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They are consuming, but nowhere near enough to spread the wealth around. And the wealthy vote themselves laws that let them keep more of their unearned wealth.

They are consuming, but nowhere near enough to spread the wealth around. And the wealthy vote themselves laws that let them keep more of their unearned wealth. Look at what’s happened to California under prop 13 [1]. What was supposed to protect little old ladies from losing their homes due to rising property taxes has turned into a commercial real estate bonanza. People are making money hand over fist renting rooms at exorbitant prices to young people, and paying next to nothing in property taxes for the privilege. Meanwhile, a young person needs a large six to seven figure income just to afford a home in the Bay Area, and then their property taxes are insanely high, forcing them to subsidize their commercial real estate neighbours. It’s ridiculously unfair. [1] https://www.latimes.com/california/story/2019-08-14/california-proposition-13-business-taxes-split-roll https://www.latimes.com/california/story/2019-08-14/californ...

chrisweekly 7y ago
To be fair, the Bay Area is an anomaly... but IMHO your points are valid.
- ohazi 7y ago
  The same is true in Los Angeles and San Diego (and basically anywhere that has a meaningful concentration of people who are willing and able to work).
zepto 7y ago
Speaking as someone who recently was finally able to buy in the Bay Area, repealing prop 13 would screw everyone in my position and do nothing to make real estate more available. I agree that it is ‘unfair’ but making it more ‘fair’ would just harm all the people who have actually made it work for them. Most people who own property in the Bay Area are not predatory landlords.
- bsanr2 7y ago
  Corrections are part of any economy with a boom/bust cycle. Things are good for you, bad for us now. Repealing P13 would reverse that dynamic. Hopefully we regress to a livable and sustainable mean.
  - zepto 7y ago
    What do you mean ‘things are good for me now’ ? You make the assumption that I’m some kind of boomer who’s somehow benefitted from buying decades ago. Repealing prop 13 in order to take peoples homes away through confiscatory taxation so that people with high incomes can buy them is not a correction. It is theft. Why not work somewhere else where you can afford a home? That is the real ‘correction’.
    - bsanr2 7y ago
      >What do you mean ‘things are good for me now’ ? You own a home. Your housing payments aren't being thrown into a void. >Repealing prop 13 in order to take peoples homes away through confiscatory taxation so that people with high incomes can buy them is not a correction. It is theft. So is rent-seeking, if we have such a low bar for "theft." Really, it's just society deciding where its priorities lay: people who need housing for practical reasons, or the people privileged enough to use their housing as an investment vehicle? >Why not work somewhere else where you can afford a home? That is the real ‘correction’. Now you're getting emotional. That's not a market correction at all.
      - zepto 7y ago
        Market corrections are about supply and demand being balanced. There is nothing emotional about suggesting that people choose to live and work in places they can afford to. The solution to the Bay Area housing crisis is for employers to establish operations in places where housing is cheaper - not for housing to be confiscated from earlier purchasers through confiscatory taxation.
        bsanr2 7y ago
        >The solution to the Bay Area housing crisis is for employers to establish operations in places where housing is cheaper - not for housing to be confiscated from earlier purchasers through confiscatory taxation. It's actually both. >There is nothing emotional about suggesting that people choose to live and work in places they can afford to. It is, within context. The proposal in question might have a net negative outcome for you, but be positive for the community. Further, while the status quo has full-time workers living on the street, readjusting this regulation and allowing a market correction to take place would presumably not ruin you, but simply force you to move. (Hey, you suggested it for others, should be good enough for you too.) In the end, though, you're against something that would ultimately be a boon for the area and is at least tenable for you. That's an emotional argument.
- lmm 7y ago
  > Speaking as someone who recently was finally able to buy in the Bay Area, repealing prop 13 would screw everyone in my position No it wouldn't; if you've recently brought, your property taxes would go down. What it would mean is that the people who bought in the '80s who would have to step up so that you both paid the same, rather than you carrying them. > and do nothing to make real estate more available. Of course it would: it would force a lot of people (particularly older non-working people) to sell up, making a lot more housing available to those who have a greater need/desire to live there now but aren't fortunate enough to have moved in decades ago. > I agree that it is ‘unfair’ but making it more ‘fair’ would just harm all the people who have actually made it work for them. The first-order effect would be zero-sum, but the current market distortion leads to inefficient allocation at second order. So levelling the playing field would be a net gain. > Most people who own property in the Bay Area are not predatory landlords. People who benefit from prop 13 are at best getting an unearned windfall.
  - zepto 7y ago
    Why would property taxes go down? The property value has gone up. At least you are being honest that the goal here is to force people out of their homes so that people with tech jobs can buy them.
    - lmm 7y ago
      > Why would property taxes go down? The property value has gone up. Assuming we want the total tax take to stay the same (changing that is a separate question), people who currently have a higher-than-average tax:property value ratio (which is people who bought recently) would have their tax bill go down (and people who currently have a lower-than-average tax:property value ratio would have their tax bill go up). > At least you are being honest that the goal here is to force people out of their homes so that people with tech jobs can buy them. In the same sense that other people are currently "forced" to rent forever and pay extra taxes to support idle homeowners, sure. Saying that I'm not allowed to own a house in San Francisco is just as cruel as saying that you're not allowed to own a house in San Francisco, whether or not you happen to have lived there for some number of years already.

chrisweekly 7y ago

To be fair, the Bay Area is an anomaly... but IMHO your points are valid.

ohazi 7y ago
The same is true in Los Angeles and San Diego (and basically anywhere that has a meaningful concentration of people who are willing and able to work).

zepto 7y ago

Speaking as someone who recently was finally able to buy in the Bay Area, repealing prop 13 would screw everyone in my position and do nothing to make real estate more available. I agree that it is ‘unfair’ but making it more ‘fair’ would just harm all the people who have actually made it work for them. Most people who own property in the Bay Area are not predatory landlords.

bsanr2 7y ago
Corrections are part of any economy with a boom/bust cycle. Things are good for you, bad for us now. Repealing P13 would reverse that dynamic. Hopefully we regress to a livable and sustainable mean.
- zepto 7y ago
  What do you mean ‘things are good for me now’ ? You make the assumption that I’m some kind of boomer who’s somehow benefitted from buying decades ago. Repealing prop 13 in order to take peoples homes away through confiscatory taxation so that people with high incomes can buy them is not a correction. It is theft. Why not work somewhere else where you can afford a home? That is the real ‘correction’.
  - bsanr2 7y ago
    >What do you mean ‘things are good for me now’ ? You own a home. Your housing payments aren't being thrown into a void. >Repealing prop 13 in order to take peoples homes away through confiscatory taxation so that people with high incomes can buy them is not a correction. It is theft. So is rent-seeking, if we have such a low bar for "theft." Really, it's just society deciding where its priorities lay: people who need housing for practical reasons, or the people privileged enough to use their housing as an investment vehicle? >Why not work somewhere else where you can afford a home? That is the real ‘correction’. Now you're getting emotional. That's not a market correction at all.
    - zepto 7y ago
      Market corrections are about supply and demand being balanced. There is nothing emotional about suggesting that people choose to live and work in places they can afford to. The solution to the Bay Area housing crisis is for employers to establish operations in places where housing is cheaper - not for housing to be confiscated from earlier purchasers through confiscatory taxation.
      - bsanr2 7y ago
        >The solution to the Bay Area housing crisis is for employers to establish operations in places where housing is cheaper - not for housing to be confiscated from earlier purchasers through confiscatory taxation. It's actually both. >There is nothing emotional about suggesting that people choose to live and work in places they can afford to. It is, within context. The proposal in question might have a net negative outcome for you, but be positive for the community. Further, while the status quo has full-time workers living on the street, readjusting this regulation and allowing a market correction to take place would presumably not ruin you, but simply force you to move. (Hey, you suggested it for others, should be good enough for you too.) In the end, though, you're against something that would ultimately be a boon for the area and is at least tenable for you. That's an emotional argument.
lmm 7y ago
> Speaking as someone who recently was finally able to buy in the Bay Area, repealing prop 13 would screw everyone in my position No it wouldn't; if you've recently brought, your property taxes would go down. What it would mean is that the people who bought in the '80s who would have to step up so that you both paid the same, rather than you carrying them. > and do nothing to make real estate more available. Of course it would: it would force a lot of people (particularly older non-working people) to sell up, making a lot more housing available to those who have a greater need/desire to live there now but aren't fortunate enough to have moved in decades ago. > I agree that it is ‘unfair’ but making it more ‘fair’ would just harm all the people who have actually made it work for them. The first-order effect would be zero-sum, but the current market distortion leads to inefficient allocation at second order. So levelling the playing field would be a net gain. > Most people who own property in the Bay Area are not predatory landlords. People who benefit from prop 13 are at best getting an unearned windfall.
- zepto 7y ago
  Why would property taxes go down? The property value has gone up. At least you are being honest that the goal here is to force people out of their homes so that people with tech jobs can buy them.
  - lmm 7y ago
    > Why would property taxes go down? The property value has gone up. Assuming we want the total tax take to stay the same (changing that is a separate question), people who currently have a higher-than-average tax:property value ratio (which is people who bought recently) would have their tax bill go down (and people who currently have a lower-than-average tax:property value ratio would have their tax bill go up). > At least you are being honest that the goal here is to force people out of their homes so that people with tech jobs can buy them. In the same sense that other people are currently "forced" to rent forever and pay extra taxes to support idle homeowners, sure. Saying that I'm not allowed to own a house in San Francisco is just as cruel as saying that you're not allowed to own a house in San Francisco, whether or not you happen to have lived there for some number of years already.