7 ms·

You may not like what he said around WW2 but anyone who recently moved to the Bay Area will love his take on landlords, from 1909: > Roads are made, streets ar

by rcpt 8y ago

You may not like what he said around WW2 but anyone who recently moved to the Bay Area will love his take on landlords, from 1909: > Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains -- and all the while the landlord sits still. Every one of those improvements is effected by the labor and cost of other people and the taxpayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is enhanced. He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived. The whole thing is worth a read. http://www.landvaluetax.org/current-affairs-comment/winston-churchill-said-it-all-better-then-we-can.html http://www.landvaluetax.org/current-affairs-comment/winston-...

kbutler 8y ago
Property taxes? At least where I live, land values are assessed annually, and the owner is obligated to pay a percentage of that value. Those tax funds are used for the very improvements mentioned, as well as usage-based utility fees for the services.
- ummonk 8y ago
  California has prop 13 which results in property taxes not keeping up with assessments.
  - zeroonetwothree 8y ago
    To be fair, just because the marginal house sells for more doesn't mean that providing local services is commensurately more expensive.
    - carbocation 8y ago
      Sure, but Churchill's point above is, "... he contributes nothing to the process from which his own enrichment is derived." The more out of step taxation is with wealth creation, more accurate that point becomes. Whether or not that's a bad thing can be reasonably debated, I think.
    - heavenlyblue 8y ago
      Really? What about heavily contributing to the devaluation of the money paid to keep said services running?
    - pjc50 8y ago
      It does however mean that house prices for staff are more expensive, so they need to be paid correspondingly more, and staff costs are a very large fraction of the cost of services.
    - landryraccoon 8y ago
      In the case of expensive urban areas it kind of does. High housing costs mean that literally everything in an area is more expensive. All services and all goods require human labor - people to load and unload trucks, stock shelves, stand behind registers, prepare goods and services etc.. High rents are a massive transfer of wealth over time from everyone else to landlords. So yes, increased housing costs do make all local services cost more, at the expense of the general public and for the benefit of landlords.
  - the_watcher 8y ago
    Sure, but it still negates the argument that landlords don't contribute towards shared services at all.
    - CalChris 8y ago
      Landlords like the Peery Arrillaga have owned their land from before Prop 13. They pay virtually nothing in property taxes for it.
      - the_watcher 8y ago
        Less than what they'd pay if they bought now (or than they should pay, either works) still negates the argument that landlords don't contribute in any way.
- pjc50 8y ago
  Not in the UK. We have a system that's vaguely related to the value of the house, banded so that expensive property is under-taxed, and usually capped by central government. It's quite a mess.
  - DanBC 8y ago
    And, since 2013, starting to disproportionately affect the poorest too. https://www.theguardian.com/commentisfree/2019/feb/16/council-tax-austerity-local-services https://www.theguardian.com/commentisfree/2019/feb/16/counci...
  - ben_w 8y ago
    And worse, it’s occipier based, not owner based. I own a flat in the UK and it’s my tenant, not me, who pays council tax.
- roenxi 8y ago
  I really like property taxes in principle, so I want to expand on the argument for why they are a good idea. Ignoring the built property, land is an asset that basically doesn't decay with time, can't be physically carried away, provides its own storage and there is always someone who could be using it (in cities). Most of the value isn't in the land either, it is the services, infrastructure and community around the property that create the value. Almost all other assets decay if you don't use them. That enforces a level of equality in the long term, where effective owners can out-compete ineffective owners, because assets are usually replaced every 20-30 years in a Ship of Theseus style process. It makes sense to have a 1.25% or thereabouts annual tax on land, so owners essentially have to repurchase it once a generation. We shouldn't allow the system to reward people because their great-grandparent bought property. We should reward them because they are responsible owners of that property, contributing to their community or somesuch to the point they can pay that tax.
  - Mikhail_Edoshin 8y ago
    This should then apply to intellectual property as well.
ColanR 8y ago
What about the benefit of actual living quarters for the tenants? Who besides a landlord is going to rent 4 walls and a roof to someone who needs it? Seems similar to saying that hotel owners 'contribute nothing to the general welfare'.
- TheOtherHobbes 8y ago
  https://en.wikipedia.org/wiki/Public_housing https://en.wikipedia.org/wiki/Public_housing
  - ColanR 8y ago
    That's just a case where the government is the landlord.
- thereisnospork 8y ago
  Well the landlord's contribution is maintenance and matchmaking. The problem is that the fair economic value of maintenance and matchmaking, plus construction (labor, materials, design, oversight, etc.) when amortized monthly is far less than the average SF rent of 2-4 thousand dollars a month.
  - ColanR 8y ago
    Isn't the problem in SF that the wages have gone up hugely for a small subset of the population? If that's the case, then the landlord is just following a standard negotiation tactic [1], since this is their livlihood. [1] https://www.monster.com/career-advice/article/dont-leave-money-on-the-table-hot-jobs https://www.monster.com/career-advice/article/dont-leave-mon...
    - thereisnospork 8y ago
      > Isn't the problem in SF that the wages have gone up hugely for a small subset of the population? Wages of the renting population is irrelevant to the 'fair economic price1' of an apartment. The equilibrium/fair cost of a latte doesn't go up because a few millionaires move into a neighborhood, it might go up because of a barista labor-shortage, a coffee bean-tariff, or other supply-side effect. You're not wrong that the rent prices are being driven up because there is an influx of wealth to a subset, but the core problem is that the supply is artificially constrained. If you put a quota on lattes sold in our hypothetical neighborhood, only the rich will be able to drink them - and will pay 'rich people prices' to ensure they can (or if you prefer, Starbucks will maximize its profit in the latte constrained environment. Let Starbucks serve all the lattes it wants, and prices will stay more or less constant. 1 to be specific, the fair economic price is the breakeven + opportunity cost (profit!) to build an operate an apartment building, which can be amortized to a monthly rent per unit that would be required in order to make building the apartment worth while to the builder, architect, et al. In SF, and much of the Bay Area, monthly rents far exceed this value - which if SF was a functioning market would drive the construction of more apartments driving rents down towards their fair economic price.
unmole 8y ago
Article about the villanous side of a Western "hero" and the top comment is cribbing about rents in the Bay Area. This is peak Hacker News.

by rcpt 8y ago

kbutler 8y ago

Property taxes? At least where I live, land values are assessed annually, and the owner is obligated to pay a percentage of that value. Those tax funds are used for the very improvements mentioned, as well as usage-based utility fees for the services.

ummonk 8y ago
California has prop 13 which results in property taxes not keeping up with assessments.
- zeroonetwothree 8y ago
  To be fair, just because the marginal house sells for more doesn't mean that providing local services is commensurately more expensive.
  - carbocation 8y ago
    Sure, but Churchill's point above is, "... he contributes nothing to the process from which his own enrichment is derived." The more out of step taxation is with wealth creation, more accurate that point becomes. Whether or not that's a bad thing can be reasonably debated, I think.
  - heavenlyblue 8y ago
    Really? What about heavily contributing to the devaluation of the money paid to keep said services running?
  - pjc50 8y ago
    It does however mean that house prices for staff are more expensive, so they need to be paid correspondingly more, and staff costs are a very large fraction of the cost of services.
  - landryraccoon 8y ago
    In the case of expensive urban areas it kind of does. High housing costs mean that literally everything in an area is more expensive. All services and all goods require human labor - people to load and unload trucks, stock shelves, stand behind registers, prepare goods and services etc.. High rents are a massive transfer of wealth over time from everyone else to landlords. So yes, increased housing costs do make all local services cost more, at the expense of the general public and for the benefit of landlords.
- the_watcher 8y ago
  Sure, but it still negates the argument that landlords don't contribute towards shared services at all.
  - CalChris 8y ago
    Landlords like the Peery Arrillaga have owned their land from before Prop 13. They pay virtually nothing in property taxes for it.
    - the_watcher 8y ago
      Less than what they'd pay if they bought now (or than they should pay, either works) still negates the argument that landlords don't contribute in any way.
pjc50 8y ago
Not in the UK. We have a system that's vaguely related to the value of the house, banded so that expensive property is under-taxed, and usually capped by central government. It's quite a mess.
- DanBC 8y ago
  And, since 2013, starting to disproportionately affect the poorest too. https://www.theguardian.com/commentisfree/2019/feb/16/council-tax-austerity-local-services https://www.theguardian.com/commentisfree/2019/feb/16/counci...
- ben_w 8y ago
  And worse, it’s occipier based, not owner based. I own a flat in the UK and it’s my tenant, not me, who pays council tax.
roenxi 8y ago
I really like property taxes in principle, so I want to expand on the argument for why they are a good idea. Ignoring the built property, land is an asset that basically doesn't decay with time, can't be physically carried away, provides its own storage and there is always someone who could be using it (in cities). Most of the value isn't in the land either, it is the services, infrastructure and community around the property that create the value. Almost all other assets decay if you don't use them. That enforces a level of equality in the long term, where effective owners can out-compete ineffective owners, because assets are usually replaced every 20-30 years in a Ship of Theseus style process. It makes sense to have a 1.25% or thereabouts annual tax on land, so owners essentially have to repurchase it once a generation. We shouldn't allow the system to reward people because their great-grandparent bought property. We should reward them because they are responsible owners of that property, contributing to their community or somesuch to the point they can pay that tax.
- Mikhail_Edoshin 8y ago
  This should then apply to intellectual property as well.

ColanR 8y ago

What about the benefit of actual living quarters for the tenants? Who besides a landlord is going to rent 4 walls and a roof to someone who needs it? Seems similar to saying that hotel owners 'contribute nothing to the general welfare'.

TheOtherHobbes 8y ago
https://en.wikipedia.org/wiki/Public_housing https://en.wikipedia.org/wiki/Public_housing
- ColanR 8y ago
  That's just a case where the government is the landlord.
thereisnospork 8y ago
Well the landlord's contribution is maintenance and matchmaking. The problem is that the fair economic value of maintenance and matchmaking, plus construction (labor, materials, design, oversight, etc.) when amortized monthly is far less than the average SF rent of 2-4 thousand dollars a month.
- ColanR 8y ago
  Isn't the problem in SF that the wages have gone up hugely for a small subset of the population? If that's the case, then the landlord is just following a standard negotiation tactic [1], since this is their livlihood. [1] https://www.monster.com/career-advice/article/dont-leave-money-on-the-table-hot-jobs https://www.monster.com/career-advice/article/dont-leave-mon...
  - thereisnospork 8y ago
    > Isn't the problem in SF that the wages have gone up hugely for a small subset of the population? Wages of the renting population is irrelevant to the 'fair economic price1' of an apartment. The equilibrium/fair cost of a latte doesn't go up because a few millionaires move into a neighborhood, it might go up because of a barista labor-shortage, a coffee bean-tariff, or other supply-side effect. You're not wrong that the rent prices are being driven up because there is an influx of wealth to a subset, but the core problem is that the supply is artificially constrained. If you put a quota on lattes sold in our hypothetical neighborhood, only the rich will be able to drink them - and will pay 'rich people prices' to ensure they can (or if you prefer, Starbucks will maximize its profit in the latte constrained environment. Let Starbucks serve all the lattes it wants, and prices will stay more or less constant. 1 to be specific, the fair economic price is the breakeven + opportunity cost (profit!) to build an operate an apartment building, which can be amortized to a monthly rent per unit that would be required in order to make building the apartment worth while to the builder, architect, et al. In SF, and much of the Bay Area, monthly rents far exceed this value - which if SF was a functioning market would drive the construction of more apartments driving rents down towards their fair economic price.

unmole 8y ago

Article about the villanous side of a Western "hero" and the top comment is cribbing about rents in the Bay Area. This is peak Hacker News.