drive to SF to have fun, which sucks because it's far, traffic sucks, and parking sucks.
If I live in suburbia but am surrounded by islands of new mixed-use buildings (housing on top, retail on the bottom), then my house is worth X + Y, because a) it's still a house in a quiet area, but b) it's now also close to walkable outdoor spaces with chic shops and restaurants, at least one of which is likely to become a popular upscale haunt.
I now have the luxury of being able to quickly drive there in my car to hang out, and then quickly go back home to my (large, quiet) house when I'm done. I get convenient use of the new space, without the inconvenience of living in an overpriced shoebox above a nightclub.
It's literally having your cake and eating it too.
But if this is a critique on low density suburbs, then I don't really buy the argument. These new developments are mostly replacing run down commercial areas that are already well separated from suburbanites and their valuable property. They're mostly near transit and other commercial areas, but when they do come near residential zoning, it's almost always older apartments rather than houses.
Even when they do end up on the border of a nice-house-suburb, the sprawl means that relatively few suburbanites live near the border, while relatively many do not, but still enjoy convenient access by car.
People like living close to shopping and restaurants.
The situation you describe is applicable to the apartment complexes and new developments being built along El Camino Real on the peninsula, but you are ignoring the issue of single family home zoning. There is a ton of opposition to upzoning in pretty much all neighborhoods on the peninsula. No body wants a duplex next to their single-family home, so they prevent any zoning changes.
I understand exactly what you mean when you use the word cosplay, however, it also strikes me that this word wouldn’t be used in the same way 10 years ago as it is today. Just an observation.
There is a supply and demand problem where there is an enormous demand for a small area when there are so many other great places to be in this country.
Jobs are abundant all over. If you want to solve the housing problems in the bay area, start programs that give people $10,000 to go anywhere else. You'll enormously increase the quality of life of the people who leave.
There's nothing wrong with an area that doesn't aspire to intense density. Nobody is entitled to that, there's nothing wrong with self determination and choosing not to grow. People need to realize there are other places to be, companies need to realize there are other places to be.
People (including myself) overvalue the dollar amount and undervalue the various increased costs. If I had never come to the bay area, I would be earning half as much, but I would be saving more, I would be living in better housing in a better neighborhood, and I would have less pressure. By all metrics but a W-2 I would be wealthier. At some point it's entirely possible that I will reach that threshold where the bay area income will blow everything else out of the water, but that's a gamble and ultimately probably not "worth it" when I consider what I want in life.
Moving across the country is just expensive and many people simply can't, or doing so would be an enormous risk mostly surrounding the large cost to relocate.
Give people a little bump to afford to change places and then home-city choice becomes much more elastic.
I got an offer in SF for ~150k, which would require me moving from a medium/high COL location.
My friend gets an offer in Huntsville, Alabama for ~90k.
Guess who has the higher cost of living adjusted salary? 90k in Huntsville is nearly 200k in SF, manly due to the "474% higher" cost of housing.
[1] https://www.nerdwallet.com/cost-of-living-calculator/compare...
Furthermore, it isn't self-determination, it's rent-seeking behaviour that is detrimental to the rest of society, essentially luck that they managed to purchase a property at the right time at the right price.
Ah yes, the perfect solution to a housing crisis: xenophobia, and using market mechanisms to enact the kinds of mass expulsions whose mere suggestion gets Trump labeled all kinds of mean things.
Mean things like racist or Nazi. All because he wants to do on paper what California does every day with prices: make the people he believes are inferior get out of "his" land.
Having all the "desirable" people in one place maximizes capital efficiency and damn the consequences.
Feels like more and more people agree with Trump at some level but they're couching it in other terms to.. not get called names? I'm not 100% sure on that bit.
IME, loads and loads of people agree with Trump on the level that some people ought to be made to GTFO from Wherever They Live. The big disagreements are on who society should target for enforced expulsion, how expulsion should be enforced (housing prices vs "canceling" vs ICE raids), and what mean names we're allowed to call people whose targets differ from ours (eg: expelling "immigrants" is Bad and Racist, but expelling "techbros" is Good and Woke, even at the intersection of immigrant tech-workers).
This is such a good idea that some places are already doing it! This article describes several implementations: https://www.forbes.com/sites/laurabegleybloom/2018/11/13/thi...
On a personal note, it's been my experience that the number of people willing to suggest that such programs should exist is perhaps not quite the same as the number of people willing to take advantage of the same.
They key is not for people to leave, but for companies to leave. Once the jobs leave, the people have no choice but to follow. People are just pawns. Jobs determine where people will go.
Voters have made it abundantly clear, they don't want more building. I live here, and I even get a postcard in the mail anytime some developer wants to start building from angry voters. And then they start creating all kinds of problems for those developers at the local level. Then when developers do finally jump through all the stupid hurdles, they get sued to pieces by selfish voters. I don't even know why the judges allow that to happen: seems like a huge abuse of the legal system.
Why don't apartment buildings get built here?
I've heard a lot of people claim earthquakes are the reason.
What does Japan know that California doesn't?
Could be, but at this point it makes more sense to pass statewide legislation, like SB50, which California failed to pass, or Oregon's successful HB 2001.
These policies are the natural consequence of normal people having 90% of their wealth tied up in their home. (And, because of low interest rates, and 25 year mortgages, being leveraged up to their neck. If there was a cap on mortgage lengths, we'd all have been better off... But it's too late, now.)
It's political suicide at this point to do anything that could possibly result in housing prices dropping. Short of a bloody communist revolution, I am not seeing any way out of this problem.
My proposal:
- Spend 10X this amount (25 Billion) making a slack competitor.
- Dog food it in house.
- Launch when you have solved the problem sufficiently.
- Make a profit and help solve many local housing problems globally.
Building more housing just converts beautiful places into ant farms with terrible traffic. Do everyone want their grandkids to live in 100sqf cells like in 5th element?
All our major problems are because we got too many people on earth - global warming, plastic contamination, air pollution, food and water availability, etc.
Your utopia is my hell.
I prefer smaller cities, personal vehicles, the outdoors, good schools, the space and freedom where the only thing I really bitch about with the local gov is the road construction and how it takes me a couple more minutes every once in a while to run an errand.