Social Fixing California

[Revolver]

I've been all over the place and I can't think of one state but Cali that has priced middle class people out so bad that they are shitting all over streets and front door of businesses. And cities are hiring clean up crews for it. Think of that. Clean up crews....for fucking cleaning up human shit. FUCKING LOL!!!

Some of you Cali-tards just need to get over yourselves and admit you have some major issues. But Derp "5th highest economy" DERPA DERPA DEEEERRRRRRPPPPP!!!

Translation: too poor to live here. lmao

 

[AgonyandIrony]

I've lived in LA, and have had my home broken into at least three times and once vandalized with spray paint. Too much crime, too many people (lousy ones, at that) and too much traffic. Also graffiti everywhere. Fuck that noise. I love it up here in the Tahoe area, it's beautiful, affordable, clean and not too many people. And not a single graffito to be seen.
I've always wanted to go to Canada, though. It looks pretty awesome.

Once I wrap up this book down here I'm probably headed to LA for awhile (kind of have to in comedy and I've got good connections.)

The rent prices are going to kill me. I pay $950 for a 650 sq ft 1br place in the French Quarter with 20ft ceilings, hardwood floors, and exposed brick walls. Across the street is a bar open until 9am and three bars on the block open until 6AM and maybe 200 restaurants in my neighborhood. Live music on every corner and sometimes a saxaphone player sits outside my apt playing Louis Armstrong. It's wonderful.

I'm also well versed in crackheads and crime so I think that part of LA won't bother me too much, the not being able to legally drink in the streets and bars closing early will be hella fucking annoying.

You ever been down here to New Orleans? How would you compare it to LA?

 

[Corona]

Well that fucking settles it then. One irrelevant poster on Sherdog hasn't seen shit on the sidewalk, that means it's not happening and cities aren't hiring clean up crew to clean it. That's it. End thread.

https://www.nbcbayarea.com/investigations/Diseased-Streets-472430013.html
https://www.vice.com/en_us/article/3k45py/san-fransiscos-homeless-crisis-is-now-a-poop-crisis
https://www.foxbusiness.com/economy/california-homeless-crisis-relocate-small-business

I mean that’s gonna happen anywhere where there’s homeless people. But I’m saying it’s not some kind of brutal epidemic. It probably happens in less than 1% of the state yet people make it sound like the state is a national dump with shit everywhere.

 

[Gregolian]

I mean that’s gonna happen anywhere where there’s homeless people. But I’m saying it’s not some kind of brutal epidemic. It probably happens in less than 1% of the state yet people make it sound like the state is a national dump with shit everywhere.

It's full of Raiders and Rams and Niner fans so...

Yeah, it's a dump with shit everywhere.

 

[Corona]

It's full of Raiders and Rams and Niner fans so...

Yeah, it's a dump with shit everywhere.

PUtO and newb ruining the state smh

 

[Satsui Ryu]

Biggest issue is the entire state's population wants to huddle around two tiny pieces of land (SF and LA). Cali is a huge state, but there are only small portions that are considered desirable. Perhaps if industry can be convinced to branch out even a little bit outside of the hubs it may spread people out a bit. But I don't think all the zoning rules in the world can fix the fact that so many people want to live in very small already densely developed areas.

 

[Gregolian]

Biggest issue is the entire state's population wants to huddle around two tiny pieces of land (SF and LA). Cali is a huge state, but there are only small portions that are considered desirable. Perhaps if industry can be convinced to branch out even a little bit outside of the hubs it may spread people out a bit. But I don't think all the zoning rules in the world can fix the fact that so many people want to live in very small already densely developed areas.

If it weren't for Hollywood I think that'd solve some of the issue with LA.

The amount of people in that town working as bartenders, waitresses, and such while trying to land "that one part" to get them to be big is a huge reason for that town's density I would imagine.

 

[Satsui Ryu]

If it weren't for Hollywood I think that'd solve some of the issue with LA.

The amount of people in that town working as bartenders, waitresses, and such while trying to land "that one part" to get them to be big is a huge reason for that town's density I would imagine.

SoCal is actually another tech hub. Not as major as Silicon Valley, but its up there. There are also a lot of major defense contractors down there. Hollywood does add some, but there is a ton of industry there.

 

[panamaican]

The housing shortage has another element: limited construction of new housing on top of the strong economy and a lot of people wanting to live here. CA's Gini is 7th among all states, which is high (that is, the inequality issue is worse than it is in the country as a whole). My guess (don't know for sure) is that you tend to have higher Ginis in urban areas, which means that it could be misleading for states with a high percentage of the population that is urban. There's also a connection between per-capita wealth and inequality so that could also be misleading (BTW, Alabama is seriously fucked, as it is highly rural and poor, and still has super high inequality).

Anyway, the notion that California is in particularly bad shape is wrong. It's actually in very good shape. But housing is a serious issue, and most people's lives would be improved if more construction were allowed.

Here's my thing about housing. Is housing a problem all over the state or only in the highly desired urban areas?

Because I think it's misdirection to look at SF, LA, and San Diego's housing problems and then claim that it's applicable to all of the counties and towns in between. Which is what you have to do to say California, the state, has a problem.

 

[Jack V Savage]

Here's my thing about housing. Is housing a problem all over the state or only in the highly desired urban areas?

Because I think it's misdirection to look at SF, LA, and San Diego's housing problems and then claim that it's applicable to all of the counties and towns in between. Which is what you have to do to say California, the state, has a problem.

Well, it's statewide on average (that is, the overall population of the state has risen much faster than housing supply). The state overall is 49th in housing units per person. But it's acutely felt in highly desirable urban areas. Here in the Bay Area, just over the past five years, there have been seven times as many created as housing units built. When you consider that a lot of those jobs are very high-paying, you see the problem.

 

[panamaican]

Well, it's statewide on average (that is, the overall population of the state has risen much faster than housing supply). The state overall is 49th in housing units per person. But it's acutely felt in highly desirable urban areas. Here in the Bay Area, just over the past five years, there have been seven times as many created as housing units built. When you consider that a lot of those jobs are very high-paying, you see the problem.

I see the problem in the broad sense. I don't see the problem as a state one. I also don't see it as a significant problem but I can concede being in the minority on that position.

 

[Jack V Savage]

I see the problem in the broad sense. I don't see the problem as a state one. I also don't see it as a significant problem but I can concede being in the minority on that position.

In addition to it leading to homelessness and to pricing middle-income workers out of cities (which all, of course, require the services provided by said workers), you have a situation with an extremely highly skilled and productive workforce that is essentially just acting as middlemen between consumers and landlords (that is, they are highly compensated but then a disproportionate share of that high compensation goes to landlords). This isn't the market at work (gov't or neighborhood associations restrict supply, and the impact is decreased productivity relative to a regulation-free baseline), is bad for the environment, and isn't how people would democratically choose to allocate resources.

 

[panamaican]

In addition to it leading to homelessness and to pricing middle-income workers out of cities (which all, of course, require the services provided by said workers), you have a situation with an extremely highly skilled and productive workforce that is essentially just acting as middlemen between consumers and landlords (that is, they are highly compensated but then a disproportionate share of that high compensation goes to landlords). This isn't the market at work (gov't or neighborhood associations restrict supply, and the impact is decreased productivity relative to a regulation-free baseline), is bad for the environment, and isn't how people would democratically choose to allocate resources.

I don't disagree with most of what you're saying. I disagree with perceiving it as a significant problem. A problem, not a significant problem.

After decades of undervalued urban real estate and thus under funded urban services, there is a legitimate element to utilizing higher property values and the related property taxes to fund local services for the less fortunate. You reference the transfer of funds between the consumers and landlords but you stopped short of recognizing the economic value realized by the urban areas. These increased revenues are often directed to areas of real need, such as local public schools.

For example, in 2018 SF announced that they had a $415M windfall as a result of the increased values and property taxes. Much of that money is going to directed to addressing the homelessness situation and they increased their public school budget by $26 million. I've seen similar stories in other cities.

Now, I'm sure you can calculate out some property tax laffer curve but, right now, it looks like the cities are benefiting. And I would imagine that the spillover from those unable to buy within the cities is benefiting the surrounding counties as well. Although this reminds me that I need to read some local research about gentrification actually resulting in more affordable housing - I'm finding that one hard to swallow just on word of mouth.

 

[Jack V Savage]

I don't disagree with most of what you're saying. I disagree with perceiving it as a significant problem. A problem, not a significant problem.

After decades of undervalued urban real estate and thus under funded urban services, there is a legitimate element to utilizing higher property values and the related property taxes to fund local services for the less fortunate. You reference the transfer of funds between the consumers and landlords but you stopped short of recognizing the economic value realized by the urban areas. These increased revenues are often directed to areas of real need, such as local public schools.

For example, in 2018 SF announced that they had a $415M windfall as a result of the increased values and property taxes. Much of that money is going to directed to addressing the homelessness situation and they increased their public school budget by $26 million. I've seen similar stories in other cities.

Now, I'm sure you can calculate out some property tax laffer curve but, right now, it looks like the cities are benefiting. And I would imagine that the spillover from those unable to buy within the cities is benefiting the surrounding counties as well. Although this reminds me that I need to read some local research about gentrification actually resulting in more affordable housing - I'm finding that one hard to swallow just on word of mouth.

The windfall is addressing a problem caused in part by the housing shortage. I don't see how that justifies the shortage. And note that building more housing units doesn't lower the total value of all holdings in the city. For example, condominiums might be worth less per unit than single-family homes, but the total value of the ground space is much higher. Land owners are doing the opposite of adding value (and being compensated for it)--to the extent they're involved in preventing construction, they're *reducing* value *and* using gov't power to extract value from people who are producing it. Cities would benefit more from more construction and a better tax structure (IMO, the ideal tax on labor, consumption, and business is 0%--taxes should be on unimproved land value, estates, and things we want less of).

 

[panamaican]

The windfall is addressing a problem caused in part by the housing shortage. I don't see how that justifies the shortage. And note that building more housing units doesn't lower the total value of all holdings in the city. For example, condominiums might be worth less per unit than single-family homes, but the total value of the ground space is much higher. Land owners are doing the opposite of adding value (and being compensated for it)--to the extent they're involved in preventing construction, they're *reducing* value *and* using gov't power to extract value from people who are producing it. Cities would benefit more from more construction and a better tax structure (IMO, the ideal tax on labor, consumption, and business is 0%--taxes should be on unimproved land value, estates, and things we want less of).

The housing shortage is not what caused the problem. Declining interest in city living coupled with low property values caused the problem. The resurgence in urban living and the subsequent increase in property values is just the housing market relocating from the suburbs to the cities.

Cities might benefit from more residential construction. Citizens definitely will. From the cities' perspective, if you have a housing shortage there is limited value to creating/increasing a tax on unimproved land. You have a shortage precisely because you have a dearth of undeveloped land. You can tax estates all you want at the state/county level, people with money will simply change their primary address out of the state (or just out of the county) and you're left with the real estate portion for tax purposes. If that happens then you have to raise property taxes to make up the shortfall, driving landowners to increase their rents.

I generally don't follow your point about land owners not adding value by preventing construction unless you're talking about truly undeveloped space. None of that directly harms the city. The city simply recoups from the land owners by raising the valuation of the land to reflect market values and raises the property taxes accordingly. For people who subsequently commute into the city for work, a basic wage tax steps in.

I'm not seeing your point on that one.

 

[Jack V Savage]

The housing shortage is not what caused the problem. Declining interest in city living coupled with low property values caused the problem. The resurgence in urban living and the subsequent increase in property values is just the housing market relocating from the suburbs to the cities.

The problem of insufficient housing supply?

Cities might benefit from more residential construction. Citizens definitely will. From the cities' perspective, if you have a housing shortage there is limited value to creating/increasing a tax on unimproved land. You have a shortage precisely because you have a dearth of undeveloped land.

To be clear, a tax on unimproved land value doesn't mean a tax on land that is unimproved--it's a tax on land with deductions allowed for improvements.

I generally don't follow your point about land owners not adding value by preventing construction unless you're talking about truly undeveloped space.

The same dynamic holds for underdeveloped space as for undeveloped space. If we have a free market in land, property is worth more to apartment/condo developers than to people either living in or owning single-family homes, and thus the developers make attractive offers to owners, who sell. Land value goes up, individual housing unit costs go down, there's an increase in productivity as a result of the transaction, businesses in the area benefit in other ways (more smart people living nearby, plus a more-concentrated customer base, and more). Zoning restrictions mean that the property is no more valuable to developers than owners, and housing-unit prices rise while land prices remain the same, and productivity doesn't increase, etc.

For people who subsequently commute into the city for work, a basic wage tax steps in.

Which has the effect of reducing value for both parties in the transaction and reducing overall economic activity, making the region poorer than it would otherwise be.

It's an interesting dynamic from a political standpoint, as the issue pits free-market types against traditional conservatives. The left is similarly divided, though I think less coherently (that is, I don't think there's any real left-wing argument against allowing more construction, but there is an impulse among some on the left against "greedy developers").

 

[panamaican]

The problem of insufficient housing supply?

The lack of funds for local service.

To be clear, a tax on unimproved land value doesn't mean a tax on land that is unimproved--it's a tax on land with deductions allowed for improvements.

I was hoping you weren't going in that direction. I think that makes no sense from the city's perspective when they can simply raise the value of the land for tax purposes. Why put in a deduction that just complicates your calculations and revenue projections? If that's your goal, new construction tax abatements work the same way.

The same dynamic holds for underdeveloped space as for undeveloped space. If we have a free market in land, property is worth more to apartment/condo developers than to people either living in or owning single-family homes, and thus the developers make attractive offers to owners, who sell. Land value goes up, individual housing unit costs go down, there's an increase in productivity as a result of the transaction, businesses in the area benefit in other ways (more smart people living nearby, plus a more-concentrated customer base, and more). Zoning restrictions mean that the property is no more valuable to developers than owners, and housing-unit prices rise while land prices remain the same, and productivity doesn't increase, etc.

Except that's not how a smart municipality would do it.

A smart municipality would simply raise the land value to reflect the increased market value of the entire parcel. Unit prices rise but so do land values and the tax base. Reassess every couple of years.

Which has the effect of reducing value for both parties in the transaction and reducing overall economic activity, making the region poorer than it would otherwise be.

It's an interesting dynamic from a political standpoint, as the issue pits free-market types against traditional conservatives. The left is similarly divided, though I think less coherently (that is, I don't think there's any real left-wing argument against allowing more construction, but there is an impulse among some on the left against "greedy developers").

It doesn't reduce value for the city if the tax is appropriately calculated compared to the surrounding municipalities, who are taxing on their own anyway. The city's only concern is attracting enough employers to keep the employees within commuting distance.

In some ways, the city might even benefit from fewer but higher taxed parcels coupled with fewer local draws on the government services.

 

[Jack V Savage]

The lack of funds for local service.

OK. That's not a problem at present. The lack of housing is a problem.

I was hoping you weren't going in that direction. I think that makes no sense from the city's perspective when they can simply raise the value of the land for tax purposes. Why put in a deduction that just complicates your calculations and revenue projections? If that's your goal, new construction tax abatements work the same way.

You mean raise the tax on property. The problem with that is that it discourages economical use of the property. The purpose of allowing deductions for improvement is that it encourages productive use of the property.

Except that's not how a smart municipality would do it.

A smart municipality would simply raise the land value to reflect the increased market value of the entire parcel. Unit prices rise but so do land values and the tax base. Reassess every couple of years.

See above. It is how a smart municipality would do it.

It doesn't reduce value for the city if the tax is appropriately calculated compared to the surrounding municipalities, who are taxing on their own anyway. The city's only concern is attracting enough employers to keep the employees within commuting distance.

In some ways, the city might even benefit from fewer but higher taxed parcels coupled with fewer local draws on the government services.

I think part of the issue may be the level that we're looking at the issue. I'm looking at the individual and regional level, while you seem more focused on the city. And I don't get why you'd dismiss increased productivity and higher standard of living for residents as a concern, which is how your argument appears to read. Again, my point is that lifting restrictions on new construction makes the city richer, in part by simply removing a major impediment to growth and in part by changing the compensation structure to align productivity with pay (instead of rewarding economically negative rent extraction). And the tax-structure change I also would support does the same thing (removes an impediment to productivity without lowering collections, and incentivizes activities that we want to encourage/removes incentives to destructive behavior).

 

[Jack V Savage]

@panamaican, another way to look at this is that I think that if we're going to deviate from a free-market situation, we should have a good reason and be aware of the tradeoffs. If you agree with that general, rough principle, what's the reason for post-market intervention to restrict housing supply, especially when there is every indication that there is a huge shortage of housing supply?

 

[panamaican]

OK. That's not a problem at present. The lack of housing is a problem.

Which I agreed with. I simply disagree with it being a significant problem.

You mean raise the tax on property. The problem with that is that it discourages economical use of the property. The purpose of allowing deductions for improvement is that it encourages productive use of the property.

I don't agree with that. Renting is an economical use of the property.

Empty improvement for tax deduction sake isn't an economical use of property, it's just incentivizing spending on the property. And no one is going to spend on property improvements unless they can recoup the expenditure in rents. Deductions don't offset the cost of the improvements. All that would do is accelerate the desire to make the rents higher.

THat is not going to create more affordable housing.

See above. It is how a smart municipality would do it.

See above. It's why a smart municipality will simply raise property taxes instead of trying to indirectly control landlord expenditures.

I think part of the issue may be the level that we're looking at the issue. I'm looking at the individual and regional level, while you seem more focused on the city. And I don't get why you'd dismiss increased productivity and higher standard of living for residents as a concern, which is how your argument appears to read. Again, my point is that lifting restrictions on new construction makes the city richer, in part by simply removing a major impediment to growth and in part by changing the compensation structure to align productivity with pay (instead of rewarding economically negative rent extraction). And the tax-structure change I also would support does the same thing (removes an impediment to productivity without lowering collections, and incentivizes activities that we want to encourage/removes incentives to destructive behavior).

I'm not dismissing it as a concern. I'm dismissing it as a significant concern. It's a matter of degree. And you are correct, i'm approaching this from the perspective of the city. I was just thinking that was the core difference in our opinions here.

I participate in a professional group that advocates strongly for more development in my city. We've decided that the best approach, and thus the one that the group advocates, is that new construction tax abatements with a sunset clause coupled with programs that incentivize low income people to stay in their homes (like reductions for seniors and low income families) works better for creating more housing than trying to dictate spending. The city did lift some height restrictions years ago but that was before I started following this stuff closely.

The bigger issue is the business tax environment. We've seen that as we attract new businesses, we create more demand for housing and that supply steps up to meet that need. But we also see that the city can generate surplus revenue simply by raising the property taxes and assessments to better reflect actual market values. These surpluses can be redirected to the public schools, dealing with the opioid epidemic, funding for the homeless. Things that were not realistically within the budget before that.

From the citizens perspective, I'm sure they'd prefer some mechanism which results in lower rents but I'm not sure that helps the city itself.

I've got to find that paper which looked into whether or not gentrification, in my city, resulted in more affordable housing overall. We did notice that gentrification had no real impact on how long people stayed in their properties.

But every city is different so I'm going to concede that you know your city better than I ever could.