11 ms·

It's been a massive windfall to people who have been homeowners for 40 years in California. High rents due to the fact that you're not allowed to build new hous

by woah 6y ago

It's been a massive windfall to people who have been homeowners for 40 years in California. High rents due to the fact that you're not allowed to build new housing, high property taxes paid by new residents, while old residents pay nothing, high income and sales taxes to paper over the gap in the budget left by the lack of property tax paid by longtime residents. The whole system has been optimized to milk as much money as possible from newcomers. The people in power in California even scapegoated the newcomers for a long time, and pretended that they were unwanted. Now that the system has finally become unsustainable, we get these ridiculous takes about how somebody "extracted wealth" from California.

fortran77 6y ago
> while old residents pay nothing This is patently false. Property taxes can and do raise 2%/year. California does need to build new housing.
- woah 6y ago
  You are quite simply wrong. Here is a map showing how next door neighbors frequently have a 10x difference in property taxes paid on equivalent dwellings: https://www.kron4.com/news/bay-area/map-bay-area-property-taxes/ https://www.kron4.com/news/bay-area/map-bay-area-property-ta...
  - omgwtfbyobbq 6y ago
    You're both right. Property taxes can increase by up to 2% per year, and new owners frequently pay far more than old owners because property has appreciated significantly in coastal metros with limited space for new construction. This had been especially obvious because historically low interest rates have enabled a lot of asset appreciation, with real estate being one example. High real estate prices lead to high property taxes, which makes the difference in taxes paid much more obvious. NIMBYism also plays a part, but I think people routinely overlook that developers often don't improve local facilities in line with local housing projects, which can lead to all kinds of awfulness. That new 1000 unit apartment complex also needs 1000+ parking spaces, along with other improvements in local infrastructure in proportion to the increase in population, but a developer won't care about that unless someone forces them to care.
    - adrr 6y ago
      They do pay. Major developments get slapped with a mello-roos tax which leads to even larger disparity in taxes paid between long term resident and new residents. It’s huge, you could be paying $20k in taxes while the person down the street is paying $5k.
      - omgwtfbyobbq 6y ago
        Mello Roos doesn't make the developer pay, they make the people in the special district pay. The developer gets to sell the units without any concern for what more people will do to local infrastructure. I guess they could be $15k/year, but I've never seen an example that high. My mom lives in Yucca Valley and has two or three Mello Roos items (water district, local community college, and something else), and I think maybe pays about $600 total for them.
        adrr 6y ago
        That’s cheap. This is Playa del Rey area in LA which has Google,FB, and other regional offices. Plus 1.2% property tax. https://playavistaexperts.com/buying-selling-resources/mello-roos/ https://playavistaexperts.com/buying-selling-resources/mello...
        omgwtfbyobbq 6y ago
        That's a good point, and I should probably be thinking about Mello Roos in terms of percent of property value or something. It's a ton off money either way, although I guess not surprising in Playa del Rey.
    - JamesBarney 6y ago
      1. You're implying that increased housing density makes it harder to find infrastructure. This is just false since high density makes infrastructure cheaper per person. 2. Why should it be the developers jobs to build out new infrastructure that isn't directly needed by their building. It's their job to build housing which brings people, those people bring taxes and those taxes pay for upgrades to infrastructure.
  - mrep 6y ago
    Holy shit! Just an example I found, 230 Atherton Ave, Atherton, CA 94027 vs 234 Atherton Ave, Atherton, CA 94027, both absolute mansions with pools looking at them on google maps and the former even has a tennis court. Property taxes paid: 8,000 for the former and 200,000 for the latter. Absolute insanity!
  - kindatrue 6y ago
    Here's a link to the map https://www.officialdata.org/ca-property-tax/ https://www.officialdata.org/ca-property-tax/ This tweet highlights some of the insaneness: https://twitter.com/nextdoorsv/status/1265719788875272192 https://twitter.com/nextdoorsv/status/1265719788875272192 Someone pays $806 per year, living next to someone who pays $27,732 per year.
  - rcpt 6y ago
    taxfairnessproject.org Worth a look
- rconti 6y ago
  Of course it's false. Old residents don't pay "nothing", they pay "next to nothing". Look up any house that changes hands after 40 years. The old owners were paying a tax liability an order of magnitude less than the new one.
  - millstone 6y ago
    Worse, if it changes hands through inheritance there is no step up in basis.
    - rcpt 6y ago
      And as a result white families pay lower property taxes in California. https://twitter.com/alfred_twu/status/1327821019931787264?s=21 https://twitter.com/alfred_twu/status/1327821019931787264?s=...
- dangjc 6y ago
  Many properties I’m looking at are assessed at a value in the $50-200k range but sell around $1mm. Long time residents in such cases Pay less than 1/5 the property taxes new residents pay.
  - kindatrue 6y ago
    https://twitter.com/nextdoorsv/status/1265719788875272192 https://twitter.com/nextdoorsv/status/1265719788875272192 Palo Alto. Someone pays $1081 per year living adjacent to someone who pays $24K per year.
- blntechie 6y ago
  It’s simply amazing how allowing to build 50 high rise condos would bring the entire bubble down but the CA (or most American) cities or the state won’t. It will obviously fail on the ballot due to NIMBYism but I’m not sure why would that even need to be on ballot.
  - inchoa 6y ago
    It doesn't go on the ballot directly, it goes on the ballot in the form of voting in local city officials (specifically the city council) who set the zoning laws/rules.
  - the_economist 6y ago
    This is not completely true, as the cost to build high rise condos is extremely high and the land is very expensive. Every place in the USA that has kept housing affordable has done so with sprawl, which California's government doesn't allow. You can see a detailed study of it here: https://www.buildzoom.com/blog/cities-expansion-slowing https://www.buildzoom.com/blog/cities-expansion-slowing
    - llampx 6y ago
      The land is very expensive, shouldn't that be good enough of a reason to build high rises? It works in NYC and most of Europe, the only reason there are few high rises in SF is because of the government that prefers artificial scarcity.
      - notnap 6y ago
        https://en.wikipedia.org/wiki/1906_San_Francisco_earthquake https://en.wikipedia.org/wiki/1906_San_Francisco_earthquake enters chat
        paconbork 6y ago
        Luckily, earthquake-resistant structures have come a long way since then. For example, Tokyo is home to the second-tallest structure in the world, and they're not exactly unfamiliar with earthquakes
lwansbrough 6y ago
If you don’t build luxury housing, affordable housing becomes luxury housing. San Francisco is a perfect example of NIMBY extremism and the damage it does to communities.
- woah 6y ago
  It's worse than that: The entire concept of "luxury housing" is a lie. The words "luxury housing" are designed to make you think that it is taking up space that could be used by non luxury housing. Like the only reason a new apartment is so expensive is because it has a gold-plated toilet or something, and if only the developer had built an apartment without a gold plated toilet you could afford it. But in Minneapolis, for example, a 2 bedroom apartment in the nicest building in the city, with a built in pool, car wash, and cigar lounge, is $2000 per month. That barely gets you a spot in someone's living room in SF. This proves that it is not luxuries that make "luxury apartments" expensive in SF. The only luxury is having a roof over your head.
  - Phobophobia 6y ago
    Mind posting a zillow link or similar? I'm evaluating moving to different metro areas, and my research for Minnesota yielded higher costs.
    - windexh8er 6y ago
      Minnesota isn't "cheap". I'd say - depending on where you want to live in the city can influence your results. Ultimately it's what you're after. I think, today, you can live there very reasonably. We have better than average access to health care, but taxes are also an impediment in Hennepin county (Minneapolis metro). The metro is very conveniently laid out - so if you're looking to move there you should broaden your search as commuting isn't horrible, public transport is decent and there's a lot of option for reasonably priced rentals - but definitely not "cheap" compared to other metro areas. The area does have a lot to offer, however.
    - no_wizard 6y ago
x3iv130f 6y ago
That is a very succinct way to put it. I doubt it will be fixed in our lifetimes as there isn't enough willpower or trust in the state government to make the needed change. People who want change are free to leave. Only when there are no other places to leave to will there be change.
mwfunk 6y ago
Not only that, but there's often comments about how people moving from CA to TX are fleeing the results of a presumably left wing tax code to enjoy the benefits of a presumably right wing tax code, but it's not that simple. CA is as expensive as it is in large part because of NIMBYs and tax schemes that were absolutely the product of right-wing ballot initiatives for the most part. OTOH, a large part of the appeal of TX is that it doesn't have a state income tax, but the state is absolutely on the dole. IIRC TX takes in ~$150b from the Federal government, but only pays ~$100b into the system. CA (like NY) pays more into the system then it takes out, so about ~$50b of the annual budget of TX is literally bumming money from other states, albeit indirectly. Which is a roundabout way of saying, the narrative about people moving from CA to TX often makes it sound like a narrative about left-wing economic policies vs. right-wing economic policies, but the reality is that CA is expensive in large part because of right-wing economic policies and TX is cheap in large part because it's basically on welfare from the Federal government. Which is fine, the system should allow economically healthier states to help the less successful states get by (looking at you KY), but it's so counter to the narrative that usually surrounds these stories that people tend to sweep it under the rug. And also TX is hardly an economically unhealthy, depressed state in need of assistance from the rest of the country. It should step up and stop being being a bum, because AFAICT it's not a bum but rather a state with well above-average prospects.
- notnap 6y ago
  If we take the water-flow economy, CA is absolutely on a full dependency of a federal government. Water is ain't cheap
- todd8 6y ago
  > IIRC TX takes in ~$150b from the Federal government, but only pays ~$100b into the system. CA (like NY) pays more into the system then it takes out, so about ~$50b of the annual budget of TX is literally bumming money from other states, albeit indirectly. This isn't true. According to the SUNY Rockefeller Institute of Government report dated Jan 8, 2019 (which used the data from the Budget of the U.S. Government, Fiscal Year 2019) the fifty states all had differing Federal expenditures vs Federal receipts but Texas and California were close. See page 15 at [1]. On a per capita basis, here are the federal expenditures per dollar of receipts for a few states: Connecticut 0.74 50th New Jersey 0.82 49th Massachusetts 0.83 48th New York 0.86 47th North Dakota 0.94 46th Illinois 0.97 45th New Hampshire 0.98 44th Washington 0.98 43rd Nebraska 0.98 42nd Colorado 0.99 41st California 1.00 40th <=== CA Texas 1.03 39th <=== TX Utah 1.04 38th Wisconsin 1.06 37th Wyoming 1.06 36th Minnesota 1.09 35th Iowa 1.13 34th Nevada 1.14 33rd South Dakota 1.15 32nd Kansas 1.23 31st Florida 1.24 30th ... Virginia 1.97 6th Alabama 1.99 5th West Virginia 2.17 4th Mississippi 2.19 3rd New Mexico 2.34 2nd Kentucky 2.35 1st [1] https://rockinst.org/wp-content/uploads/2019/01/1-7-19b-Balance-of-Payments.pdf https://rockinst.org/wp-content/uploads/2019/01/1-7-19b-Bala...
mcntsh 6y ago
> The people in power in California even scapegoated the newcomers for a long time, and pretended that they were unwanted. I feel like the average HN poster sits in a pretty air-tight STEM bubble and doesn't realise how bad life for most people in the Bay Area who are not in STEM. To them, tech workers can leave and the industry can tank and it would be a welcome change. The tax revenue the cities have made during this "boom" have not affected them at all. Building more houses just means more traffic, more crowded hiking trails and beaches, more crowded and trashed natural parks, and for what?
- MagnumOpus 6y ago
  > The tax revenue the cities have made during this "boom" have not affected them at all They think it has not affected them, but if they stop, the house of cards that is underfunded ultra-generous defined benefit state/municipal pensions tumbles like a house of cards. When the munis start going bankrupt, only then will people notice...
  - mcntsh 6y ago
    > the house of cards that is underfunded ultra-generous defined benefit state/municipal pensions tumbles like a house of cards. Who benefits from these exactly? Tax revenue is up ten fold from where it was at in 2008 and yet the quality of life for most of my connections not working in tech in the bay area is much worse. Everything is more expensive, taxes are much higher, traffic is 10x as bad, homelessness is more severe... Who's this "house of cards" supporting? The minimum wage is up, that's the only thing, but it doesn't matter. Since a couple making minimum wage could actually have an apartment in 2008, which is not the case now.

by woah 6y ago

fortran77 6y ago

> while old residents pay nothing This is patently false. Property taxes can and do raise 2%/year. California does need to build new housing.

woah 6y ago
You are quite simply wrong. Here is a map showing how next door neighbors frequently have a 10x difference in property taxes paid on equivalent dwellings: https://www.kron4.com/news/bay-area/map-bay-area-property-taxes/ https://www.kron4.com/news/bay-area/map-bay-area-property-ta...
- omgwtfbyobbq 6y ago
  You're both right. Property taxes can increase by up to 2% per year, and new owners frequently pay far more than old owners because property has appreciated significantly in coastal metros with limited space for new construction. This had been especially obvious because historically low interest rates have enabled a lot of asset appreciation, with real estate being one example. High real estate prices lead to high property taxes, which makes the difference in taxes paid much more obvious. NIMBYism also plays a part, but I think people routinely overlook that developers often don't improve local facilities in line with local housing projects, which can lead to all kinds of awfulness. That new 1000 unit apartment complex also needs 1000+ parking spaces, along with other improvements in local infrastructure in proportion to the increase in population, but a developer won't care about that unless someone forces them to care.
  - adrr 6y ago
    They do pay. Major developments get slapped with a mello-roos tax which leads to even larger disparity in taxes paid between long term resident and new residents. It’s huge, you could be paying $20k in taxes while the person down the street is paying $5k.
    - omgwtfbyobbq 6y ago
      Mello Roos doesn't make the developer pay, they make the people in the special district pay. The developer gets to sell the units without any concern for what more people will do to local infrastructure. I guess they could be $15k/year, but I've never seen an example that high. My mom lives in Yucca Valley and has two or three Mello Roos items (water district, local community college, and something else), and I think maybe pays about $600 total for them.
      - adrr 6y ago
        That’s cheap. This is Playa del Rey area in LA which has Google,FB, and other regional offices. Plus 1.2% property tax. https://playavistaexperts.com/buying-selling-resources/mello-roos/ https://playavistaexperts.com/buying-selling-resources/mello...
        omgwtfbyobbq 6y ago
        That's a good point, and I should probably be thinking about Mello Roos in terms of percent of property value or something. It's a ton off money either way, although I guess not surprising in Playa del Rey.
  - JamesBarney 6y ago
    1. You're implying that increased housing density makes it harder to find infrastructure. This is just false since high density makes infrastructure cheaper per person. 2. Why should it be the developers jobs to build out new infrastructure that isn't directly needed by their building. It's their job to build housing which brings people, those people bring taxes and those taxes pay for upgrades to infrastructure.
- mrep 6y ago
  Holy shit! Just an example I found, 230 Atherton Ave, Atherton, CA 94027 vs 234 Atherton Ave, Atherton, CA 94027, both absolute mansions with pools looking at them on google maps and the former even has a tennis court. Property taxes paid: 8,000 for the former and 200,000 for the latter. Absolute insanity!
- kindatrue 6y ago
  Here's a link to the map https://www.officialdata.org/ca-property-tax/ https://www.officialdata.org/ca-property-tax/ This tweet highlights some of the insaneness: https://twitter.com/nextdoorsv/status/1265719788875272192 https://twitter.com/nextdoorsv/status/1265719788875272192 Someone pays $806 per year, living next to someone who pays $27,732 per year.
- rcpt 6y ago
  taxfairnessproject.org Worth a look
rconti 6y ago
Of course it's false. Old residents don't pay "nothing", they pay "next to nothing". Look up any house that changes hands after 40 years. The old owners were paying a tax liability an order of magnitude less than the new one.
- millstone 6y ago
  Worse, if it changes hands through inheritance there is no step up in basis.
  - rcpt 6y ago
    And as a result white families pay lower property taxes in California. https://twitter.com/alfred_twu/status/1327821019931787264?s=21 https://twitter.com/alfred_twu/status/1327821019931787264?s=...
dangjc 6y ago
Many properties I’m looking at are assessed at a value in the $50-200k range but sell around $1mm. Long time residents in such cases Pay less than 1/5 the property taxes new residents pay.
- kindatrue 6y ago
  https://twitter.com/nextdoorsv/status/1265719788875272192 https://twitter.com/nextdoorsv/status/1265719788875272192 Palo Alto. Someone pays $1081 per year living adjacent to someone who pays $24K per year.
blntechie 6y ago
It’s simply amazing how allowing to build 50 high rise condos would bring the entire bubble down but the CA (or most American) cities or the state won’t. It will obviously fail on the ballot due to NIMBYism but I’m not sure why would that even need to be on ballot.
- inchoa 6y ago
  It doesn't go on the ballot directly, it goes on the ballot in the form of voting in local city officials (specifically the city council) who set the zoning laws/rules.
- the_economist 6y ago
  This is not completely true, as the cost to build high rise condos is extremely high and the land is very expensive. Every place in the USA that has kept housing affordable has done so with sprawl, which California's government doesn't allow. You can see a detailed study of it here: https://www.buildzoom.com/blog/cities-expansion-slowing https://www.buildzoom.com/blog/cities-expansion-slowing
  - llampx 6y ago
    The land is very expensive, shouldn't that be good enough of a reason to build high rises? It works in NYC and most of Europe, the only reason there are few high rises in SF is because of the government that prefers artificial scarcity.
    - notnap 6y ago
      https://en.wikipedia.org/wiki/1906_San_Francisco_earthquake https://en.wikipedia.org/wiki/1906_San_Francisco_earthquake enters chat
      - paconbork 6y ago
        Luckily, earthquake-resistant structures have come a long way since then. For example, Tokyo is home to the second-tallest structure in the world, and they're not exactly unfamiliar with earthquakes

lwansbrough 6y ago

If you don’t build luxury housing, affordable housing becomes luxury housing. San Francisco is a perfect example of NIMBY extremism and the damage it does to communities.

woah 6y ago
It's worse than that: The entire concept of "luxury housing" is a lie. The words "luxury housing" are designed to make you think that it is taking up space that could be used by non luxury housing. Like the only reason a new apartment is so expensive is because it has a gold-plated toilet or something, and if only the developer had built an apartment without a gold plated toilet you could afford it. But in Minneapolis, for example, a 2 bedroom apartment in the nicest building in the city, with a built in pool, car wash, and cigar lounge, is $2000 per month. That barely gets you a spot in someone's living room in SF. This proves that it is not luxuries that make "luxury apartments" expensive in SF. The only luxury is having a roof over your head.
- Phobophobia 6y ago
  Mind posting a zillow link or similar? I'm evaluating moving to different metro areas, and my research for Minnesota yielded higher costs.
  - windexh8er 6y ago
    Minnesota isn't "cheap". I'd say - depending on where you want to live in the city can influence your results. Ultimately it's what you're after. I think, today, you can live there very reasonably. We have better than average access to health care, but taxes are also an impediment in Hennepin county (Minneapolis metro). The metro is very conveniently laid out - so if you're looking to move there you should broaden your search as commuting isn't horrible, public transport is decent and there's a lot of option for reasonably priced rentals - but definitely not "cheap" compared to other metro areas. The area does have a lot to offer, however.
  - no_wizard 6y ago

x3iv130f 6y ago

That is a very succinct way to put it. I doubt it will be fixed in our lifetimes as there isn't enough willpower or trust in the state government to make the needed change. People who want change are free to leave. Only when there are no other places to leave to will there be change.

mwfunk 6y ago

Not only that, but there's often comments about how people moving from CA to TX are fleeing the results of a presumably left wing tax code to enjoy the benefits of a presumably right wing tax code, but it's not that simple. CA is as expensive as it is in large part because of NIMBYs and tax schemes that were absolutely the product of right-wing ballot initiatives for the most part. OTOH, a large part of the appeal of TX is that it doesn't have a state income tax, but the state is absolutely on the dole. IIRC TX takes in ~$150b from the Federal government, but only pays ~$100b into the system. CA (like NY) pays more into the system then it takes out, so about ~$50b of the annual budget of TX is literally bumming money from other states, albeit indirectly. Which is a roundabout way of saying, the narrative about people moving from CA to TX often makes it sound like a narrative about left-wing economic policies vs. right-wing economic policies, but the reality is that CA is expensive in large part because of right-wing economic policies and TX is cheap in large part because it's basically on welfare from the Federal government. Which is fine, the system should allow economically healthier states to help the less successful states get by (looking at you KY), but it's so counter to the narrative that usually surrounds these stories that people tend to sweep it under the rug. And also TX is hardly an economically unhealthy, depressed state in need of assistance from the rest of the country. It should step up and stop being being a bum, because AFAICT it's not a bum but rather a state with well above-average prospects.

notnap 6y ago
If we take the water-flow economy, CA is absolutely on a full dependency of a federal government. Water is ain't cheap
todd8 6y ago
> IIRC TX takes in ~$150b from the Federal government, but only pays ~$100b into the system. CA (like NY) pays more into the system then it takes out, so about ~$50b of the annual budget of TX is literally bumming money from other states, albeit indirectly. This isn't true. According to the SUNY Rockefeller Institute of Government report dated Jan 8, 2019 (which used the data from the Budget of the U.S. Government, Fiscal Year 2019) the fifty states all had differing Federal expenditures vs Federal receipts but Texas and California were close. See page 15 at [1]. On a per capita basis, here are the federal expenditures per dollar of receipts for a few states: Connecticut 0.74 50th New Jersey 0.82 49th Massachusetts 0.83 48th New York 0.86 47th North Dakota 0.94 46th Illinois 0.97 45th New Hampshire 0.98 44th Washington 0.98 43rd Nebraska 0.98 42nd Colorado 0.99 41st California 1.00 40th <=== CA Texas 1.03 39th <=== TX Utah 1.04 38th Wisconsin 1.06 37th Wyoming 1.06 36th Minnesota 1.09 35th Iowa 1.13 34th Nevada 1.14 33rd South Dakota 1.15 32nd Kansas 1.23 31st Florida 1.24 30th ... Virginia 1.97 6th Alabama 1.99 5th West Virginia 2.17 4th Mississippi 2.19 3rd New Mexico 2.34 2nd Kentucky 2.35 1st [1] https://rockinst.org/wp-content/uploads/2019/01/1-7-19b-Balance-of-Payments.pdf https://rockinst.org/wp-content/uploads/2019/01/1-7-19b-Bala...

mcntsh 6y ago

> The people in power in California even scapegoated the newcomers for a long time, and pretended that they were unwanted. I feel like the average HN poster sits in a pretty air-tight STEM bubble and doesn't realise how bad life for most people in the Bay Area who are not in STEM. To them, tech workers can leave and the industry can tank and it would be a welcome change. The tax revenue the cities have made during this "boom" have not affected them at all. Building more houses just means more traffic, more crowded hiking trails and beaches, more crowded and trashed natural parks, and for what?

MagnumOpus 6y ago
> The tax revenue the cities have made during this "boom" have not affected them at all They think it has not affected them, but if they stop, the house of cards that is underfunded ultra-generous defined benefit state/municipal pensions tumbles like a house of cards. When the munis start going bankrupt, only then will people notice...
- mcntsh 6y ago
  > the house of cards that is underfunded ultra-generous defined benefit state/municipal pensions tumbles like a house of cards. Who benefits from these exactly? Tax revenue is up ten fold from where it was at in 2008 and yet the quality of life for most of my connections not working in tech in the bay area is much worse. Everything is more expensive, taxes are much higher, traffic is 10x as bad, homelessness is more severe... Who's this "house of cards" supporting? The minimum wage is up, that's the only thing, but it doesn't matter. Since a couple making minimum wage could actually have an apartment in 2008, which is not the case now.