yonran

Proposition 13 was advertised to protect the poor and elderly citizens, but its design does not target them. In particular, it benefits those who don’t need help: commercial landlords, rental landlords, and (after Proposition 58/193) feudal estates. And it harms those poor and elderly who are unable to purchase a house. In short, it is an entitlement that benefits homeowners, at the expense of renters and home-seekers. It takes some tautological reasoning to defend its poor design if the goal is protecting lower income households; see the Stevens dissent to Nordlinger v Hahn https://www.law.cornell.edu/supct/html/90-1912.ZD.html

> Lol, what? San Francisco taxes revenue of businesses that are there?… This is just....staggeringly stupid. It just penalizes low margin businesses, for no reason. How can anyone possibly think this is a good idea?

I don’t think anybody thinks that either the gross receipts tax (with different rates depending on industry) or the payroll tax (which included stock exercise in payroll) were good ideas. They are inferior alternatives to property taxes (which are capped and distorted by Proposition 13) and income taxes (which RTC 17041.5 prohibits local governments from raising).

When you drive in a new state, it’s good to look up whether the state is “permissive yellow” (e.g. California and Washington) vs “restrictive yellow” (e.g. Oregon) as well as whether it allows “right turn on red”.

Here is the file for the proposed ordinance (https://sfgov.legistar.com/LegislationDetail.aspx?ID=4160578...). Any company operating an “Emerging Technology Device” is required to apply for a $2,006 permit prior to operating on sidewalks and public rights of way, and these devices are limited to 3mph, are prohibited from parking on the sidewalk, and are required to operate only on sidewalks wider than 6ft. Any violations are subject to $1,000 per day administrative fine, $500 per day civil penalties, and up to $500 per day criminal penalties. The definition of “Emerging Technology” means any new technology which has characteristics including a “beta” label or absence of a federal or state safety certification. The permit application is subject to a public hearing. The OET Director is required to evaluate, e.g., “effects… on public health, safety, welfare, and convenience,” “whether the Emerging Technology … are likely to have a measurable economic and/or social impact in the three- to ten-year period following the use,” “effects … on the labor market,” etc., and the OET Director may reject applications on the basis of these potential impacts.

In my opinion, this definition of “Emerging Technology” is vague and expansive enough that Public Works employees could give you a $1000 ticket for playing Pokémon Go, wearing Google Glass, operating an electric skateboard, or perhaps even vaping.

The author, Norman Yee, is the councilman who in May 2017 became alarmed at autonomous delivery robots on the sidewalks and introduced an ordinance that required delivery robot startups to apply for a permit, capped them to 9 testing robots per permit, and required an operator to be present at all times (https://sfbos.org/sites/default/files/o0244-17.pdf).

Relatedly, councilman Aaron Peskin introduced ordinances to require permits for bike rentals on the sidewalk in Feb. 2017 (https://sfbos.org/sites/default/files/o0081-17.pdf) and for scooter rentals on the sidewalk in March 2018 (https://sfbos.org/sites/default/files/o0099-18.pdf).

All residential property is already exempt from the split roll initiative (unfortunately), so residential landlords don’t need to claim the small business exemption. As for nonresidential property, if the split roll initiative passes, every single commercial landowner will want to classify themselves as a small business to get the exemption from reappraisal (unfortunately), so I imagine that this will be fairly contentious. As the initiative is written, a small business must (1) occupy the property, (3)(A) employ <50 employees, (B) be managed independently, and (C) own some real estate in California (but not necessarily the property in question?!)

The split roll initiative likely exempts many parking lots from reassessment at least until June 2025 since they can count as “small business” (fewer than 50 employees) (https://oag.ca.gov/system/files/initiatives/pdfs/19-0008%20%...)

I didn’t even realize that the headline was incorrect for another reason: The tax rate for banks under the Gross Receipts Tax is actually 0%, not 0.4%+ as implied by the headline! (Business and Tax Code 954(f)(1) http://library.amlegal.com/nxt/gateway.dll/California/busine...) Instead of a local gross receipts tax, the state of California imposes a 2% bank tax on net income (RTC 23151 http://leginfo.legislature.ca.gov/faces/codes_displayText.xh...). The gross receipts tax on financial services is on businesses other than banks and insurance companies.

See the earliest filing in CGC19579061 for Square’s complaint (https://webapps.sftc.org/ci/CaseInfo.dll?CaseNum=CGC19579061).

The headline is a bit misleading because I don’t think there are any banks in a similar situation to Square: a bank that receives most of their revenue from transaction processing fees and whose employees are almost all in San Francisco (San Francisco apparently apportions company revenue according to where the employees are).

Note: In California, local governments use relatively unfair gross receipts taxes instead of more efficient taxes because Proposition 13 (1978) forbids fair property taxes, and RTC 17041.5 (1963) forbids local income taxes (https://leginfo.legislature.ca.gov/faces/codes_displaySectio...). So we tax gross receipts of large companies, with 7 different rate schedules based on different industries in order to sort of approximate income.

fyi in Weyl’s book, he says that to avoid this problem, “Possessors would be allowed to group their assets into clusters and to pull them apart, as they choose.” In other words, Disney could bundle the domain with the business (which is already listed for only $243 billion, not “infinity”) http://assets.press.princeton.edu/chapters/s11222.pdf

I think in general the business should be bundled with the domain, although I think that probably there should be some oversight preventing completely unrelated domains from being bundled together.

In the paper by Glen Weyl linked above, the property tax should be set at about 1/normal turnover rate (e.g. 1/30 years = 3.3% per year), owners should declare their own assessed value for which they pay the tax (e.g. on the $1500 asking price in the article, the tax could be about $50/year assuming a 3.3% tax rate), and then if someone else wishes to buy the property they can purchase at the same self-assessed value.

When speculators hold onto domain names without using them, their right to exclude imposes a cost on the other member of society who wishes to use the property productively. So like progressive property taxes in general, a domain tax should be high enough not only to pay for the direct cost of services, but also to discourage idle speculators and encourage owners to use the domain productively.

Do you realize that the reason the squatter abandoned the domain (instead of keeping it forever) is the $8/year registry fee? My question is why should the squatter pay only $8 per year, and not, say, $50?

We can apply the same techniques used for progressive property taxes to prevent the two problems you identified: e.g., an owner-occupier exemption for a single domain name per person, and a deduction for investments in building the domain’s brand so that a domain with high pagerank or marketing investment pays a lower tax.

Have any TLDs attempted to implement a property tax on domains according to value to reduce cyber squatting? To implement a property tax, Glen Weyl and Eric Posner have proposed using self-assessment so that users pay what they want (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2818494 and https://www.amazon.com/Radical-Markets-Uprooting-Capitalism-...)

The article itself is talking about the constitutionality of discriminating based on familial relationship under the US Constitution, so that would be a federal issue.

But in general, housing affordability is a federal problem insofar as the federal government already subsidizes housing and transportation. Since the federal government already subsidizes housing (mortgage interest deduction, imputed rent exemption on income tax, and capital gains tax exemptions for the sale of houses), it has an interest in ensuring that these funds aren’t wasted on bidding up land prices in high-rent areas, and it has an interest in ensuring that these funds benefit both the rich and the poor. And since the federal government already pays for transportation, it has an interest in ensuring that these transportation infrastructure isn’t wasted on exclusionary cities.

The article mentions recent state laws that overrode city prohibitions on multiple units: SB 1069 (2016) required cities to approve ADUs in backyards of all single-family houses and inside houses, and AB 494/SB 229 (2017) reduced parking requirements to 1 parking spot per ADU and made them more financially feasible (by limiting utility fees and allowing ADU rental). These are a big deal, especially on suburban 5,000+ sq. ft. lots where there is enough space for egress and parking.

As for your dog, no homeowner is required to construct an ADU, so an owner who wants to keep a big yard is allowed to do so. Other homeowners can make a different decision depending on their situation.

SB 1069: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...

AB 494: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...

SB 229: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...

According to this Vox interview with Jenny Schuetz (https://www.vox.com/2019/5/17/18628267/jenny-schuetz-weeds-i...), there are two housing crises: the superstar city crisis of million dollar homes due to exclusionary zoning, and rising rents for low-income households in the rest of the country. According to Kevin Erdmann, the crisis in the rest of the country was caused by federal policies that restricted lending to low-income households, forcing them to rent for more than they would have paid in mortgage (https://www.mercatus.org/tags/housing-affordability-series https://www.amazon.com/Shut-Out-Shortage-Recession-Universit...).

When Kevin Drum looks at national medians, he entirely misses both of these problems.

I think the differences are that 1) Equipment can be produced competitively, driving down the profit on an equipment rental business, whereas in certain cities the housing is not allowed to be produced in great numbers, and 2) For a business, the depreciable capital expenses are tax deductible, while land is never depreciated or amortized (since land lasts forever). These factors reduce the profit and income tax for an equipment rental business. On the other hand, where housing is expensive, a large fraction of the rent is payment for the land, which the business cannot deduct.

> Again, this probably just betrays how little I know on the topic, but: couldn't we just tax land and housing separately?

Yes, my point in this thread was that individual taxes on vacant, rental, and imputed rental property are more complicated than a tax on the land value (except that Proposition 13 prevents us from increasing property value taxes).

Landlords have to pay income tax on the rent. If owner-occupiers didn’t pay tax on the imputed rent, then the owner-occupier would pay a lower income tax than the landlord+renter. In effect, the implicit tax deduction that owner-occupiers get on imputed rent in US Income Taxes is a regressive tax on the renter+landlord. See also this explanation: https://www.vox.com/2016/4/15/11432676/imputed-rent-taxation

As this Vox article explains[1], if rent is taxed but imputed rent is not, then a homeowner would pay no tax, but if he and his neighbor decided to rent their house to each other (with zero net change in income after rent), then he would pay the tax as a landlord. The decision to exclude imputed rent in US Income Taxes was apparently a decision of the Treasury in designing the first Form 1040 for 1913 despite economists’ arguments for including it in the tax[2].

In US income taxes, the inequality exists to this day. Owner-occupiers get to keep their rental income without paying taxes that landlords would have to pay (though landlords get to deduct maintenance), in effect taxing poorer renters at a higher rate than wealthier homeowners. When someone buys a house instead of renting, he gets an implicit tax deduction on the imputed rent that renters+landlords aren’t allowed to take.

So if we were to design a tax on hoarding scarce land, logically we would want to avoid the mistake that the US Treasury made in 1914, and include vacant landowners, rentiers, and homeowners in the same bucket. A normal property tax according to value gets this right by treating them all the same.

[1]: https://www.vox.com/2016/4/15/11432676/imputed-rent-taxation

[2]: Lawrence Zelenak, “The Early Income Tax and the Imputed Rental Income of Homeowners” https://doi.org/10.1017/9781108377157.008

It makes sense to tax homeowners who leave their units vacant, since their decision to keep scarce property off the market is a waste that exacerbates the housing crisis.

The same applies to landowners who leave land vacant or underdeveloped when they could develop it into an apartment that alleviates the housing crisis.

It also makes sense to tax landlords who charge market rents. While tenants suffer from the shortage, it is landlords who reap unearned windfalls. While vacant property owners waste value every month that could benefit society, landlords capture that value for themselves, so the city should take a cut.

And if we charge landlords a tax for the high rents they collect, then we should also charge homeowners for the imputed rent they would have collected, to remove the inequity between owner-occupiers and landlords.

If we combine these 4 taxes, we would have a pretty good system for encouraging vacant landowners to use their land efficiently while also raising revenue from the landlords who benefit from the crisis. But then we would realize that the simpler solution is a higher, fairer property tax to begin with (by repealing Proposition 13).

I think this is the right approach: to require third-party companies to have access to a dominant company’s network after the network has reached a certain threshold of size or age. I like to use the craigslist.org example: a company that is still dominant basically because it is free and was launched in 1995. We’re stuck using the ugly craigslist UI because their network is the oldest and biggest. Several companies have attempted to innovate on the craigslist.org experience but were forced to stop due to lawsuits (e.g. padmapper, 3taps, RadPad). If we wish to allow competition and innovation in the classified advertising space, then I don’t think there is a good dimension to split up the craigslist company (by metro area? by apartments vs for sale?). Instead, we should promote competition by allowing competitors to access their APIs for free or for a reasonable price. The network that a web company creates should not belong to one company forever.

Yet another reason for a heavy land value tax: to ensure that the fruits of the land benefit the community even when it has been purchased by a foreign corporation.

The author Alex Danco’s link that supposedly proves that building housing doesn’t improve affordability is a poor review article by Michael Storper and Andres Rodríguez-Pose that is rather thoroughly debunked by their own colleagues Michael Manville, Michael Lens, and Paavo Monkkonen here: https://twitter.com/mc_lens/status/1129502980498022401 In summary, Storper badly misrepresents or misunderstands the economic literature, and attacks strawman arguments, to try to avoid admitting that supply improves affordability.

The author also says, “The third factor that somehow gets left out of a lot of armchair debates about housing and yet is an essential (possibly THE essential) element in all of this is credit.” As Kevin Erdmann explains in Shut Out (https://www.amazon.com/Shut-Out-Shortage-Recession-Universit...), the opposite is true. Credit is the factor that people jump to to the exclusion of rent (and expected rent given the low rate of homebuilding), which is directly related to supply constraints. Housing prices are high in the Bay Area because rents are high; low interest rates did not detach prices from rents.

Yes, there are a lot of factors in the housing market if you want to get deep in the weeds. But in my opinion, attempts to elevate second and third order factors to avoid dealing with the first-order factors of supply and demand are sophomoric.

From the latimes article, it was a state senator from the Los Angeles area: “Sen. Anthony Portantino (D-La Cañada Flintridge), chairman of the Senate Appropriations Committee, announced at the beginning of the committee hearing Thursday that Senate Bill 50 would not advance this year, meaning the bill would not be debated again until 2020.”

Edit: Here is a video of him saying that despite the crisis, he doesn’t think the bill is right, and maybe something better will come along https://twitter.com/BryanRAnderson/status/112911212601702809...

The article is true if you limit the definition of “good investment” and “wealth-building” to mean rent appreciation. But if you take a broader definition of investment (as in a farmer invested in a tractor, or a contractor invested in a pickup truck, or a property owner invested in improvements, or a landlord invested in buying an underpriced property with an unusually high capitalization rate), then it is counterproductive. When people talk about housing as an investment around the country, how often are they referring to zero-sum rent increases, vs. how often are they referring to capital expenditures that expand the pie? And how do we get people to celebrate one type of investing (capitalism) instead of the other kind of investing (rentiers).

The author, Yonah Freemark, wrote this article discussing the implications of his paper (https://urbanaffairsreview.com/2019/03/29/upzoning-chicago-i...). In short, he does not claim that upzoning “doesn’t work.” He says 5 years may have been too short a time to measure the changes in Chicago. He also highlights numerous possible reasons for the Chicago housing price increases that may differ from the California proposals (SB 827 last year, or SB 50 this year):

* “it targeted just areas around transit (rather than the city as a whole).” SB 827 and SB 50 are a much broader upzoning.

* “it was implemented in a city with relatively affordable housing (rather than very high rents, such as in San Francisco)”

* “they should take seriously the concerns of local residents who are worried that their housing costs will increase”. SB 50 exempts tenant-occupied housing and reserves a fraction of the units for low-income households.

I think the tech anti-poaching lawsuit is kind of a strange case because these are the highly-paid employees, not entry-level laborers, and the free market for top employees is likely to increase inequality, which is sort of the opposite of the goal of the Sherman Act. It’s similar to how collusion in the NBA reduces wages at the top while increasing team profits as well as enabling higher wages at the bottom (sports teams are excluded from the Sherman antitrust act), making a more viable ecosystem (see Planet Money episode https://www.npr.org/sections/money/2018/07/11/628137929/epis...). So it’s possible that forcing a free market of top employees will increase wage inequality. And ironically, politicians now complain that these tech companies are paying too much, driving up the rent of housing (thanks to the region’s restricted housing supply), since the lack of housing channels high wages into the pockets of landlords.

How should the Bay Area economy have grown in the past decade if we had wanted to prevent the poverty created by tech and landlord wealth? We should have allowed far more housing supply, allowing apartments to bid down rents and also allowing new workers to bid down wages. We should have had higher taxes on land, allowing the poor to share the wealth created by the increasing concentration of employment centers. And we should have had higher national income taxes, spreading the wealth from the highest-paid workers in the winners-take-all economy to the rest. But given the dysfunctional local government (restrictive zoning), dysfunctional state government (Proposition 13), and dysfunctional national government (low top tiers and low taxes on homeowner rents), the collusion that the tech companies did was not clearly a bad thing. The Sherman Act is about enabling the price signal to be the “central nervous system of the economy” (U.S. v. Socony-Vacuum Oil Co) to mobilize labor and capital. But when the dominant factor in the labor market is local governments’ restrictions on the housing supply which prevent mobility, I don’t see much point in enforcing the antitrust act against companies.

In California, all the codes have an open-access version online (https://www.dgs.ca.gov/BSC/Codes). On the state website, some codes are more user-friendly than others; for example, the ICC Building Code has PDFs of each chapter that prohibit copying and printing, whereas the IAPMO Uniform Plumbing Code is a javascript app that allows you to flip between inaccessible images but not select or copy. Archive.org also has scans of the PDFs (https://archive.org/search.php?query=subject%3A%22bsc.ca.gov...) (from Public.Resource.Org, described by other comments here), which allows saving. Up.codes is much more user-friendly than either (https://up.codes/codes/california), since it allows you to search for a word and link to a specific code section and is mobile-friendly. I am very thankful that up.codes exists and has been expanding rapidly.

I am curious how far the open access decisions will reach. The building standards are incorporated into the law with amendments, so the state collaborates with the standards bodies to publish them. But these codes also reference many other standards published by ASTM, ASME, NSF, etc. by reference only (e.g. the pipe geometries, thread widths, manufacturing and testing methods). Do open access decisions cover these standards bodies’ publications too? I wish they did.

The Bay Area’s environmentalists have decided to put the mountains off limit to development. Here’s one map: (https://www.greenbelt.org/uncategorized/bay-area-policy-prot...). Randal O’Toole claims that urban growth boundaries are a major cause of the housing crisis in his book American Nightmare (https://www.amazon.com/American-Nightmare-Government-Undermi...), and Issi Romem corroborates this thesis (https://www.buildzoom.com/blog/cities-expansion-slowing is currently in a 301 redirect loop; see archive https://web.archive.org/web/20181207215721/https://www.build...).

I think the question of whether a prosperous region can have both urban growth boundaries and affordable housing is an open question. The Bay Area has not set a good example in this manner; we listen to environmentalists when it’s time to put walls around the region but we don’t listen to them when they call for greater infill development (to their credit, the Greenbelt Alliance has a subsidiary called the SF Housing Action Coalition that promotes infill development, but in SF politics they are often written off as developer shills).