Residents strain the city budget via things like public schools. Businesses put money into the city budget via gross receipts taxes.
SF wants the businesses but is very happy for residents to live elsewhere.
They don’t have a tier 1 city which people are willing to pay a premium to live in, and the taxpayers today are balking at paying for labor performed decades ago.
I’d be wary of starting a business subject to a relatively deeply indebted government if I had other options.
Did CT follow Oakland, where SF is NYC? Or if CT is SF, where is the corresponding Oakland?
I live in NYC, and my view of CT is that its modern identity is dominated by being a suburb to NYC, with a handful of big and old businesses in the big cities to keep domestic economy afloat.
The places in my mind that don't fit this model are all east of New Haven, at which point CT starts to be "Coastal New England", a region that, excepting Boston, continues up to Bar Harbor, ME.
But my view is obviously biased by my limited experience, I'm curious to hear more of your perspective.
A good modern analogue of southern CT from the 70s-90s would be the valley in the bay area e.g. Palo Alto, Mountain View etc.
I don't think CT's housing issues are anywhere remotely as bad as the Bay area. Stamford is the tier 1 city in CT IMHO, which seemed kind of lame. i.e. we would have friends in places further east (almost as far as New Haven) who would come to Stamford for the "scene". I use quotes because the scene in Stamford was pretty muted. We (who lived in Stamford) would drive to Manhattan for our weekends and special weeknights. I thought it worked really well for us. For 2400 a month, we were living in Luxury apartments and life was car friendly. Housing didn't seem too overpriced (starter homes were 600K IIRC). IMO, Stamford was pretty neat a few years back .. not sure if it has changed.
Bay area housing just went stupid until the pandemic hit. I moved out and so did many people I know. It was just not "affordable" on a 200K salary if you have multiple kids and a stay at home spouse. The housing you could get for $2400 was terrible in most parts that were reasonable commuting distance. I also would take metro north over caltrain any day.
Taxes are bad in both places. Stamford seemed more affordable and a lot better culture to me. I love the Bay area but can't make the math work :(
https://en.wikipedia.org/wiki/List_of_U.S._state_and_territo...
You can’t follow the game if you don’t have a program.
And it’s even an ANSI standard...
Even if one was inclined to open a good software shop in CT, you'd have neither low property prices nor an existing pool of highly skilled labor.
I shouldn't have presumed to speak for the parts of CT near NYC.
I haven't lived in the area for some time, but I haven't heard of many new businesses form in the last ~20 years.
The same dynamic is at play between San Jose and Mountain View/Cupertino/Palo Alto.
And "raising property values" only raises my property tax, while giving me no real benefit.
Prop 13 does not solve this problem. It merely shields historical homeowners from it, while amplifying it for everyone else. Many people and businesses were forced out by speculation because of prop 13, but you and a small group of people were exempted so you don’t care.
Evictions happen all the time, and these poor folks do not get the windfall of a $1M investment paying out. They get the trouble of trying to find a place to rent with an eviction on their record, which means they will be paying higher rents with less ability to pay.
Nobody should be forced from their home, homeowner or renter. But in California we only privilege the already privileged with that sympathy.
Prop 13 has forced far more people out of their home than property taxes have forced people in NY State out of their home. And NY has high property taxes and lots of people. So does NJ.
The idea that Prop 13 protects people from being taxed out of their hugely inflating financial asset is somewhat preposterous on its face. It mostly protects large landholders, and gives a tiny tiny benefit to the people that we are concerned about.
Focusing on the ineffective application of protection to a tiny number of millionaire homeowners, while ignoring the wealth inequality that funnels money to the people with tens and hundreds of millions of property, is extremely short sighted. It's time to stop pretending that Prop 13 is about the minor side effect of protecting a homestead, and pay attention to its primary effects, which is to encourage financial speculation with land and to give away tons of tax subsidies to those with the most land wealth that are hoarding it the most from better uses.
When you say "large landholders", are you talking about REITs and commercial property holders? If so, wouldn't Prop 15 have addressed these issues?
https://en.wikipedia.org/wiki/2020_California_Proposition_15
If you look at land distribution in cities, you'll find lots of super wealthy families, hidden behind LLCs, and a few REITs, the smaller scale landlords, and then finally individual homeowners.
Those wealthy land hoarding families are often worse than REITs for cities, in that maintaining their own political power is more important than profits, and that can be worse for people on the lower end not the economic scale than even REITs' horrifying landlord behaviors.
Have you come across any good articles showing the breakdown of land ownership in SF?
(Whether or not the assumptions behind this assumption are true is of course up for debate, though I personally tend to believe Prop 13 is a bad deal, even for those who think they benefit from it.)
When it's a broad, general effect that covers an entire stateC that causes prices to rise much faster than they would have risen without Prop 13.
Prop 13 is one of the major causes of people "paying too much money," whatever that means. No purchaser wants to pay too much. The seller is the one setting the price when it is high, and Prop 13's incentives for speculation are what gives sellers so much market power to extort purchasers.
1) sell, reaping a huge windfall. 2) use a HELOC or reverse mortgage to pay for the higher property taxes.
But of course you'd prefer both to keep the windfall and not move, a privilege afforded to you by prop 13. That is only natural.
Meanwhile, homelessness in the state continues to rise as high land values make housing production and anti-growth activists on planning committees exacerbate our housing shortage.
But there are simple solutions to this problem which do not create even worse problems, unlike prop 13. For example, Texas allows taxpayers 65 years of age or older to defer their property tax payments. In other words, the tax is still due, but not until the property is sold.
Why did California voters not implement this much simpler approach to preventing displacement? Because the goal was never to prevent displacement - it was to lock in massive tax subsidies for established homeowners, at the expense of everyone else.
https://sco.ca.gov/ardtax_prop_tax_postponement.html
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A wealth tax is no more difficult to execute than our existing property tax system.
With that said, I have been under the impression that countries that have attempted to levy general-purposes taxes on all forms of wealth have in many cases run into practical difficulties. This requires things like finding a fair way to value and re-value an art collection or shares in a company not traded or liquid. In several cases - like France - these difficulties and others have led to dropping general-purpose wealth taxes.
Have I been laboring under a misapprehension? Can you help me understand what I've missed?
I've been skeptical of skepticism (lol) of the wealth tax mostly because the easy parts dominate the hard parts. Most wealth is in the easily identifiable areas (ie. equities and property) not the hard areas. Even with private companies like some startup, surely the shares have some known valuation right?
My point is though that we've already built a bureaucratic apparatus to evaluate wealth in our property assessment system so surely it's possible to extend this.
A possible implementation would be to mostly ignore the "hard" sectors of wealth (eg. car collections/art collections) or do random audits of the tricky parts just to keep people honest.
The "Taxes were repealed in Europe so case closed" message that wealth is all too happy to push is a deflection from a thorough examination of the policy. Why were these policies "failures" in Europe? Some of the flaws of the European taxes have been already directly addressed by more recent Bernie and Warren proposals. For another example the issue some European countries had of their wealthy fleeing the country to avoid the tax isn't even possible US's tax system which will tax you regardless of where you live.
I think the hope would be that there'd be would be some limit to the willingness for someone to shift money into relatively illiquid assets (ie. cars) that aren't really that good of investments instead of keeping their money in equities and simply pay the tax. There's a balance to find there in the policy.
It's true you can make more housing by building up, but only if city zoning allows, which NIMBYs don't want.
Property values are rising at 5%-10% per year, but bulidings themselves only depreciate without dumping more money into the building. So that 5%-10% is all land value gain. As a property owner, why increase taxes by using the land more productively with new buildings, when you can continue to profit just as much without that? Also, attempting to build is hugely risky, because the permitting process is fraught, long, and likely to fail.
If we didn't have Prop 13, every single property owner would have a lot more incentive to actually try to build.
because the bubble will pop eventually.
> Residents strain the city budget via things like public schools. Businesses put money into the city budget via gross receipts taxes.
Prop 13 was meant to drastically cap property taxes. It was very successful in doing so. As a result, tax revenue from property taxes has also been capped dramatically, and cities adapted by relying more heavily on taxing businesses. Hence the current situation where residents cost more in services than they bring in in property taxes, incentivizing cities to attract businesses and wiggle out of their responsibility to build more housing units.
A good illustration of this dynamic is “RHNA” process for allocating housing unit quotas to each city in California. it is a very conflictual process where city councils typically fight tooth and nail to get their quotas reduced. A recent example in Palo Alto: https://www.paloaltoonline.com/news/2020/11/18/palo-alto-ass...