5 ms·

But the thing is that you (Bay Area landowners) are not really bearing the cost of insufficient housing. In fact, you're benefiting through increasing home valu

by flick 9y ago

But the thing is that you (Bay Area landowners) are not really bearing the cost of insufficient housing. In fact, you're benefiting through increasing home values (for which you are not taxed due to Prop. 13). It's renters and others like Ms. James who are being hurt. The particularly cruel aspect of this is that once these people have been forced to the edges of the Bay Area, they no longer get to participate in the future decisions that will either exacerbate or alleviate this problem. Ms. James no longer gets to vote in Alameda, and thus has no say in the decisions that keep housing costs high and her commute long. That's why I believe housing policy needs to be decided at the Bay Area or CA state level. When these decisions are made at the local level, it's people like your friends who selfishly vote to inflict the high costs of housing on to others. Hopefully this NIMBY-ism can be averted by making sure that all stakeholders get a say in the housing policy of a incredibly interconnected region.

lisper 9y ago
> But the thing is that you (Bay Area landowners) are not really bearing the cost of insufficient housing. That's not true. It makes it hard to find good help. (That was intended to be humorously ironic, but there's a serious point behind it: everything in the SFBA is more expensive than it would be if housing were more plentiful.) > you're benefiting through increasing home values Not really. You only benefit from this if you sell, and if you sell two bad things happen if housing prices are up. First, you take a big hit on capital gains, and second, you lose your prop 13 benefits. So rising prices make it really hard to move within the SFBA even for people who already live here. Yes, you can sell and move away, but people don't want to do that because everyplace else sucks by comparison. If that weren't true, there wouldn't be so many people wanting to move here driving up our prices!
- anarazel 9y ago
  Are you actually complaining that the higher house price wouldn't be good for you, because you'd have to pay tax when selling? I'm still not sure this isn't all sarcastic.
  - lisper 9y ago
    Nope, not sarcastic at all. I live in a house that is much too big for me. I bought it during the crash when prices were low. I would like to move to a smaller house, but I don't because it's too expensive. I can't just trade my house for one of equal value and come out even. It would be very expensive for me to move to a house of equal value, and the higher prices go the more expensive it gets. I have no objections to paying taxes. Quite the contrary.
    - pc86 9y ago
      > I have no objections to paying taxes. First you're complaining about "huge" capital gains, which is literally a tax on profit you made for doing nothing. A tax, might I add, that is much less than income tax. Second, you're complaining about Prop. 13, which just means you're upset about the prospect of paying the property taxes you actually owe, as opposed to the wildly deflated ones from when you purchased. I don't think you understand just how out of touch you're coming across, and nothing in your statement suggests you have anything but objections to paying your fair share of taxes.
      - lisper 9y ago
        I'm not complaining about having to pay taxes per se. I'm mainly just pointing out that rising house prices are not an unalloyed good even if you own. In fact, appreciating house prices ONLY help you if you sell and don't buy another house in the same market. In all other situations, rising house prices actually hurt you, at least in California. Specifically: the house I own is too big for me. I'd like to downsize. If housing prices were flat I could sell my house, buy a smaller house for less, reduce my property taxes, and only pay the transaction costs. But because my house and all the others around have appreciated, I can't do that. The smaller house I want to move in to costs more than the house I'm in when I bought it, so if I downsize my property taxes go up. Also, I have to pay transaction costs on a much bigger transaction plus pay the capital gains tax on a gain which I don't get to realize. The only way I win is if I move out of the area. But I don't want to do that. I like it here. None of this would be a problem if prices were flat. It costs me more (a LOT more!) to downsize because the market is up. Hence an appreciating market is not necessarily good for you even if you own.
- thephyber 9y ago
  > You only benefit from this if you sell Home equity is a benefit. You can borrow against it or otherwise use it as an asset on paper. > if you sell two bad things happen if housing prices are up. First, you take a big hit on capital gains Wait, what? You're arguing that it's a "bad thing" if you have to pay a percentage of additional profits? Most primary residences aren't subject to capital gains if you hold them for > 2 years, assuming the gain is less than $0.5million (married, co-owning).
  - lisper 9y ago
    I do not object to paying taxes. In fact, I'm very politically active in trying to get taxes raised on rich people like me. But if I want to sell my house and buy the house next door and those two houses cost the same, then the higher those prices are the higher my actual cost of moving is, notwithstanding that I am theoretically trading like for like. That's bad for everyone because it makes me less likely to move, which reduces the liquidity of the housing market, which drives prices up even further.
    - vecinu 9y ago
      Without Prop 13, if you were paying the taxes you actually "should" on the true market value of your house, you would most likely be forced to move out of your current house. If that happened to enough people, prices would stabilize closer to reality.
      - lisper 9y ago
        Yes, I would totally support the repeal of prop 13. What most people don't realize is that it was a colossal scam by business interests. It was sold as "let granny stay in her house" but it also applies to commercial properties, which don't change hands nearly as often as residences. California has vast tracts of prime real estate that are still being taxed at 1970s assessments. At the very least prop 13 should have been restricted to owner-occupied principal residences. But that ship sailed long before my time.
- dragonwriter 9y ago
  > (That was intended to be humorously ironic, but there's a serious point behind it: everything in the SFBA is more expensive than it would be if housing were more plentiful.) No, except for housing, most things are less expensive, because more housing would mean more population but not proportionally more infrastructure (at least, without higher maintenance costs per unit, because the cheap choices are already built) for imports to the region, which means supply increases less than demand for anything with external inputs, which means prices go up. This effect is even worse for things that are limited and local in supply, like unique local features, where you get increased demand with no increased supply, not merely supply increase less than proportional to demand. So prices on those go way up.
soft_serve 9y ago
> In fact, you're benefiting through increasing home values (for which you are not taxed due to Prop. 13) This is completely untrue. I have a house in 94087 where I live about 7 months/year (the other 5 months are in Tel Aviv, where it's also very expensive!) I own the house, bought in in 1989. I don't benefit at all from increased house prices. It just makes everything more expensive. And even under Prop 13, my property tax goes up 2% a year. That's more than inflation. I don't benefit at all from the "increased value" in my house. If I could, I'd tear down the house and build a 2-family house on the property. But even if zoning laws allowed it, the house would be reassessed at current market value, and it wouldn't be worth it to pay $32,000/year in property taxes alone. (I've looked into this to the extent of hiring a real-estate lawyer to see if it's feasible). If there were no prop 13, people would be forced out of their homes because specu-vesters would drive the prices up making just the taxes affordable. The solution is to BUILD MORE HOUSES. Build apartment buildings. Close by so people can walk or take existing mass transit to work. And allow people with single family homes to tear them down and build 2-family homes without being reassessed.
- ktRolster 9y ago
  You aren't happy at all that your house is worth a million dollars?
  - sbov 9y ago
    Speaking personally, the value of my house means little to me. I plan to live in this region for a long time - when my house goes up, other houses in the region go up. When my house goes down, other houses in the region go down. My house may be worth $1million, but selling it and buying another will get me the same house as when it was worth $500k. It only matters if I decide to sell it AND move somewhere else. Which probably isn't going to happen.
    - rrauenza 9y ago
      Speaking of moving - a downside of prop 13 is that people used to upgrade / downgrade their houses. Have kids? Get a little bigger house. Retire? Downsize. So now people buy in and don't move.

by flick 9y ago

lisper 9y ago

> But the thing is that you (Bay Area landowners) are not really bearing the cost of insufficient housing. That's not true. It makes it hard to find good help. (That was intended to be humorously ironic, but there's a serious point behind it: everything in the SFBA is more expensive than it would be if housing were more plentiful.) > you're benefiting through increasing home values Not really. You only benefit from this if you sell, and if you sell two bad things happen if housing prices are up. First, you take a big hit on capital gains, and second, you lose your prop 13 benefits. So rising prices make it really hard to move within the SFBA even for people who already live here. Yes, you can sell and move away, but people don't want to do that because everyplace else sucks by comparison. If that weren't true, there wouldn't be so many people wanting to move here driving up our prices!

anarazel 9y ago
Are you actually complaining that the higher house price wouldn't be good for you, because you'd have to pay tax when selling? I'm still not sure this isn't all sarcastic.
- lisper 9y ago
  Nope, not sarcastic at all. I live in a house that is much too big for me. I bought it during the crash when prices were low. I would like to move to a smaller house, but I don't because it's too expensive. I can't just trade my house for one of equal value and come out even. It would be very expensive for me to move to a house of equal value, and the higher prices go the more expensive it gets. I have no objections to paying taxes. Quite the contrary.
  - pc86 9y ago
    > I have no objections to paying taxes. First you're complaining about "huge" capital gains, which is literally a tax on profit you made for doing nothing. A tax, might I add, that is much less than income tax. Second, you're complaining about Prop. 13, which just means you're upset about the prospect of paying the property taxes you actually owe, as opposed to the wildly deflated ones from when you purchased. I don't think you understand just how out of touch you're coming across, and nothing in your statement suggests you have anything but objections to paying your fair share of taxes.
    - lisper 9y ago
      I'm not complaining about having to pay taxes per se. I'm mainly just pointing out that rising house prices are not an unalloyed good even if you own. In fact, appreciating house prices ONLY help you if you sell and don't buy another house in the same market. In all other situations, rising house prices actually hurt you, at least in California. Specifically: the house I own is too big for me. I'd like to downsize. If housing prices were flat I could sell my house, buy a smaller house for less, reduce my property taxes, and only pay the transaction costs. But because my house and all the others around have appreciated, I can't do that. The smaller house I want to move in to costs more than the house I'm in when I bought it, so if I downsize my property taxes go up. Also, I have to pay transaction costs on a much bigger transaction plus pay the capital gains tax on a gain which I don't get to realize. The only way I win is if I move out of the area. But I don't want to do that. I like it here. None of this would be a problem if prices were flat. It costs me more (a LOT more!) to downsize because the market is up. Hence an appreciating market is not necessarily good for you even if you own.
thephyber 9y ago
> You only benefit from this if you sell Home equity is a benefit. You can borrow against it or otherwise use it as an asset on paper. > if you sell two bad things happen if housing prices are up. First, you take a big hit on capital gains Wait, what? You're arguing that it's a "bad thing" if you have to pay a percentage of additional profits? Most primary residences aren't subject to capital gains if you hold them for > 2 years, assuming the gain is less than $0.5million (married, co-owning).
- lisper 9y ago
  I do not object to paying taxes. In fact, I'm very politically active in trying to get taxes raised on rich people like me. But if I want to sell my house and buy the house next door and those two houses cost the same, then the higher those prices are the higher my actual cost of moving is, notwithstanding that I am theoretically trading like for like. That's bad for everyone because it makes me less likely to move, which reduces the liquidity of the housing market, which drives prices up even further.
  - vecinu 9y ago
    Without Prop 13, if you were paying the taxes you actually "should" on the true market value of your house, you would most likely be forced to move out of your current house. If that happened to enough people, prices would stabilize closer to reality.
    - lisper 9y ago
      Yes, I would totally support the repeal of prop 13. What most people don't realize is that it was a colossal scam by business interests. It was sold as "let granny stay in her house" but it also applies to commercial properties, which don't change hands nearly as often as residences. California has vast tracts of prime real estate that are still being taxed at 1970s assessments. At the very least prop 13 should have been restricted to owner-occupied principal residences. But that ship sailed long before my time.
dragonwriter 9y ago
> (That was intended to be humorously ironic, but there's a serious point behind it: everything in the SFBA is more expensive than it would be if housing were more plentiful.) No, except for housing, most things are less expensive, because more housing would mean more population but not proportionally more infrastructure (at least, without higher maintenance costs per unit, because the cheap choices are already built) for imports to the region, which means supply increases less than demand for anything with external inputs, which means prices go up. This effect is even worse for things that are limited and local in supply, like unique local features, where you get increased demand with no increased supply, not merely supply increase less than proportional to demand. So prices on those go way up.

soft_serve 9y ago

> In fact, you're benefiting through increasing home values (for which you are not taxed due to Prop. 13) This is completely untrue. I have a house in 94087 where I live about 7 months/year (the other 5 months are in Tel Aviv, where it's also very expensive!) I own the house, bought in in 1989. I don't benefit at all from increased house prices. It just makes everything more expensive. And even under Prop 13, my property tax goes up 2% a year. That's more than inflation. I don't benefit at all from the "increased value" in my house. If I could, I'd tear down the house and build a 2-family house on the property. But even if zoning laws allowed it, the house would be reassessed at current market value, and it wouldn't be worth it to pay $32,000/year in property taxes alone. (I've looked into this to the extent of hiring a real-estate lawyer to see if it's feasible). If there were no prop 13, people would be forced out of their homes because specu-vesters would drive the prices up making just the taxes affordable. The solution is to BUILD MORE HOUSES. Build apartment buildings. Close by so people can walk or take existing mass transit to work. And allow people with single family homes to tear them down and build 2-family homes without being reassessed.

ktRolster 9y ago
You aren't happy at all that your house is worth a million dollars?
- sbov 9y ago
  Speaking personally, the value of my house means little to me. I plan to live in this region for a long time - when my house goes up, other houses in the region go up. When my house goes down, other houses in the region go down. My house may be worth $1million, but selling it and buying another will get me the same house as when it was worth $500k. It only matters if I decide to sell it AND move somewhere else. Which probably isn't going to happen.
  - rrauenza 9y ago
    Speaking of moving - a downside of prop 13 is that people used to upgrade / downgrade their houses. Have kids? Get a little bigger house. Retire? Downsize. So now people buy in and don't move.