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Comment by solidsnack9000 | Hacker News Reader

It is so crazy that people continue to blame tech for public policy issues. No one can say what tech did besides make money and spend it that led to the crisis — but successful industries do that everywhere without it leading to a housing crisis.

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.

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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.

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.

Apple paid $10B in income taxes on $65B of income in FY 2019. In addition they paid billions in sales/vat/gst tax and various taxes associated with employees. Apple's tax structure in Ireland was not "deemed illegal". The EU retroactively declared that an Irish tax law was invalid. Apple complied with the laws at the time they were operating.

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.

My lobbying would be going up against Apple's multimillion dollar annual lobbying budget plus their massive propaganda reach. For example, I was opposed to letting Apple "repatriate" their international cash hoard but Apple was able to get that legislation passed after a multi-year lobbying and propaganda campaign. My email to my senator did not matter at all but theirs mattered a lot.

Seems weird to single Apple out here. Apple routinely spends significantly less on lobbying compared to other tech companies. Facebook and Amazon both spent twice what Apple did, and Google 3x.

Would more tax money from Apple result in a larger supply of housing or a more affordable housing situation? I'm not clear on how it would.

It Wouldn´t. Tax revenue is not the cause of the housing shortage. If you give more money to a bad manager, he won´t suddenly become a better manager. Same with politicians and their public policy.

> If you give more money to a bad manager, he won´t suddenly become a better manager.

If we increase teacher pay will the bad teachers become good teachers?

Potentially. If the teacher is working a second job just to make rent instead of preparing a lesson plan or possibly working on their mental health. It won't help every bad teacher but it could help some.

Great point. Here's some articles that provide support to the observation that teachers are more likely than other professions to have to have a second job:

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.

The current bad teachers that get the pay rise would just be lucky. The value there would be for 5+ years down the line as more highly effective, ambitious people choose teaching as a career path and take teaching positions that future bad teachers would have received.

My old long dead relatives liked to say, you get what you pay for.

Well, I guess if you tax companies harder, maybe they'd pay their workers less, which would result in lower housing prices?

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.

Apple is also one of the most notorious tax avoiders in world history.

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.

Apple is doing nothing——nothing at all——that isn't being done by every single other large corporation.

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.

International tax law doesn’t seem very relevant to the housing crisis.

The tax law of relevance here is California’s property tax, which disincentivizes redevelopment. State revenues on corporate income don’t have anything to do with the housing shortage.

It's worth noting, tax laws don't come out of nowhere. They literally do write the tax laws. They don't sign them in to law, sure, but they do write them.

Is it better to have companies pay taxes that can go toward programs like this OR have them "give" money to help form/direct programs like the example here?

I guess they could do both, but what should the standard be?

It's better to have them pay taxes.

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.

While I hate how subversive tech has gotten — I don’t know if I agree. You are ignoring key factors: incompetence and corruption. I would bet that Apples plan is better than whatever plan some local/state politicians will put together. In fact maybe the CA laws should simply compel companies to offset the negative impact of their employees on the surrounding housing market.

Big tech companies are prone to making mistakes as well, but the difference is that as a general voter the disaster of the Amazon Fire phone or forcing a U2 album download to every iTunes account doesn't generally have impacts on my everyday life if I choose to not participate.

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.

Who gets to decide what constitutes incompetence and corruption? Billionaires and controlling shareholders? The purpose of democracy is to place that decision squarely in the hands of the populace, as imperfect as that process is.

> Who gets to decide what constitutes incompetence and corruption?

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.

Why would Apple or any other tech company know better than professionals?

Do you think the government officials would create better iPhones?

That’s a bit idealistic. When I’m sitting on a DC Metro train jerking into the station because the infrastructure deteriorated so badly they had to turn off the automatic train control, I’m not thinking “this is the result of Democratic will.”

I don't know if I'd describe any choice between two non-perfect alternatives as "idealistic". The question was "which is better", not "which is great"?

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.

> 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.

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.

If this is a government created and continuously maintained issue then it would seem that they should be as far away from any relief effort as possible.

They don't want affordable housing. If they do start wanting it then relief funding won't be necessary.

It’s a public policy issue. It’s not a matter of companies giving or not. The housing crisis not only can be solved without corporate giving or taxation, it has to be — we can’t keep feeding the rentier beast.

The complaints about tech raising costs aren't totally unfounded. Most people will point to the rather absurd salaries that employees of these companies get.

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.

So we finally have an industry that pays its workers well and often gives them ownership stakes so that the wealth generated doesn't just go to a handful of executives and owners but is distributed across hundreds of thousands of workers, and somehow it's that industry that's doing things wrong?

I never said anyone was doing anything wrong. I'm saying this is new. The average Joe in these cities is expecting to earn 125k+ with just a few years of experience. I know, because I am in that exact situation. And while that might be very nice (and fair) to the specific person earning that salary, it puts individuals without that skill at a significant disadvantage.

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.

>Most people will point to the rather absurd salaries that employees of these companies get.

Labor is finally being compensated (somewhat) fairly is what you mean, I think.

Yeah I am going to go ahead and agree with the 'compensated (somewhat) fairly'.

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".

With the birth of the modern IT centric world, the individual has the ability to create unprecedented amounts of value for a company. A good team of 5 developers can easily out value an entire department of 50 or 60 people.

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.

A few people are. Most people are not. I guess you could describe that as fair.

It is unfounded because maintaining affordable housing is a responsibility of policymakers, not of corporations, and policymakers are as familiar with the facts about inflation and demand as you are.

Their contribution to this problem doesn't necessarily have to be a negative thing. Saying they made a contribution isn't an accusation. No one is saying that they should stop doing business in California or that they should try and succeed less, whatever that might mean. However, they do contribute to the runaway social inequality in the state. Every high paying employer does, including mine.

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.

Great disparity and unaffordable housing are not an inevitable consequence of some people’s high wages, because they will engage in more consumption, buying better haircuts and so forth in a way that raises other people’s wages. Even the phrasing “consequences of their actions” carried with it a connotation of wrong doing; but the failure of California housing policy to accommodate more people — a legitimate goal, because in the US we have freedom of movement — is simply not Apple’s problem.

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.

Insane that Americans continue to look to the private sector to donate to solve public problems.

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.

They do that too. Apple is doubling the size of their Cork office in Ireland I think. They are also significantly expanding in Austin and other locations with sane cost of living.

unfortunately it's woven into the fabric of the country. american culture simply has a fundamentally broken relationship with government

Living in California, although not in the Bay area, I don't know that the public expectation was to have Apple or other tech companies do this.

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.

But Apple does pay taxes. Apple paid $10B in taxes last year.

The thing with tech companies is their desire for most of their employees to be in-house.

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.

But this is what almost every other economy around the world dreams about -- a large amount of new highly-paid workers increasing the tax base and dumping buckets of money into the economy. Municipality after municipality has tried to create such an environment (Amazon HQ2 being a great example), and in almost all other municipalities, developers would absolutely jump at the opportunity to build housing and other infrastructure to accommodate this new industry (and profit).

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 thing with tech companies is their desire for most of their employees to be in-house.

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.

What is unique to California is not the success or wealth of the ascendant industry, but the incredibly poor policy response. There are many cities in the world in a similar or even more severe situation than California cities, with regards to successful industries that pay high salaries. Bankers and traders still make more money than software engineers.

Do folks successfully fight housing in NYC?

There is so much housing in NYC.

Apple has been around for 30 years. It’s not like they appeared overnight with 20k employees looking for housing.

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?

>Supply and Demand is nice in theory, but really, pricing is more a game of "ask the maximum amount you can get away with".

Why do you think that what you are describing is not precisely "supply and demand"?

> The thing with tech companies is their desire for most of their employees to be in-house.

> 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?

Aren't software engineers in the Bay Area paid much more than other industries?

Are software engineers in the Bay Area required to be onsite much more than other industries?

> Supply and Demand is nice in theory, but really, pricing is more a game of "ask the maximum amount you can get away with".

That's exactly what the theory of supply and demand is premised on.

Supply of housing can increase if it makes sense to build housing. Zoning and other regulation can make it impossible, risky or unprofitable to build housing.

> Supply and Demand is nice in theory, but really, pricing is more a game of "ask the maximum amount you can get away with".

Most relevant point, well said. Is there any academic term for this?

Sounds like “supply and demand.” U+1F602

Tech spends money on lobbying local politicians to write favorable public policy. This should be obvious.

If they're spending money lobbying local politicians to write favorable housing policy, they should all be fired for incompetence, because none of it is working.

It's in their interest to make housing as cheap as possible so they can pay their employees less to live in the Bay Area.

While your statement is true, it makes no sense in the context of this topic.

More often than not, companies lobby for public policy which is favorable to the company, not necessarily favorable to the employees, neighbors, and communities which they are present in.

https://www.opensecrets.org/federal-lobbying/clients/summary...

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