Hey SF leadership, it's only been 12 years... sigh. Do I need to come back down there and demonstrate how I point my index finger in the air? Don't worry, I'm not running for POTUS and using this as an opportunity to throw you under the bus as a political calculus.
People see FIDI and think that level of density is happening in Pac Heights or Sunset and don't realize how thin things get once you get out of the main downtown strip.
The Sunset, Richmond district etc are just miles and miles of low rise apartments and single family homes. Imagine building 40 story towers in those neighborhoods.
The California Department of Housing and Community Development (HCD) has teeth now.
> The City’s failure to implement the Required Actions will result in HCD initiating the process to revoke housing element compliance. Various consequences may apply if the City does not have a housing element in compliance with Housing Element Law, including ineligibility or delay in receiving certain state funds, referral to the California Office of the Attorney General, court-imposed financial penalties, the loss of local land use authority to a court-appointed agent, and the application of the “builder’s remedy.”
I don't know why a second house or something like that is not being taxed to the ground in California. Like Prop13 was meant to keep seniors from being evicted from their own homes? Sure, that is the primary residence. But what are they doing with the second or third house? That is clearly an economic investment. Get taxed.
Tax those extra houses harder to the point even corporates and landlords feel the heat of profiting off of homes. I don't know why it isn't done. Cali always want raise tax on the middle class but those landowners somehow aren't getting the book thrown at them.
It is recognized. But I think the goal is that 90% of people should be homeowners and getting people there.
For the vast majority of people, owning a home is superior to renting. So I think most home policy is in getting people able to purchase, own, and sustain their own home.
Certainly, some people’s situation makes rent better, but it’s much smaller than people who should buy. But it’s too expensive to buy for too many people.
I don’t think someone should be embarrassed, but it’s not like the goal here is to get more people renting and fewer owning.
> the goal is that 90% of people should be homeowners
yeah right - info welcome from those that read giant books on the 2008 credit events.. one thread in that is that it was a clumsy and heavy-handed, politics-origin set of decisions to make "sub-prime" mortgage rates available widely, in order to move the homeownership rates in the general population from sixty-something percent to the glory-lands of ninety-something percent.
Well, in fact lending policy at scale did not do that, and as a side-effect the entire US and possible dollar-based credit system cracked at the base. The strongest economy in the world, actually almost did choke on credit.
Meanwhile, a recent study echoed here on YNews said that "A million homes are being kept empty while housing costs soar" WSJ . How does one reconcile this?
The key difference is that it’s not someone’s primary residence. Even I as a fairly libertarian person think it’s not a terrible policy to keep someone’s primary residence at a cheap tax level but increase the tax levels to prevent homes sitting empty for 50 out of the 52 weeks a year. Land is a finite resource. If we make the it more expensive to keep that house empty maybe it will be rented out to someone in which case you just increased the housing supply without having to build anything.
If you go that route, people will game it by dividing it among family. Instead, an unoccupied housing tax might make more sense, which is what they do in Vancouver.
A real land/property tax that forces productive use of land is also needed, but repealing prop 13 is probably never going to happen.
> If you go that route, people will game it by dividing it among family
That's okay, because it is solving the problem
Either,
A) the family member had another primary residence that they're vacating to make this their primary residence, thus freeing up the old property for someone to buy, or
B) the family member didn't already have a home, and the number of people with a home increases by 1, which is what we're trying to do in the first place
families would not have one of the spouses or one of their young children claim a separate home as their primary residence, because they would have to actually live there (thus separating them from the rest of the family) for it to be their primary residence
> You don't say anything about residing in it.
of course I did, that is what primary residence means: the place in which you primarily reside. Obviously you cannot legally claim a place as your primary residence if it isn't.
whatever laws and regulations China has around that, they aren't the ones in effect here
> There is no legal framework in the USA to determine a primary residence.
This is false: you can almost never claim a place as your primary residence in the US if it is not.
The distinction carries tax implications, which is why there is indeed law around it in the US (and why you rarely see families doing it to take advantage of already-existing first time homeowner incentives, etc.). Here's another phrasing of this:
You must occupy your primary residence by a certain date after closing, often within 60 days. You must live within your primary residence for the majority of the year[0]
> China has a much stronger system in place for determining and enforcing residency than the USA, if they can't do it, then how will we?
Maybe they do, or can, or don't, or can't, it's totally irrelevant because China's laws don't apply in the example we're discussing.
What they think is happening: investors are buying lots of houses, which is driving up prices, so getting them out of that business would lower prices.
What's really happening: supply shortages are driving up prices, which is making housing more attractive to investors.
Not sure where you live, but in most cases, The owner pays property tax. The rental price is based on the market rate and is not tied to the property taxes at all. Landlords will set the price as high as possible to secure occupancy regardless of the taxes they pay.
Correctly pricing a scarce resource incentivizes more efficient use of that resource.
If the property tax on your $4m SFH in Palo Alto is too high, you'll be very motivated to turn it into a 4-plex. You'll go to city council meetings, and vote against single-family zoning, and fight NIMBY lawsuits.
(Or you'll have to sell to someone who will do all of the above or pay the higher tax that you can't afford)
A LVT (land value tax) would be more appropriate. You want people to use land more effectively and encourage high density housing. Landlords / developers shouldn't be punished for providing more housing in the same footprint.
A LVT would automatically discourage owning multiple properties unless they are all net flow positive with respect to the LVT, which would decrease vacancy.
I had not heard of this strategy. Thanks for submitting it here :-) As a sidenote my father always said Prop 13 was never to protect seniors, but to help corporations buy massive plots they'd never have to pay adjusted taxes on in the future. Prop 13 locked in rates for more than just residents. I don't see an end to this without a phased elimination of prop 13, or an abrupt "now it's gone".
Homelessness will boom even more (increasing land values and taxes while on a fixed income), and small businesses will close (old buildings have low prop tax, and with most buildings triple net, the landlords don’t pay the tax).
We really signed our death sentence 20+ years ago. Californians won't have the attention span or the conviction to undo it with a phased or abrupt approach. We'll just have this unequal footing... forever
Yup, there are so many parking lots on absolute prime land in socal. Land that would turnover and rent out an entire 5 story apartment on top of it overnight, based on what neighboring plots have done. I guess having that low tax rate and renting the lot out to film shoots for their basecamp is less headache and more lucrative.
the issue with LVT is in a market where there aren't enough sales to properly value the price of land itself. It does seem to be a pretty good solution if you don't have stagnant market.
Sold in 2021 for $190K. Tax assessment in 2020 was $111K; in 2021 was $28K; in 2022 was $50K. The assessed value has no obvious tight relationship to the market value.
Eh, not quite. There are lots of market forces on that number, mainly not wanting to pay higher taxes and higher insurance and having the ability to appeal/contest it and get different appraisers.
I am not taxed differently on the land vs the buildings. There is no market force on the land portion specifically from the city. Any appeal I would make would be based on comps, which are invariably land and improvements together.
My insurance limits are distinct and negotiated between me and the insurance company, based on the cost to rebuild, which is at best loosely correlated to the current value of the improvements.
No, prop13 was meant to stop businesses and the rich from paying real property taxes (because businesses and trusts generally don't sell the property itself so never incur actual inflation values). It was sold to people as a way to stop seniors being unable to pay property taxes, and to stop Your Tax Dollars going to people in poorer parts of the state. Of course it's a constitutional amendment so cannot be overridden by any law maker for any reason, yay \o/
> was meant to stop businesses and the rich from paying real property taxes
like so many public policy, and fiscal policy decisions.. there is not one single answer. Firebrand curses at "the rich" do nothing about the serious and long-lasting effects. The truth is that in the USA, many ordinary people own very valuable assets, their home. While in other developed countries this is not the case.
Prop. 13 was very successful at doing exactly what it says on paper - locking very valuable, increasingly valuable assets, on a path of low tax. This made winners and losers. Not all the winners were "the Rich" and therefore it is useful to look more carefully at the fabric of facts.
Well said, this is not a black and white issue. Also prop 13 was a proposition, which means it was the result of a popular vote put directly to the people.
The California proposition system is one of the most democratic institutions in the US, as it is basically a form of direct democracy. The people of California voted for prop 13 by a sizable majority. If you believe democracy is a good thing, it's hard to fault this, the people voting to limit their own taxation is basically one of the founding principles of the United States.
What needs to happen is a federal government problem of assistance in finding a job and relocation. Those are 2 "artificial" blocks from preventing people who are barely scraping buy in those areas to move to a cheaper COL area.
1. You can't do an in person interview or even a phone interview for a job in that area if you are expected to be at work during the day, and cant miss days
2. Traveling is expensive. Moving even more so.
Reduce the cost of those things to zero and few things happen.
Companies get access to a wider pool of candidates for free, which they will take advantage of. This will improve the rate of economic growth in remote areas .
Areas like SF will quickly start declining due to "essential" workers leaving - nurses, restaurant workers, retail, construction e.t.c. Majority of those people dont care about where they live, and will optimize for salary/col ratio, considering they can find their respective job in a lot more places.
This will directly and effectively worsen the NIMBY's lives, which is the best way to get someone to change their mind. Government officials will be up for reelection, so they will absolutely have to cater to immediate demands.
Best part is, the people will start selling their houses and moving as well, which will drive down the cost of housing quite a bit.
Also, this necessarily will increase demand for automation, which is a good thing.
San Franciscans are pretty happy with San Francisco the way it is. After 250 years of building, it is, frankly, full. Worsening the city in the name of encouraging population growth and migration isn’t a goal that should be pursued. It’s bad for the planet, and bad for SF. In fact, San Francisco's city and county population shrank just over 7% from July 2020 to July 2022, according to U.S. Census Bureau data. That’s a good trend.
It’s not up to San Francisco anymore, the state of California is mandating it.
> The City’s failure to implement the Required Actions will result in HCD initiating the process to revoke housing element compliance. Various consequences may apply if the City does not have a housing element in compliance with Housing Element Law, including ineligibility or delay in receiving certain state funds, referral to the California Office of the Attorney General, court-imposed financial penalties, the loss of local land use authority to a court-appointed agent, and the application of the “builder’s remedy.”
hiding behind "vague" environmental factors, the California way, even though high density cities with good public transit are better for the environment
Cities don’t just stop building when they get full. If that were the case there would be no modern tokyo for example. Or modern anywhere else, central and south american cities now look like modern and tall east asian cities, in contrast to American cities that have looked broadly the same for 60 years.
It's not nearly "full", whatever that means. It's full of single family housing and far less dense than many other cities.
Additionally, density is good for the environment because it lowers emissions and lowers utility overhead. People being more spread out means more emissions resulting from transit, because everything they need to get to is farther apart. I don't know why you'd think otherwise (and you don't say).
Finally, the decisions made by San Francisco affect people other than those who live in the city. Since the foundational principle of democracy is the ability to have a say in decisions that affect you, those people deserve (and have) power over land-use decisions in San Francisco.
The official California Department of Housing and Community Development (HCD) report.
> The City’s failure to implement the Required Actions will result in HCD initiating the process to revoke housing element compliance. Various consequences may apply if the City does not have a housing element in compliance with Housing Element Law, including ineligibility or delay in receiving certain state funds, referral to the California Office of the Attorney General, court-imposed financial penalties, the loss of local land use authority to a court-appointed agent, and the application of the “builder’s remedy.”
I don't understand why the government has to be involved here. I was born in the area and it was lovely, but my parents left after my dad graduated in part because it was much more affordable to live in other parts of the country.
If SF property owners, who pay the high property taxes that fund the city don't want more housing built, why is it right for the government to come in and tell them to do it anyway? Why is it that the property owners must be the ones who have to deal with the area they fund being changed in ways they don't want, rather than people who can't afford to live there finding something within their means as my parents did?
Because they are abusing the auspices of government to block other citizens from building what they want? It'd be one thing if they owned everything and weren't selling, but instead you have some landowners campaigning to prevent anyone else from building stuff.
You seem to be under the impression that owning land in a municipality gives you the right to make decisions that affect other owners. A developer can't build what they want because a few other people object to "shade"? You can't respect the wishes of everyone like that.
California loses substantial tax revenue due to the issue. No city wants local growth (prisoners dilemma), but the state sure does and it is the decider.
Cities also benefit from local growth. More people means more funding for local schools and roads and everything else that makes a city a city. What has happened in recent years however is that local elected city leaders do not think in terms of the best interests for the collective. They think in terms of keeping their jobs, bending over backwards towards those who donate and vote in these local elections. A demographic that is by and large older, whiter, richer, more conservative, and more likely to be an existing homeowner, who in California stands to benefit from exponential increases in real estate values on top of a fixed tax rate based on their purchase price vs current valuations.
In none of these proposals is anyone forced to do anything with their land. In contrast, today you are forced to do nothing with a lot of land thats built to its zoned capacity. If you want to build an apartment on the lot you own and get some productivity out of it, too bad, says the laws of today. A true libertarian bent would be to eliminate zoning entirely and let the market naturally shape the environment to meet demand over time.
If you want to remove government involvement, you'd be in favor of dropping zoning requirements, removing various approval processes, and letting land owners develop.
Anywhere in california if what you are doing is converting farmland to suburban tract housing. Its at the next rung of density where most of the challenges lie.
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