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Cities in the United States have no mechanism to prevent nonresidents from moving in. If nonresidents want to move in and capacity is not expanding it will driv

Cities in the United States have no mechanism to prevent nonresidents from moving in. If nonresidents want to move in and capacity is not expanding it will drive up prices and result in economic pressures on the poorest residents until they vacate enough space to reach an equilibrium. A city can control how many people get to live there, or it can work to ensure that all current residents can continue to live there, but the Takings Clause of the Constitution essentially prevents doing both. Saying "sorry, we are full" (like San Francisco) amounts to telling a large portion of your poorest residents to get out (like San Francisco). People are generally pretty bad at putting two and two together and realizing that their misfortune is the result of poor capacity planning by their city government, but they still tend to get angry and angry people tend to vote out whoever is currently running their city, so pissing off a large swath of residents is rarely a good strategy.

User23 7y ago
Cities may not be able to control nonresidents moving in directly, but their taxing authority is more than sufficient to strongly discourage it. A municipality could massively raise property taxes and grandfather in current city residents for example. It could then use the new revenues to ensure the current residents can continue to live there.
- ericd 7y ago
  Yep, prop 13 and insane property prices serve that function in the SF Bay Area. If you buy now, you pay $2M upfront and ~$20k/yr property tax for a small ranch house, while your neighbor who has lived in a similar house for 40 years pays <$2k/yr, less on an inflation adjusted basis than when they moved in, thanks to prop 13. The cherry on top is that after paying a small fortune for your house, your municipal (and school) budgets are stretched thin, despite some of the highest land values in the country, because so few of the long time residents are paying anywhere near the nominal 1.x% rate. And then the long time residents loudly complain that infrastructure is buckling, and we can't afford to improve it, so we can't expand housing. It's maddening.
  - sethammons 7y ago
    The flip side of that. I live outside California and my neighbor has lived in his place for over 30 years, and it was his dad's place for 30 years before that. Because property taxes go up with assessed value and because the area became more affluent around him, he is now faced with having to sell his business that his dad started to cover property taxes or lose his home.
    - Retric 7y ago
      If property taxes are unplayable then selling the house should net a lot of money. If he really just wants to stay there he could get a reverse mortgage at this point to pay property taxes. Unless he has already dipped into that equity.
    - ericd 7y ago
      What area? But yeah, property taxes can be rough, they’re meant to ensure that you’re not sitting on land that could be used more productively. On the other hand, your neighbor’s investment in land has apparently paid off in terms of appreciation. With prop 13, I’d support age-based property tax abatement, but the current way it’s set up is insane (commercial property gets the same treatment, the tax basis can be passed on to heirs, if you sell less than some fractional share of the land, it doesn’t trigger a reset, and some other insane provisions).

User23 7y ago

Cities may not be able to control nonresidents moving in directly, but their taxing authority is more than sufficient to strongly discourage it. A municipality could massively raise property taxes and grandfather in current city residents for example. It could then use the new revenues to ensure the current residents can continue to live there.

ericd 7y ago
Yep, prop 13 and insane property prices serve that function in the SF Bay Area. If you buy now, you pay $2M upfront and ~$20k/yr property tax for a small ranch house, while your neighbor who has lived in a similar house for 40 years pays <$2k/yr, less on an inflation adjusted basis than when they moved in, thanks to prop 13. The cherry on top is that after paying a small fortune for your house, your municipal (and school) budgets are stretched thin, despite some of the highest land values in the country, because so few of the long time residents are paying anywhere near the nominal 1.x% rate. And then the long time residents loudly complain that infrastructure is buckling, and we can't afford to improve it, so we can't expand housing. It's maddening.
- sethammons 7y ago
  The flip side of that. I live outside California and my neighbor has lived in his place for over 30 years, and it was his dad's place for 30 years before that. Because property taxes go up with assessed value and because the area became more affluent around him, he is now faced with having to sell his business that his dad started to cover property taxes or lose his home.
  - Retric 7y ago
    If property taxes are unplayable then selling the house should net a lot of money. If he really just wants to stay there he could get a reverse mortgage at this point to pay property taxes. Unless he has already dipped into that equity.
  - ericd 7y ago
    What area? But yeah, property taxes can be rough, they’re meant to ensure that you’re not sitting on land that could be used more productively. On the other hand, your neighbor’s investment in land has apparently paid off in terms of appreciation. With prop 13, I’d support age-based property tax abatement, but the current way it’s set up is insane (commercial property gets the same treatment, the tax basis can be passed on to heirs, if you sell less than some fractional share of the land, it doesn’t trigger a reset, and some other insane provisions).