6 ms·

It's demand and supply. You can't control demand, but you do control supply. Restricting supply keeps prices high. Building high density homes increases supply

• jelliclesfarm 6y ago
  Let us break this down because there is too much noise. 1. What is the goal? You can only pick one of the many issues you mentioned above. Because no one of them are connected to each other. Example: even if you make a retiree pay more tax, you may not be able to afford it. Even if they build more affordable housing, it is not for you but for teachers and other people who are ok with living in high density apartments. 2. Identify the player and the player’s motivation first. Each player has a different goal and the solution to getting to each is different. This will clear the vision a bit. 3. From what I have read, it seems to me that you think $4M is too high and for whatever reason you think that if retired seniors on fixed income are made to pay tax on properties that haven’t been sold yet, somehow you and others like you can have a piece of PA real estate. Another layer of confusion is that you feel that if people build more, housing will be more affordable to the less than 4M shopping budget folks. Neither of these positions and the assumptions supporting them are rational or logical. 4. The last flaw in your argument is that it is fashioned to create villains whose actions preceded your presence in PA as something that has somehow affected your happiness. I find that this is very prevalent these days and it’s puzzlingly inexplicable to me. Your inability to afford a nice house in one of the most desirable zip codes say more about your paycheck than the assets accrued by someone thirty years ago FOR the purpose of watching their nest egg grow. Nobody buys a property so it will become a financial albatross. Mortgages are designed so that for thirty years during your productive period, you work to pay it off so that when you retire you don’t have the burden of payments but the security and comfort of an appreciated asset. They had planned their lives around this notion without expecting the boom in house prices that PA experienced. In other words, it’s not their problem or social responsibility to make it easier for those who are too poor to buy in TODAY(decades or years after they made it their home). They are not the ‘bad guys’. When we stop projecting our lack(too poor to buy in PA) as someone’s else(older existing PA homeowners) villainy, then things will become a little less murky. It’s easy to lash out at others but it won’t solve any problem. 5. Other states do not have population or GDP of California that is almost as much as small countries. Texas and WA have more taxes but they also don’t have income tax. Housing will not be stable if you don’t cap property taxes. If your property taxes are swinging wildly on the basis of speculative buying and especially from foreign buyers, how can anyone manage their finances? During a boom, it will be 10k..the next year, it could be 30k or 8k. If you increase the percentage, how will those in fixed income and mortgage free after retirement be able to cover the increases? This plan would force millions of seniors out of their homes right after they have finished payed their mortgages and have stopped working. Let’s take the example of John. John bought a house in 1990. He is 65 now and receives a pension. He has medical issues. He expects to die in the house he now owns. His finances are managed for fixed expenses including living expenses, property taxes and some savings. How do you expect him to survive if he is made to pay more taxes on a house that has multiple times and he hasn’t sold it yet. The only solution is if he uproots himself and goes to elsewhere cheap. Another example: let’s take Jack. Jack bought a property in 2000 at age 30. He got married in 2005 and has two kids in school. His house has appreciated but as has his expenses because of his growing family. His income hasn’t increased. How is he supposed to save for his retirement, his kid’s education, his living expenses and mortgage that he still owns if property taxes go on a property doesn’t own yet and hasn’t realized the market appreciation. This market appreciation is because of young tech workers who came in 2010-2015, foreign home buyers, those who have moved from out of state to CA and desire PA. So the people of CA and homeowners have to subsidize the DESIRES of newcomers and people who don’t yet pay property taxes because they don’t own homes yet but would like to by paying more taxes? In which universe do you think people would chop off their hand and limb so they can share their chair with you? What have the newly arrived people desiring a piece of PA done to PA that others living there and have built PA have to bear the cost of sharing their space with them? If you can’t afford to live in PA by buying a property, PA has nothing to lose. You have no bargaining card. At all. What are you offering in this negotiation to achieve what you want? All I hear is about how ‘unfair’ it is and what it signals is weakness and lack of resources. That’s not a good bargaining chip. 6. Everyone is free to desire and this is a good thing. But if we don’t get what we desire, lashing out at those who have what we want will not achieve anything. The city of PA doesn’t need new people. It doesn’t need extra property taxes to be levied because the state of CA redistributes all incoming public money. Even if PA gets more housing and pays more property taxes with its socialist policies, it will not benefit PA at all and will only create more restrictions and lesser resources and more crowds. There is no incentive at all. It is more so with PA than other affluent cities in other counties because PA manages its own water Dept and funds it’s own school system with parcel taxes and has its own recycling..and will soon set up microgrids to be truly independent. The high quality of life is only because of local governance. Or it would be a shitty mess like the rest of California. It is best if the start ups and tech companies move out. Because the employees abhor driving and traffic altho this has been caused by this very sector. The infantalisation of this generation’s workers starting with Google’s coddling at their ‘campus’ and then adopted by other FAANG companies and then even smaller start ups has created an entitled citizenry that is feels entitled and is used to getting what it wants when it wants. Real life is not like that. If one wants something shiny and beautiful and desirable, there is a price for it. I am grateful that it is only a monetary price. It doesn’t matter anymore because with tech moving out of California, things will become better and this insanity might stop if Californians are lucky. We have just started traded water futures for California water. Did you know that? $496/acre-foot last I checked yesterday. High density building has to stop. I have been farming long enough to have seen the drought era and I am afraid no one in tech knows or understands the tsunami of dust and wind that is waiting for us. California is mostly desert and our water comes because we steal from Rio Grande. It’s a much bigger topic, but all the tech money can’t fix water scarcity that is a guarantee. And we shouldn’t be building more or building densely because it’s easy to go vertical, but not enough water to support the increase in our state’s population.
  • fossuser 6y ago
    You're right that we don't have leverage. One way to get leverage would be renters that live in Palo Alto voting to get better representation and policy that benefits them, but I do think this is unlikely to succeed. Property tax is linked because if it was forcing existing owners to sell because they couldn't afford it then they'd be incentivized to allow higher density housing to increase supply, reducing prices, and then reducing their own tax. They wouldn't be able to do what they're doing now. As it stands the incentive is to restrict supply because there's no downside for existing owners (and only upside). I don't actually prefer this outcome, I'd prefer protecting owners while increasing supply, but without the incentive it doesn't happen because existing owners block it. As it stands new buyers are subsidizing old owners who pay comparatively nothing in property tax. Ultimately it comes down to the political positions you state at the end, you don't want more people here or a strong economy of workers here. That's fine and a genuine position to hold (even if I don't agree). I grew up in an area with a poor working economy that would have loved the economy we have here, but it's here mostly by historical accident. Can you see that it's frustrating to have people that bought in for very little cost telling others that have to spend millions that that's too bad for them? If you bought in for $4M I'd actually be more sympathetic to that position (and maybe you did), but I've found people arguing your position usually bought in for little a long time ago. > "The city of PA doesn’t need new people...will only create more restrictions and lesser resources and more crowds. There is no incentive at all." A lot of highly educated technology workers and their families create a nice environment to raise kids in and a great community to learn a ton of things. It seems reasonable to support non-zero-sum growth which can benefit others too. Higher density housing near transit also reduces congestion issues where people now have to commute from east bay. It also allows kids to work nearby in newly created jobs that are the best in the country rather than having to move away. I suspect the VC economy is here to stay, but maybe it will one day leave and housing prices will crater leaving Palo Alto like Detroit. I doubt it because the weather is nice, but there'd be some schadenfreude in that outcome for me. Unless of course I do buy in, then presumably I'd want no new housing too. :)
    • jelliclesfarm 6y ago
      >Property tax is linked because if it was forcing existing owners to sell because they couldn't afford it then they'd be incentivized to allow higher density housing to increase supply, reducing prices, and then reducing their own tax. ok. this is where you dont understand how california taxation works. or how property taxes are assigned. 40% of california budget goes to public schools and over 60% is for salaries and budgets. it is for the entire state which means its for super poor areas to improve. and there is a lot to improve. if palo alto home owners paid more money in taxes, it will not benefit palo alto schools,but maybe to put up a swimming pool in tracy where they dont have a lot of money. palo alto has removed itself from ca funds and funds it's own schools with parcel taxes. its very complicated and i can spend the next hour explaining how ca tax system works and it still wont have anyhting to do with the issue at hand. my point is that, paying more taxes has NO benefit to palo alto'ians. it doesnt improve their roads or bring infrastruture or have more parks. meanwhile..having more dense housing actually reduces the existing benefits from infrastructure, more crowds and less open spaces etc. there is literally NO upside. most people's property taxes on older properties are a form of charity because most of their kids dont even use the public school system. they are not being subsidised. look up the city of palo alto's budget. see how funds are allocated and how funds are distributed. the new families that come in consumer more than a retiree in services, built in infrastructure already funded and delivered by the previous residents and schools etc. nobody today who you think are 'subsidising' older owners came to PA because its an old frontier town that needs to be injected with new life. they desire palo alto because they like something they couldnt find elsewhere. if you increase housing supply, you kill the goose that lays eggs. everything from water to recycling to power soon to infrastructure is local. it cannot scale without regional governance taking over. the new owners are subsidised by the foundation put up by the older owners and their property taxes because to build the kind of infrastructure in place at palo alto would cost billions and no amount of tax increase will cover it. because any tax increase would go to poorer counties in california. unless you understand how california redistributes public money, it's unfunded pension liablities and deficit, you will continue to belive wrongly that older residents are being 'subsidised'. this is your first misconception. >They wouldn't be able to do what they're doing now. and what is that? do you think the water will stop? trash will pile up? roads wont be repaired? did you think PA was a village with no amenities before young workers came along? this is your second misconception. >As it stands the incentive is to restrict supply because there's no downside for existing owners (and only upside). I don't actually prefer this outcome, I'd prefer protecting owners while increasing supply, but without the incentive it doesn't happen because existing owners block it. you can prefer whatever you want, but you have no agency or influence. i prefer that Finland would allow me to fly in to buy a home, but i have no agency or influence. I want Finland farmstead. Finland doesnt need Jellicles Farm. > As it stands new buyers are subsidizing old owners who pay comparatively nothing in property tax. Again. NOT. city of palo alto budget: https://www.cityofpaloalto.org/gov/depts/asd/budget.asp https://www.cityofpaloalto.org/gov/depts/asd/budget.asp >Ultimately it comes down to the political positions you state at the end, you don't want more people here or a strong economy of workers here. That's fine and a genuine position to hold (even if I don't agree). I grew up in an area with a poor working economy that would have loved the economy we have here, but it's here mostly by historical accident. not at all a political position. this is your third misconception. not everything is political. sometimes people just dont want to take on the burden by giving up their comfort after having already done their share and fair bit. especially if they have worked for decades and finally get to enjoy their homes and retirement. so you think its a 'historical accident' that palo alto is what it is..can you expand on this part of 'history'? >Can you see that it's frustrating to have people that bought in for very little cost telling others that have to spend millions that that's too bad for them? no, i dont see it. what i see is your inablity to grasp that 'the very little cost' was a lot of money when they bought in. it is 'very little' to tech workers NOW with their 6 figure incomes now. they also dont see that for many people, the value of the home kicks in and registers as 'a lot' ONLY when they sell and at which time, they shell out the appropriate taxes. they are not telling those with millions who still cant afford market forces how much more you guys make today. it's like you go to a store and find a motorcycle parked outside and you make an offer. and the owner is like..."what the heck...it's MY bike and i dont want to sell! i need it!" and you keep insisting that its not fair that he doesnt realise how valuable it is and how its unfair that he got it at a bargain ten years ago..still using it and you have to pay four times what he paid for..and why..oh why wont he understand how frustrating it is!! etc. >If you bought in for $4M I'd actually be more sympathetic to that position (and maybe you did), but I've found people arguing your position usually bought in for little a long time ago. your fourth misconception. or rather what you fail to understand is that your sympathetic position is unsolicited. people who own are higher in the influence ladder than those who are not home owners. people who paid taxes and invested and have a vested interest in community and city are more influential than those who don't. consider this..here you are..not owning a property in palo alto, but wanting a piece of it. you are not averse to making life more expensive for those who are already there. worse, you think that you are the aggrieved party. if i lived there, i would be afraid to let you become part of the community because today you want me to pay more taxes for no direct benefit for me and tomorrow tomorrow you might brush off increases in cost of living like with water charges or electricity because you are young and work at palantir and have stock options and a couple of thousand extra in living expenses is a drop in the bucket for you even though it can completely put me in the red. why would i want this in my city and in my life? > A lot of highly educated technology workers and their families create a nice environment to raise kids in and a great community to learn a ton of things. It seems reasonable to support non-zero-sum growth which can benefit others too. to you, maybe. but when resources are limited and land cannot be 'created' or printed like currency. and when my kids have long left home and i dont need 'the ton of things', why would i want someone who doesnt have the needs as i do to dictate to me a lifestyle that is unsuitable for me? especially when you cant afford it and welcoming you means i have to give up the comforts i have taken for granted. >Higher density housing near transit also reduces congestion issues where people now have to commute from east bay. It also allows kids to work nearby in newly created jobs that are the best in the country rather than having to move away. again. these are the reasons why tech workers want to live in PA. perfectly reasonable, but not a bargaining chip. >I suspect the VC economy is here to stay, but maybe it will one day leave and housing prices will crater leaving Palo Alto like Detroit. maybe. but i dont think so. >I doubt it because the weather is nice, but there'd be some schadenfreude in that outcome for me. Unless of course I do buy in, then presumably I'd want no new housing too. :) i am sympathetic to how you feel, but i feel how you are processing it is counter productive to increase the chances of you obtaining your goal. i want to end with a small incident that comes to mind. when i was a little girl, my grandmother wore this beautiful ruby ring. i absolutely adored it and i would wear it often. but it was too big for my tiny fingers and it would keep slipping off. i would get so frustrated and one day i marched into the kitchen. i still remember this..my grandmother was slicing okra. i remember this because we used to call okra "lady's fingers" and my grandmother used it to explain her point to me. she said that even though i loved that ring very much, it wasnt right for me because i needed to grow up. i needed my hands to become bigger so the size of my fingers is the right fit for the ring's size. and she used the okra to show how it didnt fit snug over the skinny end but sat beautifully where it got fatter. i got that ring. years later. but it is mine now. i hope you get what you want, but perhaps you have to 'grow more' for your home in palo alto. even though the ring was made for my grandmother's fingers, it wasnt the right time for me to wear it. until it was. your time will come too. until then, it's noone's fault.