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Comment by JoshTko | Hacker News Reader

Honest question, what if the tech industry is a root cause?

Housing inequality could be fixed with a land tax. A land tax makes nimbyism significantly more expensive, so they're more willing to sell property to high density housing developers.

Places like Texas, with a property tax and little zoning, would handle a concentration of wealth better. Although, it'd be even more optional with a land tax instead of a property tax.

Austin certainly isn't handling it well.

We had affordable housing in California in the past without any pie-in-the-sky stuff like land-value taxes.

The older I get the more I think we should drop the income tax (and probably others) in favor of a wealth tax.

This idea is DOA because it always results in human interest stories on the local news with an 80-year-old grandma who lived in the house for 40 years suddenly not being able to afford her taxes. And then you get Prop. 13 to prevent that.

It's not wrong to be concerned about that in a property market where values can double in a decade.

In fact it would be foolish to buy property in such a market unless you are rich or something limits tax increases.

Just to note, Texas already has a high property tax on account of no state income taxes.

It is unclear how a land tax would specifically affect NIMBYs and not everyone. It seems more akin to a plan for almost total divestment of private land ownership.

You're talking about raw communism, whether or not you know it. It is immaterial whether or not land is forcibly taken or the (I assume federal) "land tax" is raised to the degree that no one can afford land except government subsidized high density housing developers. With this being the intent of raising the tax to whatever level it falls.

You may as well just confiscate the land and dispense with the pretense.

Before you begin confiscating land, try proving that inequality issues can be solved with parallel yet less potentially damaging measures. As a test run. For example, begin with educational outcomes. What have been the quantitative results of massive funding toward eliminating educational inequality? Metros like DC have some of the highest per student public school funds in the Nation.

The housing parallel is the failed social history of high density urban "projects". Which no one likes to live in nor to be around. And which have been a disaster for urban areas, with few exceptions.

It's amusing to consider that among some adherents to Henry George's theories (which largely undergird the concept of the land tax), there is a narrative that Marxist communism was a plot by neo-aristocratic parasitic monopolists to diminish the capitalist classical economics of Smith and Ricardo by sidelining Georgism (which they view as compatible with classical economics) while pushing neo-classical theories. See the work of Mason Gaffney:

https://news.ycombinator.com/item?id=23211692

https://news.ycombinator.com/item?id=17832005

https://news.ycombinator.com/item?id=21467553

I would say this is unfair to communism. State ownership of all land is actually totally compatible with capitalism.

How is this unfair to communism? The elimination of private land ownership and housing choice are core methods of Leninism. The only others being forced culture cleansing and imperialism.

Explain how government forced divestment from single family private land ownership is capitalism. Other than communism, you seem to be thinking of a potential action inherent within fascism.

In several of the hyper-capitalist developmentalist East Asian states, all land is merely leased from the government:

Singapore - https://stackedhomes.com/editorial/land-ownership-in-singapo...

Hong Kong - https://www.landsd.gov.hk/en/resources/land-info-stat/land-t...

Some of this might have been because of the impression Georgism had on some of the Chinese revolutionaries, including Sun Yat-Sen himself:

https://taiwantoday.tw/news.php?unit=8&post=13799&unitname=E...

It's also because, by coincidence, U.S. State Department official Wolf Ladejinsky was influenced by Georgism. He was certainly no fan of communism, as he was a Ukrainian refugee from Bolshevik rule!

https://www.reddit.com/r/georgism/comments/10uzddk/the_georg...

Incidentally, while Taiwan does not have exclusive government ownership of land unlike Singapore, Hong Kong, or mainland China, it is a very successful example of land reform (which involved confiscation):

https://en.wikipedia.org/wiki/Land_reform_in_Taiwan

https://asianometry.substack.com/p/how-the-kmt-achieved-land...

https://cooperative-individualism.org/medaille-john_taiwan-a...

People fleeing SF are currently fucking up the Austin housing market, and it's having the same effects on Austin as it did on SF.

So don't dismiss that tech workers are a proximate cause here.

It's not. For one thing, rental prices have been going up in a steady trend for over half a century. The tech industry didn't cause the rise in prices per se, the general economic growth of the region did (and does) that:

> Today's outrageous prices are exactly in line with the 6.6% trend that began 60 years ago.

https://experimental-geography.blogspot.com/2016/05/employme...

For another, look at the history of the city, we have been a nut house for ~150 years, since the gold was discovered. We had an Emperor! https://en.wikipedia.org/wiki/Emperor_Norton

If an increase of wealth creation is a problem for a city, that city is being badly run.

It's pretty obvious on the ground in SF that the homeless problem is fundamentally a problem of mental illness and drug abuse. A fairly large portion of the homeless there are not from SF but came there because SF tolerates behavior other cities do not. Even if there was an empty, free house offered to every homeless person in SF there would still be a massive problem because many of them would be unwilling to accept it.

The documentary "San Francisco 2.0" explores this idea, albeit casually.

How could it be? Please explain your hypothesis a bit more.

A lot of high income people concentrated in one area leads to things like income inequality compared to everyone else. It also causes housing prices to rise which leads to homelessness which causes or worsens property crime, drug use, mental illness, and general desperation that can incite violent crime.

It only leads to housing prices rising (in the long-term), if NIMBY politics makes building new housing essentially illegal. There are plenty of examples of "boom towns" throughout history where prices may have rose initially, but didn't spiral out of control, and usually settled back to a reasonable baseline relative to wages.

We aren’t at the root cause yet. NIMBY politics are largely caused by the idea that housing is an investment rather a basic human need and depreciating asset which is a rather new idea in relation to “throughout history”. People generally don’t want to vote for things that harm their investments and building new housing harms the investment that all current homeowners have made.

If society thought of housing similarly to other large purchases like cars in that there was no expectation of profit, we would all be a lot better off.

Now what caused this housing as investment idea? I haven’t seen any research on this, but my guess would be as a form of forced retirement savings as it allows people to build net worth without the self-control normally required of saving. And the difficulty of that delayed gratification is really just human nature.

It's also the easiest way for most people to achieve high leverage. My friend got a $3000 down home loan in Colorado. $3k in for $450k. The leverage on that is astronomical. A 10% appreciation in value gives him 1500% growth in wealth, with no capital gains tax when realizing.

And you don't get margin called.

If you're going to think of leverage like that, leverage works both ways on expenses though.

150x leverage means 150x cashflow burden from taxation (> 100%!) and also maintenance costs of the property.

See https://news.ycombinator.com/item?id=35044028 where I laid out how a real estate purchase is really a mix of multiple investments packaged into one sale.

FWIW Calgary, AB is an example of tons of building doing a good job to manage housing cost increases. Something like tripled the population ~300k -> > 1M over 1990-2010s and house prices remained reasonable in the suburbs (which are still Calgary proper). One thing Calgary did well was "Infills" which basically was when someone would split their single family home into 2 properties, which may or may not share a wall. Sometimes they'd buy neighboring properties and do N parcels to N+1 (or >N) new homes. eg 2 neighboring parcels became 3 homes. Smoothly incrementing the density.

It could be a contributing factor, but SF seems to have more problems than other expensive cities with concentration of rich industries like Manhattan for finance or biotech/pharma in Boston and Cambridge. Maybe the rate at which income inequality changed is another part of this. There are probably also unhelpful policy differences in SF with respect to building more housing.

To what extent the crime policies contribute statistically I don't know, but for some of the more extreme mental illness cases (that disproportionately account for homeless people being actively aggressive), there is a disconnect between philosophical ideals and what practically would be better for everyone in the long run. Mental illness (especially when substance abuse is involved) can make someone resist help and they will be unlikely to improve unless they are forced into a facility. Where the line is for doing this is a tough question but if someone is routinely threatening people on the street or does something violent, it seems like SF policy is still opposed to it.

> SF seems to have more problems than other expensive cities with concentration of rich industries like Manhattan for finance or biotech/pharma in Boston and Cambridge.

I don't think people realize how much of an outlier SF is. Incomes are a good 25% or so higher than NYC and Boston. The percentage of the people who work in tech in SF isn't really comparably to any other city and their own high paying industries.

Though SF seems to have problems that Silicon Valley (defined as the area from Sand Hill to downtown San Jose) doesn't have. Mountain View, for example, has a big homelessness problem, but it doesn't really have a huge crime problem. The typical homeless family (and it's families in MTV, vs. drug addicts in SF) lives in an RV, has a single working parent, keeps to themselves, and does their best to send their kids to schools. SF schools are some of the worst in the nation, while Palo Alto schools are some of the best. San Mateo cops actually arrest people. All these places have a greater tech concentration, greater average incomes, and greater income disparity than SF, and geographically they're located just 50 miles south.

I think the problems with SF are largely cultural and political rather than technological or economic, though the economic issues are exacerbating it. It's an "anything goes" city and has been for 150+ years. The city values your ability to express yourself in any way you please, and that includes both healthy forms like street fairs, neighborhood scavenger hunts, or Bring Your Own Big Wheel, and less-healthy forms like being able to shit on the sidewalk when you please or stab someone who looks at you funny. And that filters down to the voting preferences of the electorate. You get what you ask for.

The South Bay has all the same problems of tech dominance, income inequality, insane housing prices, etc, but the cultural orientation is very different. People in the South Bay are generally there to work hard and build a better life for themselves and their descendants. Their time-orientation is much more long-term than SF culture. And that applies across the income spectrum - even poor, Hispanic, immigrant day-workers will do their best to make sure their kids do their homework. The type of tech industry that spills out of this also reflects this cultural orientation, with the South Bay doing much more foundational engineering research and SF being more focused on how to apply technical breakthroughs from 50 miles south in new and crazy ways.

The ideology of the progressive elites is rotten and badly misinformed.

it's not hard to come to a conclusion that the companies sucking up all the money might be causing all the poor people.

It was, admittedly, already pretty bad when the industry was mostly in the valley and peninsula. SF has been expensive for quite a long time.

It’s not.

It's impossible that a 100K techies descending into SF after 2010 could have any impact on anything like the 18000 SRO units that used to house all those folks in the Tenderloin. All that wealth sloshing into a city - gentrification is a liberal fantasy.

Of course, when you bring up Manhattanizing Mission, most of these "YIMBY" astro-turf types start screeching. They want theirs, and as soon as they get it they'll be pulling up the ladder behind them. But keep your filthy mittens off the Mission.

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