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Comment by josephjrobison | Hacker News Reader

As a resident who was born here and left and then came back, I’ve had this idea kicking around in my head of “California is a luxury product”.

If you look at the entire US, and assume you have the ability to move and live in any state, there are lots of options for everyone at every income level. (Disclaimer that this doesn’t address poverty, DEI, and other limitations to a good chunk of citizens).

From the Gold Rush, to Hollywood, to East Coasters moving to health spas like Carlsbad or Calistoga, some moved here for necessity but many out of choice and luxury.

A lot more to unpack here but I think it’s interesting.

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They moved to CA in the 1840s to seek to get rich, not because they were already rich.

People moved to CA to try to make it big in movies or music, although most failed, they still lived a pretty good lifestyle throughout most of the 20th century. Not because they were already Brad Pitt or Madonna.

People moved to Silicon Valley, initially just to get jobs at a burgeoning semiconductor industry a few decades ago. Then later to start up companies in personal computing or internet businesses. Not because they were already Steve Jobs or Jeff Bezos. Although most people never got that level of success, there was still a pretty good lifestyle available to young adults in the valley throughout most of the late 20th century.

Most people throughout California's history moved there for opportunity not as a luxury.

For sure, it’s always been a blend of both but you’d have to agree there was more of it than those moving to other parts of the Western US, which impacted many things downstream.

And the question is more about whether it’s currently primarily a luxury option as a headline idea, with a thousand different caveats.

It is 100% a luxury product for one reason alone: weather.

Having lived in areas with harsh winters and then moving back to CA, you’re basically paying to gain an extra 3 months of life every year.

> you’re basically paying to gain an extra 3 months of life every year.

Huh? How so?

Harsh winters and humid summers are quite miserable. People are less likely to want to go out, certain businesses are closed, specific activities are not possible, etc.

The amount of “nice days” you get in CA is much greater than elsewhere in the US.

Even compared to Hawaii?

Fair point. I would argue that Hawaii also falls into this category (and it seems reflected in their housing prices).

Hawaii is for sure more expensive than Cali. My pockets were hurting when my vacation ended.

Too distal, and there's not a thriving non-tourism industry to work in.

In terms of cost of living Hawaii is effectively an annex of California.

Some places on the East coast have both harsh winters and harsh summers. So you could argue, an extra 6 months.

With California out of the picture, people are considering other areas that have decent weather and these areas are also getting more expensive. I won't say it so more people don't come here, but there are other places in the US with mild weather (of course not as mild as California's, but still pretty good) :).

That’s one of the hardest things about leaving California as a lifelong Californian who is accustomed to Mediterranean climates: there’s nowhere else in the United States with this type of climate. It’s generally your choice of cold winters (much of the northern US), very humid summers (the South and the East Coast), or a very long rainy season (the Pacific Northwest). Even the weather of California’s Central Valley, which has hot, dry summers, is a vast improvement over much of the rest of the country.

It’s not that I can’t deal with the weather; I dream of living in the Tokyo area again despite its brutally hot and humid summers. But it’s going to be difficult giving up a Mediterranean climate.

It reminds me of cost of a minor league baseball game ticket, which is several times cheaper than a major league game. Of course the major league game is "better", but is it really 500% better? The seats, the game, pitching speeds, the hot dogs, beer, etc. are all the same. California is better than most places in the US, but probably not worth the financial hardship that people need to suffer to live there.

I refer to this idea as making our own inflation. We such stratified groups of spending so that if you want to spend $100 1980 dollars on a pair a jeans you can find that price range. If you never want to spend more than $20 on pants that is possible also.

For all but the most constrained the same product category(inherent quality differences may or maynot exist) is available at any price point.

It's a terrible luxury product though because 1) Prop 13 means that people from 50 years ago are still in the luxury neighborhoods 2) Crime is not sufficiently eradicated even from expensive areas

California is in the top quartile of safest states in the US.

Your complaint is that rich people wont have their property taxes jacked up and they haven't "eradicated" crime.

As a response to the fact that California is as close to the French Riviera as we have in the US.

I've never seen this insanity anywhere in world except for California:

https://nypost.com/2023/07/18/san-francisco-stores-lock-up-f...

This KIND of thing however is extremely common in poverty stricken areas. Poor areas are crime ridden, because most people in poverty lack other choices, and very few people will choose to just lay down and die quietly like some people seem to think they should.

Look at mcdonalds in detroit and stuff like that, they look like banks inside, with bulletproof plastic panels between customers and staff. Californian elitists just get pissy that they have to see it in their back yard, because they want the suffering required to support their profits to be out of sight and out of mind.

People bitch and moan that "california already spends a shitload on homelessness" but like, it's california, even the small office you have to have just for a social worker to have a laptop to keep things organized will cost millions a year. If you want to function somewhere that has a land cost ten times anywhere else, you are going to have to pay more. Period. The janitors need to live there too.

Just to put a dose of reality here, Prop 13 property taxes reset on sales (there are exceptions when selling to children of the owners but generally they reset) and property turnover rates in California are generally in excess of 10%. What that means is that pretty much all of the taxes are reset every 10 years or so. This is more true of "desirable" places to live (Bay Area, LA, San Diego) than say "less desirable". I have encouraged (without success so far) the County Assessor's office to publish the "net" tax year (average, median, and mode) for the county to help people better understand this.

Unless it is the same 10 percent resetting over and over and other 90 percent don't change hands

It seems like around 2/3 of the base would be reset in 10 years, if each house has an equal, random chance to be sold. I think the reality is smaller homes change hands more often and larger homes less often, meaning the chance that a larger home changes hands in a given decade could easily be less than half.

(And naturally, the longer a house is held, the longer it’s likely to be held, even without Prop 13, but Prop 13 makes it a stronger sticky force.)

>> Prop 13 property taxes reset on sales ... and property turnover rates in California are generally in excess of 10%. What that means is that pretty much all of the taxes are reset every 10 years or so

That would be assuming certain things, among which would be that if 10% of properties sell every year, there is a consistent 10% chance of a given property selling each year.

What I can tell you from looking at the data on all the houses in the neighborhood in which we bought our home in 2019 is that the vast majority of them had been last purchased more than 20 years earlier (and quite a few more than 30).

Given the significant economic incentives created by Prop 13, houses in appreciating areas should be less likely to turn over than ones in areas where values are relatively stable.

In some (or all?) counties, if you move to another house in the same county you can keep your original tax base.

Transferring a Principal Residence Value within a County

“Proposition 60 (Revenue and Taxation Code 69.5)

Property owners of at least 55 years of age may transfer the base year value of their principal residence to a replacement principal residence. The replacement must be of equal or lesser current market value and located within the same county. Sacramento County does not allow base year transfers from other counties.”

https://assessor.saccounty.net/LowerMyTaxes/BaseYearValueTra...

As of 2023 this is true any county to any county. What they took away was being able to inherit the tax base on rental properties.

Great addition thanks!

My point here folks is this is a knowable number if you want to know it. Just spend some time at the County seat and look at the public records for home sales. If you know a realtor you can pull MLS data and if you do some data science on it you can draw heat maps of neighborhoods where turnover is more rapid and those where it is less. Do a bit of legwork. I'll tell you that the retiree living in a home they have had for 50 years is an outlier, but encourage folks to go to the primary sources themselves, don't take my word for it.

If you have a property that's owned by your corporation, you can "sell" the property by transferring your company ownership to another holding corporation (slowly by changing the BoD over time). The property deed doesn't change hands; no prop13 trigger.

This is how all the rich people avoid prop13 taxation.

Yes you can. I re-iterate that county tax records in the US (California for sure) are public records and you can go to the county clerk's office and get copies of them. In CA it is often "free" to view them at the office but costs money to have copies made. So spend some time and find out what everyone is paying in property taxes.

If you do this in a "wealthy" area, you will find a lot of properties are held in living trusts (because probate), a lot will be in individual names, and a few will be own by LLCs. The latter are typically rentals (rather than rich people avoiding taxes, they are avoiding lawsuits from their tenants). As of 2023, if you aren't careful[1] the LLC rentals will lose their tax basis when they are inherited.

If you were working for Redfin or Zillow you could probably pull this out of data you had on your servers because the companies have paid the counties for copies of all the records.

[1] Where careful here is having created the LLC organizing document (or amended it) to allow for the transfer of majority ownership without triggering a sale. See this link for the current hoops -- https://www.kaidenelderlaw.com/blog/2023/march/can-an-llc-he...

Nah, many luxury products (like an Ivy League education) involve lower class people. It adds flavor.

crime in Mill valley, just on the other side of the golden gate bridge, is infinitesimal

As I kid who lived outside the US a couple of times and would boomerang back, I feel that way about the whole country. We have something like 8.8% of our population as millionaires so like 22M people. And I never have to hire guards for routine travel trips.

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