California's housing bill SB 50 has died in the state Senate
usatoday.com
usatoday.com
The appeal of Wiener’s SB 50 was that it would have quickly increased the capacity of housing using fairly good heuristics to improve access to opportunity (already residential, near transit stops or jobs, not high fire risk). It’s unfortunate that the state senate doesn’t seem to want to treat the housing shortage with the urgency that it deserves.
The problem is NIMBY bullshit in the purest sense. People will use every excuse in the book to prevent new housing in their neighborhood. While a fair amount of the time environmental policies are abused to block development, zoning laws are also abused, parking/ land use legislation, hell I've seen houses blocked because they increase the shade in a park by 2% for half an hour during the evening.
None of this is "environmentalism", its rich people standing on a high hill screwing over everyone else beneath them.
Motivated Reasoning is a hell of a thing!
People with rent control are under the same incentives. Have a $2000 rent controlled apartment that would rent for $4000? If something changes in your neighborhood the makes you want to move, you don't really have that option. So you fight really hard against changes.
The longer Prop 13 is around the worse it gets and California has just passed statewide rent control. Things will continue to get worse on this front and I don't see a way for California society to change the situation.
One doesn't need to live in California long before they see a community leaflet opposing a local housing development. These developments, on the surface, all look like great ideas. The stated reasons to oppose the permit all seem thin: Accusing the developer of greed, or claiming that traffic will get worse. Homes closer to work and a local discount store do increase traffic on surrounding streets but decrease cross-town traffic in the wider area. They might even encourage people to walk!
They did just change the situation. They made it worse!
Reminds me of what I've heard about working in the academic world: Since people often have a job for life, workplace conflict can't be resolved as everywhere else, where someone switches job or gets fired. Instead people make each other's life hell forever.
Just a story I've heard, I have no personal experience. But I've heard it several times.
Yes, people talking self serving nonsense are lying. But they're primarily lying to themselves!!!
Essential book: https://www.amazon.com/Elephant-Brain-Hidden-Motives-Everyda...
TED talk version: https://www.youtube.com/watch?v=V84_F1QWdeU
Vehicle miles driven doesn't make as big of a difference as one might expect. A paper[0] I saw linked on reddit had an interesting graph: https://imgur.com/a/n7u8fGH
In this paper, what carbon emissions you lose by not driving you gain from building emissions. Maybe because the study area was New York, with more fuel oil-heated buildings? Presumably, decarbonized heating and electricity generation would make a difference, but New York state already is pretty good by that metric: https://www.eia.gov/electricity/state/newyork/ (Though nowhere near carbon neutral, or carbon negative, as would be required for keeping global warming to 2C)
---
0: Andrews, C. J. (2008). Greenhouse gas emissions along the rural-urban gradient. http://dx.doi.org/10.1080/09640560802423780 If you don't want to buy the PDF, then visit the crow site.
What's surprising is that at the other end of the spectrum, in rural (not sub-urban) areas, other factors (forests, etc.) combine to cause lower per-capita emissions than suburbs (and in some cases, negative per-capita emissions because of sequestration).
Basically, from a carbon-emissions perspective, post-war suburbs are unsurprisingly worst, rural areas get some help from sequestration in forests (this fact being the contribution of the paper), and dense urban environments are the least-emitting.
So if you move into the city instead of commuting, you might be using the same commercial buildings a before, but their emissions are suddenly attributed to you.
Most of the environmentalists that I know are very much in favor of increasing housing density and reducing commute time in ICE vehicles. Current housing policy does neither of these things.
So-called environmentalists don't have a monopoly on hypocrisy, it's pretty much universal.
https://www.mercurynews.com/2019/11/06/in-fight-against-urba...
I'm so confused by your reaction, are there specific housing policies that are focused on the environment that have had bigger effects than things like prop 13? or cities with 30k jobs in a year but 300 units of housing (looking at you, mountain view)?
You can see the NIMBY lines so clearly.
I live at the yellow star at the top of the map. Needless to say, my lot is vastly smaller than an acre :)
The ads date is 1913.
That makes me rethink how much zoning is about muni's forcing developers to do things. And how much of zoning is actually regulatory capture. Developers have always been pushing as much lux as the market and technology can bear. And home owners that are all in try to protect their investment in class distinction.
https://www.fostercity.org/community/page/creation-foster-ci...
It takes Palo Alto 30 years to do flood mitigation because of a couple frogs in the creek.
If Mountain View needs housing, make more land. It will never happen because there are always myriad obstacles to building.
https://ww2.kqed.org/quest/2010/09/30/landfill-and-liquefact...
Look how much of the city of SF was built on landfill. When was the last time a major bay area development was done on reclaimed land?
If anything, CEQA and other environmental regulations have contributed more to improving the quality of life for working class people and the poor than it has contributed to their detriment. California is the median for poverty in the US and also happens to be in the top 15 for quality of life while also being in the top 10 most environmentally friendly states. Because of that, I don't see a correlation between environmentalism and poverty.
>The bill also garnered support from environmental organizations, including Natural Resources Defense Council and California PIRG, because of its potential to reduce the carbon pollution that comes from long driving commutes.
The state senators are probably making quite a bit of money off this housing shortage that they wouldn't make with an adequate housing supply on the market.
This decision is extremely frustrating coming from a legislature filled with landlords.
Not only do the people have the power to vote out legislators, in California they also have the power to bypass them and legislate directly. But, while there is broad consensus that housing is a problem, there isn't broad consensus on solutions among the public any more than there is among legislators.
You mean, what if big cities had higher commercial/industrial rents, higher taxes, higher minimum wages,and more regulation, while less crowded places give massive abatements of their already lower taxes in desperate bids to attract employers?
I think that's been tried.
The real problem is that when you incentivize and subsidize putting your net worth into a single large investment vehicle, and then let holders of that investment decide how much competition to it will be allowed nearby, it creates a vicious cycle of ever-increasing supply shortage.
Eventually, of course, this will reverse. When the boomers die, renters will be the ones voting. But not before an entire generation has their net worth leeched by a geriatric vampire class of rent-seeking housing supply hoarders.
When the Boomers die, their GenX and Millenial offspring will inherit their homes, oftentimes, in California, without a full-value tax assessment. And, as the relationships between wealth and voting propensity and wealth and homeownersip are both unlikely to switch directions, homeowners will still be overrepresented in the electorate, and there'll be a new generation of the geriatric vampire class of rent-seeking housing-supply hoarders, and a new generation complaining about them.
This would mean the inheritance in many cases will be the cash left over from the property sale.
why so salty?
https://sf.curbed.com/2019/5/17/18629809/sb-50-housing-trans...
Still, California has a 2.5 million housing unit deficit to repay by 2025 or it risks a further escalation of the homelessness epidemic.
California is one big vetocracy.
America doesn’t have a left wing in its political landscape, at least not one with any representation or power. Sanders might change that, but I doubt it.
He's the epitome of everything wrong with SF Supervisors: they pit communities against each other to create political gridlock and build voting blocs for reelection, but do fuck-all to actually solve San Francisco's problems.
No matter how many times they say "gentrification" in the same tone as "boogeyman," it won't refute basic supply-and-demand. Inaction just makes all the problems worse.
The only way to bring down rents is to increase supply.
Everyone else is lying to you.
Presumably the mortgage on the first home is quite far below current market prices, but this is not enough to drive the landlord to offer a price that is necessarily in line with rents at the time the home was purchased.
The mortgage interest is no longer tax deductible, so effective cost of ownership is higher than when compared to someone paying a mortgage on a home they live in.
The profit from renting is compared against profit from selling. If the rental price is driven too low, the owner will prefer to sell and collect the profits (and the home will likely be taken off of the available rental inventory, which will further drive up rents).
Sounds remarkably like national politics.
There is a 2-term (8-year) term limit (each member can run for re-election 1 single time before being termed out), so this summary is false on its face.
In recent elections several incumbents have won re-election by only 2 or 3 percent. It is entirely plausible for an unpopular member to be unseated by a well organized challenge.
Before 20 years ago, the elections were at-large, so what you’re going on with this complaint is a pretty short time frame (maybe a couple dozen individual elections involving an incumbent).
The SF board of supervisors (and its elections) doesn’t seem materially different than other American political offices.
What people don't seem to understand is if you live in SF you probably have housing that's working for you.
Lots of people can't live in that city. Guess what? If they don't live there they can't vote there. I'm not sure why but even as people decry NIMBYism they seem to think there's some groundswell of support that's somehow suppressed.
At this point we should just make Fresno really desirable too or something.
That's my rather unpopular opinion. Could just force the Tech Billionaires, VC's and lords of finance to point the fire hose of money somewhere else for a change.
Take climate change. If every corporation took a carbon negative stance like Stripe and Microsoft, that would make a big dent in carbon emissions.
Unfortunately, a lack of housing is a problem that the government created. And it's a problem that only the government, in my view, can really fix.
As long as housing supply is artificially restricted, I don't see how this gets better.
Please let me know if I am wrong.
Sure, but it's a lot easier for a software company to go carbon neutral than a power company. Which is not to take away from what they're doing, it is still hard to do!
The way I see it, we have two basic technologies for coordinating as a society: free markets, and governments. Neither is perfect all of the time. But when it comes to problems rife with externalities (like pollution, or intellectual property), free markets on their own tend to be bad at aligning incentives, and governments are the least-worst solution.
Edit to clarify: this was about the climate change part, but I agree that the government is causing the problem here wrt. zoning.
That's not to say those resources can't be scaled up, but those changes require time and money where forcing new zoning may create new problems quickly while trying to solve an old one.
Zoning laws might be the right method in some cases, but I'd also like to see laws, tax incentives, etc for solutions that solve multiple problems.
For example, some of my coworkers work remotely 100% of the time. Many more would do the same if they were allowed. One of my coworkers moved to a farm far from his city apartment when he was able to work remotely. Not only does that help with the housing situation, it reduces emissions, reduces traffic, etc. An incentive for moving employees to remote work could dramatically reduce, maybe even reverse urban inflow.
It could also be very helpful to the economy as it would distribute more high earning individuals over a larger area, instead of most living in and around major cities. For example, I know a couple people who moved back to the midwest when they were allowed to work remotely. It's not a one-size-fits-all solution either, but it is one of many options that should be considered.
This is smart. I'm stealing this :)
I find the anti-government sentiments and libertarian beats on this website frequently tiring at best, gravely ill-conceived at worst.
[1]https://www.shareable.net/public-housing-works-lessons-from-...
Right. A system that includes both government and free markets, just like the OP said.
No, they're not, because while externalities and other forms of misaligned incentives are departures from the norm in free markets, they are the norm in governments.
How do you figure? A totally free market results in monopolies, which are rife with externalities that exist for the purpose of maintaining the monopoly. Government is the body responsible for balancing and managing those negative factors against the desirable results being produced.
In cases where there is a natural monopoly (because economies of scale outweigh the deadweight costs of a larger firm), yes. Historically such cases are rare. Most historical cases of monopoly are due to government interference, not free markets. Indeed, the word "monopoly" originally meant a government-granted exclusive right to sell some particular good or service.
If manufacturing semiconductors, with fabs that cost tens of billions of dollars isn’t a natural monopoly, why do we think anything is?
> The Myth ofNatural Monopoly Thomas J. DiLorenzo
> It is a myth that natural monopoly theory was developed first by economists, and then used by legislators to "justify" franchise monopolies. The truth is that the monopolies were created decades before the theory was formalized by intervention-minded economists, who then used the theory as an ex post rationale for government intervention. At the time when the first government franchise monopolies were being granted, the large majority of economists understood that large-scale, capital intensive production did not lead to monopoly, but was an absolutely desirable aspect of the competitive process.
Railroads: government granted.
Public utilities: government granted.
Telephone: government granted.
Air travel: government granted.
Cable TV: goverment granted.
ISP: government granted.
Seems like a lot.
I'd have to disagree. Not many markets have monopolies - where you only have one firm in the market. Tech is an exception.
In fact, I'd say that many government policies, while necessary, are a major contributor to monopolies, by imposing high costs to enter markets.
Our markets are becoming less competitive today because of government action due to regulatory capture - the intentional weakening of the regulatory state from within. We need more powerful, dedicated regulators in order to maintain competitive, free markets.
Unfettered faith in free markets and unfettered faith in governments are equally bad things.
But then some corporation would move away from that, get extra money and eat competition who is more green/moral/etc.
Competitive economy maximizes profits in the space allowed by regulations. That's a feature, not a bug. But it also means that expecting some sectors/inputs to become unfashionable and die out is very close to wishful thinking.
But I don't see Microsoft or Stripe going anywhere soon. They've built many great products and delivered a lot of value to users and displacing them will not be easy.
Spending money on lowering climate emissions may help improve their public image, which is a good tradeoff.
The other thing that confuses me is why companies aren’t moving either. It’s been a long time since a "new" city was created, but we have plenty of land available, and a lot of it is in pretty (but not natural park) locations. Is there that much of a network effect with talent being in one region that companies would rather pay a 4x compensation premium than relocate to new or lower cost locations? Are there any examples of big companies that have relocated their HQ to lower COL locations and then failed because they couldn't attract talent to move there, or is it just conjecture that this would occur?
This relationship seems to hold across a remarkable range environments. In the ancient times, in modern times, in the Renaissance, in American, in Europe, in Asia, in the first world, in the third world, and so on.
This is what makes bootstrapping a new city so difficult. Let's say your economic metro has 10 million people. even if you manage to coordinate 100 thousand leaving together, the new city will still have nearly 50% lower productivity than the old mega metro.
Density seems to boost productivity by making it easier to quickly spread innovations. Think about Silicon Valley. There are hundreds of tech companies in a single job market. New technologies and approaches. Employees switch companies every six months and bring the best practices to their new firms.
Take those same companies and disperse them across the continental US. Workers don't move firms because relocating is expensive, unpleasant and risky. Instead of bouncing between jobs every six months, people stay "loyal" to their local employer for decades at a time. Every time a new innovation is discovered at one firm, it takes orders of magnitude longer to diffuse across the industry.
Think of the major improvements in software engineering during our lifetime. Things like devOps, test driven development, microservices, rigorous source control, code review, open source, containerization, and the like. Silicon Valley adopted all of these practices years, if not decades, before the average IT department in Tulsa or Jacksonville.
Great comment, but... that's a bit of an exaggeration! The rest of us read HN and mailing lists and web sites and whatnot, and technology does tend to spread faster thanks to it, these days.
> … in contemporary US cities productivity increases by about 11% with each doubling of their population.
People can’t live here without both husband and wife working full time. Now to move to a different city or state, both husband and wife needs a job there or the new salary + cost of living must equal the other person quitting their job. That is just a difficult mental model to get over. It will happen, but only at the breaking point
As for companies moving, there is good and bad about your hq being located close to other hqs and good and bad locating away, but there is generally far more good in locating together. Shared talent, shared training...
It’s also worth noting that this is true for people who are well past the “foot in the door” segment of their careers — even if one is able to move to a low CoL area thanks to remote-friendly policy at their current company, by doing so they’ll likely be locking themselves to said company for an indefinite period and greatly diminishing their chances at getting raises. Of course that doesn’t matter to everybody, but generally speaking it’s against one’s best interest to move away from the city despite savings on housing, commute, etc.
If a software company did this, my guess is all development would cease for a long time and you may exceed the “bus factor” and permanently kill a large portion of projects. In fact I’m aware of management at one company winding down projects by moving the skeleton crew who agrees to leave to a lower COL city.
This is not much different from outsourcing to a lower COL country.
Yes, it's pretty strong.
Employers want to be where the employees are, and employees want to be somewhere where there are other jobs.
The Bay Area is a hub because it's where the industry was born. People who have deep knowledge in the industry are here. If you want to grow your startup somewhere else, you can. I think the problem is that you might eventually hit a wall as you grow. You'll need to pull in UX research, or a PM, or grow a legal team. In most places in the country, these roles just won't exist, or there won't be any domain knowledge to build them out from scratch.
Also, just like the film/tv industry, tech workers want to move around a lot. Unless you're in a hub like Seattle, NYC or the Bay Area, your options to move around are limited.
Remote cities can work if all the stars align or someone finds a company that lets them remote work. However, once you leave the job after 4 or 5 years, you will have to find another remote working position.
Of course plenty more from later years offset that.
My (bay area) college class was half from CA, half from the northwest. About 50% of those from the northwest moved 'home' after school. Is that a revolving door? Did they get sick of the area? Or did they never intend to stay?
[1] https://source.wustl.edu/2015/12/most-americans-live-surpris...
EDIT: I was wrong about this.
Or you have multiple kids and you sell the place and split the cash... nice windfall, taxes or no.
Meanwhile, the people whose parents DIDN'T leave them one of those houses are still way worse off...
Now let us look at it from the other side
1. The family, probably unfairly, benefited from not having to pay the full tax for so long.
2. In scenario that you mentioned the kid just inherited a $1m+ house. What part of it makes him poor that he can't pay the new property taxes? Sure, they might choose to cash out and go live somewhere else because it makes financial sense for him, but that is not `an unfortunate` situation at any stretch.
3. I know there are significant cost-basis advantage here, in additional to all the wealth just inherited, but I don't know enough about it yet.
[1] https://en.wikipedia.org/wiki/Economies_of_agglomeration
The people at risk of homelessness lack the resources to move; the people with the resources to move have, on average, far less incentive to want to.
For a lot of people the Bay Area is maximizing this. But we're taking a huge social loss (as a nation) by making it so expensive to live in the area that offers the greatest opportunity.
It seems like people from Silicon Valley are moving to Portland and Seattle specifically: https://www.forbes.com/special-report/2011/migration.html
Not necessarily the best or most up-to-date sources, but I'm only going to bother spending so much time on this.
I mean, historically speaking, yeah.
Company isn't a person. It can't think for itself.
Here are the reasons company choose to not move:
1. The powerful executives are often the people who existed since beginning. They've had invested their compensation in the city where the company's headquarter is and now they are permanently part of the city's influencial people with ties in government, law and more.
So you want them to leave and become no one in some new city?
Their old connections and knowledge of the city will become worthless - they made all those connections and acquired that knowledge when they were young and now those executives might be in 40s or 50s and might not have same drive to earn all of that back
They profit from rents, they profit from sale of property in the their city. They profit in lots of ways.
When you acquire new talent, you recognize majority of the compensation goes towards "rent" and that rent end ups in the pocket of successful city dwellers (aka executives at the said company)
When decision makers in the company benefit from this. You can't build a rival company with lower costs unless you can somehow make it run without these executives.
2. Employees will not move that easily because in big cities employment market is efficient, switching to another company is easy and most new players will he dying to snatch those freshly laid off employees.
huh?
the I-25 corridor north of Denver is sprinkled with towns and such that were nothing but an intersection and a gas station 20 (15?) years ago. right now they're bedroom community type things, but they've got some big box stores. they'll keep growing.
are they big cities right now? no. (was your claim very specific? nope.)
Endorsement: https://padailypost.com/2019/08/30/sb50-author-wiener-endors...
Her campaign page: https://www.shellymasur.com/
Spicy take: they're fundamentally not mad about those things happening right now, they're mad about those things happening to them right now. California housing advocacy is Winston Smith screaming, "Do it to Julia!" over and over again.
They oppose bills like SB50 because they prefer a zero- or negative-sum solution over a positive-sum solution, which would still allow those people to live near them and "destroy their community".
In fact, it reduces displacement. Without new housing, more and more people are going to outbidding each other for a constrained supply of housing, thus displacing lower income residents. Increasing the housing supply is the best way to prevent displacement.
If new housing is not built then rich people will push out existing residents. Think about it.
Increasing the supply of housing displaces no one. What do you mean "no guarantee that tenants can move back"? A new apartment building creates units that new residents can move into instead of out-bidding residents on the existing supply of housing. An apartment that doesn't get built is an existing resident that now has to compete with more prospective renters, or further subdivisions of the existing housing.
gentrification/displacement can't happen if upzoning happens at scale of the entire regions/state. e.g. techies won't move to Oakland if there's a bunch of new housing in San Francisco, Palo Alto, Cupertino etc.
This doesn't apply to any parcel that has a building been rented out for the past seven years. A length of time calculated to ensure that it is not profitable to tear down existing housing
That among a whole host of other protections to make sure that nobody is displaced.
There was a serious chance seriously upgrade protections for tenants while also increasing supply to prevent other pressures and welcome more people in to our cities. Instead a bunch of wealthy NIMBYs in suburbs do what they do and maintained exclusionary zoning to keep our apartments.
A fraction of self described tenants groups carried water for landlords and wealthy homeonwer's profits by opposing this and giving conservatives the language to sound like they were woke. But be it tenants groups, non-profit affordable housing builders, unions, social justice groups, you will find them among the supporters.
You’re right that people will sue over anything, and that’s why I support state preemptions in this case, but there’s no excuse for what cities have failed to do.
YIMBYs need to focus more on winning local elections instead of hoping for sweeping changes at the state level.
It's sad they didn't follow Oregon's lead and legalize some more diverse housing options.
The one and only fix for NIMBYism is to remove local control. Cities have every incentive to continue restrictive zoning because the immediate costs are externalized to the larger region, while the benefits--satisfaction of home owning voters who don't want multi-family dwellings in their neighborhood--inure directly to the city leaders. It's a collective action problem. Mandates don't work well because leaders who comply are voted out of office, while those who find loopholes or simply ignore mandates are favored at the polls.
So when politicians complain that SB50 and similar bills remove local control, that's exactly the point. But nobody wants to say that aloud because to most people "local control" is in the abstract a good thing, and losing local control a bad thing.
When the carrying costs of a piece of property are artificially low there isn't nearly as much incentive to put that piece of property to its best and highest use, so you end up with people being just fine with single family houses instead of multi story apartment buildings.
And then redeveloping resets the tax basis.
Both of these appear to favor holding onto older substandard property.
Thank you for this.
There are also, as you say, those who are quite privileged and wish to preserve that. To them, gentrification is a great way to scare other people into averting change.
It's a complete reversal of cause and effect. New buildings don't cause demand; new buildings are a response to demand. You can't make the sun shine by passing a law against rain.
So they were looking to do something statewide, to put everyone on a level playing field.
For example, look at the reaction to Uber building a new HQ in Oakland, which they ultimately abandoned[1]
> Residents were not as thrilled. After watching the rapid gentrification and rising real estate costs in neighboring San Francisco, many feared Uber would accelerate similar trends in Oakland. The area was already struggling to hold onto its own history as a diverse, working-class area known for activism while absorbing a wave of wealthy new residents.
[1] https://money.cnn.com/2017/08/25/technology/business/uber-oa...
Boston University's Katherine Levine Einstein explains the dysfunctional politics behind America's housing crisis.
https://www.amazon.com/Neighborhood-Defenders-Participatory-...
"Since the collapse of the housing market in 2008, demand for housing has consistently outpaced supply in many US communities. The failure to construct sufficient housing - especially affordable housing - in desirable communities and neighborhoods comes with significant social, economic, and environmental costs. This book examines how local participatory land use institutions amplify the power of entrenched interests and privileged homeowners. The book draws on sweeping data to examine the dominance of land use politics by 'neighborhood defenders' - individuals who oppose new housing projects far more strongly than their broader communities and who are likely to be privileged on a variety of dimensions. "
County-level decisions on zoning has essentially outlawed most new housing except for single family housing which led to this crisis.
In the US the State has legal authority over land use and can supersede local jurisdictions at any time.
I personally think mandatory over-the-counter zoning approval for fourplexes statewide is clearly desirable. People who want to sell their rat-infested shacks[1] for $4 million dollars, in the same year that the shack had an assessed value of $65k, obviously prefer if local zoning regimes continue to protect them from competition.
1: https://socketsite.com/archives/2020/01/dilapidated-postcard...
Housing and Land Use definitely need wider jurisdictions. State level would be nice, but at the very least they need metro regional jurisdiction. When a city like San Jose or San Francisco doesn't build enough housing, the affordability and traffic effects ripple far throughout the region. Right now, land use planners don't have to care about the effects they have on neighboring cities, but with wider jurisdictions they absolutely would have to take those concerns into account.
https://en.m.wikipedia.org/wiki/Louisiana_Woman,_Mississippi...
>The song details the travails of a couple geographically separated by the Mississippi river. They emphatically pledge that their love is too great to let the wide distance of the river keep them separated. Overcoming alligators and bouts of distraction (the man is often sidetracked by spending time fishing) the man pledges to somehow cross the river while the woman claims she'll go so far as to swim the distance (1 mile the song claims). This is an especially bold proclamation on her part as in 1973, arsenic, E. coli and fecal coliform bacteria levels in the Mississippi river far exceeded modern WHO recommendations by over 2000% (similar to current levels in the Ganges river).
"Senate Bill 50, which would have allowed construction of mid-rise apartment complexes near transit and job centers and fourplexes in most single-family neighborhoods throughout California, was opposed by state senators who said the measure took too much power away from local governments and failed to sufficiently address low-income housing needs."
So it seems there are people in the CA state senate who would rather see this done at county or city levels. However, sometimes these projects hinge on state support in the form of taxes/allocation or if there is existing state-level legislation that requires amendment or repeal... I think. I'm not a gov buff.
Overall, though, I think the prevailing thought is that the cities/counties that some say "need" affordable/denser housing would never on their own vote for new legislation. Palo Alto is named in this article[0] where a resident claims building higher density dwellings is less important than curbing corporate expansion. Quote:
"Greg Schmid, a 78-year-old retired economist, said the region should slow the expansion of large companies. Young, highly paid tech employees are overwhelming Palo Alto, he said, and adding to traffic congestion. The situation, he said, only works for the companies’ benefit and drives out families who earn less and could otherwise live in Palo Alto.
“The aggressive expansion of big business does not have any sensitivity to the need for a sustainable community,” Schmid said."
I think it's a fair point.
--
0. https://www.latimes.com/california/story/2020-01-29/high-pro...
1. https://www.latimes.com/politics/la-pol-ca-california-apartm...
Predictably, the municipalities behave as an oligopoly because they know that people can no longer move just outside city limits, which is what people used to do when cities were behaving badly.
I think it's sometimes used to threaten local zoning boards to capitulate to other developer demands, but it does contribute somewhat to the supply of affordable housing.
The measure fails despite more Yea than Nay votes. The California State Senate has 40 seats and always require 21 votes to pass. Vacancies (currently 1), absences and abstentions don't appear to affect the denominator of the 51% threshold. As a result, Not Voting is essentially a disguised no vote.
This is such a lame rule. People wanting to vote no should have to say so and vacancies shouldn't make it harder for bills to pass.
One only has to look at San Francisco‘s current zoning map to understand why this bill was important to solving the housing crisis in the state.
https://sfplanning.org/sites/default/files/resources/2019-02...
In San Francisco, most of the city is zoned RH-1 or RH-1(D). Areas not zoned RH-1 (Essentially residential areas that allow the construction of multifamily apartments and other larger condominium projects) are seeing an explosion of growth and change; mostly in lower income minority neighborhoods where developers can affordably purchase property.
It’s incredibly unbalanced; and senate bill 50 would have balance the scales to favor more housing options in some of these areas with stringent zoning for only residential single-family homes.
Even though Senator Wiener is from San Francisco, the city council itself came out against this bill. San Francisco is the densest large city in California, with a larger ratio of the population living in apartments then most other cities in the state. Sen. Weiner is pretty safe from backlash as a majority of San Franciscans understand that other cities around the state need to do their part in building housing just like San Francisco has over the last century.
For other politicians around the state, senate Bill 50 is Kryptonite. Like everywhere else in America, Politicians are elected by residents. The largest constituencies of voters tend to be those in single-family homes because mostly California lives in single-family homes. Very expensive single-family homes.
People do not want to change the neighborhood to drastically in a way that would alter the equity they have accumulated in their home.
The best way to not be reelected is to support this bill. Why support multi family apartment construction for people who do not live in their district? Very much the “I got mine“ attitude.
There is no panacea here. It’s going to take a ballot referendum, which is not likely to pass for the same reasons. Or change to the fair housing act. In the 50s and 60s, California zoning was indeed complicated with racial bias and exclusion. Above all else, it is the epitome of Systemic racism for the time period; and the biggest flaw in the fair housing act. As it turns out, the system is still working as originally intended. Fixing the fair housing act to cover residential zoning might be more achievable then anything California can do on it’s own.
Katherine Levine Einstein was on The Weeds podcast a few weeks ago and gave a really good summary of her findings. She doesn't have an answer, but it at least frames the situation in a way that seems solvable.
As a senior engineer, I was able to negotiate 150k for remote work (and I'd rent a house house in a nice Midwestern city or a nice apartment in Tokyo for $1200/month) vs 300k+ per year in Mountain View
Even with $3000/month rent, $6 gallons of milk, etc, I'm saving up way more money per year for a similar quality of life. Not to mention that I'm making way more connections and learning more in my time here, so I'll be in a way better spot after 5 years career-wise
I took the Tokyo side of this trade. I don't think my learning and connections are significantly impeded by being in Tokyo, and my quality of life is leaps and bounds greater.
Examples: Strangers regularly assault or shout slurs at me in San Francisco while I am distracted by trying not to step in the human feces on my way to work. In Tokyo, while I was waiting at a crosswalk in the rain without an umbrella, a stranger placed his umbrella above me. In Tokyo, everyone uses a form of bike lock that's essentially an extra back brake with a combination lock. In San Francisco, I lost my $500 bicycle from inside the trunk of my locked car in a private garage. In Tokyo, I do not really have any reason to own a car.
I will save a little bit less money per year, and I will not get to deduct as much money per year from my income due to theft. I think it comes out alright.
I rent a ~1600 sq. ft. house in the southwestern US for about $1400/month including utilities. It blows my mind what people pay for a quarter of that on the coasts.
You shouldn't scrap it completely; you should limit it to primary residences (spend more than half the year there). That would get rid of some of the worse issues.
It shocks me every time I hear fellow left-of-center people talk about scrapping Prop 13, but then also rail against gentrification or some other issues. Absent Prop 13, people would literally be forced from their homes from high taxes.
Prop 13 was a response to the inflation of the 1970s that drove asset and investment prices higher.
Low income seniors have https://www.sco.ca.gov/ardtax_prop_tax_postponement.html so Prop 13 is wholly unnecessary for them.
That law basically says if you can’t afford the increases, we’ll bank it. If you can, pay up.
This is part of the problem is that people are unwilling to compromise. On one side you have those who view even the risk of a single person being displaced by gentrification and rising housing prices as unacceptable.
On the other side you have those will accept nothing less than displacing everything. I make enough that I don't care, and I don't really want to live in CA long term (from NYC).
But I think a primary residence carve-out that applies to everybody would be a good compromise, but that seems to be a dirty word in CA politics.
https://fred.stlouisfed.org/series/CASTHPI
Take Q1 of 1995 for instance. The inflation adjusted home value at that time was ~340, and the interest rate was 9%. In that case, a $340k home would have a $2.7k monthly payment. A $680k home today with interest rates at 3.75% today would have a $3.1k monthly payment, and I believe that most of it's appreciation is because of low interest rates.
If housing prices were driven by prop 13, then when interest rates go up, housing prices should stay the same. If housing prices depend on mortgage rates, then they should decrease over time as interest rates increase.
The only way to get lower-cost housing is to build more housing. It's that simple.
One of the problems with housing is that local governments get less revenue from housing than business. That gives them every incentive to approve commercial construction and deny residential.
Take away the financial perverse incentive., and there is a lot of money to be made by approving badly needed dense residential housing near existing commercial buildings.
Rescinding Prop 13 is unlikely to change anything because assessed values will be even more if developers can build bigger, multifamily dwellings in the neighborhood. So, yes, taxes would go up, but the local pressure to restrict zoning won't change as the incentives still line up the same way relatively.
To take the example that you just latched on to, if rezoning the land makes it worth more, and therefore increases local taxes, this becomes an incentive for the city to balance its budget by rezoning. And some of that rezoned land will get dense residential living. Which will reduce traffic congestion. And make everyone's lives better.
(Unless you’re talking about the government building massive amounts of social housing to account for the market failure, in which case I agree).
This seems to always be stated as if stating it makes it true. Prop 13 has little to do with high housing prices and a lot to do with getting more revenue for governments.
Prices are influenced by supply and demand. The artificial limiting of supply by all of the governments in California is the biggest factor in why the prices are outrageously high.
Once higher property taxes are out of the picture, higher property values are purely beneficial for homeowners, which means there's every incentive to vote for anti-housing policies to enrich themselves at the expense of transplants and immigrants.
> Once higher property taxes are out of the picture, higher property values are purely beneficial for homeowners, which means there's every incentive to vote for anti-housing policies to enrich themselves at the expense of transplants and immigrants.
I will agree that it will impact the absolute price of the housing.
When we talk about "housing prices", what we are really talking about is "monthly payments". Increasing the tax rate will just result in an exchange of dollars previously going to mortgages to dollars going to taxes. The monthly payment will remain the same, largely unaffordable, rate.
So, I disagree that it makes housing more affordable, because it has done nothing to change the supply or demand.
If you have some sort of refutation for the claim that supply and demand affect price, you should publish and collect your Nobel Memorial Prize in Economic Sciences.
And again every year after that, including whatever increase your taxing authority may legally apply, usually the maximum allowed by law unless you actively fight it.
Texas has no state income tax and property taxes are (so they tell me) quite high as a result. My property tax is $7k+ each year. Not onerous because I have a full time job, but many of the retirees and landlords in my area did find it onerous enough to sell. Bad for renters because a lot of reasonably priced rental properly was lost, good for the city because a house like mine was torn down and 5-7 condos or townhomes took their place. Now the city is looking at easily 8 or 9 times the tax revenue for a single lot like mine since these new homes also appraise higher than mine.
If anything prop 13 represents one extreme and Texas the other. It would be nice if we could meet somewhere in the middle.
Prop 13 doesn't change the property tax rate, it changes WHO pays the full "nub" rate and who enjoys a "nobility" rebate.
It disincentives home owners from moving, even when their new jobs are far away, increasing commuting time.
It also creates a resource allocation imbalance. Folks that are retired and don't benefit so much by living in highly concentrated job areas tend to remain there. Even when younger people who would benefit more from living in these areas would be willing to pay more, providing an incentive for retired owners to move to a less concentrated area and making a profit.
But with Prop 13, we have instead a system that artificially distorts the housing market(and not in a "just" or "deserving" way).
Part of it was capping rates.
I fully supported SB50. Build. More. Housing.
https://www.econlib.org/land-taxes-the-return-of-henry-georg...
http://www.tax-rates.org/taxtables/property-tax-by-state
And if you rank the states by percentage revenue from property tax, you'll see they are right in the middle
https://www.urban.org/policy-centers/cross-center-initiative...
So why not do that work before sending it for a vote?
If it had passed this vote now it could have been tinkered with between now and a possible eventual passage in the next several months.
California is not just SV for a start. What's the point of having all your workers in a high CoL area again?
Get a small office to appease VCs but have your workers somewhere else. Your money will go further as well
> The objectives as mandated by the Congress in the Federal Reserve Act are promoting (1) maximum employment, which means all Americans that want to work are gainfully employed, and (2) stable prices for the goods and services we all purchase
The qualifier "want" is a distraction, as everyone "wants" to work if that's what it takes to have a reliable bed to sleep in.
Furthermore, "stable" prices are untenable in the face of technological progress that makes everything less expensive. In order for the CPI average to keep going up, the price of housing has to shoot through the roof.
edit: Try drawing out the basic feedback loop. The Fed acts by creating new money. It doesn't simply give this money away to everyone (which would cause across the board price inflation), but it can only be accessed by taking on loans. Anything that can be financialized becomes awash in this new money - housing, cars, education. Consumers then have to settle for paying interest payments (rent) on sky-high asset valuations, rather than having smaller loans that can be paid off early to achieve economic bargaining power.
“And once again, any US organization allowed to use a .gov domain loses yet ANOTHER notch of credibility, and confidence in their competence.“
Our “Governments“ are becoming obsolete... meanwhile we’ll continue to delegate more and more of the responsibilities to provide the utilities we need to technology companies.
I think based on the voting records YIMBYs should join forces with PHIMBYs and make the next iteration of SB50 really take public and affordable housing seriously. The existing provisions added to SB50 already got the bill much closer. Why not add some provisions from AB1279? Maybe repeal article 34 in the constitution? Maybe repeal Costa-Hawkins? There are NIMBYs that are pretty clearly hiding behind affordable housing that we know are insincere. We know their cities and counties aren't doing enough to help poor folks. But the evidence suggests there are enough people that want to upzone and build housing to get this done.
Does this strike others here are a reasonable path forward?