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I realized after a while of living there that California is run as a real estate cartel. Land owners who bought when the state was cheap own it, and everyone wh

by api 3y ago

I realized after a while of living there that California is run as a real estate cartel. Land owners who bought when the state was cheap own it, and everyone who bought later is beholden and locked in with golden handcuffs to the high price environment they created. I call it a cartel because the scarcity is 100% a policy choice. Density is not high, public transit is awful, and there is a ton of land left to develop on. Real estate in California is like diamonds from DeBeers. If you aren't rich, don't stay there. All your surplus will go to landlords. If you buy at these high prices >50% of your income will go to servicing the mortgage and if the property market there ever does crash you'll be ruined. You’ve basically bought into a cartel. I'd say for the Bay Area it's worthwhile to go to build out your career but if you aren't making at least $350k/year by age 35 leave. Personally I’m glad I left because I loathe this property cartel and what it does to people and wouldn’t want to put my money into it. IMHO the state has this totally fake reputation as a liberal “woke” place when in reality it’s a landlords kingdom. Texas is more progressive than California because a working class person can afford a home.

readyman 3y ago
>California is run as a real estate cartel Literally the political power that got Tesla off the ground (with fed funding) to save real estate prices in the San Bernadino Valley, LA, etc.
- shuckles 3y ago
  Tesla's primary R&D and manufacturing operations are in the San Francisco Bay Area. How does that impact land values in Southern California?
  - readyman 3y ago
    That's irrelevant. EVs are necessary to preserve land values in Socal, which is why Cali real estate funded Cali politicians to use all of their weight to win fed funding for the Tesla project in the first place. Everybody knows (whether they admit it or not) that EVs don't help with global warming. They merely displace polution from places like the San Bernadino Valley and Los Angeles, which is all they were meant to do, for the purpose of preserving real estate values. And it's working.
    - seanmcdirmid 3y ago
      > Everybody knows (whether they admit it or not) that EVs don't help with global warming. That isn’t true: this is very a popular crank theory right now, but it’s not a popular opinion in mainstream science or among the public at large.
      - readyman 3y ago
        It's absolutely true. The detriment of manifesting the necessary new and very nasty manufacturing processes make it a done deal, especially compared to simply building trains, which is admittedly not simple in the US due to the cruel and unusual political economic situations. Nevertheless, all of this is true.
        seanmcdirmid 3y ago
        I get it, it’s the most important theory of crank science today. But it makes assumptions like people buying EVs and incinerating their existing ICE cars, everyone getting electricity from small island diesel generators or the dirtiest coal plants, etc… China is doing all of the above, BTW and it’s working well for them. You build out HSR, local transit, and EV capabilities out all at the same time. It will work out well for them.
        readyman 3y ago
        >You build out HSR, local transit, and EV capabilities out all at the same time And the critique is that the US is not and cannot do so. These are political problems and our politics are dominated by the interests of capital, not the interests of our society.
        seanmcdirmid 3y ago
        The statement “EVs won’t seriously do anything about global warming” is explicitly a global one, not limited to the USA (or you could have said US warming).
    - 3y ago
  - GaryNumanVevo 3y ago
    Read up on the history of California's Zero-Emission Vehicle credits, Tesla regularly makes revenue in the hundreds of millions by selling these credits to other auto manufacturers. https://stockdividendscreener.com/auto-manufacturers/teslas-regulatory-credits-revenue/#A1 https://stockdividendscreener.com/auto-manufacturers/teslas-... These credits were originally thought up to incentivize EVs because the smog in LA was near apocalyptic level.
    - shuckles 3y ago
      Smog in LA peaked decades before EV credits were thought up.
deleted 3y ago
[deleted]
nostrademons 3y ago
It's interesting to trace the impact that Prop 13 has had on further policy choices and subsequent culture. Prop 13 caps property taxes at 1% and also limits the increase in assessed value to 2%/year. In a region where housing prices appreciate by ~7%/year and that filters down into the basic cost of living for most municipal workers, this makes it impossible for local municipalities to balance their budgets without a steady influx of new buyers. The only way they can bring their tax basis up is to ensure that new homeowners buy in at ever-increasing prices, so that the tax basis can be reassessed upwards on purchase and the new homeowners can subsidize old homeowners who are paying well below market rates on taxes. Local municipalities in turn control planning and zoning, and so they pass zoning codes and approve projects on the basis of what will increase assessed values and hence tax revenue the most. This further exacerbates the housing shortage, raising inflation and increasing the need for ever-increasing home values even more. Basically CA voters enshrined a pyramid scheme into the state constitution in 1978, and it's filtered down into every aspect of the state's economy by now.
screenobobeano 3y ago
Sounds like you haven’t met the Texas cartel yet! They’re nice, they are sorry about the fact that you’re going to have share a police force with 3 other districts, but they promise you can get electricity all year round this year.
shostack 3y ago
If you consider Texas more liberal than California purely on the basis of home affordability it is clear you're not interested in making a serious point.
- api 3y ago
  My point is that I see deep hypocrisy in a society that prices housing out of reach of anyone below upper middle class while pretending to be liberal and progressive. I don’t consider Texas liberal but at least you can have a home without earning $200k or above or having a liquidity event. My personal opinion is that any good done by liberal policies in California is negated by housing.
  - toomuchtodo 3y ago
    Chicago and the western suburbs in Northern Illinois would’ve been a better example than Texas imho.

by api 3y ago

readyman 3y ago

>California is run as a real estate cartel Literally the political power that got Tesla off the ground (with fed funding) to save real estate prices in the San Bernadino Valley, LA, etc.

shuckles 3y ago
Tesla's primary R&D and manufacturing operations are in the San Francisco Bay Area. How does that impact land values in Southern California?
- readyman 3y ago
  That's irrelevant. EVs are necessary to preserve land values in Socal, which is why Cali real estate funded Cali politicians to use all of their weight to win fed funding for the Tesla project in the first place. Everybody knows (whether they admit it or not) that EVs don't help with global warming. They merely displace polution from places like the San Bernadino Valley and Los Angeles, which is all they were meant to do, for the purpose of preserving real estate values. And it's working.
  - seanmcdirmid 3y ago
    > Everybody knows (whether they admit it or not) that EVs don't help with global warming. That isn’t true: this is very a popular crank theory right now, but it’s not a popular opinion in mainstream science or among the public at large.
    - readyman 3y ago
      It's absolutely true. The detriment of manifesting the necessary new and very nasty manufacturing processes make it a done deal, especially compared to simply building trains, which is admittedly not simple in the US due to the cruel and unusual political economic situations. Nevertheless, all of this is true.
      - seanmcdirmid 3y ago
        I get it, it’s the most important theory of crank science today. But it makes assumptions like people buying EVs and incinerating their existing ICE cars, everyone getting electricity from small island diesel generators or the dirtiest coal plants, etc… China is doing all of the above, BTW and it’s working well for them. You build out HSR, local transit, and EV capabilities out all at the same time. It will work out well for them.
        readyman 3y ago
        >You build out HSR, local transit, and EV capabilities out all at the same time And the critique is that the US is not and cannot do so. These are political problems and our politics are dominated by the interests of capital, not the interests of our society.
        seanmcdirmid 3y ago
        The statement “EVs won’t seriously do anything about global warming” is explicitly a global one, not limited to the USA (or you could have said US warming).
  - 3y ago
- GaryNumanVevo 3y ago
  Read up on the history of California's Zero-Emission Vehicle credits, Tesla regularly makes revenue in the hundreds of millions by selling these credits to other auto manufacturers. https://stockdividendscreener.com/auto-manufacturers/teslas-regulatory-credits-revenue/#A1 https://stockdividendscreener.com/auto-manufacturers/teslas-... These credits were originally thought up to incentivize EVs because the smog in LA was near apocalyptic level.
  - shuckles 3y ago
    Smog in LA peaked decades before EV credits were thought up.

deleted 3y ago

[deleted]

nostrademons 3y ago

It's interesting to trace the impact that Prop 13 has had on further policy choices and subsequent culture. Prop 13 caps property taxes at 1% and also limits the increase in assessed value to 2%/year. In a region where housing prices appreciate by ~7%/year and that filters down into the basic cost of living for most municipal workers, this makes it impossible for local municipalities to balance their budgets without a steady influx of new buyers. The only way they can bring their tax basis up is to ensure that new homeowners buy in at ever-increasing prices, so that the tax basis can be reassessed upwards on purchase and the new homeowners can subsidize old homeowners who are paying well below market rates on taxes. Local municipalities in turn control planning and zoning, and so they pass zoning codes and approve projects on the basis of what will increase assessed values and hence tax revenue the most. This further exacerbates the housing shortage, raising inflation and increasing the need for ever-increasing home values even more. Basically CA voters enshrined a pyramid scheme into the state constitution in 1978, and it's filtered down into every aspect of the state's economy by now.

screenobobeano 3y ago

Sounds like you haven’t met the Texas cartel yet! They’re nice, they are sorry about the fact that you’re going to have share a police force with 3 other districts, but they promise you can get electricity all year round this year.

shostack 3y ago

If you consider Texas more liberal than California purely on the basis of home affordability it is clear you're not interested in making a serious point.

api 3y ago
My point is that I see deep hypocrisy in a society that prices housing out of reach of anyone below upper middle class while pretending to be liberal and progressive. I don’t consider Texas liberal but at least you can have a home without earning $200k or above or having a liquidity event. My personal opinion is that any good done by liberal policies in California is negated by housing.
- toomuchtodo 3y ago
  Chicago and the western suburbs in Northern Illinois would’ve been a better example than Texas imho.