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The problem with housing in California is that we do not build it because regulations prohibit new housing. Look at a zoning map in San Francisco. Housing is il

The problem with housing in California is that we do not build it because regulations prohibit new housing. Look at a zoning map in San Francisco. Housing is illegal.

ethbro 7y ago
I believe the full reasoning is that (1) if property owners paid property taxes on the full market value of their property, then (2) they would lobby for (or at least cease opposition against) upzoning for density, and (3) more dense housing would be legalized and built.
- rizwank 7y ago
  Can you help me understand how #1 becomes #2?
  - TulliusCicero 7y ago
    In most parts of the country, there's both an upside and downside to increasing property values to landowners. Upside: they're worth more, they could sell and move somewhere else cheaper, pocketing the money, or they could rent out their place for more. Downside: they have to pay higher ongoing property taxes. Most landowners still like increasing property values, but it's not all good for them. With prop 13, the downside is wiped out. Increasing values are only good; they could increase 10x overnight and this would only make landowners filthy rich, there's no negative effect for them. Ergo, they have every incentive to keep housing supply constrained, to keep voting for politicians and policies that limit housing density.
    - ethbro 7y ago
      And to bear specifically on the sub-point that blights the Bay Area -- by removing increasing property taxes, you are removing market pressure for highest and best use. Another way to think about property taxes is that they're annual nudges to encourage best use of the property. Without that pressure, as TulliusCicero notes, why would I ever sell before retirement? And furthermore, why would I even try to make money off the property (say, by renting)? That's probably not in the city's (as in, all the people living there) best interest to have a substantial portion of homeowners so disengaged from the actual market. PS: Which isn't to say there aren't gentrification and affordable housing debates to be had. Simply that Prop 13 doesn't really help with that -- it just removed risk from those who are already homeowners.
- justinzollars 7y ago
  It would be a lot less painful and a lot less expensive for us if we just increased the density. But people have to have their beautiful bay views.
- rsmckinney 7y ago
  How about (4) stop importing density from India and China. Immigration is by far the #1 cause for extreme density in the Bay Area and the #1 contributor to inflated real estate and higher taxes.
jogjayr 7y ago
Existing homeowners don't care about new housing because their property taxes don't rise due to a constricted supply. If they did, I'd bet you those zoning laws would change pretty darned quickly.
TulliusCicero 7y ago
Yes, and why is it illegal? It's almost like there's no political pressure to allow more housing, because there's no incentive existing homeowners to support that. Almost as if...
- stjohnswarts 7y ago
  That's why it is sometimes necessary for state governments to step in and override local laws on zoning, regulations on housing etc, that just hasn't happened in California yet.

The problem with housing in California is that we do not build it because regulations prohibit new housing. Look at a zoning map in San Francisco. Housing is illegal.

ethbro 7y ago

I believe the full reasoning is that (1) if property owners paid property taxes on the full market value of their property, then (2) they would lobby for (or at least cease opposition against) upzoning for density, and (3) more dense housing would be legalized and built.

rizwank 7y ago
Can you help me understand how #1 becomes #2?
- TulliusCicero 7y ago
  In most parts of the country, there's both an upside and downside to increasing property values to landowners. Upside: they're worth more, they could sell and move somewhere else cheaper, pocketing the money, or they could rent out their place for more. Downside: they have to pay higher ongoing property taxes. Most landowners still like increasing property values, but it's not all good for them. With prop 13, the downside is wiped out. Increasing values are only good; they could increase 10x overnight and this would only make landowners filthy rich, there's no negative effect for them. Ergo, they have every incentive to keep housing supply constrained, to keep voting for politicians and policies that limit housing density.
  - ethbro 7y ago
    And to bear specifically on the sub-point that blights the Bay Area -- by removing increasing property taxes, you are removing market pressure for highest and best use. Another way to think about property taxes is that they're annual nudges to encourage best use of the property. Without that pressure, as TulliusCicero notes, why would I ever sell before retirement? And furthermore, why would I even try to make money off the property (say, by renting)? That's probably not in the city's (as in, all the people living there) best interest to have a substantial portion of homeowners so disengaged from the actual market. PS: Which isn't to say there aren't gentrification and affordable housing debates to be had. Simply that Prop 13 doesn't really help with that -- it just removed risk from those who are already homeowners.
justinzollars 7y ago
It would be a lot less painful and a lot less expensive for us if we just increased the density. But people have to have their beautiful bay views.
rsmckinney 7y ago
How about (4) stop importing density from India and China. Immigration is by far the #1 cause for extreme density in the Bay Area and the #1 contributor to inflated real estate and higher taxes.

jogjayr 7y ago

Existing homeowners don't care about new housing because their property taxes don't rise due to a constricted supply. If they did, I'd bet you those zoning laws would change pretty darned quickly.

TulliusCicero 7y ago

Yes, and why is it illegal? It's almost like there's no political pressure to allow more housing, because there's no incentive existing homeowners to support that. Almost as if...

stjohnswarts 7y ago
That's why it is sometimes necessary for state governments to step in and override local laws on zoning, regulations on housing etc, that just hasn't happened in California yet.