The pandemic has given most companies a good reason to do so already and my bet is on most of them not returning to their overpriced San Francisco headquarters when this is eventually over.
I am aware that I am a part of the problem: my wife and I are white, yuppie, dink tech workers. :)
These issues are complex.
I voted yes on Proposition L: the tax is quite small and I think the tech firms are unlikely to leave, meanwhile SF can get more taxes from them (many of them were historically given tax breaks, like Twitter, to move into the mid-market area). If they do leave, I don't see that as a bad thing.
Meanwhile socioeconomic disparity is an oozing sore in San Francisco, we have billionaires rubbing elbows with homeless people every day. Nationally, we've had round after round of tax cuts for the wealthiest, if SF wants to tax excessive income disparity, I say, fair enough.
Quite the problem ... the kind of problem that multitudes of cities and regions in the world are desperately trying to recreate.
>This has changed the nature of San Francisco in a way that many dislike, including me.
This is where progressives don't live up to their name. The nature of cities is constant change. Meanwhile the activists are desperately trying to keep change to a minimum so that the character of neighborhoods never changes. It's an interesting dichotomy.
>because rents have gone up so much, and also it's just not as fun, it's crowded and stressed.
Rents will drop if you increase density ... but that would mean building higher density housing and thereby accepting that the character of cities and neighborhoods change.
>I am aware that I am a part of the problem: my wife and I are white, yuppie, dink tech workers. :)
The fact that you're white and a tech worker isn't the problem. It's that you had the opportunity to move to San Fransciso for work due to the tech boom, and now you're trying to pull the ladder up so others cannot do the same.
Most residential units are not used or traded as a speculative asset.
[..] The majority of the residential housing developments in Singapore are publicly governed and developed, and home to approximately 78.7% of the resident population.[..]
I keep hearing proponents of strict exclusionary zoning laws arguing that they don't like the risk of having the value of their investment decrease because of this. SF will be a great example of how change happens weather you like it or not and allowing dense housing is what makes the change good or bad. You either sacrifice some of the view or sacrifice not having homeless camps.
San Francisco gets several millions of dollars to spend from which they spend a measly amount on the homeless(and that’s over 350 million/annum)..where is the rest? Even the money spent on homeless solutions is mostly going to contracted non profits(look at their board..probably has ex-city employees as board members) or more public sector employees.
With 350 million, I would have created a new sustainable village to house 1000 people with jobs inside. Instead, SF still huffs and puffs and spends tax dollars on piffle and squat.
You think housing is somehow immune to supply and demand? If that's the case, you can't claim rents are rising due to increase demand from young professionals. Which then raises the question: "What does affect rental prices?"
I always tell people that, "it is a nice problem to have." Totally agree with you.
But it is still a problem nonetheless. It's fair enough to raise taxes to try to solve some of the problems which hugely successful businesses have created by displacing people.
Building more housing: YES, more dense housing: YES, programs for homeless people: YES -- on the back of such success, we should have all the money we need to maintain San Francisco.
YES my presence is symptomatic of the problem but, being self-aware, I try to address that by genuinely loving San Francisco, paying more taxes myself when I am asked to do so, participating in local art and culture, and not treating it like a transient place but rather my home and a treasure.
Regarding your statement that I'm trying to block others' advancement: proposition L is about taxing companies whose CEOs make 100-600x more than the median at their company. I am not hurting other regular folks by supporting this, furthermore I'm not even hurting the CEOs (they make 100x more than normal folks). If you benefit from society to the point where you're the leader of such a company, for goodness sake, give a little back gracefully, that's progressive taxation and it has been one of the foundations of our society since 1862.
SF is a liberal, expensive place, because supporting such population density and giving everyone a high quality of life is hard and requires work and money. If we categorically define all taxation as bad, we lose all basis for collective action. America is getting lost in the labyrinth of its own arguments.
100%. I think we agree on more that we disagree about, but we happen to be talking about Prop L.
The question on L is what's any of this have to do with the amount of money made by a CEO's employees? Should a CEO of a small number of highly paid employees be taxed less than the CEO of a large number of blue collar employees? That doesn't make any sense.
People talk about the ratio of employee to CEO pay because it's a quantifiable indicator of underlying causes. Trying to change the indicator directly misses the point. Why is the city so unaffordable to the working class? That's not being solved by this.
This is quite the ad hominem. I may have missed it, but I'm not sure where OP said anything about density or housing. Is there something wrong with not wanting the city that you love to be invaded by the human version of a swarm of locusts?
He is, by his own admission, one of those locusts.
The spoils from this boom primarily benefited companies and people based in and around the Bay Area. People there didn't realize that the rest of the country (and much of the developed world) were still struggling and haven't fully recovered from the 2008-10 recession. The increased prosperity and resulting tax base growth papered over the fundamental mismanagement and poor governance in that area. Some of the highest incomes and highest taxes in the country and yet some of the most dilapidated infrastructure, highest poverty rates and poorest quality of life in the country. "European taxes and third world quality of life" is how I describe the area to people.
Yet, people moved here for the jobs and then new jobs followed the people.
14 years (i.e. half a generation) since then and at the beginning of what is another major recession and economic reset, it's perhaps difficult for most people to imaging that the appeal of the area has diminished and that things aren't magically going back to 2019. People have moved out, companies are hiring elsewhere, the tax base is down >50% and budgets are deep in the red. The local governments can try and raise taxes to squeeze a few million more here and there, but fundamentally, they will have to cut waste and cut spending in the next few years to survive.
I'm not saying SF is going to become the next Detroit, but I remember NYC in the 70s or Seattle post-Boeing (also, early 70s) as an example of what happens to cities when a major industry leaves town. It's a death spiral of lower tax collection -> poorer services -> more people leaving.
This applies to sooooo many cities. I think money beyond the level required to provide basic services just gets wasted and the citizens see nearly nothing from it. It's so common it seems like some fundamental law of the universe.
Rent prices are the underlying problem pushing people out. Underlying _that_ problem is a lack of supply. SF zoned for and issued permits for a large number of offices, but not the corresponding residential structures to house those new workers. So they came here and were forced to compete with existing residents for a place to live.
The fix is to keep the economic prosperity and build more housing.
> Meanwhile socioeconomic disparity is an oozing sore in San Francisco
I'd argue that mixed income neighborhoods are the best kind. Many of the mechanisms for disadvantaging poor communities require geographic segregation. School quality, policing practices, etc
And underlying that problem is Prop 13 - the insane multi billion dollar tax break that Californians bestowed on all land speculators. Until it's gone nothing will change.
Until the landowners start to feel some downside from the housing disaster don't expect anything to change.
That makes sense to me. I don't keep up with exact SF policies but I'm guessing there are zoning and the NIMBY factor to deal with.
Underlying this problem is? Money, influence and power? I know a soon to be ex-POTUS that might be the perfect man for the job! He can come in and cut all deals needed. Then SF is saved and then he goes from city to city and country to country to redeem himself.
The Board of Supervisors are elected from districts instead of city wide. This means they're heavily influenced by neighborhood associations with a vested interest in maintaining the status quo. Throw in the normal, human fear of change and... the result isn't pretty.
I am all for building more and more dense housing. I'm not sure how to accomplish it. The way I see it, SF either becomes more dense, or it becomes even more of "a toy city for rich people" & loses all hope of economic diversity.
I grew up in Michigan. I am well aware of how cities can fall into decline. My wife on the other hand grew up in Minnesota. So in my mind, I often compare Detroit with Minneapolis. I think the problem with Detroit is that, it never diversified. It was all auto industry. Minneapolis's economy has several pillars: finance, insurance, healthcare, industry. You can ask yourself whether or not SF is either Detroit or Minneapolis in this example. I tend to think of SF as the New York of the West coast. It has very unique geographical advantages. It will have ups and downs, but will continue to be reborn.
This is the case for the tech industry, not categorically. Important distinction there.
None of the billionaires here made that money from their salary. This will not touch them at all.
> If they do leave, I don't see that as a bad thing.
Chasing away jobs and the tax base will not end well. There is a decent chance SF enters a financial death spiral from its pension obligations. At the very least, massive cuts are in order. SF will not be transformed magically back to the year 2005, but it could very well wind up back in the 70s.
Although it doesn't mention capital gains, so if the CEO owns a significant part of their company already and doesn't have an additional vesting schedule, then they could make personal income from appreciation of the business that wouldn't be counted towards this bill.
San Francisco's huge, number one problem has been and still is that it makes building new housing illegal: https://techcrunch.com/2014/04/14/sf-housing/.
Increase supply and prices will eventually fall. This is not a complicated problem and the relationship between supply, demand, and price has been known since the time of Adam Smith. https://news.ycombinator.com/item?id=16704501
Alternatively, if some aspect of your process like sugar is taxed then companies seek alternatives like corn syrup. That extends to property taxes, executive pay, etc where companies seek alternatives to better utilize resources. Though in the case of salaries that my end up as various executive perks.
Taxing land value -- that is, collecting the lion's share of the annual rental value of the land for public purposes -- removes the speculative element, and makes it worth only what it is worth FOR USE.
That almost always creates jobs, first for construction, and then to utilize the space. It may create housing, and goodness knows, much of California is in desperate need of housing. And housing creates jobs -- houses and highrises don't maintain themselves.
Virtuous circle --- the opposite of the vicious one that Proposition has created (and which was easy to predict before it was enacted).
If you want jobs and housing, tax land value.
Otherwise, keep California doing what it does now.
a personal wealth tax is not felt or distributed down lane. As long as it is not a company tax, it will not be directly pointed to the buyer.
Yes it would be. A tax on salaries, would force companies to have to pay more to attract talent.
And these are additional costs that the company would have to pay.
Twitter's highest paid executive looks like they make something in the $7M range (Dorsey's total comp is approximately zero for several years, as he is counting entirely on capital returns on his investment, not compensation from the firm); I'm doubting that their median SF pay is below ~$70K.
Until the next ones comes. That could be in 1 year or 100 years. No one knows.
Reminds me of the repeated hurricanes that drive people out of coastal areas.
People still live in coastal areas, and rich people continue to build lavish vacation homes on the coast despite the fact that they're washed away by storms every couple of decades. Part of being rich is not having to worry about money, which is why many rich people live in cities, states and countries that tax them more: the benefits of doing so outweigh the costs. I think you can draw parallels between that and companies choosing to remain in cities for similar reasons despite some drawbacks existing.
Think about hedge funds, bond traders, etc. For example, they will be all firing desk support people and replacing them with RobertHalf.
Tech needs to expand to other parts of the country. If SF wants high taxes, so be it, let all participate in the competition of where to be located.
But again, the pandemic and rise of remote work makes this hard to predict.
It helps that they are also much more new housing friendly than SF and SV.