California is gripped by economic problems, with no easy fix
economist.com
economist.com
I run a business and let me tell you there is no unemployment here, it's hard to retain employees.
There is no outflow of migration as far as I can see, housing is extremely scarce.
In fact one of the only reasons I would leave is because housing is cheaper elsewhere.
California is doing so well, that me and many other people are paying a huge premium to live here.
Also SF isn't California, it's a small part of the state.
https://www.census.gov/data/tables/time-series/demo/geograph...
But there is still a housing shortage in California due to inadequate construction and foreign immigration.
https://www.businessinsider.com/moving-from-california-pros-...
No one has ever said this. No normal rational adult could possibly think SF was right wing.... this is some Overton window type of bias or something. I can't even think of anywhere the country more left wing than SF. NYC is certainly not more left wing than SF... People would be crying and protesting putting the National Guard in BART. NYC welcomed it.
>The people I know didn't leave because of some kind of "failed state" vibe though
Everyone I know moved out because SF got shitty. More crime, more open drug use like this https://www.tiktok.com/t/ZTLka6qqp/ and less cops, less personal safety, less riders on BART so you don't even feel safety amongst the crowd. I tried moving to Burlingame for a year, but that was boring and outrageously expensive so I just moved out of the Bay Area altogether.
If you want a real failure story, it's San Francisco. Plenty of well-to-do people are leaving it, and at best it serves as a temporary workplace for people who don't care about its future.
This conversation is pointless since you don’t understand economics 101 or the law of supply and demand. That’s why you think it “doesn’t matter”… you’re missing the forest through the trees. The prices are going up because there’s a chokehold on supply… when you restrict supply and demand remains the same or increase—prices go up. This isn’t rocket surgery.
Just Google the rates of homebuilding in California. It peaked in the 70s and dropped every decade since.
Sure, here’s an article: https://www.washingtonexaminer.com/news/2432071/california-h...
Yes, it’s great to work for a big tech company in California. But I guarantee it’s better to be a teacher or any other normal job in Denmark. Not everyone works for Google or Apple so maybe we should stop pretending like that’s all that matters…
And homebuilding peaked pretty much everywhere in America in the 1970s, as did population growth, so this isn't surprising.
You mean like the Rustbelt where all their good jobs got outsourced? Yep… you might be onto something here.
The difference is California is artificially restricting supply (i.e., market manipulation) by making it more difficult through zoning laws and permitting. It’s intentional. This is good for homeowners who want to pull up the ladder on the next generation (including their kids) who will be priced out. This is why jobs continue to move to Austin, TX or Raleigh, NC. Money goes where it’s treated best. California thinks it’ll never kill its golden geese, but it looks like they will. There’s a reason there was an exodus from places like the Bay Area during the pandemic and remote work—-people only live there for the income potential and once they didn’t have to, they moved as fast as they could to other places.
Because of tech HQs, Bay Area had an excessively high concentration of tech workers. You could say that it was easier to find a Java programmer than a java barista there, which was a problem because the programmer's labor was all exported. So everything tangible was expensive and/or cruddy there for no good reason, then finally remote work took off somewhat. But plenty (most? idk) of those who left the area still stayed elsewhere in CA.
Do you not get that it's all relative? If California was building enough homes for its population growth and now it isn't--that certainly impacts prices. This is why Japan has cheap homes--even though they have tough zoning laws. It's all a game of manipulation.
Yes, other states have zoning laws, but they don't cripple new housing development. California has absurd laws that allow neighbors to challenge homes being built on empty lots or about the design choices of someone else's home. You claim to be for freedom in another comment then defend this? Which is it? Do you want an open market or not? Or are you just for what benefits you? That's fine, but be honest about it.
> not everyone has to live in the same city, and there's always more land to build on
This is the stupid and selfish talking again. This is why the Bay Area has workers living in Gilroy and Livermore commuting to SF and San Jose. This isn't good for anyone. San Francisco doesn't have to stay 2 stories tall... that's all a charade to prevent housing supply increasing.
>But plenty (most? idk) of those who left the area still stayed elsewhere in CA.
I actually don't disagree with this, but curious if you can cite anything because I had workers move to Florida, Montana, Colorado, Washington, Philadelphia, Boston, NYC, Utah... and none of them ever returned. I do think a lot stayed in California--I for one moved from SF to Burlingame and then to Sacramento then to San Diego. I do think there would be some interesting migration patterns to track.
Meanwhile, what is wrong with building in San Jose?
I just looked at the population density by square mile and SF is not that far ahead of Tokyo and I have a feeling those statistics are either old or inaccurate. There is exponentially more foot traffic in Tokyo and London than in SF, so while I see that the statistic you're referring to does exist--I would question whether they are using similar methodologies or there is something else throwing this off. Tokyo has skyscrapers all over and people everywhere.
You can easily build more than two story row houses--and the quality of life would actually improve. That's why people find NYC desirable--the population density.
>If you want to go anywhere in your car you might spend 10-15 minutes parking.
So take public transportation? Not everyone needs to live in a SFH with a garage.
>Meanwhile, what is wrong with building in San Jose?
I for one don't want to live in San Jose. It's boring and the weather sucks. Why is this the solution to San Francisco's housing shortage? Why do they want to attract homeless people they can't help but not want to build houses for people who actually want to live there? Why can't San Francisco solve its own problems? Houses don't need to be artificially limited to 2 stories. They should increase housing limits to 6-8 stories and allow supply to increase to match demand. San Francisco just makes it difficult/impossible to build with useless permitting processes. The only people who benefit are existing home owners.
>And well, don't live in the bad part of Antioch.
Might as well tell people not to be poor. Super useful advice, bub.
And if you want to call me ignorant, give me the source on those "record lows" because all I can find is https://fred.stlouisfed.org/series/SMU06000002023610001SA like are you comparing to the 2006 bubble?
> Might as well tell people not to be poor. Super useful advice, bub.
The suggestion is that if you cannot afford to live in an ok part of a city, you can instead be in a rural area, or better yet not live in California if you dislike it this much. I don't know if you'd find life better in the comparable part of Dallas or Detroit; weather alone might change your mind.
This is downtown SF after the sun goes down. This is 10x worse than it was 5 years ago. Meanwhile a fentanyl genocide is going on while liberal scumbag voters and politicians pat themselves on the back for giving out needles to them. It’s sick.
And the jobs are probably stealing catalytic converters, stripping copper from light poles, etc.
The homeless in California are on drugs and mentally ill. If they’re not, there are plenty of programs to support them, but if you’re on drugs then yeah you’re never gonna afford rent here… you can’t afford to be a junkie and afford rent on an apartment.
The idea that Prop 13 is set in stone is just not the case anymore. I was changed in 2020 and nearly removed completely for corporations.
The legislature cannot, currently, legally override the constitution.
Folks are addicted to spending money, and the results don't really matter. It took national outrage to get us to value-engineer a $1.6M toilet down to $1.0M.
But for commercial real estate ? That seems totally ridiculous. There is so much tax that could be collected there!
California has, like most states, Constitutionally-mandated balanced operating budget (it does have a bit of reserve fund which can be used to avoid immediate cuts when revenue projected in the balanced budget falls short, so it can end up with some deficit from bad projection, but that is pretty limited); it cannot monetize spending since it doesn't issue its own currency, and borrowing (which it can do for capital projects) takes voter approval.
Jerry Brown didn't do anything that unusual in balancing budgets, but what he did do is risk political capital to take ending the supermajority requirement to pass a budget to the voters, succeed, and thereby end the annual (good times or bad) minority blockade budget crisis that made California effectively ungovernable.
(Unfortunately, the supermajority rule for tax increases—which applies to any tax pokicy shift that is includes any increase in any situation—remains, preventing most tax policy shifts in practice.)
> Notably, the current Gov started tenure with a substantial surplus, and mysteriously now has record deficits again.
Its not really a mystery—the sources of volatility are well known, the swing (though not the precise magnitude) was predicted, and why the Governor argued for changes that would allow greater transfers to reserves in years of predicted surplus, rather than returning as much projected surplus revenue directly as is currently required.
My theory is that if it were repealed, and people had to pay property tax on something approaching the actual current market value of their homes, home values would tank. Homeowners would then "lose" a significant fraction of their net worth, get pissed off, and immediately vote out anyone who had voted for the repeal.
And the reason it hans't been phased out is that the state has significant issues with legislative process as well as economic management. i.e. passing constitutional amendments by popular vote instead of just regular laws which makes them borderline irreversible.
https://www.dgs.ca.gov/Resources/SAM/TOC/6000/6920#:~:text=A....
Zoning control changes could (as far as I can tell) be done via legislative action alone (and probably fading some resulting lawsuits).
Prop 13 was passed in 1978 as a constitutional amendment, so the only way to repeal or reform that would be another amendment. The process for doing so via the legislature requires a two thirds supermajority in both houses, and then it goes to the ballot anyways. https://ballotpedia.org/California_Constitution#Amending_the...
log(5)/log(1.02) = 81 years
log(5)/log(1.08) = 21 yearsThe proposition was intended to prevent appreciation from pricing people out of their homes - in other words, to decrease the volume of transactions on the real estate market. This is government interference in the market - on top of the government interfering in the construction of new homes in the first place...
If they regularly re-assessed property values while lowering the applied rate, they could collect the same amount of money overall without distorting the market.
California does have high overall taxes, but not the highest. Part of the reason income taxes are so high is because property taxes have a very low effective rate.
In terms of "property tax as a percentage of personal income" it is only 24th.
https://www.visualcapitalist.com/cp/us-property-taxes-by-sta...
Por que no los dos? Put fiscally conservatives on the task of cutting, and put a progressive in charge of reform.
Repealing prop 13 would cause the single biggest increase in homelessness in the states history.
A huge percentage of California homeowners would be evicted as a consequence of their next 10x higher property tax bill...
https://www.sfchronicle.com/bayarea/article/embattled-nonpro...
https://www.cbsnews.com/sanfrancisco/news/san-francisco-city...
This analysis puts it at 24/50 in fact.
We had a proposition in Palo Alto that only local residents could use some of the parks. That was challenged and now doesn't exist as you can guess how police identified non-locals. Can we do the same for prop 13?
Any economic problems they are having are (1) self inflicted, (2) policy driven and (2) could be fixed very quickly if the locals would admit that it is a problem worth fixing. Presumably the locals aren't worried.
California's a big economy. But it's not (at least superficially) outsized relative to other parts of the United States that contain similar populations.
https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ...
I don't understand the intent of the comment. People commonly compare California's GDP to various countries, not its per capita GDP.
Also add people on rent controlled housing, who are in a similar boat, and that number would be even higher.
Ultimately, you just have to look at the immigration numbers of "the best and the brightest", who can go anywhere in the world including CA and Denmark. I was one of them and decided to come to CA over any European country. So were many of my friends and many of my European colleagues from countries with all the benefits you mentioned.
I actually work for a Californian big tech company, remotely in Europe. I could move to the bay area but my life quality is better here, on many levels.
Yes. And I'm glad my family migrated to Fresno instead of Denmark.
Both can be true! And maybe you’re just overly sensitive of criticism of California and could admit it’s not perfect and not everyone makes $400k a year in big tech? Or do you not get outside your bubble ever?
So you could call me a little more sensitive than them for even responding, but still pretty callous. Nowhere is perfect, go experience another state if you don't believe me, or if you've never lived in CA then don't complain about living here.
What I do is consistently vote for harsher criminal justice and political candidates who at least acknowledge that illegal immigration is a problem here. This usually means moderate Republicans.
You're just deflecting. SF is a shithole now: https://www.tiktok.com/t/ZTLka6qqp/ This is 10-20x bigger of a drug scene than 5 years ago. SFPD doesn't even bother doing anything now. It looks like something out or Robocop. The problem is LA is like that now, Oakland is worse, East bay cities are bad too. Central Valley has homeless all over too. The only cities that seem to be free of it are Palo Alto, Saratoga, Marin, Montecito, Palos Verdes, etc.--essentially the super rich enclaves that can afford to pay the homeless to go somewhere else or have the police harass them into moving somewhere less amenable.
Again one exception, SF was nicer just 8 years ago, and probably better in the 90s before tech companies ruined it. That city is exactly how you describe it now. The rest of CA is not.
Denmark is a great place… if you’re Danish. A terrible place if you are immigrating from outside of Europe.
Compared to California, Danish is more xenophobic, live in smaller homes, have worse restaurants, have fewer prestigious institutes, lower income, and have worse weather.
I regularly fly to Copenhagen specifically to dine at Michelin star restaurants, some of the best in the world. Everything else is true about Denmark though
>live in smaller homes, have worse restaurants, have fewer prestigious institutes, lower income, and have worse weather.
Yeah but those are only superficial things in the grand scheme of things. The things that actually matter like, home affordability, quality of public schools, quality of life, vacation time, hours worked per week, life expectancy, parental leave, etc.
And yeah Danish food is kinda boring but they like it so who are we to complain. I used it as an example because their society actually benefits the average person like a teacher or railroad worker whereas in America/California if you aren’t working for a big tech company and in the top 15% of income you’re kinda not doing all that well compared to other developed countries. Most jobs in California don’t even offer paid parental leave… we’ve pathetically behind Europe but yeah.. we earn more if you don’t account for longer hours and all those pesky benefits like vacation or sick leave or parental leave.
And good weather shouldn't be taken for granted. It can affect your entire mood.
And I don't really care about time off to be honest, but if I did, I'd work as a contractor.
* Btw, check out their non-tourist malls, all American chains. IHOP, Papa John's, censored Victoria's Secret. Corvettes and Suburbans parked outside... well they also have those cool Land Cruisers you can't get in the US anymore.
Of course when people talk about where is best place to live, most people think it in terms of immigrating.
If you want to move to Denmark that is cool with me, but if I'm moving anywhere it is probably California.
[0] In hindsight I might have been wrong about this - I was comparing household income in California - https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ... - to average income in Denmark - https://en.wikipedia.org/wiki/List_of_countries_by_average_w... . Median household vs. average per capita isn't a reasonable comparison. Regardless, I wouldn't move to Denmark.
lol proved my point. Being a Californian looks remarkably different if you’re not in the Bay Area or coastal Southern California. Most of California is super rural and poor and doesn’t have access to high paying jobs. Sure, if you win the lottery and work for Apple or Google you’re gonna be okay but go look at Mountain View, Cupertino, and surrounding areas and it’s super unimpressive what you get for your money. There’s a reason people in Denmark are happier, wealthier, have a higher quality of life, live longer, etc. Yes, the income total at the high end is capped but overall people are better off. That’s why you can’t just say oh well people in Palo Alto and Montecito are doing well… therefore California is amazing!
The Bay Area and LA alone make up 50% of the population.
https://web.archive.org/web/20240401233215/https://www.econo...
https://ycharts.com/indicators/california_unemployment_rate#....
Yeah, article is making signal out of noise. Unemployment was ~4.1% before the pandemic, spiked, recovered, and indeed has inched up to near 5% since. The graph shape indeed looks basically identical to federal data at FRED: https://fred.stlouisfed.org/series/UNRATE
So... are we supposed to trust the rest of the article? Not sure I'd bet on it. People love articles that confirm priors, and those are the most dangerous kind.
The 1 year federal unemployment rate looks like noise: a mix of up and down. Down, down, up, down, down, up, flat, flat, down, flat, flat, up. And the total change over the last year was only 0.3%.
There are no months in the last year when the UE rate fell in California. That would be very unusual for noise over a flat trend. Also, it's now 1.4% higher than the federal rate, and the total increase over the past year was 0.8%.
> In California there are roughly 0.8 job openings per unemployed person—the lowest in the country—whereas in America’s other 49 states the overall ratio is 1.6.
And that checks out. It's the inverse of (1 divided by) this:
https://www.bls.gov/charts/state-job-openings-and-labor-turn...
If you're anything else, then it's not worth it.
Beyond that... it's nearly impossible to build an affordable market rate house, starting a small business is more difficult than anywhere else due to regulation, our public schools are terrible.... but yeah there are some really well run tech companies that pay absurd amounts of money so a lot of people are still willing to put up with it all. I think there will be a breaking point though...
Every time some liberal/progressive voter has to clean up feces/needles off their front stoop, is robbed in their driveway, takes their kids to a public park but a homeless person is there doing drugs in the bathroom (or much much worse), or the cops tell them they can't remove the homeless camp on their block, I suspect they become ever-so-slightly more conservative. Eventually this will turn even the bluest state red. Democrats are digging their own grave by pandering to nonsense and ignoring the reality of what it's actually like living here.
When I grew up here in the 90s, the homeless were more like 1-5 per 100,000--not it feels like it's 50x to 200x that. They also weren't allowed to just camp in public spaces and leave ecological disasters everywhere they went... Whatever policies we've enacted need to urgently be repealed. Ideology now trumps objective reality.
It seems our problems with homelessness stem mostly from high housing costs and our dysfunctional homeless industrial complex.
Like I said above, I was a progressive voter my entire life and never questioned it. But there are only so many times you’re gonna clean up human feces or needles before it changes your ideological perspective on deregulating drugs and theft…
Shoplifting incident yesterday: https://www.cbsnews.com/sanfrancisco/video/watch-group-of-th...
Stuff like this happens constantly, most isn't even reported. I used to work by the Salesforce tower and saw this happen a few times in 2018-2019.
If you make enough money and have a $2M house, you can insulate yourself from a lot of this. I unfortunately am not as insulated from it as I'd like to be. I live in a 'nice' neighborhood, but even I've had homeless people camp in front of my house, a hit and run on my car that 911 wouldn't respond to, etc etc. Like I said, people only have to have a few of these eye opening incidents before they start questioning the direction this state is heading in and who is steering the ship.
It’s pretty funny.