I guess this is part of the post-Reagan civic reality of the US. We've given up on taxation as a means to raise money for the public good. Instead, we must rely on a random patchwork of private enterprises to occasionally improve things for some people.
> We've given up on taxation as a means to raise money for the public good.
Have we? California's marginal tax rate is over 50%, higher than many European countries. The Internet suggests that someone making $260,000 (200,000 pounds) will pay about 41.5% of their income in taxes in the U.K. https://www.thesalarycalculator.co.uk/salary.php. Using a similar tax calculator for California suggests that they'd pay about 39%. I assume the U.K. is also in a post-Reagan, post-tax world?
Must be Reagan. Couldn't be total mismanagement at all levels of California government.
That is on top of the Federal tax rate. Americans pay into two separate tax systems. It would be like paying taxes to the EU in addition to your country, which is how the US system works.
As a mechanical point: income tax comparisons should also include payroll taxes. It may not flip the analysis here, but payroll taxes tend to be much higher in Europe.
They should also include health insurance, which they don't in the US, and costs about $10K/yr (with high variance for family size and benefits package), or another 2-4 % on rayiner's example (again, high variance due to # of wage earners).
Bay area tax rates are about the same as living in Toronto, minus the public health insurance. I'm also skeptical a lack of tax money is the root problem here...
This is not remotely true. I make more than that, and my effective tax rate is 27%. This because, US has a very convoluted tax system with a whole bunch of deductions. And both Fed and state tax systems are progressive, so you simply cannot add them up, since only a portion of that is applied to your highest income level. Not factor in property related deductions, health care related deductions, children related deductions, and various investment loopholes.
Note that the 50% figure is marginal tax rate. In California, it’s basically what you pay in your 500,000-th dollar. Which is higher than the 45% you’d pay in the UK. (Though the tax burden is higher in the U.K. unless you make millions because the brackets kick in earlier.)
The figure I cited above is from a tax calculator that I’ve found to be pretty accurate. Note that the various deductions are much less valuable for high income earners under Trump’s new tax plan due to the limit on SALT deductions. Finally, while the calculator I used excludes US credits for healthcare, children, etc., the calculator I used for the U.K. also does that. The hypothetical is basically a single Google programmer who rents and has no kids.
You are literally just spreading a lie over and over again.
CA's top marginal tax rate is 12.3%. If it were >50% no rich person would live in the state.
The combined state and federal rate is not >50% either, and any calculator that claims otherwise is lying. And that's before you even take deductions into account.
If you're paying >50% marginal tax rate in CA, your accountant should be fired. And possibly investigated for embezzling funds from you in the form of "tax payments."
I think it’s pretty clear from my post that I’m talking about combined state and federal taxes in California, especially given the comparison to the U.K. which has a single level of income tax. It makes no sense to just look at state taxes, because a lot of federal taxes go back to the state as grants (transit, highway, Medicaid, ACA subsidies, education), or go to pay for social services the state would otherwise have to pay for itself (Medicare, Social Security, food security, etc.)
As to the combined marginal rate, it’s 50.75% on labor income above $576,000 (12.3% state, 37% federal, 1.45% Medicare). Then there is a 1% surcharge on incomes over $1 million. I’m not sure why you’re talking about dedications because that won’t affect the top marginal rate.
I don’t know how tax system works in the UK, but to calculate US taxes you cannot just simply add the tax rates. Because taxes in the US are progressive. For both Fed and CA taxes, your first $x gets taxed at a lower rate, next $y gets taxed at a slightly higher rate. The highest rate kicks in >$1mn. Then we have a standard deduction of $23k for married couples. Which means $23k of your income is not taxed. Then state taxes are deductible on your Fed income, which means you can subtract the state taxes to calculate your Fed tax income bracket. Then there are myriad of deductions for property tax, mortgage, child care, health care, etc etc. Finally SSN and Medicare tops out at $100k, and you don’t pay beyond that. Net effect is you are probably paying close to 25-30% in effective tax rate
You are talking about effective rates (affected by deductions); parent (and I below) are talking about marginal rates (the rate isn't generally affected by deductions - only the income theshold)
> The combined state and federal rate is not >50% either, and any calculator that claims otherwise is lying.
Why are you so confident here? The top CA marginal rate is 13.3%. Top federal marginal rate is 37%. Medicare tax is 1.45%. simple addition gives a top marginal rate for wage income of 51.75%. I have no idea how your accountant can get that lower.
The top marginal rate in California is 12.3%. The 1% is a separate levy, so if your take that into account you have to do the same for your comparison rates.
And then you find that your tax burden in Texas ends up being close to the same as it was in California, but your taxes in Texas don't get you any public services.
Wow that is a lot closer than I realised. I was always of the assumption that the US tax rate was much lower than the UK and Europe.
That 2.5% extra in the UK (so about £5k/$8k a year) includes free healthcare too (plus at £200k you'd almost certainly be in a job that also has excellent private health care for you and your family with no extra payments as well as the free NHS). I understand that this can cost many tens of thousand in the US even before you use it.
I just don't get the US system sometimes I really don't. Perhaps instead of calling for SV companies to move elsewhere in the US, why not just come to London or Zurich or Berlin?
For 2019, the federal top rate is 37% and the California state top tax rate is 13.3%. You'll have hit the SALT deduction cap way before you hit the top marginal rate, so if you get there, you're looking at a marginal rate of 50.3%, which does exceed 50%.
2. It's slightly disingenuous to call it "California's marginal tax rate" when 2/3 of that figure comes from federal taxes. It's like saying "Texas's marginal tax rate is 37%".
3. The SALT deduction changes have made it so that residents of states with high taxes are effectively double-taxed. California isn't responsible for this state of affairs.
not really. California has high INCOME taxes compared to other states but significantly lower real estate taxes, and revenues due to the infamous Prop 13. Commercial real estate is the most significant source of deficits in this state.
Within 10 blocks of where I live more than 30,000 new units are being constructed (or have finished construction) in a 3 year window.
That doesn't include the dozen residential buildings of 100+ units I see on my daily commute, or the other dozens of buildings being built along public transportation routes in LA.
Long Beach and San Diego have also experienced residential building sprees.
The problem is that California is such a desirable place to live that even with all the undesirables leaving the state for the South, we still can't keep up with the growing demand for new housing.
I don't live in California. I live in a place with functional zoning laws and no parking minimums. These greatly restrict density in places like LA.
This WSJ piece is instructive. Tokyo has seen flat housing prices despite population growth. The secret? Tokyo had a lot more housing starts than NYC or SF.
Yes, california attracts new people. A sensible housing market would build more houses to build them. It is not clear how higher taxes would help, unless you think higher japanese tax rates cause their private sector to build more.
Well, the taxes in CA are extremely high. A typical 2M house in the penninsula will pay over 27000/year in taxes and that's not even counting income taxes. That's not even counting all the permiting fees, building fees, and countless other fees that developers need to pay, which are passed on to the consumer, and all the regulations which raise the cost of building in the first place.
Perhaps, you meant, we've given up on the ability of government to use those taxes for the greater good. I'd agree with that. for the last 50 years, If even a tiny fraction of those taxes were used to solve all the zoning and building regulations, we'd be in great shape right now.
I think it's more likely that a typical $2M house on the peninsula is paying much less than $27,000/year in property taxes because of prop 13.
Only the homes that have been sold in the last ~5 years are actually paying 1% of property value in yearly taxes. Many homes are paying much, much less because they haven't been sold in 20 years and/or were passed down within the family. Or, the owners move out and rent the home and continue to get artificially low property taxes (while increasing rent higher and higher reach year).
This gives me a bad feeling. On the one hand companies are arguing that their only obligation is shareholder value. How can they square this with spending money on stuff that doesn’t benefit them? More likely this is geared towards benefitting Apple but probably doesn’t do anything to address systemic problems. In the end California needs to build much more housing especially in areas like SV or LA.
If they're taking advantage of laws for "Opportunity Zones" and such, there are some substantial tax benefits for investing their money this way. It's not gonna have a huge impact on the bottom line for a company like Apple, but it beats having $100 billion just sitting in the bank
What's ridiculous is there is hundreds of billions of dollars that would love to help ease the housing crunch in California, however due to utterly braindead oppressive zoning regulations, none of it ever gets spent. Apple spending 2.5 billion dollars is meaningless, that money is far better spent on lobbying to fix the underlying cause of the high rents.
Three possible outcomes (with possibility of a blend of all 3 happening):
1. Housing market collapses as boomers realize they need to retire and neither Gen X or Millenials have the money to afford the current stock at their expected price.
2. Alt-outcome #1: Government bails out boomers once #1 occurs (wouldn't surprise me because the Baby Boomer generation is one of the most selfish groups in existence and they actually vote so they tend to be angry, loud, and in control.
3. Alt-outcome #2: Foreign money scoops up all the boomer housing and we have whole new problem.
4. Alt-outcome #3: People and companies realize that there are 49 other states in the US, companies build satellite offices, and people move out of California and realize that you can buy a big house with a great school system where the cost of living vs. salaries make a lot more sense.....
No, but there are lot of places in the US where working class/middle class households (median income of around $70K) can both find jobs and housing they can afford.
Your average Software Engineer in Atlanta for instance is definitely not struggling to find a nice (3000 square foot) brand new house in the burbs in a great school system with a mortgage that doesn’t leave them house poor.
But they have to live in oppressive heat and humidity. There is a reason California is popular -- the temperate weather. You can't really find similar weather anywhere else in the US.
The level of distress many of my peers are experiencing due to the cost of housing is horrible, and I'd be happy for the value of my house to be cut in half if it would reduce the misery.
I have worked on a bunch of depressing homelessness service projects, and I say they're "depressing" because they money can't be used effectively due to the oppressive zoning regulations you mention. http://seliger.com/2017/08/30/l-digs-hole-slowly-economics-f...
California raises hundreds of millions or billions of dollars for affordable housing, then restricts the ability of organizations to build that housing.
Because if you build the rows and rows of gross generic condos with corporate shops underneath that ruined Seattle, it will no longer be such a desirable place to live.
In older cities there are rows and rows of very similar looking buildings in very desirable areas. All those buildings were brand new once upon a time. Cities are cool because of the people who live there. If Seattle is so boring and generic, that says more about the people than the architecture.
Maybe, but then those "boring and generic" people will move out of "interesting" architecture and allow other people the opportunity to improve the place.
It's ugly as sin. It's almost Brutalist but without any of the exciting style (which, I say as a fan of Brutalist architecture, is it's only saving grace.)
- - - -
It's very easy to see that, if you replaced all those blocks and blocks of single-family homes around it, that make up the Outer Sunset district today, with similar condo-monsters you could fit another 100,000-200,000 people out there.
One huge problem with that is that there's no infrastructure for those people. Nevermind that the nearest grocery store is over a mile away (in a city that is 7x7 miles square), we could build more grocery stores.
Consider the roads. The only way out of there is East on Sloat or Lincoln, or South on 19th Ave which becomes 280. The Great Highway extension to Lake Merced and Skyline Blvd is closing soon due to the beach reclaiming the area (hello climate change.)
Which reminds me, the Westerly will be beachfront property in a few years. I mean the beach will reach it. Talk about underwater real estate. The whole of the Sunset is going to need a big dike. (Because that worked out so well for New Orleans.)
Anyhow, I had a friend who moved from Outer Sunset to Oakland and his commute time (to downtown SF) was reduced by half. In a lot of ways it makes much more sense to build in the East bay than on the SF peninsula.
(If I were starting a startup I would do it in Davis CA!)
I'm just ranting now...
- - - -
Just converting the existing blocks to e.g. Westerly-style condos isn't the way forward that I personally want to see. The thing is so fucking ugly it makes me sad. It doesn't even try to take advantage of the incredible view. The ocean-facing side ignores the ocean. The ground floor is hostile, it looks and feels like a fortress. "There's no organic flow through. It's like an ant farm." It somehow looms over the Sloat Nursery next door despite the distance. Tiny inner courtyards that are doomed to eternal gloom. I just hate this building so much, especially compared to what it could have been.
Not a fan of that building, but at least they are trying to do something. A small correction to "Nevermind that the nearest grocery store is over a mile away" - I heard that there will be a Whole Foods placed on the bottom floor of that thing, so that would solve the grocery store issue.
I'm a bay area software engineer, but on a government contractor's salary. I would never even consider setting foot inside of a Whole Foods for fear of spending my entire monthly grocery budget in a single trip. In my mind Whole Foods solves the grocery store issue every bit as well as a 7-eleven.
I totally get that. Shopping at Whole Foods is not part of my plan either. My point is narrowly tailored, in that the OP said that there is a new apartment building being built with no matching resources to support it. That's not true because having a Whole Foods directly underneath an apartment building charging $4K rents does seem like a match.
I live in the Outer Sunset, and it is not by any stretch of the imagination a food desert. There's many grocery options with easy parking or by train, just not in walking distance.
Maybe our tastes differ but actually like that building. Lots of facade variations and it is somewhat interesting. Ground level activation would be better with an activated street wall but that's my only big complaint.
I'm looking at it through the lens of abstract possibilities (al la Christopher Alexander's "Pattern Language" et. al., and Paolo Soleri's concept of the "Arcology") as well as the beauty of (some of) San Francisco's historic architecture. (see also the "Wells Scale" https://firequery.blogspot.com/2009/05/wells-scale.html )
Just keep building them until people stop buying them. Most of the problems you mention are self-correcting; if conditions become unfavorable, demand will be reduced.
Except for the shanty towns. Seattle is the only US city I've been to that has literal shanties built on every flat spot available next to the highway. Take a taxi from the airport to downtown some time to see for yourself.
The generic architecture retort is a boogeyman. Most cities are “rows and rows of generic housing”. San Francisco is littered with cookie cutter townhomes that were built cheaply and are almost architecturally identical.
> due to utterly braindead oppressive zoning regulations
It is not brandead for the people who live in a place to decide they want to keep it as when they bought it. It produces a lot of issues and problems, sure.
> But it could also be that crisis has gotten so out of control, it can no longer be solved at the local level.
We can't do anything. We're helpless! Please rain money on us from DC to spare us having to reform our zoning and permitting processes!
All of the policies that drove this mess are local. Which means solving the mess can also be done locally.
We're not helpless. We just cosplay as helpless because it means we can avoid discussing the hard changes to popular policies that might be needed. I am so, so sick of seeing this canard given serious credibility.
> All of the policies that drove this mess are local. Which means solving the mess can also be done locally.
Right. But what's a "housing crisis" for society at large is a huge money source for local home owners, who are the demographic setting the local policies.
Don't expect them to vote away their source of riches.
> huge money source for local home owners, who are the demographic setting the local policies.
And why do you think this? A home is one of the least liquid assets one can own. It’s not a huge money source. It’s not even a money source home owners at all.
Because a housing crisis leads to skyrocketing home values. They benefit from increased housing prices.
Further, any countering increase in property taxes is dampened by Prop 13. So there is very little reason to sell and cash-in vs just holding on for longer as the problem worsens.
When you are a homeowner with an expensive house, you don't want more homes built. That will increase supply and lower price.
That's not true. More homes require more/better infrastructure (e.g. water, sewage, roadways). Infrastructure improvements cost massive amounts of money meaning tax increases.
Infrastructure costs far far outweigh tax increases. Portland's East Side Big Pipe built to reduce the amount of sewage going into the river cost $1.4 billion paid by real-estate taxes.
As a Bay Area single-family home owner, I do not see how I am benefiting from increased housing prices. I have lived in my home for almost 10 years and expect to live in it for another 20. I don't rent it out or derive any income from it. My home is not a "money source".
The only visible effect of increasing home prices in my neighborhood is a slight increase in my tax bill every year. It's arguably unfair that Prop 13 means my tax bill doesn't go up more proportionally, and that people who bought 20 years ago pay a tiny fraction of what I pay, but that's a topic for a different thread.
I don't even know how much my house is worth anymore. I don't care. It doesn't affect my life at all. I'd oppose a 100 unit high-rise apartment being built next door to me not because of housing prices, but because there'd be 100 more cars on my street which is made for far fewer. There'd be 100 more noisy neighbors partying at all hours. There'd be 100 more kids in my daughter's already overcrowded school. I'm not a real estate investor. I don't care about supply and demand and market prices and all that crap.
> As a Bay Area single-family home owner, I do not see how I am benefiting from increased housing prices. I have lived in my home for almost 10 years and expect to live in it for another 20. I don't rent it out or derive any income from it. My home is not a "money source".
Most people buy a larger house while raising a family, then sell it for a smaller one after the kids grow up. The increase in price funds much of their retirement. (This is basically a pyramid scheme, but when the population actually looked more like a pyramid than it does now, it mostly worked. This is now breaking down but a lot of people haven't accepted that yet.)
Moreover, even while you continue to live in your house, having more equity allows you to take out a home equity loan to e.g. send your kids to college.
> I'd oppose a 100 unit high-rise apartment being built next door to me not because of housing prices, but because there'd be 100 more cars on my street which is made for far fewer. There'd be 100 more noisy neighbors partying at all hours. There'd be 100 more kids in my daughter's already overcrowded school. I'm not a real estate investor. I don't care about supply and demand and market prices and all that crap.
Nobody is saying that there shouldn't exist single family homes. The problem is that the landscape is covered in them and we need to convert some percentage of that land into higher density housing. You may not like that to be your house, but take consolation in the fact that if it is, the value of your land will increase significantly (because someone will want to buy it and put up a high rise), and then you can take the money and buy a different single family home in an area still zoned for lower density. And have hundreds of thousands of dollars left over to use for whatever you want as compensation for your trouble, because a single family home in the area still zoned for lower density won't cost you as much as you got for your existing one which is now zoned for higher density.
> The increase in price funds much of their retirement.
What increase in price? Your “profits” were simply transferred to the other home owners profits. To extract real benefit you need to move out of state which is not what a lot of people want to do.
The increase in the value of the land when it's rezoned.
Suppose you have a house currently worth $500K because it's only zoned for single family homes. Rezone that area for higher density and developers could be willing to pay you $700K or more for the land so that they can build a dozen condos on it, sell them for $300K each and get back $3.6M. It's worth more after the rezoning because they weren't allowed to do that with the land before.
Then you take your $700K, buy a $500K home similar to your original one in an area still zoned for single family homes and have $200K left over for whatever you like. Or maybe you have $300K left over because you only have to pay $400K for that single family home once there is less housing scarcity because there are now lots of new condos ten miles down the road where you used to live.
The 100 units don’t have to come with 100 cars, if we fixed parking demands and appropriately fund public transportation we could allow more travel with less single occupant vehicles.
> Because a housing crisis leads to skyrocketing home values. They benefit from increased housing prices.
That’s the point I’m trying to make. A home’s value is NOT liquid. You can’t extract any portion of it until you move. And you have to move AWAY to get that value.
The best you get is a relatively low interest HELOC but that’s hardly a money maker.
In fact a lot of people are stuck in their homes for that reason. Any move would be a 5x or 10x change in property tax bill.
You have an asset. It's worth $1000. You borrow $1000 against it. The next year, after taxes and interest, you owe $1050. Meanwhile, the asset is now worth $1100. Your net worth has gone up and you have turned that appreciation into extra money to spend. You can do the same thing the next year, and your asset will be taxed as if it's worth $1010, and your net position is still in the black.
What you've perhaps missed, I think, is that property tax rates in CA don't scale with appreciation.
You don't exactly day trade houses but it's not that difficult to sell one, otherwise we wouldn't have so many real estate agents. It's a HUGE money source in two ways: who got to a heavily gentrified area first and bought a cheap house, reaped the benefits of good jobs and increasing values for years, especially with how California sets real estate taxes. After 20-30 years of tax-free appreciation they can sell their once 500k house for 2.5M and move to a lower cost of living area.
IF you're from around here and didn't notice this pattern then you need to be paying a little more attention.
Anecdotally, since I purchased my house in the summer of 2016 in the PNW, it has appreciated nearly 50%. That's a 6 figure increase just because of the area I live in, and I've done virtually nothing to the home
I don't think people believe that, even if it might be true. I've long thought a "density will make your land more valuable" advertising campaign would be interesting education which might sway some avaricious minds.
It could also be greedy local optimization, if everyone around you sells out your house is worth more. So you do want high rises everywhere except your own little neighborhood.
it increases the value of the land that is being densified. It does not increase the value of the surrounding existing low-density housing that is currently being held at a ridiculously high value because of the artificial scarcity that zoning laws have created.
And it definitely doesn't make rents go down, which if you're a landowner in the bay area is a huge source of revenue.
> It does not increase the value of the surrounding existing low-density housing
Yes it does.
If I live in suburbia surrounded by suburbia, my house is worth X, because it's a house in a quiet area. I have to drive to SF to have fun, which sucks because it's far, traffic sucks, and parking sucks.
If I live in suburbia but am surrounded by islands of new mixed-use buildings (housing on top, retail on the bottom), then my house is worth X + Y, because a) it's still a house in a quiet area, but b) it's now also close to walkable outdoor spaces with chic shops and restaurants, at least one of which is likely to become a popular upscale haunt.
I now have the luxury of being able to quickly drive there in my car to hang out, and then quickly go back home to my (large, quiet) house when I'm done. I get convenient use of the new space, without the inconvenience of living in an overpriced shoebox above a nightclub.
It's literally having your cake and eating it too.
What about the people near the new mixed-use developments? Thats where the issues come in, if you are adjacent to it, there is noise, traffic etc which do not increase your value
I think this is more of an issue when rezoning already dense areas like San Francisco. In SF, everybody's close to something they don't like.
But if this is a critique on low density suburbs, then I don't really buy the argument. These new developments are mostly replacing run down commercial areas that are already well separated from suburbanites and their valuable property. They're mostly near transit and other commercial areas, but when they do come near residential zoning, it's almost always older apartments rather than houses.
Even when they do end up on the border of a nice-house-suburb, the sprawl means that relatively few suburbanites live near the border, while relatively many do not, but still enjoy convenient access by car.
Would your home be worth more if the single family home next to you was demolished and a multi-floor apartment building was built next to you?
The situation you describe is applicable to the apartment complexes and new developments being built along El Camino Real on the peninsula, but you are ignoring the issue of single family home zoning. There is a ton of opposition to upzoning in pretty much all neighborhoods on the peninsula. No body wants a duplex next to their single-family home, so they prevent any zoning changes.
I can’t comment on your opinion here because I don’t know enough, but I wanted to highlight how interesting the use of the word “cosplay” is.
I understand exactly what you mean when you use the word cosplay, however, it also strikes me that this word wouldn’t be used in the same way 10 years ago as it is today. Just an observation.
The local incentives do not favor building more housing. The alternative is not federal subsidies but statewide policies that mandate higher density zoning.
There is a supply and demand problem where there is an enormous demand for a small area when there are so many other great places to be in this country.
Jobs are abundant all over. If you want to solve the housing problems in the bay area, start programs that give people $10,000 to go anywhere else. You'll enormously increase the quality of life of the people who leave.
There's nothing wrong with an area that doesn't aspire to intense density. Nobody is entitled to that, there's nothing wrong with self determination and choosing not to grow. People need to realize there are other places to be, companies need to realize there are other places to be.
Why would you subsidize people to leave if the market for labor suggests that for high income households, living in Bay Area is still totally worth it?
You have to be pretty far up in order to meet that bar, not many do.
People (including myself) overvalue the dollar amount and undervalue the various increased costs. If I had never come to the bay area, I would be earning half as much, but I would be saving more, I would be living in better housing in a better neighborhood, and I would have less pressure. By all metrics but a W-2 I would be wealthier. At some point it's entirely possible that I will reach that threshold where the bay area income will blow everything else out of the water, but that's a gamble and ultimately probably not "worth it" when I consider what I want in life.
It is unfortunate that regionally self-imposed policies have put you into this situation. I still don’t understand why that justifies a further subsidy. Are you saying the extra 10 grand would help people overcome a mental hurdle which has trapped them in a bad situation?
An overwhelming number of people live mostly paycheck to paycheck, like 80% of the population.
Moving across the country is just expensive and many people simply can't, or doing so would be an enormous risk mostly surrounding the large cost to relocate.
Give people a little bump to afford to change places and then home-city choice becomes much more elastic.
The converse can be argued, that individuals are not entitled to state-protected property values at the expense of others.
Furthermore, it isn't self-determination, it's rent-seeking behaviour that is detrimental to the rest of society, essentially luck that they managed to purchase a property at the right time at the right price.
An individual isn't, but if the existing population consistently votes in a certain way, a new minority who want to change things aren't entitled to their desires.
Ah yes, the perfect solution to a housing crisis: xenophobia, and using market mechanisms to enact the kinds of mass expulsions whose mere suggestion gets Trump labeled all kinds of mean things.
Mean things like racist or Nazi. All because he wants to do on paper what California does every day with prices: make the people he believes are inferior get out of "his" land.
California as a whole passed Prop 13 by a ballot measure, which prevents localities from fixing the problem by taxing long-time housing wealth at the same rate it inflates in value.
Having all the "desirable" people in one place maximizes capital efficiency and damn the consequences.
Feels like more and more people agree with Trump at some level but they're couching it in other terms to.. not get called names? I'm not 100% sure on that bit.
>Feels like more and more people agree with Trump at some level but they're couching it in other terms to.. not get called names? I'm not 100% sure on that bit.
IME, loads and loads of people agree with Trump on the level that some people ought to be made to GTFO from Wherever They Live. The big disagreements are on who society should target for enforced expulsion, how expulsion should be enforced (housing prices vs "canceling" vs ICE raids), and what mean names we're allowed to call people whose targets differ from ours (eg: expelling "immigrants" is Bad and Racist, but expelling "techbros" is Good and Woke, even at the intersection of immigrant tech-workers).
> Jobs are abundant all over. If you want to solve the housing problems in the bay area, start programs that give people $10,000 to go anywhere else. You'll enormously increase the quality of life of the people who leave.
On a personal note, it's been my experience that the number of people willing to suggest that such programs should exist is perhaps not quite the same as the number of people willing to take advantage of the same.
I actually agree with some of this. But, jobs are NOT abundant all over.
They key is not for people to leave, but for companies to leave. Once the jobs leave, the people have no choice but to follow. People are just pawns. Jobs determine where people will go.
Voters have made it abundantly clear, they don't want more building. I live here, and I even get a postcard in the mail anytime some developer wants to start building from angry voters. And then they start creating all kinds of problems for those developers at the local level. Then when developers do finally jump through all the stupid hurdles, they get sued to pieces by selfish voters. I don't even know why the judges allow that to happen: seems like a huge abuse of the legal system.
The State needs to get involved to force the issue and pass SB50 and override the local county and city governments. Feds could also dangle some money as incentive.
> All of the policies that drove this mess are local. Which means solving the mess can also be done locally.
Could be, but at this point it makes more sense to pass statewide legislation, like SB50, which California failed to pass, or Oregon's successful HB 2001.
> All of the policies that drove this mess are local. Which means solving the mess can also be done locally.
These policies are the natural consequence of normal people having 90% of their wealth tied up in their home. (And, because of low interest rates, and 25 year mortgages, being leveraged up to their neck. If there was a cap on mortgage lengths, we'd all have been better off... But it's too late, now.)
It's political suicide at this point to do anything that could possibly result in housing prices dropping. Short of a bloody communist revolution, I am not seeing any way out of this problem.
Won’t the net effect of this be an increase in housing prices, making housing prices even more inaccessible? Anytime I see affordable housing programs that don’t increase the supply of housing, but inject more dollars into the market, it makes the problem worse.
A better way would be build a campus in a cheapper place and offer benefits for works to move to this places.
Continental US is full of dying cities that need a stead source of income that big companies like Apple, google could supply. In the day and age of remote work and comunication, there`s no more escuses to concentrate resources in places like California, NY, etc.
Google is providing internet using ballons. My guess is that extending fiber optic networks would be a cheapper option.
Infrastructure can always be build, and cities are willing ti give fat tax cut to companies that bring this kind of infra and jobs to it.
Lets be honest: is cheapper to build an data center in a more distant citie than spend time, money and energie trying to covince San Francisco buroucrats to change its zonning laws.
Balloons are a cockamame scheme that never made sense. In the US if you have the need it's always cheaper to just run a cable, in the great scheme of things it's not that hard to do, we have millions of miles of cables everywhere.
It's that overbuilding a fiber network when there's already a telco and a cable network isn't very economical. It is a pretty good way to convince the incumbents to upgrade to gigabit available speeds though, which makes overbuilding even less economical, but does solve the original problem of slow last mile connections.
Yes, its almost like those cash strapped, barely profitable telcos have to save all their pinched pennies for they day they need to out compete a legitimate, newcoming competitor's build out. Clearly the free market is working wonders for the totally competitive telecom industry. I mean Verizon and Comcast are just neck and neck! look at em go!
I can't stop remembering all those dark fiber stories from a bunch of years ago... All these dotcom dark fiber bundles must have just worn out from throwing off all that competitive white light/white heat in the last 20 years.
I'm honestly not sure if you're agreeing with me or not. There's really too much sarcasm in that post. I think you and I agree that the local telco/cableco duopoly is not usually meaningfully competitive among themselves, but does effectively prevent new entrants in most markets.
Dark fiber is great, but it solves long distance access issues, not last mile residential access issues. Long distance networking is actually subject to pretty healthy competition, if you can get to your local internet exchange, you'll have a wide variety of carriers that can get you anywhere else.
Oops, sorry about that. I forgot to make an affirmative point, which is yes I agree with you.
Telco talk makes me grouchy and of course I cannot resist :)
You're right about that dark fiber doing nothing for connecting end users, as you mentioned. As soon as a WISP or municipality lights up the fiber, out come the steep conversion discounts and carpet-bombing PR and if at all possible, the lawyers.
Thanks again, I'll try to ensure I'm not wasting time with grousing in the future.
There's plenty of infrastructure where I am in a suburb of St Louis. We could also use some liberal SV people to help tip the politics the right way in my county. We have a few clients here too, they are not all on the coasts. Many mid-market companies have left California because their margins can't sustain the cost of operations.
I have a feeling that once liberals of the coast go to the inner country they will problably start being more conservative. Small cities have a bigger sense of comunity, form bigger families, and that tends to lean to conservative spectrum.
Also the lower cost of living will problably incentive liberals couples to have more children and maay tip the tendency and help ewnew american population.
That is why liberals of the coast all move together to Austin, and recreate the high housing prices, homelessness and strangely obstructive building situation.
You seem to assume public sentiment actually becomes existing public policy. That would be great because at least then the democratic will of the people would finally be enacted. But right now all you’ll ever see will be mostly industry-captured and/or anti-public-housing, specifically neoliberal policy designed to commoditize housing even more deeply.
Well, public sentiment affects the conditions of survival for politicians. It’s not the same thing as what you’re talking about but it does have an influence.
In California today, we have a crusading mentality, trying to save the world from itself but neglecting administration of our own affairs, and our politicians reflect that. For example, consider that PG&E has been left unsupervised to a point where their neglect is burning down the state, while California politicians have vigorously maintained separate emissions standards for cars — something which ends up affecting the whole country — for decades. This outward, crusading focus is also reflected in actions like the SF city council’s recent declaration of the NRA as a terrorist organization.
The formalization started in the connection between lords and their retainers. Gradually every other kind of tenancy was subsumed by it. It didn’t happen all at once — the high value relationships were, naturally, the ones that got formalized first.
Absolutely! I wish those companies would get this more. It's time to move those jobs to places that appreciate growth, places that want growth and deserve growth.
Once they get growth the same kind of people crop up trying to stop it. Look at other areas getting new growth you see the same stuff as the bay area its just not 40 years old.
> A better way would be build a campus in a cheapper place and offer benefits for works to move to this places.
I would support that, but however, there is a vocal minority that complains that it's 'gentrification', since it has the side effect of raising the cost of living.
I don't understand why you say Apple and Google could supply such, because I am guessing (sadly) that even their deep coffers are tiny in comparison to how much money it would take to fund such fixes.
Yes but the cross-section of people who prefer to live in the midwest and talented engineers is much smaller and the main reason why it's difficult to do that.
Amazon, Facebook, Microsoft, Google, and Twitter all have offices in the Detroit metro area.
Any medium sized city will have at least a few insurance companies looking for developers. Not to mention other random tech jobs and startups, especially if it's a college town. I worked in Lansing MI for 3 years after college and it was one of my favorite jobs I've ever had.
Madison Wisconsin, Omaha Nebraska, Minneapolis Minnesota, St. Louis Missouri, are all places in the Midwest that are going to have plenty of tech jobs.
Then of course, there's Chicago, which is a bit less affordable than the rest of the Midwest, but still better than San Francisco or NYC. They have a huge tech scene.
Chicago and Milwaukee. Madison Detroit. There are plenty of tech hubs throughout the country.
Sv isn't special anymore. You might not want to live in the Midwest. But plenty of talented people do. I would want a 7 figure salary to live in sv for many obvious reasons
> The main reason that resources are concentrated in those places is because they're nicer places to live.
They are not the only nice places to live though? Theres plenty of other states that have nice areas and probably a lower crime rate altogether.
> You would have to pay me an absurd amount of money to move back to the midwest.
Or you benefit from the talen pools elsewhere... You can recruit local and not necessarily just people from one state. Lots of very capable developers across the country.
That’s an absurd claim. “Niceness of place” is far from the only criterion people use to choose where to live. It’s probably not even in the top 5 actually.
Proximity to jobs, proximity to family, cost of living, whether you can legally work there, and safety all trump “niceness of place” for a majority of buyers/renters.
I think most companies are no longer expanding much in the bay area, but if you already have a lot of employees there it's pretty hard to convince them to move. Once you have a house and a family it doesn't make much sense to move away. And since there are so many people who have a life in the bay area, it makes sense to maintain a presence so you have access to that local talent which isn't willing to leave.
Agreed. As someone who has lived in CA all thier life, I'm afraid of leaving, because of lack of opportunity elsewhere, but the cost of living here is absurd. My rent constitutes 75%(!!) of my monthly expenses.
"Yes, the student loan bubble and the first housing bubble and the two stock market bubbles of the past 30 years weren't enough, let's intentionally create another housing bubble."
The same people doing nothing to fix the supply problem are pushing small blocks of 'affordable housing' as the only solution, while simultaneously blaming the job/wealth creators for giving people enough money to buy houses.
The addition of loans by Apple also seems odd to me. We've seen repeatedly that gov backed 'affordable housing' is not a sufficient solution to supply problems. It's just going to further create a two-tier market, with the lucky few getting 'affordable' houses and everyone else stuck paying millions for tiny houses using gov/company incentivized loans.
Not to mention this continues the trend of incentivizing and redirecting increasing amounts of middle class capital into low-value housing instead of into job creation and other net-gain investments.
Apple, Google and Facebook should invest on making other areas new tech hubs. Creating more and more jobs in the Bay Area just makes it worse. There are so many talented employees willing to work in other areas.
> There are so many talented employees willing to work in other areas.
Not enough though. I've worked at so many companies that fled the midwest due to lack of a technical talent pool and an inability to attract remote talent, even with generous relocation benefits.
The appeal of Silicon Valley, NYC, or Seattle is the abundance of high paying, prestigious tech companies to work for. While it may be cheaper to live in Pittsburgh or Columbus, there's still the issue that you can't find nearly as many comparable jobs in the same market. Currently, if you work for Google in Pittsburgh, you're stuck there unless you're willing to take a paycut. This isn't a problem if you're in Seattle.
That's why Apple and other companies need to put more than money where their mouth is, and also commit to expanding more resources in those areas and attracting workers to relocate there. It isn't as if there's a dearth of talent where CMU is, and the lower CoL and other expenses are additional benefits for opening up offices there.
The problem with Pittsburgh (and the rust belt in general) is that it's still losing population in general. Adding a few tech jobs won't change the fact that it's a generally undesirable place to live (old infra, cold winters, high crime) - so people with the means of relocating will generally do so.
Meanwhile, there are plenty of cities in the south that are rapidly gaining population, especially from people with education, and would be excellent places for companies looking to expand. Atlanta, Nashville, Austin, Dallas, Raleigh, Durham, and Charlotte are all far cheaper than SV, and are much easier to recruit talent to than Pittsburgh or Columbus.
Thats selective there are fast growing tech hubs with sane cost of living. Austin TX, parts of NC, parts of CO, NoVA.
It's also worth keeping in mind that counties with highest median income are all around DC.
Taking Austin for a moment, the real estate market has doubled since 2012, and zillow calls the market 'hot'. While obviously not Bay Area prices, real estate growth is high.
I'm pretty skeptical of 'in the world' claim, but I have heard that the north-south arterial axis of the city build out makes getting around challenging at times.
My overall point is, 'fast growing tech hubs' have growth related problems. Only in an extreme anti-tax state like TX, you may never have any infrastructure build up, except for maybe more interstates.
Ultimately, municipal elections draw only the most engaged voters, and outside of those times, officials have broad authority to control how things are built. Getting re-elected is always a concern, so we end up with a general slow-to-change civic pattern that appears to be repeating all across the US. Even in much-lauded NYC, people complain about (a) underinvestment in subways (b) many manhattan buildings are illegal under current planning code. Building code is a primary challenge to reducing change, and I hardly see anyone, except CA state authorities, attacking overly restrictive planning code.
In NoVa there is no overly restrictive planning code to begin with. It results in fairly fugly developments sometimes like parts of Tysons, but would take that any day over SV cost of living.
Yeah, one thing I always hated about tech being concentrated all in a few places. I'm not far from an Air Force base, so there's a lot of military contractors. Some of them scan Linkedin and Github, so I have had some unsolicited contacts from recruiters. I don't know if they actually looked at my projects and profile, or just automatic emails they send to everyone.
It seems like they are using older technology and some stacks people hate on like Java... Actual Java, not Javascript... Sure I could probably learn those stacks too though if I wanted to, but got my mindset on certain technologies I like.
I know they are working on developing drones though, but not sure if that's a contractor or Airforce itself as seen on the news. Trump wants to take money away from the military to fund the wall, which is going to have a big impact on the base funding for local jobs was reported here. But coding stuff for drones sounds fun and exciting, but knowing your tech could just as well be killing innocent people instead of only bad guys is also a conflict. Or even the possibility you screwed up something that got your own people killed, would hate to have that burden doing critical life related software. Speaking of life, I was looking up startup incubators a few years ago, but it seemed like the only one focused on medical and biotech instead of more consumer tech. Sure there's probably programming involved in those too, but probably more developing chemistry and stuff that isn't my field either, but it'd be fun to be part of a startup that could cure cancer!
I wish they could attract more tech though, but I don't think it's going to happen. I think the people at large tech companies don't even have the area on the map either, and even if I got lucky with a startup and funded, I doubt I'd even consider the area either. Some of the conditions of getting seed funding, is relocating anyways. One of the cities was trying to persuade for the Amazon HQ 2 project like many others, but of course that didn't happen. I ran into one guy involved with the local tech community randomly chatting, basically was telling me that life isn't all about social and gaming apps. Sure it's probably a great paying job, but very corporate I'd imagine, and being government related probably super slow to get anything done. Meetings just to decide about your other meetings.
I know some people really love startups, but then after they become more corporate they cash out and move onto something new and exciting. Plus some investors don't want founders to be CEOs and want to put someone in with more experience and adult supervision, Be nice to be able to run a large company but still have it feel like a startup. I'd imagine companies like Google is better at this than other companies. I'd imagine since Google has so many different things, different parts like Chrome, cloud, YouTube and other projects would be run like mini-companies within the bigger company, with a bunch of smaller teams since something as large as the cloud can be split up into even more smaller parts for each tech solution/products.
Then some people even told me that programming isn't real work, the only real jobs are the people who put in the hours doing hard work at factories in the heat, with their hands and muscle. Sure they do valuable work too, even programmers need a computer to program on and people wanting to buy the computers to play games and chat put money in both the factory workers and programmer's pockets. However I doubt any computer factories here, but steel factories sure. I know I hear some things about factories though, and I'm surprised they don't even have heat or AC, and no mandates legally for them to do either. It seems like a form of slave labor.
I feel like if I had a huge company with the resources, I'd visit the factory personally and put investments to improve life there. However if ever starting a new product, maybe at some point build your own factory instead of contracting it out, so could design everything from the ground up. I know some CEOs visit factories anyways though, but I feel like it's more of a PR stunt more than anything else when they do these events, then the mayor, state senators and others come too with the media cameras. Wouldn't surprise me though some CEOs care though, but boards and investors put profits first, I really like the idea of having a company that's profitable but also doing good and treating everyone well too. Care about customers all the way down to the employees. Even warehouse businesses look bad if you read and watch some news on it, even one warehouse had someone drop dead and management told people to keep working. I know some CEO even raised prices of life saving drugs, and said it was his fiduciary duty by law when defending himself to the media. So I guess that's a excuse to be a jerk to everyone and stretching the intent, but I think you can be profitable, while treating people good and making quality products if you really wanted to instead of being greedy. I know some companies try to not have shareholders or as many, and even pay a part of the profits back as a bonus to employees which seems like a nice incentive.
However, I think people who aren't really into computers much or thought about programming imagine that programming on a computer is the same as relaxing playing video games or creating a document in Microsoft Word. People view a webpage thinking they are simple but don't know that there's HTML, CSS, Javascript just to display the page, then the backend is a whole other mess, server logic, databases, file, queuing, caching and as you get larger that gets even more complex and messy as you grow. But then again this is the rust belt. It's easier to think about doing things are easy from the 10,000 feet view, then actually getting anything done when you peel back the layers, then layers have even more of their layers to peel back. It's a never ending quest of things you can do, learn, problems come up, etc. Sure it looks easy when you watch TV and movies, especially when the CSI agents build an application in visual basic to trace an IP address and magically enhance pixels.
Then also some places don't like tech, they don't trust it with all the news of breaches. Then some people also really like their town being small, and quiet. They don't want the tech money to come and increase values of housing but also increasing other things too.
Heroin is a huge epidemic here too sadly. Then some towns rely mostly on one employer and they then decide to relocate can be a huge hit to a local economy. My dream is to get something going that I can manage remotely and move somewhere warmer or retire early to travel full time. However, I think some of the skills I've been studying myself like Typescript and React probably could get hired at a startup in Miami or Austin as a backup plan. However, I'm pretty much done with this area other than family. I don't see any opportunity for tech, it's cold, higher taxes than any others.
I also was interested in the bay area, since that's where a majority of the tech industry started, but as I got older I realized I didn't like the politics of California as it seems like almost everything they do is backwards, then crime and affordability too. I see others are realizing this so other tech hubs are expanding and popping up too thankfully.
I think the weather has a lot to do with things as people hate cold, but I think cities or the state could be doing more to attract tech. There's also the brain drain problem, people get massive amounts of student loan debts to go to schools in better places and never return home, as they get a job and fit in better in the community where their college is. There used to be a huge cash register company here, so I'd assume you could write a point of sale system software which might be fun! But Georgia gave them millions of dollars to leave for their state instead...
However, I feel like my opinions don't matter, even had a teacher told me these tech people just got lucky... Sure some luck, being at the right place at the right time but also a lot of hard work and effort put in. So I feel like voting with my feet is the best option at some point. I'm sure a lot of people feel this way though, but not everyone talks about it. They just take their student loan money, hop on a plane to better cities with top schools and wave bye after being dropped off at the airport. Then also it a shame for their families, can't help out and I know some families shame their children for wanting to leave and better themselves.
If only there was a trivially simple policy that is nearly guaranteed to work, that has worked everywhere it was tried, like reducing zoning restrictions ... If only the most obvious things were possible, such as building apartment buildings all over the place ...
We wouldn't want to do that. That might reduce the "character" of the neighborhood. No, it's far better to have homeless camps all over the place with poop lining the streets and people paying 80% of their paycheck for rent/housing than take a chance on reducing "character".
If America even had any "character". I'm sorry for being frank but most of the US, in particular outside of big cities but also often in big cities, looks like crap and depression. Neighbourhoods look better in Argentina, Italy and Greece, countries currently in the middle of their own Great Depression. Rows of boring malls and identical houses, no people walking around, parking lots. Everything is built in the cheapest way it could possibly be built, and out of a single template repeated across the country, and yet somehow costs a fortune. Including most of Silicon Valley. You have to go to Connecticut or some other super wealthy place with a bit of history to have some enjoyable neighbourhoods.
Also, the reason why for example Spain is so exciting visually is precisely because it mixed styles and influences over time. It's completely natural. Have you seen the Mosque–Cathedral of Córdoba? It's mind blowing, so cool.
There's only one thing that people really want to preserve, and that is the current price of their homes. US government is complicit in running this ridiculous policy of forever home price appreciation, be it via Fannie Mae or the FED or mortgage incentives or zoning restrictions.
The first time I went to France, I became really overwhelmed by seeing how beautiful every building was. Like, wow, coming from the US I never really stopped to think that there were times and places where people actually cared about making the things around them look nice.
I know exactly what your talking about. the suberbs stretch for miles and miles with no downtowns, cafes, parks or libraries anywhere in sight. everywhere you look, its the same old 1 story L-Shaped house that spreads over the entire lot, with 2 or even 3 garages. On most houses almost a third of the living space is dedicated to garaging. Outside the house is nothing but concrete. The roofs have no slopes, no towers, no alcoves. the windows have no shutters, no flowers. People don't care for their lawns.
Ugh yes, I recently moved back to one of the few places in the country that actually has history and it is SO NICE compared to the time I spent in LA and Seattle. There’s variety!
Americans, well lets say those in the Bay Area, should be absolutely ashamed at the state of the place. There are poor regions in other countries that have life, verve, some sense of activity that "cities" all in the BA desperately need. Americans should hang their heads in shame at how uncultured and depressing the copy-paste strip malls, parking lots, shitty roads and shitty colonial Spanish architecture that screams "drought and death" just pales in comparison to Europe or Asia.
The only way to fix California's many ailments is to vote and vote out the ideology that has had a firm grip on this State and it's cities for decades. The proof, as they say, is in the pudding. They can do anything they want. Pass any law they wish. And things are getting worse, not better.
It's as simple as that. Keep voting these people into office from the local to the State level and you will not solve any problems, you'll create more and more.
I know so many people, both families and business owners who are planning to leave California. It isn't easy, you can't uproot your life and business just like that. One company where a friend works moved the entire operation to Arizona. Large company. They service multi-million dollar contracts and support hundreds of families with the jobs they create. They had enough and moved camp. Everyone I know from that one company could not be happier with the move. This is not an isolated example.
If Californians truly understood the financial state of this State, the abject failure of the government they have supported for so long, they would be horrified.
I have done lots of construction in CA, and so have friends and family. It's a nightmare, even for the simplest things.
Want to improve housing and the overall economic environment here? Stop voting for the same ideologies that have created and maintained the problems in the first place.
Just thought of this as an interesting add-on to the above.
A friend of mine has a company that installs holiday decorations, mostly for large businesses. Think everything from CNN to Disneyland.
The other day he was telling me that for years doing any fabrication work on site has had so much red tape that it is incredibly expensive in time and money.
If, for example, they have an aluminum rod that needs to be cut a little shorter, they are REQUIRED to get the Fire Department, Fire Marshall, Security and other groups involved. I asked what the theory might be. He said sparks and fire. To which I replied: "Aluminum doesn't spark, even steel won't spark unless you are using a grinder. Even at that, the sparks have virtually no energy and only fly a few inches." It doesn't matter, he said, that's the rules and we have to abide by them or we can't do business.
He explained that one of the consequences of this is that the cost of some of these projects is massive. They have to do a ton more planning and work in order to avoid any fabrication work on site. Even worse, because you can't plan everything perfectly, any fabrication requires taking things down, bringing them to the shop and then back to the site. It ends-up being cheaper than getting a small army involved to make a small cut on a a 1/4 inch piece of aluminum rod.
This is a drop in the ocean when compared to totality of the California "experience" if you are in business here.
California exactly understand the state and have voted what they like. And that's why the Democratic party have a supermajority. Californians have voted for the 5th largest economy, huge budget surpluses, unprecedented economic growth, huge investments in clean energy, high minimum wages. This has resulted in unprecedented wealth creation, economic value, innovation at all levels. We went from a 27bn deficit to $30bn surplus. We went from Prop 8 to leading the country in LGBT laws, decriminalization of minor drug offenses, protection of the most vulnerable communities. California population is actually going up (up 2 million over the decade) and conservatives are getting replaced by wealthy residents. So excuse me, that I will keep voting for this, while at the same time working on local zoning reform. We don't need Trumpian politics to solve local zoning
You are mixing way too many issues. For example, LGBT laws and drug offenses have nothing whatsoever to do with having sound fiscal and regulatory policies. Don't throw everything onto one pile. Things don't work that way. Yes, those are important policies and I am glad we have them. That does not mean EVERYTHING else is done well.
As for the economic balance sheet, you are not well informed. For starters, check this out:
That said, this isn't the entire story. California liabilities are in a range between 1.5 and 3 TRILLION dollars. It's massive and not something that leads to good outcomes. The nature of a Ponzi scheme is that it feels great until the music stops.
Not sure what "Trumpian politics" might be (Is that actually a thing?).
> California population is actually going up (up 2 million over the decade)
You are falling for using very shallow analysis. Did you stop to ask how much of what you claim might be due to birth? And how much might be due to net international migration?
The fact is exactly opposite what you think it is. Here, check this out. Nice charts too:
"Besides births, the main reason California’s population hasn’t already started falling has been international migration into the state. Every year since 2011, net domestic migration has been negative—i.e., MORE PEOPLE LEAVE CALIFORNIA THAN MOVE IN FROM OTHER STATES. But from 2011 to 2016, the number of international migrants moving into California was larger than the number of locals who were moving out.
Since then, however, domestic departures have outstripped international arrivals. In 2018, 156,000 locals left the state, compared to 118,000 international who came."
Yet, that doesn't tell the entire story. Businesses are leaving California, and with them job creation and more:
"What is more serious is the number of California-based companies that have left or signaled their intention to leave the state. Last year marks the first anniversary of the announcement that Carl’s Jr., a California burger icon for more than six decades, was relocating its headquarters to Nashville. It’s a symbol for what’s become a stream of businesses that have quit California. What was once an almost quiet exodus of companies now looks more like a stampede."
There's also a bit of bigotry in a comment like "conservatives are getting replaced by wealthy residents". I won't even go into the assumptions this makes. One thing is clear: Democrats have become a party that is for the poor, so long as they vote Democrat and don't bitch about the fact that the people they vote for somehow magically never seem to do anything for them. The proof, as they say, is in the pudding. People who earn $55,000 and less are leaving CA if they can because things have become unsustainable. So, yeah, if the assumption is that all of those are conservatives and are being replaced by "wealthy residents" --the implication being that they are good people because they are not conservatives-- sure, yeah, Democrats want to help the poor so much they multiply them.
The irony here is that CA has been under leftist control for decades now and it is still a mess and getting worse. This is a case just like that of Chicago, where nobody wants to talk about the thousands of black kids getting shot there every year, dozens per week, because the inconvenient truth is they've been under Democrat control for somewhere close to a century and the place is a mess.
This is a website that should inspire deep introspection about how this ideology has derailed, to the detriment of all:
What if housing crisis should be approached from other end - controlling population growth.
Building more housing just converts beautiful places into ant farms with terrible traffic. Do everyone want their grandkids to live in 100sqf cells like in 5th element?
All our major problems are because we got too many people on earth - global warming, plastic contamination, air pollution, food and water availability, etc.
Do what ya need to do on the coasts; Destroy personal liberties and freedoms, regulate and outlaw everything, have fun with your social experiments, but please leave me out of it. People tend to be pretty shitty, when your surrounded by millions all on top of each other I guess I can see how you believe its getting close to the end of the world.
Your utopia is my hell.
I prefer smaller cities, personal vehicles, the outdoors, good schools, the space and freedom where the only thing I really bitch about with the local gov is the road construction and how it takes me a couple more minutes every once in a while to run an errand.
They could make a lot of their employees remote. Literally anything tech-related should be, and apple would set a great example. Why spend even more on what is apparently a bottomless pit?
Are workers going to live there, or will the properties be endlessly flipped by all kinds of investors as prices rise ?
Almost all of the funds will go towards increasing demand by helping people buy homes. It does little to increase supply. So this fund will actually make the housing situation worse overall since it'll increase the competition for the meager supply of housing that's available.
That's not true. 1.3 billion out of the 2.5 billion is to increase supply:
> $1 billion affordable housing investment fund: The $1 billion commitment to the state of California is a first-of-its-kind affordable housing fund that will provide the state and others with an open line of credit to develop and build additional new, very low- to moderate-income housing faster and at a lower cost.
> $300 million Apple-owned land will be available for affordable housing: Apple intends to make available land it owns in San Jose worth approximately $300 million for the development of new affordable housing.
Can someone tell me why entire west of interstate 280 is empty and not opened up for housing ? Why is that there are only 3 bridges crossing the bay and not 10 ?
It puzzles me why housing of any kind be expensive in bay area. There is like ton of free land there.
Those are the Santa Cruz mountains. They already house many parks, and small residential enclaves.
However, In today's wildfire-prone climate, it is extremely unlikely insurers would ever offer policies for residences built there as the mountains are heavily forested and quite rugged.
Is $300M worth of land in San Jose a lot? My guess is that would only amount to a few dozen acres. Will they be building actual dense housing on that land? IMHO California would be better of if the entire $2.5B was spent on high density housing and local support (mass transit connections, food, and retail space).
Ehhh, as a professional armchair land developer, I'm sure IF they can build upwards with the land it could amount to a lot of new apartments. Just a theory.
It is so crazy that people continue to blame tech for public policy issues. No one can say what tech did besides make money and spend it that led to the crisis — but successful industries do that everywhere without it leading to a housing crisis.
Apple on Monday announced a $2.5 billion plan to help address the housing crisis in California, becoming the latest tech giant in the state to address a problem that it helped cause.
Apple makes computers! They don’t write tax laws or run housing associations. Policymakers and older Californians have managed to shift blame to a younger generation of working people.
If they're spending money lobbying local politicians to write favorable housing policy, they should all be fired for incompetence, because none of it is working.
More often than not, companies lobby for public policy which is favorable to the company, not necessarily favorable to the employees, neighbors, and communities which they are present in.
The complaints about tech raising costs aren't totally unfounded. Most people will point to the rather absurd salaries that employees of these companies get.
These large salaries are affecting inflation in the areas the employees live, driving up the demand for large homes that the typical non-techie could never hope to afford.
It's indirect, and it's not fair to lay everything at the feet of the companies, but there are consequences to them growing so quickly.
That said, this is a systemic issue that needs to be solved at a higher level, not at the level of individual companies or people.
Yeah I am going to go ahead and agree with the 'compensated (somewhat) fairly'.
Tech employees offer unprecedented leveraged effort -> work put in affects so many people, and has huge effects. In terms of return to capital, right now employees, especially for startups, are getting shafted beyond belief.
Thanks for attending my TED talk on "why I will never work for another startup again".
With the birth of the modern IT centric world, the individual has the ability to create unprecedented amounts of value for a company. A good team of 5 developers can easily out value an entire department of 50 or 60 people.
Developers might be compensated fairly, or at least somewhat fairly, but that value isn't pulled from nowhere.
Too often people who critique the economy are focused on the individual view. Economies are large systems, and any good developer knows that a system with weak spots quickly turns into a sinking ship.
So we finally have an industry that pays its workers well and often gives them ownership stakes so that the wealth generated doesn't just go to a handful of executives and owners but is distributed across hundreds of thousands of workers, and somehow it's that industry that's doing things wrong?
I never said anyone was doing anything wrong. I'm saying this is new. The average Joe in these cities is expecting to earn 125k+ with just a few years of experience. I know, because I am in that exact situation. And while that might be very nice (and fair) to the specific person earning that salary, it puts individuals without that skill at a significant disadvantage.
Without modifying the system, we're going to see this gap between the skilled-in-IT and the not-skilled-in-IT get wider and wider until anyone not doing IT might as well sign their lives away to unending dept and poverty.
It is unfounded because maintaining affordable housing is a responsibility of policymakers, not of corporations, and policymakers are as familiar with the facts about inflation and demand as you are.
Insane that Americans continue to look to the private sector to donate to solve public problems.
Literally any country in the world would accept Apple's headquarters and not demand a cent in donations for anything.
I wish American companies would put more pressure on the government to solve public problems, this would include threatening to leave to other jurisdictions if necessary.
They do that too. Apple is doubling the size of their Cork office in Ireland I think. They are also significantly expanding in Austin and other locations with sane cost of living.
Living in California, although not in the Bay area, I don't know that the public expectation was to have Apple or other tech companies do this.
I'm happy for it, but would be happier still to see Apple paying taxes to fund similar programs rather than privatizing something that I agree should be done through the government.
Is it better to have companies pay taxes that can go toward programs like this OR have them "give" money to help form/direct programs like the example here?
I guess they could do both, but what should the standard be?
If this is a government created and continuously maintained issue then it would seem that they should be as far away from any relief effort as possible.
They don't want affordable housing. If they do start wanting it then relief funding won't be necessary.
While I hate how subversive tech has gotten — I don’t know if I agree. You are ignoring key factors: incompetence and corruption. I would bet that Apples plan is better than whatever plan some local/state politicians will put together. In fact maybe the CA laws should simply compel companies to offset the negative impact of their employees on the surrounding housing market.
Who gets to decide what constitutes incompetence and corruption? Billionaires and controlling shareholders? The purpose of democracy is to place that decision squarely in the hands of the populace, as imperfect as that process is.
> Who gets to decide what constitutes incompetence and corruption?
Can we at least have Swedes decide “what constitutes incompetence and corruption?” Like democracy, except only Swedes in Sweden get to vote in US local elections. Once a year, a committee of Swedes will have to come over here and ride BART/the NYC Subway/Metro and report back before voting.
Big tech companies are prone to making mistakes as well, but the difference is that as a general voter the disaster of the Amazon Fire phone or forcing a U2 album download to every iTunes account doesn't generally have impacts on my everyday life if I choose to not participate.
This sounds like a great way of only diverting resources to those who already have it, and also of creating company towns that have historically been bad for workers.
That’s a bit idealistic. When I’m sitting on a DC Metro train jerking into the station because the infrastructure deteriorated so badly they had to turn off the automatic train control, I’m not thinking “this is the result of Democratic will.”
I don't know if I'd describe any choice between two non-perfect alternatives as "idealistic". The question was "which is better", not "which is great"?
Government suffers from bureaucratic overhead and tyranny of the masses. But most of the other things it suffers from — control by special interests, regulatory capture, buying elections and politicians, are caused by billionaires and rich corporations. At least going through taxes and government has some amount of public influence instead of just abdicating the whole thing and submitting to becoming an complete oligogarchy.
> But most of the other things it suffers from — control by special interests, regulatory capture, buying elections and politicians, are caused by billionaires and rich corporations.
Billionaires and rich corporations caused WMATA and MTA to completely neglect maintenance for decades and let their systems literally catch on fire (despite being just as well funded as European systems?) Billionaires and rich corporations cause our education system to underperform (while being among the most well funded?) Billionaires and corporations cause our intractable housing issues?
I just don’t buy this. European countries have billionaires and big corporations, regulatory systems that can be captured, etc. In fact they’re often the ones more overtly pushing pro-corporate policies. (Trump’s corporate tax cuts, for example, came long after similar cuts in Sweden, France, Ireland, and the U.K. Trump is fighting to cut the capital gains tax, for example, while many OECD countries don’t even have one.) Yet their trains somehow run on time, their schools are good, their crime rates are low, and their cities are generally nice and orderly.
It’s a public policy issue. It’s not a matter of companies giving or not. The housing crisis not only can be solved without corporate giving or taxation, it has to be — we can’t keep feeding the rentier beast.
They don’t write tax laws or run housing associations. Policymakers and older Californians have managed to shift blame to a younger generation of working people.
Apple is also one of the most notorious tax avoiders in world history. They've taken extreme efforts to avoid paying taxes in every jurisdiction in which they do business, to the extent that a number of their tax structurings have been deemed illegal.
On the one hand, it's good that Apple is finally putting its money where its marketing is. On the other hand, if they hadn't spent 40 years avoiding taxes, they wouldn't have driven the development of an entire cottage industry of multinationals avoiding taxes.
It Wouldn´t. Tax revenue is not the cause of the housing shortage. If you give more money to a bad manager, he won´t suddenly become a better manager. Same with politicians and their public policy.
Potentially. If the teacher is working a second job just to make rent instead of preparing a lesson plan or possibly working on their mental health. It won't help every bad teacher but it could help some.
Great point. Here's some articles that provide support to the observation that teachers are more likely than other professions to have to have a second job:
> To begin, how do we know who works a second job? The Bureau of Labor Statistics (BLS) conducts a year-round survey, called the American Time Use Survey, in which it asks individuals how they have spent their time both on the day of the survey and in the very recent past. In addition to asking about a person’s main occupation, the BLS asks if they worked another job in the last seven days. Our sample is made up of individuals with a college education who report being employed full-time from 2003 through 2016, giving us just over 36,000 observations.
> Overall, teachers (defined as elementary and secondary teachers, excluding special ed) are about 30 percent more likely than non-teachers to work a second job based on survey responses. That comes down to about 11 percent of non-teachers and 14 percent of teachers.
Now possibly this difference is due to having summers off and time to take on a job and that job doesn't affect their main seasonal work of teaching. However, we don't know as these studies didn't look into that. Wait, or do they?!?
> What time of year would you expect to find that teachers are most likely to hold second jobs? Like me, you may have guessed summer, but it turns out that’s not what the data says. First, teachers are more likely than non-teachers to have a second job all year, except in the October and November run-up to the holiday season. For teachers, the big months for second jobs are January and February. I would have thought that teachers are more likely to pick up outside work when school is not in session. But you can see from the chart that that’s not what’s going on.
The current bad teachers that get the pay rise would just be lucky. The value there would be for 5+ years down the line as more highly effective, ambitious people choose teaching as a career path and take teaching positions that future bad teachers would have received.
Well, I guess if you tax companies harder, maybe they'd pay their workers less, which would result in lower housing prices?
If you pay people whatever, then they're gonna start competing against each others for the same finite resources (housing), driving up prices to artificially high levels. You see this is cities with tech, oil & gas, finance, or other high-paying industries.
Apple is also one of the most notorious tax avoiders in world history.
This is quite a stretch. Apple's effective tax rate is somewhere near 24-26%, which is far above many of its peers.
However when the tax conversation comes up, every level and every jurisdiction has self-serving ideas about how much of that tax should be payable to them. e.g. "Apple made $X worldwide, therefore they owe Cupertino/California/United States N% of $X", etc.
It's worth noting, tax laws don't come out of nowhere. They literally do write the tax laws. They don't sign them in to law, sure, but they do write them.
Apple paid $10B in income taxes on $65B of income in FY 2019. In addition they paid billions in sales/vat/gst tax and various taxes associated with employees. Apple's tax structure in Ireland was not "deemed illegal". The EU retroactively declared that an Irish tax law was invalid. Apple complied with the laws at the time they were operating.
As far as I'm aware, Apple (as do most large corporations) follows various tax laws in the various jurisdictions they operate in. If you feel those laws are unfair then you should lobby your government to change the laws. IMO, blaming companies for the laws they follow is not a good way to fix the problem you see.
My lobbying would be going up against Apple's multimillion dollar annual lobbying budget plus their massive propaganda reach. For example, I was opposed to letting Apple "repatriate" their international cash hoard but Apple was able to get that legislation passed after a multi-year lobbying and propaganda campaign. My email to my senator did not matter at all but theirs mattered a lot.
Seems weird to single Apple out here. Apple routinely spends significantly less on lobbying compared to other tech companies. Facebook and Amazon both spent twice what Apple did, and Google 3x.
Apple is doing nothing——nothing at all——that isn't being done by every single other large corporation.
They're doing this because it's what US tax law allows. People can whine about Apple being a "tax avoider" but that's just a fig leaf to cover the truth, which is that you can't call Apple a "tax evader" because it's untrue.
Want Apple to repatriate all that income? Great. Change the tax law, which means, get rich Republicans to change it.
Til then? Stop blaming the companies for working within the system that we, the voters, have set up.
The tax law of relevance here is California’s property tax, which disincentivizes redevelopment. State revenues on corporate income don’t have anything to do with the housing shortage.
The thing with tech companies is their desire for most of their employees to be in-house.
Causing a mass of people to arrive at a location that previously did not have that.
Over time, of course.
People who, due to the nature of their job and their employer, earn way more money than the average working person.
And when 10 people like this go for the 1 available house on the market, guess what happens? The price of the house goes up. Up to a point where only 1 of the bidder is willing to pay that price. Or rent.
Notice that I said "willing to pay" as opposed to "what that person can afford".
Supply and Demand is nice in theory, but really, pricing is more a game of "ask the maximum amount you can get away with".
And of course, owners of property in the same region can't let their property sit at a value much lower than the property around them. If the property around them can go for a certain amount, then so can they.
And this process repeats unendingly. Making it impossible for people with non-tech jobs to get affordable housing. And if not for the big tech company, it never would have happened.
So yeah, it is 100% correct to put the blame on tech companies. If not for them, this would not have occured in the first place.
> The thing with tech companies is their desire for most of their employees to be in-house.
This is true of almost every company. I would say that tech companies have a higher % of remote employees than most; our frustration is only that it can be higher.
What is unique to California is not the success or wealth of the ascendant industry, but the incredibly poor policy response. There are many cities in the world in a similar or even more severe situation than California cities, with regards to successful industries that pay high salaries. Bankers and traders still make more money than software engineers.
But this is what almost every other economy around the world dreams about -- a large amount of new highly-paid workers increasing the tax base and dumping buckets of money into the economy. Municipality after municipality has tried to create such an environment (Amazon HQ2 being a great example), and in almost all other municipalities, developers would absolutely jump at the opportunity to build housing and other infrastructure to accommodate this new industry (and profit).
And in most other locations with land and/or lax building policies, this isn't a problem. This is a feature. But in California (and NYC to some extent too, back to the HQ2 example), developers can't soak up the demand. There's no land left, and upzoning isn't an option.
So yes, it IS California's fault. The money is there -- the article being the most absurd example of it, but the land use policies aren't. Free up the land, let people build up, and you'll have 5x the housing in a matter of years.
California can't even build an In-N-Out, let alone multi-story dense housing.
Apple has been around for 30 years. It’s not like they appeared overnight with 20k employees looking for housing.
The city has had a literal generation to respond to housing pressure. How much housing has been built in Beijing, or even in New York, over that same time period?
Supply of housing can increase if it makes sense to build housing. Zoning and other regulation can make it impossible, risky or unprofitable to build housing.
Their contribution to this problem doesn't necessarily have to be a negative thing. Saying they made a contribution isn't an accusation. No one is saying that they should stop doing business in California or that they should try and succeed less, whatever that might mean. However, they do contribute to the runaway social inequality in the state. Every high paying employer does, including mine.
This doesn't mean they necessarily have an obligation to do anything about it and again, it also doesn't mean it's a bad thing. It's an inevitable side effect of their success. They did business, made a ton of money, spread it around, and one of the myriad indirect consequences is social inequality which contributes to the housing problem. Again, it's not a bad thing per se, but it's a real thing. The fact that it wasn't a bad thing doesn't mean there is no moral responsibility attached.
It's nice to see a company trying to deal with the consequences of their actions without being forced to.
Great disparity and unaffordable housing are not an inevitable consequence of some people’s high wages, because they will engage in more consumption, buying better haircuts and so forth in a way that raises other people’s wages. Even the phrasing “consequences of their actions” carried with it a connotation of wrong doing; but the failure of California housing policy to accommodate more people — a legitimate goal, because in the US we have freedom of movement — is simply not Apple’s problem.
Because it isn’t really a consequence of their actions, what Apple is doing here is not really the kind of action that we want to see. It’s not like a company coming and cleaning up an oil spill that they made — it’s like a company coming in and cleaning up the government’s oil spill, and it represents an extension of corporate involvement in public life that dealing with the consequences of their actions wouldn’t. They are dealing with the government’s consequences.
Fair enough, but hopefully others follow. There are other "free", or even cost savings, things they could do too.
For example, if silicon valley could hire more remote people, that could help relieve some bay area home pricing pressure. I would love to work for Apple to improve their SDK/API documentation, and that probably isn't a job that would require feet on the ground in cupertino to be effective.
How does this plan compare to what Intel and others built in NW Portland area a decade ago? Genentech and a few others moved a lot of operations up there, it seems.
Apple is throwing their money into a REIT essentially. Guessing a lot will be small apartments for their own staff which will save a lot in wage demand.
This was on NPR today, and they glanced at it, but really, the elephant in the room, sitting on top of the housing issue, is fucking transportation.
I have turned down no less than FOUR positions in the last few years for one reason: they were in Sunnyvale, and there was no way I would move back to Sunnyvale, and there is no way to commute to Sunnyvale on any semblance of efficient public transportation.
Fuck Sunnyvale.
But more largely; fuck the state of transportation in silicon valley as a whole. BART is a joke, cal-train is a joke, Amtrak is a joke, buses are a joke.
Not everyone is a Tesla driving google employee who could give a shit about how people actually need to move about to make the whole economy work here.
If tech companies actually had the best interests of the long term viability of silicon valley in mind, housing is nothing without the ability to get around efficiently. And cars ain't it.
The thing that fascinates me about the narrative around the tech industry is that it’s one of the few where salaries have not been utterly flat since the 70s as adjusted for inflation. We make a lot more than many other workers, but mostly because many industries have gotten away with giving their increased profits to their CEOs and not their workers. Our executives are just as wealthy, but our workers actually make competitive salaries. I wish we could move the conversation towards actually paying average workers much more rather than complaining about how much tech workers are making. My takeaway is that other people should make more, not that we should make less.
Is that right? Steve Jobs, Bill Gates, Jeff Bezos. It seems to me like the average Tech worker is 3-5x higher paid than the average worker. The average tech CEO is 3-5x more valuable than the average CEO. It's not that the trend is different, it's just that tech workers are comfortable enough not to kick up a fuss.
Is Apple going to increase supply by providing free loans for their workers to build mother in-law apartments on to their houses? Or decrease demand by reducing their workforce in the bay? Or install high speed rail to expand the number of viable commuter cities? If they’re not increasing supply, or decreasing demand, they’re just shuffling money around.
This reminds me how Steve Jobs answered the question about how city residents will benefit from their new campus (2011) [1]. So I honestly don't get why in the US of all countries private company have to solve problem that government supposedly taxes them for.
It's funny to watch this now. Living in Cupertino, none of those benefits materialized. Only 10% of Apple's workforce lives in Cupertino (thanks in large part to those busses he talked about). Apple barely pays any taxes in the city, because they get a bunch of tax breaks. Their employees do patronize the local restaurants to some extent, but for the most part they eat in their cafeterias.
And most importantly, the campus is closed to the public. The original proposal was to make the center of a spaceship a public park, but somehow they managed to get it approved as a private space.
If they really cared about this issue, they would start with their own backyard.
Apple is currently supporting the plans of a developer in Cupertino who wants to build 3M sq ft of office space for them and then not build enough housing to offset that space.
If Apple really cared, they would tell the developer that they won't rent any of that office space unless the development is more housing than office, and use their leverage and clout to make that happen.
> the city that is actively pushing the office/housing ratio way out of wack like this.
No it's not. The city is trying to make them build only housing and no office, but they are using SB35 to go around the city. The city has approved a ton of housing but the developers aren't building it because the city won't approve the office space the developers want to go with it.
The city is trying to improve the housing ratio and the developers are trying to make it worse.
Apple could push the developers to make the housing ratio better if they actually cared.
the bay area needs to loosen housing laws and allow more building. Its not really an apple problem (except in the PR/political sense), but a supply and demand problem.
Easy to solve this problem: just spend this $2.5B on bribes and repeal a bunch of bullshit laws and regulations which enable NIMBYs and don't allow housing to be built. Moreover, there's no other way of solving this problem. I'm not an Apple shareholder, so I don't really care how they spend their money, but if I were, I'd be pissed.
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