7 ms·

In the UK we have the concept of "Section 106" payments which allow a development through planning by the developer paying the local government some amount of m

In the UK we have the concept of "Section 106" payments which allow a development through planning by the developer paying the local government some amount of money to redress the cost of dealing with congestion, public relam, affordable housing, etc. For large skyscraper developments in London, this can be many many millions of pounds. Does something similar exist in CA?

mdasen 11y ago
I'm not sure there's an official code for it in the States, but it definitely happens. In this case, Apple is spending in excess of a hundred million - $66M on things like infrastructure and low-income housing, $35 incentivizing alternative transit to work, and $15.4M annually to the Santa Clara Valley Transportation Authority (http://venturebeat.com/2013/06/04/apple-campus-2-7k-employees-32m-in-property-tax-9k-construction-jobs-66m-in-public-improvements/ http://venturebeat.com/2013/06/04/apple-campus-2-7k-employee...). In some cases, companies get sweet deals from locations to move there - Tesla is getting a whopping $1.2B from Nevada. But in Apple's case, they're paying.
Lazare 11y ago
Yes. But it's usually handled at a higher government level than the local council of a 60k person town. :) California, in particular, is somewhat famous for having an enormous number of state agencies; I rather assume one or more of those made the deal with Apple.
djschnei 11y ago
Wow... outstanding haha. So in bringing more business to an area, they need to pay twice? At what point do people actually own the land they own?
- awinder 11y ago
  Uh, yeah, they have to cost-share the burden of upsetting the current infrastructure. Say you owned a piece of property adjacent to where all this new building is going on. Is it your responsibility to chip in? Is it your responsibility to shoulder the cost burden of what is effectively a zoning-related issue? I mean, god, when do you really own the property you're standing on? You didn't even ask for all this development, but now you've got to pay for expanding the infrastructure because a new developer wants to reap financial reward by developing up his land? Yeah. It's not a property freedom issue, it's a cost ecosystem issue. As time goes on and life changes, owning property is going to have fluid costs, and tax assessments on people who come in to develop land is one way to defray those costs from disproportionately hitting people who have lived in an area for a long time. Frankly, those people would never really plan for that kind of thing to happen, so you're avoiding a lot of nasty repercussions by taxing the person upsetting the ecosystem, rather than the members of the ecosystem itself.
- talmand 11y ago
  If failure to pay property taxes means you vacating the property after government seizure, then you don't own the land anyway. Threat of seizure is a serious problem for a business, why not force them to pay twice?
  - djschnei 11y ago
    uuuuuh because it's immoral? You're saying "well we already threaten them with violence/guns to pay once, might as well do it twice" - I shouldn't have to explain my objections.
    - talmand 11y ago
      I'm not sure you understand the point of my comment. I was sarcastically agreeing with you.
- goldbrick 11y ago
  1) the developer doesn't "bring" business to the area, they are supported by their clients and are responding to economic incentives, same as anyone else. 2) if you do perceive them as "bringing" business, then it's only right to equally perceive them as bringing congestion, pollution, and all the other undesirable side effects of economic activity. 3) when does one ever "own" land? Property rights are enforced by the government, it's only fair that they receive compensation for that.
  - jessriedel 11y ago
    > Property rights are enforced by the government, it's only fair that they receive compensation for that. The compensation they extract has nothing to do with the cost of enforcing property rights, because those costs are trivial.
    - goldbrick 11y ago
      Not trivial at all, just mostly invisible and most of us who've only known modern western societies never give it a second thought.
      - jessriedel 11y ago
        Try again. Law enforcement was just 9% of the Cupertino municipal budget in 2015. http://www.cupertino.org/index.aspx?page=1222 http://www.cupertino.org/index.aspx?page=1222 What fraction of that do you want to bet has anything to do with protecting private property, as opposed to the large revenue generating activities like parking tickets?
        goldbrick 11y ago
        Like I said, completely invisible to you.
      - djschnei 11y ago
        Try again. That "protection" you're referencing is actually the natural cooperation between rational actors that capitalism and market economies in general foster and perpetuate. Capitalism is the invisible hand, not government.
- tamana 11y ago
  Never. Land is partly common property. Real estate is taxed ongoing because the Earth has finite land. Google "Land Value Tax"
  - djschnei 11y ago
    Luckily, we have a totally non coercive, completely voluntary way to regulate the use of finite resources, which automagically allocates resources favoring their most productive uses. It's called a market economy. How can something that is common property, like you assert (I disagree) be claimed arbitrarily by one group of people and charged for?
- rhino369 11y ago
  >So in bringing more business to an area, they need to pay twice? It's very possible for situation where whatever property tax the city gets isn't enough to cover the actual services a company requires. Fire, EMS, police, road construction, etc. This is especially true when the workers are mostly commuters. Then the workers don't pay local taxes either. There are positive externalities like nearby restaurants and hotels with increased business. Its really unfair to blame apple for it since they didn't make the rules. But I think it would be fair to levy a "worker" tax that tries to raise revenue for teh city to service the thousands of employees who spend 8-12 hours a day in Cupertino but don't pay a cent in taxes.
todd8 11y ago
Believe me, it happens in the US, by hook or by crook. I was a partner in a large residential development. There were countless ways that government gets what it wants from the developers. For example, we had a commitment for a water line to the development from the water control district. Only later after buying the land, the politics had changed and we found that yes they would bring water to the project only not in our lifetime. We would have to pay for the water lines ourselves if we wanted them. Over the years as the development grew (hundreds of residential lots) we went to the city council to request a left turn lane for the entrance. They would let us pay to put one in, but only if we planted wildflowers along the city's highways. There seems to be constant sleazy negotiation required for any development one does. The local governments have monopoly control over the process, and they force developers to pay up.
cauterized 11y ago
In the US, it's more likely for a locality to pay a developer (often in the form of tax credits) to build in its area or to pay a company to move there. The theory is that it'll increase the local tax base and be a net positive, but as you point out there are also externalities and additional burdens borne by existing infrastructure and citizens.
spiralpolitik 11y ago
California is a unique snowflake when it comes to planning and development. Mostly due to a number of issues: 1) Prop 13 allows commercial property owners to avoid tax reassessment when the property is transferred (they sell the shell company owning the property rather than the property itself so the property doesn't trigger a reassessment) . This means a lot of property owners are paying 80s or 90s levels of property tax rather than the amount they should be paying under current rates thus depriving cities of revenue. 2) NIMBYs. CA and especially the Bay Area is full of people that are supportive of building more infrastructure or housing as long as it isn't built where they live. They fear that any kind of infrastructure (roads, public transit) or new development (affordable housing) will bring "the wrong sort of people" into the area and affect their property prices. Cupertino and other valley cities are notorious for not building enough housing relative to the number of office space for this reason. 3). Environment impact studies. Any proposed development needs one of these and if your plan gets sucked into the detailed version then it can take years or even decades to get the project approved. If people don't approve of your development then generally they get lawyer-ed up and file a review. This will stop most developers cold as nobody wants to spent years and potentially millions dollars in court before they can break ground. So there you have it. It generally considered to be impossible to get any large infrastructure project built in California in under 20 years. See the high speed rail project. 19 years to deliver a link between two nowhere towns (Merced and Bakersfield). China is positively rolling in the aisle with laughter.

mdasen 11y ago

I'm not sure there's an official code for it in the States, but it definitely happens. In this case, Apple is spending in excess of a hundred million - $66M on things like infrastructure and low-income housing, $35 incentivizing alternative transit to work, and $15.4M annually to the Santa Clara Valley Transportation Authority (http://venturebeat.com/2013/06/04/apple-campus-2-7k-employees-32m-in-property-tax-9k-construction-jobs-66m-in-public-improvements/ http://venturebeat.com/2013/06/04/apple-campus-2-7k-employee...). In some cases, companies get sweet deals from locations to move there - Tesla is getting a whopping $1.2B from Nevada. But in Apple's case, they're paying.

Lazare 11y ago

Yes. But it's usually handled at a higher government level than the local council of a 60k person town. :) California, in particular, is somewhat famous for having an enormous number of state agencies; I rather assume one or more of those made the deal with Apple.

djschnei 11y ago

Wow... outstanding haha. So in bringing more business to an area, they need to pay twice? At what point do people actually own the land they own?

awinder 11y ago
Uh, yeah, they have to cost-share the burden of upsetting the current infrastructure. Say you owned a piece of property adjacent to where all this new building is going on. Is it your responsibility to chip in? Is it your responsibility to shoulder the cost burden of what is effectively a zoning-related issue? I mean, god, when do you really own the property you're standing on? You didn't even ask for all this development, but now you've got to pay for expanding the infrastructure because a new developer wants to reap financial reward by developing up his land? Yeah. It's not a property freedom issue, it's a cost ecosystem issue. As time goes on and life changes, owning property is going to have fluid costs, and tax assessments on people who come in to develop land is one way to defray those costs from disproportionately hitting people who have lived in an area for a long time. Frankly, those people would never really plan for that kind of thing to happen, so you're avoiding a lot of nasty repercussions by taxing the person upsetting the ecosystem, rather than the members of the ecosystem itself.
talmand 11y ago
If failure to pay property taxes means you vacating the property after government seizure, then you don't own the land anyway. Threat of seizure is a serious problem for a business, why not force them to pay twice?
- djschnei 11y ago
  uuuuuh because it's immoral? You're saying "well we already threaten them with violence/guns to pay once, might as well do it twice" - I shouldn't have to explain my objections.
  - talmand 11y ago
    I'm not sure you understand the point of my comment. I was sarcastically agreeing with you.
goldbrick 11y ago
1) the developer doesn't "bring" business to the area, they are supported by their clients and are responding to economic incentives, same as anyone else. 2) if you do perceive them as "bringing" business, then it's only right to equally perceive them as bringing congestion, pollution, and all the other undesirable side effects of economic activity. 3) when does one ever "own" land? Property rights are enforced by the government, it's only fair that they receive compensation for that.
- jessriedel 11y ago
  > Property rights are enforced by the government, it's only fair that they receive compensation for that. The compensation they extract has nothing to do with the cost of enforcing property rights, because those costs are trivial.
  - goldbrick 11y ago
    Not trivial at all, just mostly invisible and most of us who've only known modern western societies never give it a second thought.
    - jessriedel 11y ago
      Try again. Law enforcement was just 9% of the Cupertino municipal budget in 2015. http://www.cupertino.org/index.aspx?page=1222 http://www.cupertino.org/index.aspx?page=1222 What fraction of that do you want to bet has anything to do with protecting private property, as opposed to the large revenue generating activities like parking tickets?
      - goldbrick 11y ago
        Like I said, completely invisible to you.
    - djschnei 11y ago
      Try again. That "protection" you're referencing is actually the natural cooperation between rational actors that capitalism and market economies in general foster and perpetuate. Capitalism is the invisible hand, not government.
tamana 11y ago
Never. Land is partly common property. Real estate is taxed ongoing because the Earth has finite land. Google "Land Value Tax"
- djschnei 11y ago
  Luckily, we have a totally non coercive, completely voluntary way to regulate the use of finite resources, which automagically allocates resources favoring their most productive uses. It's called a market economy. How can something that is common property, like you assert (I disagree) be claimed arbitrarily by one group of people and charged for?
rhino369 11y ago
>So in bringing more business to an area, they need to pay twice? It's very possible for situation where whatever property tax the city gets isn't enough to cover the actual services a company requires. Fire, EMS, police, road construction, etc. This is especially true when the workers are mostly commuters. Then the workers don't pay local taxes either. There are positive externalities like nearby restaurants and hotels with increased business. Its really unfair to blame apple for it since they didn't make the rules. But I think it would be fair to levy a "worker" tax that tries to raise revenue for teh city to service the thousands of employees who spend 8-12 hours a day in Cupertino but don't pay a cent in taxes.

todd8 11y ago

Believe me, it happens in the US, by hook or by crook. I was a partner in a large residential development. There were countless ways that government gets what it wants from the developers. For example, we had a commitment for a water line to the development from the water control district. Only later after buying the land, the politics had changed and we found that yes they would bring water to the project only not in our lifetime. We would have to pay for the water lines ourselves if we wanted them. Over the years as the development grew (hundreds of residential lots) we went to the city council to request a left turn lane for the entrance. They would let us pay to put one in, but only if we planted wildflowers along the city's highways. There seems to be constant sleazy negotiation required for any development one does. The local governments have monopoly control over the process, and they force developers to pay up.

cauterized 11y ago

In the US, it's more likely for a locality to pay a developer (often in the form of tax credits) to build in its area or to pay a company to move there. The theory is that it'll increase the local tax base and be a net positive, but as you point out there are also externalities and additional burdens borne by existing infrastructure and citizens.

spiralpolitik 11y ago

California is a unique snowflake when it comes to planning and development. Mostly due to a number of issues: 1) Prop 13 allows commercial property owners to avoid tax reassessment when the property is transferred (they sell the shell company owning the property rather than the property itself so the property doesn't trigger a reassessment) . This means a lot of property owners are paying 80s or 90s levels of property tax rather than the amount they should be paying under current rates thus depriving cities of revenue. 2) NIMBYs. CA and especially the Bay Area is full of people that are supportive of building more infrastructure or housing as long as it isn't built where they live. They fear that any kind of infrastructure (roads, public transit) or new development (affordable housing) will bring "the wrong sort of people" into the area and affect their property prices. Cupertino and other valley cities are notorious for not building enough housing relative to the number of office space for this reason. 3). Environment impact studies. Any proposed development needs one of these and if your plan gets sucked into the detailed version then it can take years or even decades to get the project approved. If people don't approve of your development then generally they get lawyer-ed up and file a review. This will stop most developers cold as nobody wants to spent years and potentially millions dollars in court before they can break ground. So there you have it. It generally considered to be impossible to get any large infrastructure project built in California in under 20 years. See the high speed rail project. 19 years to deliver a link between two nowhere towns (Merced and Bakersfield). China is positively rolling in the aisle with laughter.