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So the thing holding back California is that they don't get enough taxes? There must be something more nuanced i'm missing, but it almost feels like a comedy sk

So the thing holding back California is that they don't get enough taxes? There must be something more nuanced i'm missing, but it almost feels like a comedy sketch thinking of a California college professor explaining to people that California not taxing it's citizens enough is the thing holding it back.

alexb_ 3y ago
The nuance is that with restrictions on property tax there is absolutely no disincentive for citizens to support local policies that restrict housing development. You are incentivized to keep the housing supply as low as you can possibly get it, because raising the price of your own property has zero downsides. This creates homelessness due to a restricted supply of housing.
- Dig1t 3y ago
  >support local policies that restrict housing development You are absolutely correct that this is the problem. But the solution is not to disincentivize home ownership with a tax, it is to fix zoning itself. Homeowners will still have an incentive to restrict housing supply even with a tax. However if you restricted the power of local zoning boards to tell people what they are allowed to build on their own land, then you would fix the housing crisis virtually overnight. There is a strong incentive for developers to build as densely as possible because they can make more money per acre, but the problem is that local zoning boards stop most development. https://www.almanacnews.com/news/2023/02/01/atherton-guts-most-of-multifamily-housing-from-plan-its-sending-to-state https://www.almanacnews.com/news/2023/02/01/atherton-guts-mo... >The council removed multifamily housing plans that were met with ire by residents, and softened changes to a lot on Oakwood Boulevard in Golden State Warriors' star Steph Curry's neighborhood ^ that is just one of a million examples of what I'm talking about. This has been going on for decades and the housing crisis we have now is the result.
  - alexb_ 3y ago
    Asking to change policy without changing the incentives that led to said policy is a fool's errand. You have to change what people are incentivized to do to actually change anything because people respond to incentives, not ideas. The way you fix zoning itself is by incentivizing people do to so. Plus, that's not the only supply problem that comes from Prop 13. People don't want to ever sell their houses because that means their property tax will be reassessed when they move. That's another huge problem caused by Prop 13.
    - Dig1t 3y ago
      I completely agree with you about incentives. I'm saying there is already an incentive to build densely, developers already want to do this because they make more money by doing so. They are literally not allowed to build anything other than single family homes though, the local homeowners actually control what is allowed to be built. That is to say: the people who have an incentive to keep housing supply low are the ones deciding what is allowed to be constructed in their town. If I go buy a piece of land in Cupertino and I want to build an apartment complex, I have to go apply for permits and get approval from the city of Cupertino zoning board. The people on that board are all people who live in Cupertino that own single family homes, they have a strong incentive to deny my application if I am building my apartment complex anywhere near their neighborhood. Basically every single city in California has zoning laws that prohibit you from building anything other than suburban single family homes in most of the town. What I'm saying is that you can fix the housing crisis by passing a law that limits the power of the zoning board to deny permits for these types of housing. Take a look at the Cupertino zoning map: https://map.gridics.com/us/ca/cupertino#11.67/37.3159/-122.033/0/45 https://map.gridics.com/us/ca/cupertino#11.67/37.3159/-122.0... if you click layers -> planning -> zoning you can see an overlay of the zoning for the whole city. The light beige color is "single family" zoned, meaning that nobody is allowed to build anything other than low-density homes. Notice how _most_ of the city is designated "single family". This is the cause of the entire problem. Nobody is allowed to build anything more dense than the single family homes that are already there. Not-so-coincidentally, Cupertino is one of the most expensive places to live in the US. Look at Houston, TX. They have no zoning laws (it's not perfect they still have deed restrictions which sometimes act similarly to zoning laws), and it is a massive city. The median house price is ~340k, something that most normal people can afford. There is a clear correlation between reduced zoning restrictions and lower housing costs.
uoaei 3y ago
Hi, welcome to the conversation, I can tell this is the first time you've engaged with this topic, so I'd love to introduce you to the economic dynamics at play. When property taxes don't rise, people are disincentivized from selling their home because if they buy a new home they must pay property taxes at the new rate, not the grandfathered one. This creates a bottlenecked supply of housing because no one sells. Growth stagnates and then you get these wild fights about who's allowed to build where, how much they're allowed to build, and what kinds of undesirables might move in and "change the community". It's really a clever ploy to use people's conservative instincts to juice the real estate market since scarcity brings about insanely high costs. Now those with Prop 13 homes are even less incentivized to move because their house's worth just keeps rising. They can use that and borrow against it to play financial games and make their money make money. All because they happened to have bought a home before this law passed: entirely luck, nothing to do with merit or skill.
- Domenic_S 3y ago
  Do you have data to support this claim? It doesn't appear to play out like this in practice. Compare CA vs a state like NJ and home sales seem on par per capita. https://journal.firsttuesday.us/home-sales-volume-and-price-peaks/692/ https://journal.firsttuesday.us/home-sales-volume-and-price-... https://njar-public.stats.10kresearch.com/docs/lmu/x/EntireState?src=map https://njar-public.stats.10kresearch.com/docs/lmu/x/EntireS...
  - uoaei 3y ago
    Why do all these sites only consider from 2010 onward? Prop 13 was passed in 1978.
  - 2c2c2c 3y ago
    Would assume this is due to the constant inflow of high income tech workers to california
- AlbertCory 3y ago
  Do a little research. If you move in CA and you're over 55, you can now keep your property tax bill. Previously it was only certain counties that honored that; now it's all of them. https://www.financialplannerla.com/transfer-california-property-tax/ https://www.financialplannerla.com/transfer-california-prope... > All because they happened to have bought a home before this law passed. Again, do some research. Prop 13 passed in 1978, 45 years ago. The number of current homeowners who bought before then is vanishingly small. House prices were escalating before 13 passed, and the jumps in property taxes were in fact a prime reason why it passed. > they can use that and borrow against it to play financial games and make their money make money Do you have any data at all to support that assertion? > This creates a bottlenecked supply of housing there are all kinds of reasons why there's too little building. Grandfathered house values are only one of them. Regulations and high costs are much more important.
kmeisthax 3y ago
Considering that lots of Californians pay practically no property tax... yes! Absolutely tax more! The current system is extremely conservative. Any time a piece of property changes ownership, it gets hosed by the assessors. If you move to California you will be paying insane sums in property tax while living next to people who are paying almost nothing. This is an effective subsidization of people who hold property for a long time, which creates market distortions. For example, people normally sell their house and move when they retire, because they don't need as much housing and can save money by downsizing. This means more houses on the market, which pushes down prices and keeps people from living in their cars. But not in California, because a lot of people are getting the best property tax deal available in the country there.

alexb_ 3y ago

The nuance is that with restrictions on property tax there is absolutely no disincentive for citizens to support local policies that restrict housing development. You are incentivized to keep the housing supply as low as you can possibly get it, because raising the price of your own property has zero downsides. This creates homelessness due to a restricted supply of housing.

Dig1t 3y ago
>support local policies that restrict housing development You are absolutely correct that this is the problem. But the solution is not to disincentivize home ownership with a tax, it is to fix zoning itself. Homeowners will still have an incentive to restrict housing supply even with a tax. However if you restricted the power of local zoning boards to tell people what they are allowed to build on their own land, then you would fix the housing crisis virtually overnight. There is a strong incentive for developers to build as densely as possible because they can make more money per acre, but the problem is that local zoning boards stop most development. https://www.almanacnews.com/news/2023/02/01/atherton-guts-most-of-multifamily-housing-from-plan-its-sending-to-state https://www.almanacnews.com/news/2023/02/01/atherton-guts-mo... >The council removed multifamily housing plans that were met with ire by residents, and softened changes to a lot on Oakwood Boulevard in Golden State Warriors' star Steph Curry's neighborhood ^ that is just one of a million examples of what I'm talking about. This has been going on for decades and the housing crisis we have now is the result.
- alexb_ 3y ago
  Asking to change policy without changing the incentives that led to said policy is a fool's errand. You have to change what people are incentivized to do to actually change anything because people respond to incentives, not ideas. The way you fix zoning itself is by incentivizing people do to so. Plus, that's not the only supply problem that comes from Prop 13. People don't want to ever sell their houses because that means their property tax will be reassessed when they move. That's another huge problem caused by Prop 13.
  - Dig1t 3y ago
    I completely agree with you about incentives. I'm saying there is already an incentive to build densely, developers already want to do this because they make more money by doing so. They are literally not allowed to build anything other than single family homes though, the local homeowners actually control what is allowed to be built. That is to say: the people who have an incentive to keep housing supply low are the ones deciding what is allowed to be constructed in their town. If I go buy a piece of land in Cupertino and I want to build an apartment complex, I have to go apply for permits and get approval from the city of Cupertino zoning board. The people on that board are all people who live in Cupertino that own single family homes, they have a strong incentive to deny my application if I am building my apartment complex anywhere near their neighborhood. Basically every single city in California has zoning laws that prohibit you from building anything other than suburban single family homes in most of the town. What I'm saying is that you can fix the housing crisis by passing a law that limits the power of the zoning board to deny permits for these types of housing. Take a look at the Cupertino zoning map: https://map.gridics.com/us/ca/cupertino#11.67/37.3159/-122.033/0/45 https://map.gridics.com/us/ca/cupertino#11.67/37.3159/-122.0... if you click layers -> planning -> zoning you can see an overlay of the zoning for the whole city. The light beige color is "single family" zoned, meaning that nobody is allowed to build anything other than low-density homes. Notice how _most_ of the city is designated "single family". This is the cause of the entire problem. Nobody is allowed to build anything more dense than the single family homes that are already there. Not-so-coincidentally, Cupertino is one of the most expensive places to live in the US. Look at Houston, TX. They have no zoning laws (it's not perfect they still have deed restrictions which sometimes act similarly to zoning laws), and it is a massive city. The median house price is ~340k, something that most normal people can afford. There is a clear correlation between reduced zoning restrictions and lower housing costs.

uoaei 3y ago

Hi, welcome to the conversation, I can tell this is the first time you've engaged with this topic, so I'd love to introduce you to the economic dynamics at play. When property taxes don't rise, people are disincentivized from selling their home because if they buy a new home they must pay property taxes at the new rate, not the grandfathered one. This creates a bottlenecked supply of housing because no one sells. Growth stagnates and then you get these wild fights about who's allowed to build where, how much they're allowed to build, and what kinds of undesirables might move in and "change the community". It's really a clever ploy to use people's conservative instincts to juice the real estate market since scarcity brings about insanely high costs. Now those with Prop 13 homes are even less incentivized to move because their house's worth just keeps rising. They can use that and borrow against it to play financial games and make their money make money. All because they happened to have bought a home before this law passed: entirely luck, nothing to do with merit or skill.

Domenic_S 3y ago
Do you have data to support this claim? It doesn't appear to play out like this in practice. Compare CA vs a state like NJ and home sales seem on par per capita. https://journal.firsttuesday.us/home-sales-volume-and-price-peaks/692/ https://journal.firsttuesday.us/home-sales-volume-and-price-... https://njar-public.stats.10kresearch.com/docs/lmu/x/EntireState?src=map https://njar-public.stats.10kresearch.com/docs/lmu/x/EntireS...
- uoaei 3y ago
  Why do all these sites only consider from 2010 onward? Prop 13 was passed in 1978.
- 2c2c2c 3y ago
  Would assume this is due to the constant inflow of high income tech workers to california
AlbertCory 3y ago
Do a little research. If you move in CA and you're over 55, you can now keep your property tax bill. Previously it was only certain counties that honored that; now it's all of them. https://www.financialplannerla.com/transfer-california-property-tax/ https://www.financialplannerla.com/transfer-california-prope... > All because they happened to have bought a home before this law passed. Again, do some research. Prop 13 passed in 1978, 45 years ago. The number of current homeowners who bought before then is vanishingly small. House prices were escalating before 13 passed, and the jumps in property taxes were in fact a prime reason why it passed. > they can use that and borrow against it to play financial games and make their money make money Do you have any data at all to support that assertion? > This creates a bottlenecked supply of housing there are all kinds of reasons why there's too little building. Grandfathered house values are only one of them. Regulations and high costs are much more important.

kmeisthax 3y ago

Considering that lots of Californians pay practically no property tax... yes! Absolutely tax more! The current system is extremely conservative. Any time a piece of property changes ownership, it gets hosed by the assessors. If you move to California you will be paying insane sums in property tax while living next to people who are paying almost nothing. This is an effective subsidization of people who hold property for a long time, which creates market distortions. For example, people normally sell their house and move when they retire, because they don't need as much housing and can save money by downsizing. This means more houses on the market, which pushes down prices and keeps people from living in their cars. But not in California, because a lot of people are getting the best property tax deal available in the country there.