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The issue isn't that folks need to earn $50/hr to live in much of California (though they do). The big issue is that with housing so ridiculously overpriced, mo

by ttfkam 3y ago

The issue isn't that folks need to earn $50/hr to live in much of California (though they do). The big issue is that with housing so ridiculously overpriced, most folks can never buy; home prices exceed most folks' ability to get raises and build up enough for a down payment. This leaves existing land owners able to extract venomous amounts of rent, taking away discretionary funds to be spent in other areas. Which feeds on itself where folks need higher wages to compensate. But those higher wages aren't going to businesses that pay those wages, putting small business owners further into the squeeze. It's a direct wealth transfer from the non-landowners to the landowners, further stratifying our communities and choking the common economic engine. I say this as someone who "owns" (mortgage) their home. And if the housing market hadn't imploded at between 2008 and 2012, I'm not sure my wife and I could have bought even then. Raising the minimum wage won't work. What will work, very few rich people would ever allow: a graduated tax on every additional property you own. Own one house that you live in as your primary residence? Low property tax. Own 30,000 units? Massive tax bill that encourages you to flee from the idea of using real estate as a glorified stock market. Housing for people, not portfolios. Bring the prices down. Bring that discretionary spending back to local communities. Hell, fund our schools properly while we're at it!

fortran77 3y ago
California is right at the median for % of state revenue from property tax. It's not particularly low in California at all. https://www.visualcapitalist.com/cp/us-property-taxes-by-state/ https://www.visualcapitalist.com/cp/us-property-taxes-by-sta... They just need to build more housing! Changing the taxes won't make more houses or apartments.
- ttfkam 3y ago
  There are a lot of vacant properties where the buildings are literally being used as investments rather than living spaces. There are a LOT of housing that isn't being used due to greed and speculation. But yes, NIMBY definitely has its role as well in preventing increased density, which has all kinds of poor side effects like increased dependency on cars+insurance. Increasing the taxes, by the way, is to disincentivize the land hoarding, not specifically to increase state coffers.
- ttfkam 3y ago
  Also bear in mind that due to Prop 13 back in the 1970s, if you sit on your property for decades, your property taxes don't rise quickly. To make up the shortfall, property taxes are raised that only affect new purchases. So not only are new homes far more expensive than they have ever been, incumbent landowners pay a disproportionately lower amount of property taxes. So looking at the average tax percentage as we see in the chart you linked is not a complete economic picture.
sillystuff 3y ago
> What will work, very few rich people would ever allow: a graduated tax on every additional property you own. Own one house that you live in as your primary residence? Low property tax. Own 30,000 units? Massive tax bill that encourages you to flee from the idea of using real estate as a glorified stock market. Perhaps a graduated capital gains tax instead? 100% capital gains tax on any residential zoned property (whether a structure on it or not), for 3+ properties owned by any natural person, and 100% capital gains on all residential zoned property owned by non-natural persons. With an exception for the initial builder/developer. Either helps address lack of affordability for purchasing a home, but both would likely significantly drive up rental costs (the capital gains version long-term increasing rental costs, while the property tax version would immediately cause a huge spike in rents, but the beneficial effects would also be more delayed for the capital gains version too). I can't think of a way to prevent driving up the price of rent without direct price controls, and those are even more anathema to some folks than paying taxes.

by ttfkam 3y ago

fortran77 3y ago

California is right at the median for % of state revenue from property tax. It's not particularly low in California at all. https://www.visualcapitalist.com/cp/us-property-taxes-by-state/ https://www.visualcapitalist.com/cp/us-property-taxes-by-sta... They just need to build more housing! Changing the taxes won't make more houses or apartments.

ttfkam 3y ago
There are a lot of vacant properties where the buildings are literally being used as investments rather than living spaces. There are a LOT of housing that isn't being used due to greed and speculation. But yes, NIMBY definitely has its role as well in preventing increased density, which has all kinds of poor side effects like increased dependency on cars+insurance. Increasing the taxes, by the way, is to disincentivize the land hoarding, not specifically to increase state coffers.
ttfkam 3y ago
Also bear in mind that due to Prop 13 back in the 1970s, if you sit on your property for decades, your property taxes don't rise quickly. To make up the shortfall, property taxes are raised that only affect new purchases. So not only are new homes far more expensive than they have ever been, incumbent landowners pay a disproportionately lower amount of property taxes. So looking at the average tax percentage as we see in the chart you linked is not a complete economic picture.

sillystuff 3y ago

> What will work, very few rich people would ever allow: a graduated tax on every additional property you own. Own one house that you live in as your primary residence? Low property tax. Own 30,000 units? Massive tax bill that encourages you to flee from the idea of using real estate as a glorified stock market. Perhaps a graduated capital gains tax instead? 100% capital gains tax on any residential zoned property (whether a structure on it or not), for 3+ properties owned by any natural person, and 100% capital gains on all residential zoned property owned by non-natural persons. With an exception for the initial builder/developer. Either helps address lack of affordability for purchasing a home, but both would likely significantly drive up rental costs (the capital gains version long-term increasing rental costs, while the property tax version would immediately cause a huge spike in rents, but the beneficial effects would also be more delayed for the capital gains version too). I can't think of a way to prevent driving up the price of rent without direct price controls, and those are even more anathema to some folks than paying taxes.