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Comment by pokstad | Hacker News Reader

Because there are limited resources surrounding those homes. Like streets, schools, sewage, etc. You can’t just magically scale up the housing without also scaling up infrastructure.

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I think you're thinking about the problem in the reverse order, it costs money per foot to lay down a street, sewage lines, internet, electricity, gas ect. If there are more units per square foot it makes more economical sense for everything. It's the reason rural regions still use septic tanks and DSL internet, it's expensive to lay it down. Think of it this way, if it costs 10k/year for a quarter acre lot to have access to a city municipality and to pay for the road maintenance but you double the units of housing on the lot, all of a sudden it costs 5k/year per unit on the quarter acre lot (plus a little bit for a second hookup.) This means not only do you have more units of total housing but a more economical infrastructure.

Money per foot is one thing. But the actual total infrastructure on that street has to be up to snuff before you build, while money can be taxed later.

I think the reasoning behind this is "create a problem, solve a problem". If you never create the problem there's no incentive to solve it. You have other problems instead, like homelessness and crime.

In mathematical terms, you're stuck in a local maxima, and to get to a higher global maxima you need to descend the gradient a little bit and put up with some short-term pain.

It's supposed to work with the promoter applying for a permit, and if it makes sense either it's granted or the infra is built.

Failing infrastructure can have disastrous impacts. It's not somewhere where you can afford to move fast and break stuff. There is no alternative to competent government here, no easy way out.

It's not really possible to move quick and break things, there are only so many home builders, carpenters, electricians, plumbers ect. I agree that failing infrastructure can absolutely have disastrous impacts but city councils in America are not run by the most competent people with decent foresight from what I have seen, they see that a bus route runs 95% capacity every morning at 9am, do nothing, a few months later, it's 105%, people start complaining, then they add another bus during that period and repeat the cycle. The only time I have seen infrastructure be built in advance of new housing is when a construction builds the infrastructure along with a new suburban housing development, which is great for the first 30 years, the taxes on those new houses only needs to be like 3k/year for police/fire/ect because everything is new, except after 30 years then the roads need to be repaved, sewers redone, ect, a 10k+/yr bill starts hitting and the local government is all confused about how to pay for it with the 3k/yr they are collecting, rinse, repeat. Local governments just aren't good at predicting usages until they happen.

The root of the issue is the competency of the local government. That has to be fixed.

Things can get built fairly rapidly in many places if all restrictions are removed. You can definitely move fast and break things.

This is precisely why municipalities are permitted to impose exactions on a project--so that developers can't unfairly offload infrastructure costs on the public. If the additional sewage volume of a project is going to overflow pipes 5 miles away, municipalities can and regularly do exact fees as a condition of approval to cover the costs of upgrades.

Unfortunately, these days exactions are also abusively imposed to offset the supposed costs of "gentrification" and other unquantifiable social phenomena, and sometimes the dollar value of such imaginary costs conspicuously set so high as to make a development financially unviable. This is how cities like SF force developers to include below-market-rate units or to make cash contributions to low-income housing projects, even when a project is not actually displacing any pre-existing tenants.

That cashflow problem can be addressed through bonds.

My understanding is that they put a cap on property taxes that fund the infrastructure and then turned around and said there is no money for infrastructure.

Isn’t it a chicken and egg problem? The only way to fund the new infrastructure to accommodate growth that will bring in property taxes to fund it in the future is via debt or impact fees. Either can be difficult for local governments to do.

Also voters are often given lots of say, people who don’t want density get entrenched and vote for local leaders who are like minded.

Sort of. Property taxes can only increase at ~2 percent a year due to Prop 13. However, people are still buying and selling houses. The people who have recently purchased a house pay high property taxes, because the property is expensive.

This is why the next step should be reforming prop 13.

If we charge fair property tax to homeowners, based on the actual present value, municipalities will be able to afford the infrastructure improvements.

It’s not fair for poor people to be driven out of their houses when rich people choose to enter the neighborhood.

That is the very essence of gentrification. If you want to destroy more communities of color in the Bay Area, this is how to do it.

If you want to protect poor homeowners, that's a noble goal, but it should be achieved with a narrowly tailored policy. Thousands of rich homeowners in Palo Alto are paying less than 10k per year on multi-million dollar properties because of Prop 13, and that's both unfair and unsustainable. Not to mention the corporate properties: Disney World, for example, pays an indefensibly low tax rate.

The negative side effects of Prop 13 far, far outweigh any benefit to poor people (most of whom are renters priced out due in part to Prop 13!).

Renters are just as impacted by prop 13 as buyers, since landlords pass on the costs.

That’s now how pricing happens at all. Rent is not based on “cost plus” pricing it is based on supply and demand

There’s an obvious and easy first step: End Prop 13 for anything that isn’t an owner occupied home. Business/capital interests won’t allow that though.

Are you in favor of a wealth tax in general or a property tax in particular?

That’s a regressive tax. Most of the fixed income people living in my neighborhood would be driven out of California if we charged them the current market rate for property taxes.

Corporations benefit hugely form prop13 for commercial property [1]. The current dominant left-wing pragmatic approach is to remove prop13 for corps, and leave it in place for residential properties.

[1] Corporate approach to keeping 1970s tax rate on large land lots: a) the property should be owned by a specific corp. b) corp has board of directors controlled by original owner c) deal made to sell the land d) new owner slowly replaces the BoDs as to not trigger a "corporate change". e) new BoD is fully controlled by new owner and corp now sold (with land assets). Due to prop13, that land is still taxed at original ownership rates.

Rishi Kumar brings up these points in a local article [1]. It's a good question:

"These bills will not require developers to invest in infrastructure improvement, rather only provide bare-minimum parking, avoiding costly entitlements. How will the current infrastructure — water, sewer, gas, roads — support the increased population? Who will make the necessary infrastructure investment?"

[1] https://padailypost.com/2021/03/19/guest-opinion-sb9-sb10-th...

Good thing the government tracks the capacity of those things. There's no need to ask random people with no expertise what they think.

All those things can routinely be built, without magic, as needed.

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