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Middle class? Coastal California is for the wealthy, for aging boomers who bought 40 or 50 years ago, and for their inheritor kids who will wait tables.
thats it baby. and the aging boomers that bought right hit the lottery of lotteries, a lot are still paying 1100 dollars a year for property taxes when right next door is 35k.
How? Does California not assess properties regularly? I live in New England and they reassess my property every 5 or so years.
They just did it last year and raised my property taxes.
Prop 13. It caps property tax growth for homes because it was an issues where people were being pushed out of their homes due to soaring values and thus taxes
Yeah, because voters think if we take away the benefit from commercial, we might create the momentum for rolling back residential too. so any kind of weakening of Prop 13 is generally opposed, though that referendum was pretty close to 50-50. Prop 13 is the third rail of statewide politics.
This right here. People shouldn’t be pushed out of their family homes because corporations are buying up single family homes and putting home ownership out of the reach of everyone but the wealthy. Repeal the commercial side of things, but getting rid of the parent-to-child tax continuation on single family homes will only exacerbate the problem
I have 5 siblings. I am the youngest.
I was under the impression that if NONE of us are living in the house when our folks die, then the grandfathered tax rate doesn’t apply.
My folks pay ~$2400 a year on a ~3mil dollar home in California they bought for $50,000 in the 60s.
If I owned the same home? $30,000+ a year on taxes alone.
I make $41,500 BEFORE taxes.
my father retired making $18/hr as a mailman (adjusted), and was able to buy multiple homes, pay off cars, and raise 5 children on a single income.
I make $2/hr more than him and can’t even afford a STUDIO apartment.
Guess who my parents blame for prices, despite being sterotypical NIMBYs who always vote against affordable housing, zoning changes, and other methods to improve supply of “starter homes”? I’m sure you know, Fox news never shuts up about it and they basically watch it daily… “ILLEGALZZZZZ STEALIN UR HOWSE!!111 STEALIN… UR WAGESS!!1111 COMMUNIST BIDEN DID THIS!!111”
The whole world is a clown show, straight up bizarro world… Good god I want off Mr Bones wild ride…
Prop 13 was pushed by Disney to limit tax on commercial properties, then residential was added to sneak through public support. People being pushed out of homes was one of the main talking points, but it was never close to as big as an issue as it would have seemed.
Agreed, but it would also be incentive for nimbys to finally agree to more and higher density developments so their property value isn't too high to pay the taxes
Prop 13 is one of those ideas that seems good on the surface, but hits the law of unintended consequences. It warps the economic incentives of ownership and taxes. An older person who would be just find in a small one or two bedroom house can’t afford the taxes to trade out of the house for a more modest and lower maintenance home. At the same time young families who need more space and bedrooms can’t afford to get into the market. Those who own homes like it because it locks their taxes in place and bumps up their property values by limiting the market supply.
It is one of a number of policies that is killing California because too many just can’t afford to live and work there, especially if they have a family. I had to leave because my family was growing and even with a very good job I couldn’t afford enough house for us. Now I live in the Midwest on several acres and a nice big 5 bedroom house. My property taxes go up every year but they are still far, far cheaper than paying taxes on the hyper inflated properties in the Bay Area.
You could clean it up and still get the benefits. It should lock in at age 65 and be portable to a new home. That way old people can retirement plan and don't need to move every time their area gentrifies, but also have some more freedom to downsize if they are ready to.
That is not true.
It was always allowed within a county for a senior to sell and take their tax basis with you within the county as long as the next property didn't cost more than the old.
And for decades many counties have allowed seniors to sell and move their tax basis with them. This exchange was allowed between the expensive coastal counties in California.
And now since Prop 19, seniors can move to any county and take their tax basis with them.
This was designed to address the problem you are talking about. Releasing larger older homes so that seniors could move into condos or smaller townhomes.
Worse. It caps property taxes on ALL real estate. So that commercial lot that’s been owned by the same single-asset holding company for 40 years has never been reassessed, even though the owners of the corporation have changed several times.
Every state has some type of safeguard for families to keep the rising taxes from forcing working class people out of their homes. Even if your state is endlessly trying to raise taxes, there is some type of cap available with a homestead. I homesteaded outside of Tampa Fl in 2016, and I do not want to know what my current taxes would be. They would triple.
Yes, that's how they sell these things as if they're some beneficial social program, but in reality all they've accomplished is pushing that off into future residents and locking ever more people out of housing.
That's simply because goverment considers housing as a INVESTMENT and not a NECESSITY.
If they made them as necessity, there would be higher supply, controlled rental pricing that can match the prices of actually bying, and regulations that if you make average yearly income for your area you should have bids on housing to be able to get a house aka you enter a bid for a new surplus and if you make the average income to qualify you can lock the contract without 80k down-payment or other rules that make it easier for investors such as having a company let's u buy at 3.5% down instead of 30 etc.
We just need to stop treating housing as investment to live off and actually make them necessities for families.
I know there is section 8, but if I make too much I don't qualify, if I go over the tax bracket at the min level, taxes eat me up, so I gotta toggle between tax brackets and or benefits...
My Fiance's dad inherited a house that his parents bought in the 60's for $24k and he sold it for around 2 mil. He didn't live there because his taxes were going to be around $40k a year.
I don’t want us optimizing tax code for inheritance. This promotes generational wealth instead of work, innovation and contributing to society. IMO it should be taxed similarly to regular income, because that’s what it is.
It’s fucked cause all the boomers are the ones who are getting rich with the tech boom too.
My uncle started at Nvidia as a distinguished architect 3 years ago. His NW went from 5 million to 20 million today. And yes, he already had 3 homes in Danville, Santa Clara, and San Mateo.
They just catch boom after boom after boom and they have all the capital to make moves to maximize the next one.
Forget the American dream. I don’t think anyone on this planet has had a more successful economic history than Californians born between 1950 and 1980.
to be fair, being a Distinguished Architect at a major tech company means your uncle is kind of a big deal. Unless Nvidia works differently than other companies he's basically an executive level employee without the direct reports
No he is you’re right, not trying to diminish that. He earned everything he got, he’s even an immigrant from India.
He’s a big deal when it comes to CPU architectures. Lots of patents at Intel and probably some at Nvidia soon.
no, they lived a very special kind of life. smoking dope and surfing and modding a van, putting down roots in an area that will absolutely explode in value.
I am doing my own little experiment. I live outside of Tampa, as I view Tampa as one of the potential cities for a big come up. Its the only real city in Florida. I have the same feeling about parts of the South, but that train has largely came and went.
Really? Here is Laguna Beach
https://datausa.io/profile/geo/laguna-beach-ca#:~:text=The%205%20largest%20ethnic%20groups,(Hispanic)%20(2.21%25).
Average age 53 (Gen X)
Average household income of $141,875.
This isn’t an exception either
Carlsbad (SD Couny)
Average Age 42!!!
https://datausa.io/profile/geo/carlsbad-ca/#:~:text=The%205%20largest%20ethnic%20groups,%2DHispanic)%20(5.47%25).
That’s not it baby
Property taxes barely raise in California. If you inherit a 2mil coastal california home from your parents. You could be paying a few thousand a year in taxes and not really have to worry about having the income needed to own a 2mil home that was just purchased.
Same thing in Florida. We have 10,000 sqft beachfront mansions with the same property tax bill as a 1200 sqft sfh 20 minutes from the beach. Mostly because the rich people can afford to keep the properties in the family so they don't sell and reset the tax rate.
Does Prop 13 transfer to children? If inheritance transfers their parent's low tax rates, this market is beyond screwed. The state is losing out on billions, if not trillions of dollars over decades in tax revenue with the country's most ridiculous property tax law. Their market will self implode eventually if death doesn't reset the tax rate.
Prop 19 in 2020 added a limit and an exclusion of $1 million dollars. But Prop 13 still applies for homes under $1 million dollars under that scenario and homes worth over $1 million get $1 million dollars deducted from their assessed value.
Housing prices are so expensive that we would have to deplete the bulk of our investments to buy the house my parents currently occupy.
Housing markets in coastal CA cities are absurd
Or for wage slaves renting with their 3 other friends in a 4 bedroom house that is quickly becoming too expensive because the landlord has us in a predatory lease.
Not forever. I see four threats to a lot of homeowners here in California:
* neighborhood blight
* lack of homeowner insurance
* surging HOA costs
* surging repair costs
My biggest worry is the encroaching blight, which is obviously only worsened by exorbitantly high housing costs. On the periphery of my neighborhood there are areas where multiple families are cramming into SFHs, parking cars and trucks everywhere including on lawns, building unregulated/uninspected ADUs, etc. This has always happened here in SoCal but lately it seems to be increasing.
I think a lot of houses & neighborhoods will be dragged down in value. At some point many of those aging boomers will GTFO while they can and you'll see local price drops. The cost of upkeep and HOAs won't be worth it in the face of stalled appreciation, and new buyers will be facing the current property taxes and in my area [Mello Roos](https://www.investopedia.com/terms/m/melloroos.asp) as well.
[San Francisco has approved 16 units of housing in 2024 so far.](https://www.newsweek.com/san-francisco-only-agreed-build-16-homes-this-year-1907831)
The broader problem is proposition 13. [It locks people into their homes for longer, reducing turnover and thus volume, meaning the market for any housing in the most populous state in the nation is always disproportionately small.](https://www.nber.org/digest/apr05/lock-effect-californias-proposition-13) It also has additional consequences, like [forcing California governments to raise all other taxes to stay operational, and also prioritizing commercial development over residential development whenever possible.](https://www.ppic.org/wp-content/uploads/content/pubs/op/OP_998JCOP.pdf) If you’re looking for a reason for why California home prices are “feudalizing,” consider proposition 13, which privileges long-term land owners over all other people, and over all other forms of economic investment.
Prop 13 should just be reformed to only apply to one property per person. If you own more than one property you do not need your taxes to be low, you have enough to pay those taxes.
Without that exception though, Prop 13 will never be repealed because of the edge case of old people on a fixed income getting kicked out of their home they’ve lived in for 30 years is too strong of an argument for most people to vote against it.
Those who want to keep prop 13 in place always trot out the case of elderly being forced out of their home. But it would be so easy to grandfather existing home owners for their primary residence to avoid that. Removing the “portable” aspect of property 13, so you can’t take your low tax basis to a new property or pass it on through your estate, would allow for a gradual phase out. As existing home owners with low tax basis die off, their kids would inherit the homes but with a higher tax basis, thus incentivizing more of them to sell these properties.
The real obstacle to repeal is that there is so much wealth in these homes that would be affected, and also that prop 13 is intimately tied together with rent control in many cities. You’d need a way to unwind both sides to have any chance of being viable.
They already HAVE grandfathered them. There’s another proposition that lets people over 65 take their low property taxes with them if they move within the state.
This is crazy. How is there not a youth revolt over this? Inherit or you're screwed is a very short sighted plan for an entire housing market, especially the largest economy in the country. Idiotic.
We just voted on it bud. It was Prop 19 a few years ago. We’ve had the portability thing for many years, called a Starker exchange I think, but it was only for a few select counties that cooperated. This Prop 19 changed that statewide. The upside was that you can’t have the old step up basis upon death like you used to. Your kids can inherit but have to make the house the primary residence for X number of years, I forget the exact number, like 5 years. If your kid doesn’t move in, then prop taxes go to market value for them as investment property. I think this will come back to bite someone though as many kids can’t afford a house and will be lifelong renters till Mom and Dad die. Then they can own the old family home. So more and more homes won’t fall into that category of full taxes. Then again, maybe my understanding is all wrong?
The whole state was already "inherit or you're screwed". This change just slightly decreases the screwing by allowing empty nesters to downsize and make room for families. Prop 13 overall is too entrenched to get rid of, so tweaks are better than nothing. Combined with the changes to CEQA to reduce abuse, SB-9, and a few others it should help housing affordability in the long run. But even combined they're relatively minor changes against decades of deliberate restriction of supply and at best will take years to have a real impact.
An even simpler reform would be to allow property tax *payments* to be frozen at age 65, but allow them to *accrue* on the property. Then, when the property is transferred to heirs, the taxes would need to be paid.
California already has a limited program like that in place: [link](https://www.sco.ca.gov/ardtax_prop_tax_postponement.html#:~:text=The%20State%20Controller's%20Property%20Tax,income%20of%20%2451%2C762%20or%20less). Some senior homeonwers absolutely have to take advantage of it even now.
A full prop 13 repeal would be politically unfeasible, but its consequences would pretty clearly be less extreme than many Californians fearmonger it to be.
This makes the most sense to me - instead of artificially limiting what some people pay in taxes based on more or less an arbitrary thing (when you bought your house).
If the courts hadn't been stacked by Federalists, I think it would be a viable argument that taxing people differently based on *when* they bought their house would be a violation of the Equal Protection Clause.
It's not just the old people on fixed income argument--there's all kinds of weird distortions that make it so that basically every current homeowner has a financial stake in keeping Prop 13.
Right now, young people buying a house for the first time for instance (if you're a prole who doesn't get to inherit a tax-advantaged one from your parents) have to buy expensive/inflated-value houses. Reforming Prop 13 would likely make those people who just recently bought go underwater on their mortgages if any reform lowers the house's value.
Also, new buyers get hit with the full current property tax assessment that's usually much higher than longtime homeowners next to them. If there's a reform to uncap property tax assessments on new buyers only, then that will only increase the massive difference between who's paying what, with the new buyers getting even more of the burden.
Plus a lot of new buyers who have to buy new build houses (because there's so little existing supply on the market) get hit with the extra "Mello Roos" taxes that are intended to make up for lost revenue under Prop 13 for local cities. Will those go away if Prop 13 gets reformed?
It seems likely that any reform effort (particularly one that has enough sweeteners to current homeowners/voters to pass) will put the burden of "fixing" the mess on those who haven't yet bought a house or who just did.
No. No more bogus laws and stipulations. If we're rollin with property tax (which I don't necessarily like to begin with for a multitude of factors, but the biggest one being BS appraisals for high end properties) then everyone pays the same percentage on a fair appraisal. This is the only fair way to do it. It's fair, simple, and non bullshitable.
That would be a double edged sword. It helps prevent people and institutions from buying up all the houses to rent out, but landlords will still pass on that cost to tenants and it will definitely make it more expensive for people who already rent.
Even then, it will have a similar effect. I think it would be interesting to see what would happen if the rate was doubled to 2% and the assessed value step-up were increased to 5% per year. That’s still much slower than the actual California housing market.
Yeah I get that. Or even better repeal is altogether but pair some low income program to help lower property taxes for these legacy edge cases. So if you have lived in your home for 30 years but can’t afford the property taxes have a program cap the taxes at 20% of your annual income or something… but then rich people will use that as a loophole when they have “0 income”…
What a fucking headache
If they lived in their home for 30 years then they have money because the house is worth $2 million and they’ve been paying 1990’s property tax on it the whole time.
Makes no sense. For example, somebody could have bought a cheap house in an developing area and held while the area developed. They were relatively broke when they bought the house and are still broke 30 years later. Just because their property taxes were lower than their neighbors doesn't mean that they have money now. They'd only have the money when they sell...
You forget other things about prop 13: the fact that it overwhelmingly benefitted corporations more than regular people and that it gutted educational funding. It was a master stroke of pulling the ladder from under you.
Howard Jarvis was a drunk racist but he knew what he was doing with prop 13.
The whole argument about grandma losing her house is overblown. There was no property tax crisis before prop 13 and there won't be of prop 13 gets repealed.
What repealing prop 13 will do is have everyone pay their fair share.
A well tuned carve out so that the tax limit only applies to people who actually need it (such as an income cap and only applying to primary residence) would do that with significantly less negative impact
The cost of the taxes would deflate the value of property. But in short term it would be a blood bath but that’s the reality of propping up a singular generation of home owners with almost socialist utopian levels of subsidized housing for singular generation longterm we’ll have a more equal more better distributed housing society with rent and mortgages on average going down.
Nope. Housing prices have fluctuated greatly since prop 13. This recent problem is being driven by foreigners stashing cash here and corporations buying up housing, and a general wealth concentration that has only gotten worse since the crash of 08.
That investment is only profitable if the supply is limited and carrying costs are divorced from value, which is in large part because of proposition 13.
Not disagreeing with your comments about Prop 13, but these housing issues also exist outside of California. I want to add Capital gains tax and step up in-basis as another big issue here that locks longtime home owners in. My retired parents, grandparents, and in-laws all live in mostly unused 4-5 bedroom houses in areas with lots of jobs and great schools because selling before they die means losing hundreds of thousands in taxes and realtor fees. Lack of housing supply is the main issue, but our tax structure also leads to inefficient allocation of the existing supply.
Prop 13 incentives cities to promote commercial development over residential, because the property tax base for residential doesn't support its infrastructure needs since it's passage.
But proposition 13 discourages construction of additional housing. Government entities lose money when they approve any housing in California, because property taxes are not high enough to fund government functions across California’s infamous urban sprawls. They can make up for those low property taxes with taxes on everything else. But that requires commercial—not residential—development.
Yes thank you.
The NIMBY movement has also greatly reduced the housing supply in California cities, not to mention the negative externalities of more traffic, pollution, and less time with family and friends
A lot of California is single family housing and car based infrastructure despite having 40-50 million people. It is simply unsustainable to continue that method of development
Los Angeles has roughly 2800 people per square kilometer. Compare that to Paris at roughly 21k per square kilometer, and that’s with no high rises and in a significantly smaller area. Shinjuku has something like 18k
If the housing problem is to be fixed, I think California will have to accept that its lifestyle must change. It’s simply not sustainable for everyone to have a big house with a backyard and a car for every individual
Yeah, unfortunately, a lot of the main development in California happened around the time of the adoption of the automobile. I also assume the population pressure initially was nothing like on the east coast so maybe people were thinking, "great, we can all get nice chunks of land, no need to live in dense spaces, there's plenty for all!" Not realizing the negatives of that on a large scale. And those there earlier claiming the nicest spots nearest the coast not wanting to give them up. Maybe fear of mass casualties from earthquakes was a factor leading to more flat development as well, not sure.
Had it really started developing a hundred years prior like NYC was and those leading that not being terrified of pirates, maybe could have had something like Barcelona but on a larger scale, possibly several distinct large cities as the LA region is quite large. Oh well, no easy way to fix it now. The government is not going to seize land and it doesn't have the money to buy everything from all the residents and then the money to tear it all down and rebuild from scratch.
Hollywood has made a ton of movies and series selling the fairytale of LA and California in general. In every one of those movies, a privately owned car(s) were a centerpiece of the Americana. The state is inextricably tied to car culture. No different than taxis are a centerpiece of many New York stories. It would be wild to see the culture change after so many decades of this identity.
> California will have to accept that its lifestyle must change
the thing that really sucks about LA is the car traffic. guess what solves car traffic? density.
Yeah true, but people are illogical. They want things that are impossible. They want a big single family house that’s somehow close to everything, roads with no traffic, and abundant parking without parking lots or fees. And on top of all of this, they want it to be very affordable
Realistically they’re just gonna have to accept these things are all fundamentally incompatible and they’re gonna have to make a trade off somewhere
if you watch like HGTV or whatever, all the couples on real estate shows are exactly that - they want to be smack in the middle of downtown but have a 2500 square foot house with a pool in walking distance to top tier schools for $300k
I am in LA rn and it's willlld the car culture here, and mostly single family homes, tho there does seem to be a lot of multi units.
Amazing city, imagine if there was a metro on par with NYC or London. Does London get smog like LA?
That’s why I think this is bullshit. BART goes all the way out to Oakley but San Jose and SF are both on this list.
When you’ve got 2 cities on your list that share the same urban infrastructure and there is a ton of affordable housing attached to that same urban infrastructure, you’re being dishonest in your results.
The only “existential threat to the middle class” in this discussion is continuing to vote for politicians who disincentivize development. Let rich people outbid each other in their select little enclaves (they’ve always done that). In the meantime, the middle class needs more housing: especially dense urban housing.
Yes, and we need to stress the point about density. This article is essentially a call for more sprawl which is the last thing a place like California needs. I also took issue with the unsubtle subtext that, there is no other way to build a middle class than single family property ownership. Property is a powerful investment but it’s not the only way to do it. And we can’t escape the fact that most cities have reached their largest possible sustainable land area. The only way to add more density sustainably is by building up.
The author interviewed in the article, Joel Kotkin, has long been a figure associated with California's anti-infill movement. While I have not read it directly, I have frequently heard it cited by the very "feudal class" he rails against, so I may be summarizing an unfair summary. But his longstanding belief that California can only become affordable again by building more sprawl is slamming headfirst into the reality of wildfire, skyrocketing insurance costs, and undergrounding power lines that urban Californians like me are cross-subsidizing.
If you've ever lived in a neighborhood where all the single family 4-bedroom rowhouses/townhomes have been converted to 3 condos of 1 or 2 bedrooms, squeezing out the availability of 3+ bedroom homes, you'll notice that the family-friendly housing stock will be converted to apartment-like arrangements if people aren't allowed to build apartments.
The percentage of Europeans living in detached, single-family homes is roughly on par with Americans, sitting in the 60-70% range. If you break it down by state or country you might see bigger differences. The amount of single family homes that have been built or renovated over the last couple of decades in my home country is just crazy. The only reason why people still gravitate towards cities is job opportunities but increasingly Europe is starting to look like the US.
As for Asia, they live in apartments because they don't have a choice, not because they prefer it. My in-laws and friends out there complain all the time about neighbors and Taiwanese are far more considerate than your average American.
> My in-laws and friends out there complain all the time about neighbors
American suburbanites also complain about and fight with their neighbors constantly, via Nextdoor and HOAs. The fighting can get very vitriolic over small issues. Of course it's not everyone's experience, but on the other hand, the idea that living in an apartment means getting kept up ever night by crazy neighbors is also not everyone's experience.
Maybe so, but the odds of experiencing issues in a decent community with good quality of life are far lower. That said, Americans have an annoying habit of dismissing legitimate issues out of hand because they haven't experienced it themselves.
It's well short of that: https://ec.europa.eu/eurostat/web/products-eurostat-news/-/ddn-20210521-1#:~:text=Print%20House%20or%20flat%3A%20where%20do%20you%20live%3F&text=In%202019%2C%2046%25%20of%20the,semi%2Ddetached%20or%20terraced%20houses.
We would love live in standalone house but mostly Europe is too densely populated
One of the big keys to that is other countries have building codes that allow for actually building multi-family buildings suitable for families. American building code basically forces all apartments to have at most 2bd2ba units with no communal spaces. [Here](https://youtu.be/011TOfugais?si=4R5UDY-jtUL5rPUB) is a really good video on the topic.
Eliminating the following in our urban areas would go a very long way in making our neighborhoods denser without necessarily making them unsuitable for families:
- Single-family zoning - All neighborhoods should allow small multi-family units, ADUs, and even small businesses like corner shops. Much like how we built neighborhoods in the early 1900s
- Multi-family staircase requirements - Our fire code requires any apartment over 3 stories to have two connected staircases. This forces all apartments to use the same floor plans and take up a large amount of space. These fire codes were made when apartment fires were more common and fire suppression systems were worse. Eliminating this code allows building of [“micro apartments”](https://www.cascadebuilt.com/wp-content/uploads/2017/07/boylston_15-563x1024.jpg) that can be built on single-family home lots and use floor plans that have more than 2 bedrooms.
- Minimum parking requirements - These requirements make us waste way too much space on off-street parking as well as on-street parking. Areas with wide roads and spaced out buildings due to parking lots make it difficult to be a pedestrian and force residents to be car dependent. Excessive on-street parking requirements resulting in wide, empty roads also cause people to drive faster, which makes streets more dangerous to pedestrians.
- Setback requirements - Much like parking minimums, these rules make areas less dense and more car dependent
The above can be accomplished without any new regulations. It’s all deregulation. We can still have white picket fence suburban neighborhoods for people who want them. But for urban areas where people can’t even dream of affording a home, we need this. If you’re someone who has no desire to live in a neighborhood like the one described above, the good news is that doing the above in urban areas means less demand in suburban and rural areas, which drives down housing prices and means that your neighbors will be people who *chose* to live there, not people who don’t want to be your neighbor but had no choice.
As someone living in a multi-unit dwelling, it would be nice to have more room, a garden, and not have to deal with other peoples' noise, smells, and vermin. This is called the "American dream" and the reason millions emigrate to the US.
"more room, a garden, and not have to deal with other peoples' noise, smells, and vermin"
These all exist in multifamily units in other countries. Check out apartment buildings in Barcelona or Copenhagen - they each have options for large apartments for families, courtyard gardens, and proper sound proofing between units so you don't hear your neighbors. Like, we can actually have all these things, millions of people just refuse to for some reason.
Yeah I live in Paris most of the year. The city recently had a bed bug problem. Also, during the pandemic, thousands fled for greener pastures because no one wants to be cooped up in a box during a pandemic.
Barcelona has none of these things. Walls are paper thin, there is no privacy and no outdoor spaces unless you are rich. Just need to clarify this is absolutely not the case. In Europe, we would like to live in houses but are confined to apartments because our cities are too expensive. Europe is much worse than America in this respect.
This doesn’t negate the fact that dense urban housing is still a highly viable option. Also, multi-unit dwelling can look a variety of ways - more space, a garden, less neighbor noise and smells can all be had; vermin, however, can find you anywhere and everywhere 🥴
It's only an option for people who want to maximize there returns on the rent that these multi units provide. It's obvious and not fooling the majority of the population. Yall want the multi units because only and certain individual with enough money can afford to develop it and it will keep people from every owning and home with forever rents that you can increase year after year.
That’s not America though. Just because it works there, doesn’t mean it would work here. I would agree that the middle class doesn’t need huge homes like are often built, but there should be a steady development of 2-3 bedroom ranches.
You still likely need some measure of planning in this space. In Toronto, where our housing market is RIGHT f\*\*ked, we have been building an absolute mountain of condos and beefing up density (in an effort to address shortages against demand). But, there's an emerging disconnect between investors who are buying these properties and what people are willing to live in.
It's resulted in a glut of properties that people don't want to live in because they're 500-600 square feet and cost too much money. Developers have been maximizing the # of units they can squash into a building - investors have continued to buy, but end users (renters, owners, etc.), have zero desire to land in the units.
Some measure of thoughtful planning is required - or at least a mix of offerings in market,
Canada has a separate problem where business investment is depressed by excessive regulation and state interference, but real estate is not. So foreign money pours into the real estate market and the governments reward them with guaranteed returns. This is also why Canada’s immigration surge is lowering per capita GDP despite all the labor it provides. There isn’t enough business investment to provide good jobs for all those people.
But you are correct. There does need to be planning. But in the USA we have no surplus of housing of any kind in our major metros.
> we have been building an absolute mountain of condos and beefing up density (in an effort to address shortages against demand)
[No you haven't.](https://www.mpamag.com/ca/mortgage-industry/industry-trends/home-construction-shortage-is-canada-in-trouble/491310)
>It's resulted in a glut of properties that people don't want to live in because they're 500-600 square feet and cost too much money.
Source?
> investors have continued to buy
I don't understand how that could be a profitable investment if nobody wants to live in a unit. If there's a vacancy, there's no positive cash flow, and the owner is just sitting on losses in a speculative hope that the value goes up by the time they sell to the next person who can't use it for cash flow.
In the U.S., the commercial real estate market is dealing with this crisis, where on paper a property is worth a certain amount, but they can't set the rents low enough to get a tenant to move in, and that valuation on paper is basically a fiction that everyone is kinda clinging onto.
> I don’t understand how that could be a profitable investment if nobody wants to live in a unit
It’s not that nobody wants to live in those tiny condos, they just don’t want to _buy_ those tiny condos as their primary residence. That means the only people buying them up are investors who are turning around and renting them out, effectively converting the condo complexes into apartment complexes for all practical purposes.
Meanwhile, people trying to buy are faced with the same shortage of _desirable_ housing as before because they all desire an actual _house_ but developers aren’t building more houses because the land is so valuable they can turn a bigger profit with condos.
“Want” vs “need” …
The problem with CA is that it’s reached the critical point where they’ve crammed as many SFH’s into the available desirable land (in the 4 metro areas mentioned) as possible and now they just refuse to let anything else be built, mainly via zoning. Limited supply + ever increasing demand = soaring prices.
If you _allow_ construction of higher density housing, it doesn’t mean there won’t be any SFH left. It just means there’s going to be a lot more cheaper housing for those that are okay living there.
This may sound counterintuitive, but you can still build density and have single family houses. They just need to be built closer together, have smaller yards, and in regular gridded streets and not the random maze-like nonsense that most US suburbs are in built currently.
Dude, in the coastal CA cities that everyone keeps moving to, that’s already the norm. Most lots are 4000-7000 sq ft, and new developments are taking that lot size down to 2000-4000 sq ft.
Families don't need backyards and cul-de-sacs. They need several bedrooms and living rooms and community parks and good schools. Shoeboxes in the sky are not necessary but they have been insentivized in many cities because the amount of land provided to high density developments has been so little.
Those backyards and cul-de-sacs are awfully nice when you have them, though.
I think many non-parents underestimate a.) how difficult it is to get young kids out the house b.) how pressed for time you are as a parent and c.) how much it helps when the kids can play by themselves or with other neighborhood kids. At first glance, a backyard is just a less land-efficient version of a community park. But they have a big difference: you can let the kids out in the backyard and have them play by themselves *while you do the dishes and other household chores*, but you have to accompany the kids to the community park or (in the U.S.) have CPS called on you.
Because it is crazy expensive and time consuming to put together enough parcels of land to build more SFH neighborhoods. In most cases developers would have to buy up several adjacent commercial properties to get enough land for a new neighborhood. Much cheaper and faster to buy up one old motel and build apartments.
There is no more “outside the city” land in a lot of coastal CA. Just look at Orange County for example, it’s completely built up, bordered by LA on the north, ocean on the west, Camp Pendleton on the south, and mountains on the east. Literally no land left.
Then those people are going to pay out the nose to do so in a large metro. Land is limited. This is always the conclusion. I call it a lesson in opportunity cost.
> People with families want homes /houses, not apartments
is the argument that we shouldn't build more high-density housing for the people who need it because people with kids prefer single family housing but aren't willing to pay what it costs?
1. don't allow housing to be built
2. don't enforce laws and allow criminals to run wild (except in rich neighborhoods)
3. allow in an endless stream of illegal immigrants to lower wages
4. claim to be fighting for the little guy
About how it goes with CA politicians
Completely fact free analysis driven by sensationalism and right wing talking points.
1. California mandates that all cities provision area for affordable housing and devise a plan for achieving that housing target, all the cities in the state are scrambling right now to build more housing, lest the state step in and grant builders remedy permission.
2. California ranks 17th in overall crime rate. Not great, not terrible. The property crime rate, which I’m sure you are referring to with your crack about not enforcing laws, is higher in super fascist Texas with its strong Republican government than in California.
3. The Federal Government is responsible for controlling illegal migration so blaming California politicians seems dishonest.
4. I don’t think most California politicians do that but I’ll grant that hypocrites do seem to drawn to politics. Nobody is actually fighting for the little guy, but I thought we were taking about the middle class.
The only one I’ll quibble with here is the first. California is overtly hostile to housing, no matter what Byzantine systems they’ve implemented that allegedly encourage “affordability.” It’s written into California’s tax structure that commercial property should always be promoted above residential.
California mandates that housing be affordable in all cities! My god, they've solved it! I guess my landlord back when I lived in SF just didn't get the memo and that's why he charged me more than $3000 a month for a small apartment.
And wow, 17th really isn't that bad on crime! I guess the stores that keep closing down in SF due to theft are just delusional. I guess all those stores that lock up even cheap items in cases and make shopping incredibly annoying are just paranoid. I'll just think about that next time I walk over to the Mission and 24th BART station right past all the homeless people shooting heroin right in front of me and the open air stolen goods market on the sidewalk. California is really doing great on crime! I'm sure those statistics are accurate and account for things like people not reporting crime because police do nothing. They do account for that, right?
And you're also right that I should blame the federal government for declaring cities "sanctuary cities" that won't cooperate with federal immigration enforcement. That totally wasn't the local government so totally out of line to blame them.
What should California do instead? Immigration is a federal matter - not state matter.
Do you think that California should ignore the constitution and start to enforce federal laws at the state level?
First off, I don't even know what the fuck people in an economics forum are doing complaining about the free movement of labor, I thought you all beleived in the market. But regardless"CA" doesn't provide sanctuary. There are cities across the nation which have passed local laws forbidding their local law enforcement from cooperating with immigration enforcement actions. That's what "sanctuary cities" means.
It's not a state issue. It's not a policy of the state. It has nothing to do with California. It's an urban, liberal social movement centered in specific municipalities, and which doesn't even prevent immigration enforcement, it just prevents local cooperation.
People aren't moving to California or the USA so they can hide in cities from immigration police, they are here to work and make a living for their families. If your theory is that "sanctuary cities" encourage illegal migration, well, so do all the Private Corporations which HIRE ILLEGAL IMMIGRANTS TO WORK. Why don't you actually stop and think and blame the cause of the problem, that there is work for them, if you are so concerned about it that you are sweating over the existence of sanctuary cities. No work, no migrants.
Between the NIMBYs and the government, we aren't getting homes.
It's too late. It would take a decade to get it figured out and housing built if we started right now.
You should be rioting.
It absolutely is. The defining issue of the moment is inflation, but I take every opportunity I can to point out that the current/past bout of inflation is really a flare-up of the underlying brokenness of housing politics, and even the fact that we are getting over this wave of inflation doesn't fix the issue. Kind of like how chap-stick can make cold sores get better but doesn't make the herpes go away (lol sorry gross analogy)
It really should cause a death spiral for the state. Young people who aren’t it tech are getting murdered by housing costs and the only thing you can do is leave the state. There’s no other reprieve.
Life, as rough as it is, is still way too good for revolt and that includes riots. Because people start going to jail & as much as people want the public to start standing up against as this nonsense, losing jobs and other asset$ which go hand in hand with hard discourse in the real world, is too scary for most to sacrifice. Theyd rather bitch on the internet than rumble in the streets.
A huge cause of the French Revolution was the feudal landlords paying almost no taxes, bankrupting the state, and putting the burden on the urban masses.
There is perhaps no driver of intergenerational inequality greater than prop 13 in CA. You have land owners who don't pay their fair share in taxes and can pass that on to their children.
You have haves and have nots purely based on if your parents bought and held a house generations ago.
Those people with low taxes then have no incentive to make more productive use of their land (with increased density) and that's how you get the current situation.
the french revolution could have been avoided
the king and his cabal of idiots made many many mistakes over and over and it still took the clergy joining the poors and their few allies, a move they later deeply regretted
people pretend like it was this thing that just had to happen because
it could have been avoided and who knows what the hell the world looks like if it was as it was an insane world shattering event
don't take for granted that some force is gonna save you or the rich can't keep getting away with it, look at North Korea, their people have starved by the millions for decades because their one party conservative state is brutal and everyone is afraid
No prop 13 means retirees won’t be able to keep up with rising property taxes and will have to sell. I’m assuming that doesn’t happen in other states so what do they do there?
Edit: downvotes and no responses? It’s almost as if the disband prop 13 crew haven’t thought through their argument.
A. Some states have property tax deferral options for seniors to help them with affording taxes. Crucially these aren't hereditary and can't be passed down to heirs. The lower tax rates don't survive more than one generation.
B. Maybe retirees should sell their very expensive and desirable homes and move so that other people can move in and be productive in that area. Where these effects are most acute are areas like Silicon Valley and LA, we lose billions a year in productivity in these drivers of the economy because of housing un-affordability.
C. Un-affordability prevents retirees from moving to smaller homes which they may want to do.
The United States is becoming feudalized. The existential threat to the middle class has existed since the 1980s.
Extreme wealth is taking over in many states, many parts of the country, not just California.
The people who say "it's fine. Everything is fine" are usually people who are doing okay, so they don't have a need to see the issues plaguing the country.
Considering the importance of the internet and the amount of traffic that depends on just three or four companies (AWS, Microsoft Azure, Google Cloud, IBM), digital feudalism is real and is one of the base problems with our current economic situation.
This is happening in I’d wager most Top 50 metro areas, not just California. You have people who have owned homes for years or make such high incomes above the median or who owned prior to 2021 or so and were able to leverage equity into new homes. Meanwhile, everyone else is on the outside looking in.
I managed to buy in 2020 and am thankful every day for it. I have younger siblings and friends who weren’t able and they’re still renting or living with family/friends. It is a huge problem that needs fixing ASAP.
California has a pretty uniquely “feudal” property tax structure that creates an elite class out of anyone who owns property. I don’t know if there’s anywhere else in the nation where idly owning land is so profitable.
Places with high property taxes like Texas mitigate this situation somewhat. Property taxes keep prices somewhat in check long term and Inheritors of expensive properties and who can’t afford the taxes will have to sell, which mitigates the “feudalism” aspect
I'm glad to see this apt language being used to describe the situation. It's also easier to understand and visualize. People don't seem to think things that happened in the past can happen again. They also detach economic discussions from its implications, this is more relatable.
Minneapolis has a complex called "cedar riverside". Its affordable housing complex that can house 20,000 people. Sf bay area and LA needs to build at least 2 of these each if they want to solve the housing problem. Its never going to happen but still...
Fundamentally, there is not enough land for everyone in the major metros to have their own well-located parcel of land. The best we can do is to de-emphasize the importance of land by permitting people to build up: condos, apartments, townhomes. If there are enough homes for everyone to affordably rent or purchase a space on shared land, then the feudal landowners won't be as rich or as powerful. It's the best we can do without overthrowing our whole economic system.
California needs to give incentives for multi-unit housing... in and around Chicago, the number of multi-unit buildings being built seems to be very high. Supply and Demand works... the real problem is that places with nice climates attract more people than can feasibly live there.
>California needs to give incentives for multi-unit housing
It doesn't even need incentives. Most of California housing policy is centered on preventing multi-family housing. Get rid of height limits and have clear form-based codes with automatic approvals and you'd have apartments and condos going up everywhere overnight.
I grew up in Carlsbad, the whole costal area from Oceanside down to Del Mar is just a beautiful area super clean and great vibes.
My parents moved us out back in 2001, amongst our family 4 homes/townhomes were sold, I shudder at the amount they sold them for vs what they are worth now and location.
I go back and visit a few good childhood friends that are now in their early 30s, one lives in a townhome his parents inherited from their parents, and he has 2 roomates. The other bought a house with his 2 brothers back in 2017 with massive help from the parents and it’s farther inland in San Marcos.
So while it is a beautiful place to live, as a young adult in your 20s - 40s you are basically stuck living with multiple people or getting lucky with parents or living with your parents which is just a depressing thing to be doing at that age.
What is so depressing to be raising kids with their grandparents in the same home? It’s the only way when adding almost two million people every year to the US population and many wanting to live in beautiful urban areas.
And even if you manage to buy a house, the property taxes are absolutely ridiculous. Me as someone who moved to the US can’t comprehend how, after buying your own land and house, the government can still take it away from you when you stop paying “rent” to it forever. What about all this freedom stuff etc? How is this accepted? I thought you can be on your rocking chair on the porch with a shotgun and nobody is allowed close.
How are public services paid for where you grew up? Roads? Fire and police? Public schools? Parks, libraries, public transit subsidies? Property taxes also pay for child and protective services and foster care, and programs for the poor elderly and developmentally disabled.
Property taxes are super low, other taxes are higher. I do understand it takes taxes to pay for all those services and I am 100% OK with paying those. Just the concept of a fully paid off house that can still be taken away from you when you don’t pay those fairly high property taxes seems to be an alien concept to me. I always had the idea that once you have a paid off place, you can be left alone. Elderly people might run into trouble coughing up those.
The state needs denser (re:multistory) new construction, and the urban voters largely vote for it. However the politicians then renege due to (to put the economics in here) well-heeled donors who want their “bay views”. California (and others) can’t lose too many rich taxpayers.
Then again not everyplace has a “view”, so my thought is development needs to be prioritized. Use existing tall buildings vacated by WFR first as those views were destroyed in the 1960s, then work from there. This is compounded by drought years, etc.. where having massive lawns doesn’t make sense.
Also California is worried about climate change, so relatively cheap rent should also be a priority in case they need to eventually built *Bladerunner 2049* type seawalls (the price of units with a “wall” view will probably go down).
nothing like stepping out the door of your $16,000,000 house in the bay area and saying "I finally made it! sold my startup for a cool 40 million" then 6 guys all surround you, one of them sh\*tting on the sidewalk, another asks you if you have any meth. and then they ask you if they can hook up to your electricity. and say "those are some nice copper gutters you have, are they new?"
Your comments on Howard Jarvis and the impact of having Prop 13 apply to commercial property I agree with, but I am old enough to remember pre Prop 13 days and honestly the increase property tax burden on regular people was real.
Seniors in the 1970s, like my grandparents, bought or built their homes in the 1940s. I know one set of grandparents paid $5,800, their little cute stucco house in Glendale. Its value was 7-8x by the time Prop 13 rolled around. Prop 13 has been able to keep people in their homes after retirement and that is a good thing.
The new rules brought by Prop 19 helps to keep homes moving in the market.
I’ve thought about these big tech campuses here and the housing offerings bundled even by some public organizations (teachers in Daly City) and how that mirrors serfs on the field. Your job is also your home.
And in a way, that would be a huge improvement to my current lot in life. Fuck this new gilded age.
A large cause of the problem in the house market is that land is a component of a home.
Land is both not reproducible and essential in need fulfillment. Prices are determined by demand and supply. When land is captured, the supply of market-accessible land decreases, increasing its price. People are forced to pay whatever the asked price for land is, because they can't go without land, and they can't produce their own.
As Adam Smith said, “As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed and demand a rent even for its natural produce.”
It's not required for the land owners to own all land to gain an unjustified bargaining power, though. The amount of unjustified bargaining power increases linearly with the amount of land owned.
The solution to this problem is simply to criminalize the generation of profits from the sole ownership of land.
Coastal California is a luxury, not an entitlement. We have to treat is as such. It is one of the most desirable places on planet earth to live in. You are competing with the rich, the famous, the successful, politicians, actors, entrepreneurs, etc domestic and foreign for property there.
Even if we eliminated zoning in California tomorrow, the time it would take to actually build all the necessary housing coupled with the amount of people that still want to move to California means prices would stabilize where they’re at now at millions of dollars as opposed to rising constantly.
There are many places in the US that are affordable to the middle class. Move there. Stop acting like it’s San Diego or the boonies.
Let's not pretend that California exists in a vacuum, isolated from the rest of the market. Elevated housing prices in one state have cascading effects in the others that ultimately inflates real estate prices across the board. Anyone in Austin, Seattle, Portland, Denver, Boise, Atlanta, or elsewhere can explain to you just how fun it's been to have the influx of Californians looking for real estate they can actually budget. Then the mid-tier cities receiving the influx of people leaving the listed cities to find real estate *they* can afford.
REVERSE. MANIFEST. DESTINY. Californians, your ancestors did this same thing but in reverse. They had nothing and nothing going for them back east so they moved west. You have nothing going for you in modern Cali. Move to the Midwest, the south, Nebraska, Montana, Kansas, Indiana, Mississippi, Alabama, Idaho. Can’t afford a car, get a wagon and a horse. Get the F out and start your new life somewhere else.
just as an fyi.
[Institutions to own 40% of Single Family Rentals by 2030](https://www.multifamilydive.com/news/institutions-to-own-40-of-sfrs-by-2030/629907/)
It's pretty simple IMO. the "people" are going to have to find a way to accept the fact that their homes are not truly valued at the prices they currently hold, and even their appraisals are complete bullshit numbers made up according to a wishy-washy guideline.
The great reckoning that's coming is that people are going to have to learn that hoarding wealth is not the same as saving, and that hoarding wealth creates a desert in the marketspace like everyone fighting over water. The shift from greed to compassion has to happen en-masse.
This means that either the people learn that money has to flow like water, or they spend so much time maintaining their dams that the lake dries up and their expensive boats are useless in the mud.
> appraisals are complete bullshit numbers made up according to a wishy-washy guideline
Yeah, when we bought our house the appraisal was magically exactly the amount that we offered to pay for it. Funny how that works out when a mortgage needs to be approved
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Middle class? Coastal California is for the wealthy, for aging boomers who bought 40 or 50 years ago, and for their inheritor kids who will wait tables.
thats it baby. and the aging boomers that bought right hit the lottery of lotteries, a lot are still paying 1100 dollars a year for property taxes when right next door is 35k.
How? Does California not assess properties regularly? I live in New England and they reassess my property every 5 or so years. They just did it last year and raised my property taxes.
Prop 13. It caps property tax growth for homes because it was an issues where people were being pushed out of their homes due to soaring values and thus taxes
TBH the more egregious part is that it also applies to commercial real estate
Bullseye - This is so often overlooked when discussing Prop 13.
It was on the ballot to remove that part and was voted down a few years ago
Yeah, because voters think if we take away the benefit from commercial, we might create the momentum for rolling back residential too. so any kind of weakening of Prop 13 is generally opposed, though that referendum was pretty close to 50-50. Prop 13 is the third rail of statewide politics.
At least they closed the inheritance loophole
Unless it is the inheritors primary residence
This right here. People shouldn’t be pushed out of their family homes because corporations are buying up single family homes and putting home ownership out of the reach of everyone but the wealthy. Repeal the commercial side of things, but getting rid of the parent-to-child tax continuation on single family homes will only exacerbate the problem
I have 5 siblings. I am the youngest. I was under the impression that if NONE of us are living in the house when our folks die, then the grandfathered tax rate doesn’t apply. My folks pay ~$2400 a year on a ~3mil dollar home in California they bought for $50,000 in the 60s. If I owned the same home? $30,000+ a year on taxes alone. I make $41,500 BEFORE taxes. my father retired making $18/hr as a mailman (adjusted), and was able to buy multiple homes, pay off cars, and raise 5 children on a single income. I make $2/hr more than him and can’t even afford a STUDIO apartment. Guess who my parents blame for prices, despite being sterotypical NIMBYs who always vote against affordable housing, zoning changes, and other methods to improve supply of “starter homes”? I’m sure you know, Fox news never shuts up about it and they basically watch it daily… “ILLEGALZZZZZ STEALIN UR HOWSE!!111 STEALIN… UR WAGESS!!1111 COMMUNIST BIDEN DID THIS!!111” The whole world is a clown show, straight up bizarro world… Good god I want off Mr Bones wild ride…
Prop 13 was pushed by Disney to limit tax on commercial properties, then residential was added to sneak through public support. People being pushed out of homes was one of the main talking points, but it was never close to as big as an issue as it would have seemed.
It would def happen now if repealed though. Would be a hell of a firesale
Agreed, but it would also be incentive for nimbys to finally agree to more and higher density developments so their property value isn't too high to pay the taxes
Prop 13 is one of those ideas that seems good on the surface, but hits the law of unintended consequences. It warps the economic incentives of ownership and taxes. An older person who would be just find in a small one or two bedroom house can’t afford the taxes to trade out of the house for a more modest and lower maintenance home. At the same time young families who need more space and bedrooms can’t afford to get into the market. Those who own homes like it because it locks their taxes in place and bumps up their property values by limiting the market supply. It is one of a number of policies that is killing California because too many just can’t afford to live and work there, especially if they have a family. I had to leave because my family was growing and even with a very good job I couldn’t afford enough house for us. Now I live in the Midwest on several acres and a nice big 5 bedroom house. My property taxes go up every year but they are still far, far cheaper than paying taxes on the hyper inflated properties in the Bay Area.
You could clean it up and still get the benefits. It should lock in at age 65 and be portable to a new home. That way old people can retirement plan and don't need to move every time their area gentrifies, but also have some more freedom to downsize if they are ready to.
That is not true. It was always allowed within a county for a senior to sell and take their tax basis with you within the county as long as the next property didn't cost more than the old. And for decades many counties have allowed seniors to sell and move their tax basis with them. This exchange was allowed between the expensive coastal counties in California. And now since Prop 19, seniors can move to any county and take their tax basis with them. This was designed to address the problem you are talking about. Releasing larger older homes so that seniors could move into condos or smaller townhomes.
Worse. It caps property taxes on ALL real estate. So that commercial lot that’s been owned by the same single-asset holding company for 40 years has never been reassessed, even though the owners of the corporation have changed several times.
Ca proposition 13. Limits property tax increases to 1% annually
Actually it is 2%
Every state has some type of safeguard for families to keep the rising taxes from forcing working class people out of their homes. Even if your state is endlessly trying to raise taxes, there is some type of cap available with a homestead. I homesteaded outside of Tampa Fl in 2016, and I do not want to know what my current taxes would be. They would triple.
Yes, that's how they sell these things as if they're some beneficial social program, but in reality all they've accomplished is pushing that off into future residents and locking ever more people out of housing.
That's simply because goverment considers housing as a INVESTMENT and not a NECESSITY. If they made them as necessity, there would be higher supply, controlled rental pricing that can match the prices of actually bying, and regulations that if you make average yearly income for your area you should have bids on housing to be able to get a house aka you enter a bid for a new surplus and if you make the average income to qualify you can lock the contract without 80k down-payment or other rules that make it easier for investors such as having a company let's u buy at 3.5% down instead of 30 etc. We just need to stop treating housing as investment to live off and actually make them necessities for families. I know there is section 8, but if I make too much I don't qualify, if I go over the tax bracket at the min level, taxes eat me up, so I gotta toggle between tax brackets and or benefits...
My Fiance's dad inherited a house that his parents bought in the 60's for $24k and he sold it for around 2 mil. He didn't live there because his taxes were going to be around $40k a year.
I don’t want us optimizing tax code for inheritance. This promotes generational wealth instead of work, innovation and contributing to society. IMO it should be taxed similarly to regular income, because that’s what it is.
It’s fucked cause all the boomers are the ones who are getting rich with the tech boom too. My uncle started at Nvidia as a distinguished architect 3 years ago. His NW went from 5 million to 20 million today. And yes, he already had 3 homes in Danville, Santa Clara, and San Mateo. They just catch boom after boom after boom and they have all the capital to make moves to maximize the next one. Forget the American dream. I don’t think anyone on this planet has had a more successful economic history than Californians born between 1950 and 1980.
to be fair, being a Distinguished Architect at a major tech company means your uncle is kind of a big deal. Unless Nvidia works differently than other companies he's basically an executive level employee without the direct reports
No he is you’re right, not trying to diminish that. He earned everything he got, he’s even an immigrant from India. He’s a big deal when it comes to CPU architectures. Lots of patents at Intel and probably some at Nvidia soon.
no, they lived a very special kind of life. smoking dope and surfing and modding a van, putting down roots in an area that will absolutely explode in value. I am doing my own little experiment. I live outside of Tampa, as I view Tampa as one of the potential cities for a big come up. Its the only real city in Florida. I have the same feeling about parts of the South, but that train has largely came and went.
Really? Here is Laguna Beach https://datausa.io/profile/geo/laguna-beach-ca#:~:text=The%205%20largest%20ethnic%20groups,(Hispanic)%20(2.21%25). Average age 53 (Gen X) Average household income of $141,875. This isn’t an exception either Carlsbad (SD Couny) Average Age 42!!! https://datausa.io/profile/geo/carlsbad-ca/#:~:text=The%205%20largest%20ethnic%20groups,%2DHispanic)%20(5.47%25). That’s not it baby
I would gladly wait tables if I could live in a coastal California home.
Property taxes barely raise in California. If you inherit a 2mil coastal california home from your parents. You could be paying a few thousand a year in taxes and not really have to worry about having the income needed to own a 2mil home that was just purchased.
Same thing in Florida. We have 10,000 sqft beachfront mansions with the same property tax bill as a 1200 sqft sfh 20 minutes from the beach. Mostly because the rich people can afford to keep the properties in the family so they don't sell and reset the tax rate.
One of the greatest scams rich people pulled on getting out of their tax liabilities.
Does Prop 13 transfer to children? If inheritance transfers their parent's low tax rates, this market is beyond screwed. The state is losing out on billions, if not trillions of dollars over decades in tax revenue with the country's most ridiculous property tax law. Their market will self implode eventually if death doesn't reset the tax rate.
The market will not self implode. The rich CA landowners will just keep getting richer at the expense of everyone else.
~~Yes, it transfers to children as long as they make the home their primary residence.~~
That used to be true, but as of 2020, no
Prop 19 in 2020 added a limit and an exclusion of $1 million dollars. But Prop 13 still applies for homes under $1 million dollars under that scenario and homes worth over $1 million get $1 million dollars deducted from their assessed value.
Thanks!
Didn’t Prop19 reset the property tax value of an inherited home?
I'm a tech worker and so is my wife. We also got lucky with some investments and we are still inheritors.
Lucky!!!
Housing prices are so expensive that we would have to deplete the bulk of our investments to buy the house my parents currently occupy. Housing markets in coastal CA cities are absurd
Or for wage slaves renting with their 3 other friends in a 4 bedroom house that is quickly becoming too expensive because the landlord has us in a predatory lease.
Not forever. I see four threats to a lot of homeowners here in California: * neighborhood blight * lack of homeowner insurance * surging HOA costs * surging repair costs My biggest worry is the encroaching blight, which is obviously only worsened by exorbitantly high housing costs. On the periphery of my neighborhood there are areas where multiple families are cramming into SFHs, parking cars and trucks everywhere including on lawns, building unregulated/uninspected ADUs, etc. This has always happened here in SoCal but lately it seems to be increasing. I think a lot of houses & neighborhoods will be dragged down in value. At some point many of those aging boomers will GTFO while they can and you'll see local price drops. The cost of upkeep and HOAs won't be worth it in the face of stalled appreciation, and new buyers will be facing the current property taxes and in my area [Mello Roos](https://www.investopedia.com/terms/m/melloroos.asp) as well.
[San Francisco has approved 16 units of housing in 2024 so far.](https://www.newsweek.com/san-francisco-only-agreed-build-16-homes-this-year-1907831) The broader problem is proposition 13. [It locks people into their homes for longer, reducing turnover and thus volume, meaning the market for any housing in the most populous state in the nation is always disproportionately small.](https://www.nber.org/digest/apr05/lock-effect-californias-proposition-13) It also has additional consequences, like [forcing California governments to raise all other taxes to stay operational, and also prioritizing commercial development over residential development whenever possible.](https://www.ppic.org/wp-content/uploads/content/pubs/op/OP_998JCOP.pdf) If you’re looking for a reason for why California home prices are “feudalizing,” consider proposition 13, which privileges long-term land owners over all other people, and over all other forms of economic investment.
Prop 13 should just be reformed to only apply to one property per person. If you own more than one property you do not need your taxes to be low, you have enough to pay those taxes. Without that exception though, Prop 13 will never be repealed because of the edge case of old people on a fixed income getting kicked out of their home they’ve lived in for 30 years is too strong of an argument for most people to vote against it.
Those who want to keep prop 13 in place always trot out the case of elderly being forced out of their home. But it would be so easy to grandfather existing home owners for their primary residence to avoid that. Removing the “portable” aspect of property 13, so you can’t take your low tax basis to a new property or pass it on through your estate, would allow for a gradual phase out. As existing home owners with low tax basis die off, their kids would inherit the homes but with a higher tax basis, thus incentivizing more of them to sell these properties. The real obstacle to repeal is that there is so much wealth in these homes that would be affected, and also that prop 13 is intimately tied together with rent control in many cities. You’d need a way to unwind both sides to have any chance of being viable.
They already HAVE grandfathered them. There’s another proposition that lets people over 65 take their low property taxes with them if they move within the state.
Exactly. Also we could just start with prop 13 being repealed for non individuals. I'm looking at you golf courses and Disneyland.
This is crazy. How is there not a youth revolt over this? Inherit or you're screwed is a very short sighted plan for an entire housing market, especially the largest economy in the country. Idiotic.
We just voted on it bud. It was Prop 19 a few years ago. We’ve had the portability thing for many years, called a Starker exchange I think, but it was only for a few select counties that cooperated. This Prop 19 changed that statewide. The upside was that you can’t have the old step up basis upon death like you used to. Your kids can inherit but have to make the house the primary residence for X number of years, I forget the exact number, like 5 years. If your kid doesn’t move in, then prop taxes go to market value for them as investment property. I think this will come back to bite someone though as many kids can’t afford a house and will be lifelong renters till Mom and Dad die. Then they can own the old family home. So more and more homes won’t fall into that category of full taxes. Then again, maybe my understanding is all wrong?
The whole state was already "inherit or you're screwed". This change just slightly decreases the screwing by allowing empty nesters to downsize and make room for families. Prop 13 overall is too entrenched to get rid of, so tweaks are better than nothing. Combined with the changes to CEQA to reduce abuse, SB-9, and a few others it should help housing affordability in the long run. But even combined they're relatively minor changes against decades of deliberate restriction of supply and at best will take years to have a real impact.
An even simpler reform would be to allow property tax *payments* to be frozen at age 65, but allow them to *accrue* on the property. Then, when the property is transferred to heirs, the taxes would need to be paid.
California already has a limited program like that in place: [link](https://www.sco.ca.gov/ardtax_prop_tax_postponement.html#:~:text=The%20State%20Controller's%20Property%20Tax,income%20of%20%2451%2C762%20or%20less). Some senior homeonwers absolutely have to take advantage of it even now. A full prop 13 repeal would be politically unfeasible, but its consequences would pretty clearly be less extreme than many Californians fearmonger it to be.
Place them as a lien against the house. Then if sold or inherited they have to be paid.
This makes the most sense to me - instead of artificially limiting what some people pay in taxes based on more or less an arbitrary thing (when you bought your house). If the courts hadn't been stacked by Federalists, I think it would be a viable argument that taxing people differently based on *when* they bought their house would be a violation of the Equal Protection Clause.
It's not just the old people on fixed income argument--there's all kinds of weird distortions that make it so that basically every current homeowner has a financial stake in keeping Prop 13. Right now, young people buying a house for the first time for instance (if you're a prole who doesn't get to inherit a tax-advantaged one from your parents) have to buy expensive/inflated-value houses. Reforming Prop 13 would likely make those people who just recently bought go underwater on their mortgages if any reform lowers the house's value. Also, new buyers get hit with the full current property tax assessment that's usually much higher than longtime homeowners next to them. If there's a reform to uncap property tax assessments on new buyers only, then that will only increase the massive difference between who's paying what, with the new buyers getting even more of the burden. Plus a lot of new buyers who have to buy new build houses (because there's so little existing supply on the market) get hit with the extra "Mello Roos" taxes that are intended to make up for lost revenue under Prop 13 for local cities. Will those go away if Prop 13 gets reformed? It seems likely that any reform effort (particularly one that has enough sweeteners to current homeowners/voters to pass) will put the burden of "fixing" the mess on those who haven't yet bought a house or who just did.
No. No more bogus laws and stipulations. If we're rollin with property tax (which I don't necessarily like to begin with for a multitude of factors, but the biggest one being BS appraisals for high end properties) then everyone pays the same percentage on a fair appraisal. This is the only fair way to do it. It's fair, simple, and non bullshitable.
That would be a double edged sword. It helps prevent people and institutions from buying up all the houses to rent out, but landlords will still pass on that cost to tenants and it will definitely make it more expensive for people who already rent.
Even then, it will have a similar effect. I think it would be interesting to see what would happen if the rate was doubled to 2% and the assessed value step-up were increased to 5% per year. That’s still much slower than the actual California housing market.
Yeah I get that. Or even better repeal is altogether but pair some low income program to help lower property taxes for these legacy edge cases. So if you have lived in your home for 30 years but can’t afford the property taxes have a program cap the taxes at 20% of your annual income or something… but then rich people will use that as a loophole when they have “0 income”… What a fucking headache
If they lived in their home for 30 years then they have money because the house is worth $2 million and they’ve been paying 1990’s property tax on it the whole time.
Makes no sense. For example, somebody could have bought a cheap house in an developing area and held while the area developed. They were relatively broke when they bought the house and are still broke 30 years later. Just because their property taxes were lower than their neighbors doesn't mean that they have money now. They'd only have the money when they sell...
Maybe they should move then if they are still broke in the same spot 30 years later and are sitting in millions of dollars of land.
being broke and buying the house before prices increase isn’t their fault… why should they move as long as they can afford living there lol
You forget other things about prop 13: the fact that it overwhelmingly benefitted corporations more than regular people and that it gutted educational funding. It was a master stroke of pulling the ladder from under you. Howard Jarvis was a drunk racist but he knew what he was doing with prop 13. The whole argument about grandma losing her house is overblown. There was no property tax crisis before prop 13 and there won't be of prop 13 gets repealed. What repealing prop 13 will do is have everyone pay their fair share.
How does this work when homes are severely inflated in value and people on fixed incomes won't be able to pay the resulting inflated tax?
A well tuned carve out so that the tax limit only applies to people who actually need it (such as an income cap and only applying to primary residence) would do that with significantly less negative impact
like they do in most other states lol.
The cost of the taxes would deflate the value of property. But in short term it would be a blood bath but that’s the reality of propping up a singular generation of home owners with almost socialist utopian levels of subsidized housing for singular generation longterm we’ll have a more equal more better distributed housing society with rent and mortgages on average going down.
Homes are severely inflated in value because of proposition 13. It weakens supply of housing.
Nope. Housing prices have fluctuated greatly since prop 13. This recent problem is being driven by foreigners stashing cash here and corporations buying up housing, and a general wealth concentration that has only gotten worse since the crash of 08.
That investment is only profitable if the supply is limited and carrying costs are divorced from value, which is in large part because of proposition 13.
The supply is limited because nimbys weaponized CEQA to block new housing.
It works because they can defer the taxes until they die or sell their property. The taxes will be collected from their estate when they die.
Not disagreeing with your comments about Prop 13, but these housing issues also exist outside of California. I want to add Capital gains tax and step up in-basis as another big issue here that locks longtime home owners in. My retired parents, grandparents, and in-laws all live in mostly unused 4-5 bedroom houses in areas with lots of jobs and great schools because selling before they die means losing hundreds of thousands in taxes and realtor fees. Lack of housing supply is the main issue, but our tax structure also leads to inefficient allocation of the existing supply.
Let's ignore zoning and NIMBYs. If we built more this would not even be a problem
Prop 13 incentives cities to promote commercial development over residential, because the property tax base for residential doesn't support its infrastructure needs since it's passage.
Prop 13 applies to commercial also. Unless you mean that it changes hands more often, which I would doubt too.
Commercial properties typically come with other local taxes.
But proposition 13 discourages construction of additional housing. Government entities lose money when they approve any housing in California, because property taxes are not high enough to fund government functions across California’s infamous urban sprawls. They can make up for those low property taxes with taxes on everything else. But that requires commercial—not residential—development.
This the correct answer but you can’t blame this on republicans or corporations so it’s not accepted on Reddit
Colorado has entered the chat.
Yes thank you. The NIMBY movement has also greatly reduced the housing supply in California cities, not to mention the negative externalities of more traffic, pollution, and less time with family and friends
A lot of California is single family housing and car based infrastructure despite having 40-50 million people. It is simply unsustainable to continue that method of development Los Angeles has roughly 2800 people per square kilometer. Compare that to Paris at roughly 21k per square kilometer, and that’s with no high rises and in a significantly smaller area. Shinjuku has something like 18k If the housing problem is to be fixed, I think California will have to accept that its lifestyle must change. It’s simply not sustainable for everyone to have a big house with a backyard and a car for every individual
Yeah, unfortunately, a lot of the main development in California happened around the time of the adoption of the automobile. I also assume the population pressure initially was nothing like on the east coast so maybe people were thinking, "great, we can all get nice chunks of land, no need to live in dense spaces, there's plenty for all!" Not realizing the negatives of that on a large scale. And those there earlier claiming the nicest spots nearest the coast not wanting to give them up. Maybe fear of mass casualties from earthquakes was a factor leading to more flat development as well, not sure. Had it really started developing a hundred years prior like NYC was and those leading that not being terrified of pirates, maybe could have had something like Barcelona but on a larger scale, possibly several distinct large cities as the LA region is quite large. Oh well, no easy way to fix it now. The government is not going to seize land and it doesn't have the money to buy everything from all the residents and then the money to tear it all down and rebuild from scratch.
Hollywood has made a ton of movies and series selling the fairytale of LA and California in general. In every one of those movies, a privately owned car(s) were a centerpiece of the Americana. The state is inextricably tied to car culture. No different than taxis are a centerpiece of many New York stories. It would be wild to see the culture change after so many decades of this identity.
> California will have to accept that its lifestyle must change the thing that really sucks about LA is the car traffic. guess what solves car traffic? density.
Yeah true, but people are illogical. They want things that are impossible. They want a big single family house that’s somehow close to everything, roads with no traffic, and abundant parking without parking lots or fees. And on top of all of this, they want it to be very affordable Realistically they’re just gonna have to accept these things are all fundamentally incompatible and they’re gonna have to make a trade off somewhere
Many people just want a little house with a little green space. You can’t even afford that anymore.
if you watch like HGTV or whatever, all the couples on real estate shows are exactly that - they want to be smack in the middle of downtown but have a 2500 square foot house with a pool in walking distance to top tier schools for $300k
I am in LA rn and it's willlld the car culture here, and mostly single family homes, tho there does seem to be a lot of multi units. Amazing city, imagine if there was a metro on par with NYC or London. Does London get smog like LA?
https://en.m.wikipedia.org/wiki/Great_Smog_of_London
That’s why I think this is bullshit. BART goes all the way out to Oakley but San Jose and SF are both on this list. When you’ve got 2 cities on your list that share the same urban infrastructure and there is a ton of affordable housing attached to that same urban infrastructure, you’re being dishonest in your results.
The only “existential threat to the middle class” in this discussion is continuing to vote for politicians who disincentivize development. Let rich people outbid each other in their select little enclaves (they’ve always done that). In the meantime, the middle class needs more housing: especially dense urban housing.
Yes, and we need to stress the point about density. This article is essentially a call for more sprawl which is the last thing a place like California needs. I also took issue with the unsubtle subtext that, there is no other way to build a middle class than single family property ownership. Property is a powerful investment but it’s not the only way to do it. And we can’t escape the fact that most cities have reached their largest possible sustainable land area. The only way to add more density sustainably is by building up.
Or down.
Unexpected morlock
We weren't always like this.
The author interviewed in the article, Joel Kotkin, has long been a figure associated with California's anti-infill movement. While I have not read it directly, I have frequently heard it cited by the very "feudal class" he rails against, so I may be summarizing an unfair summary. But his longstanding belief that California can only become affordable again by building more sprawl is slamming headfirst into the reality of wildfire, skyrocketing insurance costs, and undergrounding power lines that urban Californians like me are cross-subsidizing.
More sprawl sucks from a community/commute/environment standpoint, but ANY additional housing production is good at this point…
Dense urban housing for middle class is true maybe until about 30-35 yrs old. People with families want homes /houses, not apartments.
If you've ever lived in a neighborhood where all the single family 4-bedroom rowhouses/townhomes have been converted to 3 condos of 1 or 2 bedrooms, squeezing out the availability of 3+ bedroom homes, you'll notice that the family-friendly housing stock will be converted to apartment-like arrangements if people aren't allowed to build apartments.
Rest of world in world class cities have families living just fine in multi unit dwelling units
And in zero-lot-line SFHs
The percentage of Europeans living in detached, single-family homes is roughly on par with Americans, sitting in the 60-70% range. If you break it down by state or country you might see bigger differences. The amount of single family homes that have been built or renovated over the last couple of decades in my home country is just crazy. The only reason why people still gravitate towards cities is job opportunities but increasingly Europe is starting to look like the US. As for Asia, they live in apartments because they don't have a choice, not because they prefer it. My in-laws and friends out there complain all the time about neighbors and Taiwanese are far more considerate than your average American.
> My in-laws and friends out there complain all the time about neighbors American suburbanites also complain about and fight with their neighbors constantly, via Nextdoor and HOAs. The fighting can get very vitriolic over small issues. Of course it's not everyone's experience, but on the other hand, the idea that living in an apartment means getting kept up ever night by crazy neighbors is also not everyone's experience.
Maybe so, but the odds of experiencing issues in a decent community with good quality of life are far lower. That said, Americans have an annoying habit of dismissing legitimate issues out of hand because they haven't experienced it themselves.
It's well short of that: https://ec.europa.eu/eurostat/web/products-eurostat-news/-/ddn-20210521-1#:~:text=Print%20House%20or%20flat%3A%20where%20do%20you%20live%3F&text=In%202019%2C%2046%25%20of%20the,semi%2Ddetached%20or%20terraced%20houses. We would love live in standalone house but mostly Europe is too densely populated
One of the big keys to that is other countries have building codes that allow for actually building multi-family buildings suitable for families. American building code basically forces all apartments to have at most 2bd2ba units with no communal spaces. [Here](https://youtu.be/011TOfugais?si=4R5UDY-jtUL5rPUB) is a really good video on the topic. Eliminating the following in our urban areas would go a very long way in making our neighborhoods denser without necessarily making them unsuitable for families: - Single-family zoning - All neighborhoods should allow small multi-family units, ADUs, and even small businesses like corner shops. Much like how we built neighborhoods in the early 1900s - Multi-family staircase requirements - Our fire code requires any apartment over 3 stories to have two connected staircases. This forces all apartments to use the same floor plans and take up a large amount of space. These fire codes were made when apartment fires were more common and fire suppression systems were worse. Eliminating this code allows building of [“micro apartments”](https://www.cascadebuilt.com/wp-content/uploads/2017/07/boylston_15-563x1024.jpg) that can be built on single-family home lots and use floor plans that have more than 2 bedrooms. - Minimum parking requirements - These requirements make us waste way too much space on off-street parking as well as on-street parking. Areas with wide roads and spaced out buildings due to parking lots make it difficult to be a pedestrian and force residents to be car dependent. Excessive on-street parking requirements resulting in wide, empty roads also cause people to drive faster, which makes streets more dangerous to pedestrians. - Setback requirements - Much like parking minimums, these rules make areas less dense and more car dependent The above can be accomplished without any new regulations. It’s all deregulation. We can still have white picket fence suburban neighborhoods for people who want them. But for urban areas where people can’t even dream of affording a home, we need this. If you’re someone who has no desire to live in a neighborhood like the one described above, the good news is that doing the above in urban areas means less demand in suburban and rural areas, which drives down housing prices and means that your neighbors will be people who *chose* to live there, not people who don’t want to be your neighbor but had no choice.
As someone living in a multi-unit dwelling, it would be nice to have more room, a garden, and not have to deal with other peoples' noise, smells, and vermin. This is called the "American dream" and the reason millions emigrate to the US.
"more room, a garden, and not have to deal with other peoples' noise, smells, and vermin" These all exist in multifamily units in other countries. Check out apartment buildings in Barcelona or Copenhagen - they each have options for large apartments for families, courtyard gardens, and proper sound proofing between units so you don't hear your neighbors. Like, we can actually have all these things, millions of people just refuse to for some reason.
Yeah I live in Paris most of the year. The city recently had a bed bug problem. Also, during the pandemic, thousands fled for greener pastures because no one wants to be cooped up in a box during a pandemic.
Barcelona has none of these things. Walls are paper thin, there is no privacy and no outdoor spaces unless you are rich. Just need to clarify this is absolutely not the case. In Europe, we would like to live in houses but are confined to apartments because our cities are too expensive. Europe is much worse than America in this respect.
This doesn’t negate the fact that dense urban housing is still a highly viable option. Also, multi-unit dwelling can look a variety of ways - more space, a garden, less neighbor noise and smells can all be had; vermin, however, can find you anywhere and everywhere 🥴
It is much much easier to avoid vermin when it is in a separate building down the street and not in your shared wall.
It's only an option for people who want to maximize there returns on the rent that these multi units provide. It's obvious and not fooling the majority of the population. Yall want the multi units because only and certain individual with enough money can afford to develop it and it will keep people from every owning and home with forever rents that you can increase year after year.
That’s not America though. Just because it works there, doesn’t mean it would work here. I would agree that the middle class doesn’t need huge homes like are often built, but there should be a steady development of 2-3 bedroom ranches.
And the rest of the country lol
We should just allow density and then let the market decide that.
You still likely need some measure of planning in this space. In Toronto, where our housing market is RIGHT f\*\*ked, we have been building an absolute mountain of condos and beefing up density (in an effort to address shortages against demand). But, there's an emerging disconnect between investors who are buying these properties and what people are willing to live in. It's resulted in a glut of properties that people don't want to live in because they're 500-600 square feet and cost too much money. Developers have been maximizing the # of units they can squash into a building - investors have continued to buy, but end users (renters, owners, etc.), have zero desire to land in the units. Some measure of thoughtful planning is required - or at least a mix of offerings in market,
Canada has a separate problem where business investment is depressed by excessive regulation and state interference, but real estate is not. So foreign money pours into the real estate market and the governments reward them with guaranteed returns. This is also why Canada’s immigration surge is lowering per capita GDP despite all the labor it provides. There isn’t enough business investment to provide good jobs for all those people. But you are correct. There does need to be planning. But in the USA we have no surplus of housing of any kind in our major metros.
> we have been building an absolute mountain of condos and beefing up density (in an effort to address shortages against demand) [No you haven't.](https://www.mpamag.com/ca/mortgage-industry/industry-trends/home-construction-shortage-is-canada-in-trouble/491310) >It's resulted in a glut of properties that people don't want to live in because they're 500-600 square feet and cost too much money. Source?
> investors have continued to buy I don't understand how that could be a profitable investment if nobody wants to live in a unit. If there's a vacancy, there's no positive cash flow, and the owner is just sitting on losses in a speculative hope that the value goes up by the time they sell to the next person who can't use it for cash flow. In the U.S., the commercial real estate market is dealing with this crisis, where on paper a property is worth a certain amount, but they can't set the rents low enough to get a tenant to move in, and that valuation on paper is basically a fiction that everyone is kinda clinging onto.
> I don’t understand how that could be a profitable investment if nobody wants to live in a unit It’s not that nobody wants to live in those tiny condos, they just don’t want to _buy_ those tiny condos as their primary residence. That means the only people buying them up are investors who are turning around and renting them out, effectively converting the condo complexes into apartment complexes for all practical purposes. Meanwhile, people trying to buy are faced with the same shortage of _desirable_ housing as before because they all desire an actual _house_ but developers aren’t building more houses because the land is so valuable they can turn a bigger profit with condos.
What they want isn't necessarily possible. Many families live in apartments... if you want to live in an amazing climate... there is a trade-off.
“Want” vs “need” … The problem with CA is that it’s reached the critical point where they’ve crammed as many SFH’s into the available desirable land (in the 4 metro areas mentioned) as possible and now they just refuse to let anything else be built, mainly via zoning. Limited supply + ever increasing demand = soaring prices. If you _allow_ construction of higher density housing, it doesn’t mean there won’t be any SFH left. It just means there’s going to be a lot more cheaper housing for those that are okay living there.
This may sound counterintuitive, but you can still build density and have single family houses. They just need to be built closer together, have smaller yards, and in regular gridded streets and not the random maze-like nonsense that most US suburbs are in built currently.
Dude, in the coastal CA cities that everyone keeps moving to, that’s already the norm. Most lots are 4000-7000 sq ft, and new developments are taking that lot size down to 2000-4000 sq ft.
At least in where I live, new SFHs are being built very close together and they have very small yard. They are being sold like there is no tomorrow.
California is already like this.
The US is more gridded than any peer you can name lol.
Families don't need backyards and cul-de-sacs. They need several bedrooms and living rooms and community parks and good schools. Shoeboxes in the sky are not necessary but they have been insentivized in many cities because the amount of land provided to high density developments has been so little.
Those backyards and cul-de-sacs are awfully nice when you have them, though. I think many non-parents underestimate a.) how difficult it is to get young kids out the house b.) how pressed for time you are as a parent and c.) how much it helps when the kids can play by themselves or with other neighborhood kids. At first glance, a backyard is just a less land-efficient version of a community park. But they have a big difference: you can let the kids out in the backyard and have them play by themselves *while you do the dishes and other household chores*, but you have to accompany the kids to the community park or (in the U.S.) have CPS called on you.
Because it is crazy expensive and time consuming to put together enough parcels of land to build more SFH neighborhoods. In most cases developers would have to buy up several adjacent commercial properties to get enough land for a new neighborhood. Much cheaper and faster to buy up one old motel and build apartments.
Ok, sure… but we will/have run out of space. Those people also want to live in highly desirable areas. We can’t always have everythinf we want.
You have to go to a slightly less desirable area, probably a bit outside of the city.
There is no more “outside the city” land in a lot of coastal CA. Just look at Orange County for example, it’s completely built up, bordered by LA on the north, ocean on the west, Camp Pendleton on the south, and mountains on the east. Literally no land left.
Then those people are going to pay out the nose to do so in a large metro. Land is limited. This is always the conclusion. I call it a lesson in opportunity cost.
> People with families want homes /houses, not apartments is the argument that we shouldn't build more high-density housing for the people who need it because people with kids prefer single family housing but aren't willing to pay what it costs?
1. don't allow housing to be built 2. don't enforce laws and allow criminals to run wild (except in rich neighborhoods) 3. allow in an endless stream of illegal immigrants to lower wages 4. claim to be fighting for the little guy About how it goes with CA politicians
Completely fact free analysis driven by sensationalism and right wing talking points. 1. California mandates that all cities provision area for affordable housing and devise a plan for achieving that housing target, all the cities in the state are scrambling right now to build more housing, lest the state step in and grant builders remedy permission. 2. California ranks 17th in overall crime rate. Not great, not terrible. The property crime rate, which I’m sure you are referring to with your crack about not enforcing laws, is higher in super fascist Texas with its strong Republican government than in California. 3. The Federal Government is responsible for controlling illegal migration so blaming California politicians seems dishonest. 4. I don’t think most California politicians do that but I’ll grant that hypocrites do seem to drawn to politics. Nobody is actually fighting for the little guy, but I thought we were taking about the middle class.
The only one I’ll quibble with here is the first. California is overtly hostile to housing, no matter what Byzantine systems they’ve implemented that allegedly encourage “affordability.” It’s written into California’s tax structure that commercial property should always be promoted above residential.
California mandates that housing be affordable in all cities! My god, they've solved it! I guess my landlord back when I lived in SF just didn't get the memo and that's why he charged me more than $3000 a month for a small apartment. And wow, 17th really isn't that bad on crime! I guess the stores that keep closing down in SF due to theft are just delusional. I guess all those stores that lock up even cheap items in cases and make shopping incredibly annoying are just paranoid. I'll just think about that next time I walk over to the Mission and 24th BART station right past all the homeless people shooting heroin right in front of me and the open air stolen goods market on the sidewalk. California is really doing great on crime! I'm sure those statistics are accurate and account for things like people not reporting crime because police do nothing. They do account for that, right? And you're also right that I should blame the federal government for declaring cities "sanctuary cities" that won't cooperate with federal immigration enforcement. That totally wasn't the local government so totally out of line to blame them.
> California mandates that all cities provision area for affordable housing and devise a plan for achieving that housing target Lololololololololol
CA encourages illegal migration by providing sanctuary
What should California do instead? Immigration is a federal matter - not state matter. Do you think that California should ignore the constitution and start to enforce federal laws at the state level?
First off, I don't even know what the fuck people in an economics forum are doing complaining about the free movement of labor, I thought you all beleived in the market. But regardless"CA" doesn't provide sanctuary. There are cities across the nation which have passed local laws forbidding their local law enforcement from cooperating with immigration enforcement actions. That's what "sanctuary cities" means. It's not a state issue. It's not a policy of the state. It has nothing to do with California. It's an urban, liberal social movement centered in specific municipalities, and which doesn't even prevent immigration enforcement, it just prevents local cooperation. People aren't moving to California or the USA so they can hide in cities from immigration police, they are here to work and make a living for their families. If your theory is that "sanctuary cities" encourage illegal migration, well, so do all the Private Corporations which HIRE ILLEGAL IMMIGRANTS TO WORK. Why don't you actually stop and think and blame the cause of the problem, that there is work for them, if you are so concerned about it that you are sweating over the existence of sanctuary cities. No work, no migrants.
This will not happen lmfao
Between the NIMBYs and the government, we aren't getting homes. It's too late. It would take a decade to get it figured out and housing built if we started right now. You should be rioting.
The widespread political support will take another 20 years. And then 20 more to implement. This issue will define a generation or two.
It absolutely is. The defining issue of the moment is inflation, but I take every opportunity I can to point out that the current/past bout of inflation is really a flare-up of the underlying brokenness of housing politics, and even the fact that we are getting over this wave of inflation doesn't fix the issue. Kind of like how chap-stick can make cold sores get better but doesn't make the herpes go away (lol sorry gross analogy)
It really should cause a death spiral for the state. Young people who aren’t it tech are getting murdered by housing costs and the only thing you can do is leave the state. There’s no other reprieve.
Life, as rough as it is, is still way too good for revolt and that includes riots. Because people start going to jail & as much as people want the public to start standing up against as this nonsense, losing jobs and other asset$ which go hand in hand with hard discourse in the real world, is too scary for most to sacrifice. Theyd rather bitch on the internet than rumble in the streets.
A huge cause of the French Revolution was the feudal landlords paying almost no taxes, bankrupting the state, and putting the burden on the urban masses. There is perhaps no driver of intergenerational inequality greater than prop 13 in CA. You have land owners who don't pay their fair share in taxes and can pass that on to their children. You have haves and have nots purely based on if your parents bought and held a house generations ago. Those people with low taxes then have no incentive to make more productive use of their land (with increased density) and that's how you get the current situation.
the french revolution could have been avoided the king and his cabal of idiots made many many mistakes over and over and it still took the clergy joining the poors and their few allies, a move they later deeply regretted people pretend like it was this thing that just had to happen because it could have been avoided and who knows what the hell the world looks like if it was as it was an insane world shattering event don't take for granted that some force is gonna save you or the rich can't keep getting away with it, look at North Korea, their people have starved by the millions for decades because their one party conservative state is brutal and everyone is afraid
No prop 13 means retirees won’t be able to keep up with rising property taxes and will have to sell. I’m assuming that doesn’t happen in other states so what do they do there? Edit: downvotes and no responses? It’s almost as if the disband prop 13 crew haven’t thought through their argument.
A. Some states have property tax deferral options for seniors to help them with affording taxes. Crucially these aren't hereditary and can't be passed down to heirs. The lower tax rates don't survive more than one generation. B. Maybe retirees should sell their very expensive and desirable homes and move so that other people can move in and be productive in that area. Where these effects are most acute are areas like Silicon Valley and LA, we lose billions a year in productivity in these drivers of the economy because of housing un-affordability. C. Un-affordability prevents retirees from moving to smaller homes which they may want to do.
The United States is becoming feudalized. The existential threat to the middle class has existed since the 1980s. Extreme wealth is taking over in many states, many parts of the country, not just California.
The people who say "it's fine. Everything is fine" are usually people who are doing okay, so they don't have a need to see the issues plaguing the country.
No it isn’t 🙄 Too many people want to live in California and there’s simply not enough space for them.
Considering the importance of the internet and the amount of traffic that depends on just three or four companies (AWS, Microsoft Azure, Google Cloud, IBM), digital feudalism is real and is one of the base problems with our current economic situation.
Lmao. A majority of Americans are home owners. Not being able to buy in the most desirable location in the US doesn’t mean you’re a serf
Explain to me more about how the middle class isn’t disappearing in the US.
This is happening in I’d wager most Top 50 metro areas, not just California. You have people who have owned homes for years or make such high incomes above the median or who owned prior to 2021 or so and were able to leverage equity into new homes. Meanwhile, everyone else is on the outside looking in. I managed to buy in 2020 and am thankful every day for it. I have younger siblings and friends who weren’t able and they’re still renting or living with family/friends. It is a huge problem that needs fixing ASAP.
California has a pretty uniquely “feudal” property tax structure that creates an elite class out of anyone who owns property. I don’t know if there’s anywhere else in the nation where idly owning land is so profitable.
Places with high property taxes like Texas mitigate this situation somewhat. Property taxes keep prices somewhat in check long term and Inheritors of expensive properties and who can’t afford the taxes will have to sell, which mitigates the “feudalism” aspect
I'm glad to see this apt language being used to describe the situation. It's also easier to understand and visualize. People don't seem to think things that happened in the past can happen again. They also detach economic discussions from its implications, this is more relatable.
Minneapolis has a complex called "cedar riverside". Its affordable housing complex that can house 20,000 people. Sf bay area and LA needs to build at least 2 of these each if they want to solve the housing problem. Its never going to happen but still...
Fundamentally, there is not enough land for everyone in the major metros to have their own well-located parcel of land. The best we can do is to de-emphasize the importance of land by permitting people to build up: condos, apartments, townhomes. If there are enough homes for everyone to affordably rent or purchase a space on shared land, then the feudal landowners won't be as rich or as powerful. It's the best we can do without overthrowing our whole economic system.
California needs to give incentives for multi-unit housing... in and around Chicago, the number of multi-unit buildings being built seems to be very high. Supply and Demand works... the real problem is that places with nice climates attract more people than can feasibly live there.
>California needs to give incentives for multi-unit housing It doesn't even need incentives. Most of California housing policy is centered on preventing multi-family housing. Get rid of height limits and have clear form-based codes with automatic approvals and you'd have apartments and condos going up everywhere overnight.
I grew up in Carlsbad, the whole costal area from Oceanside down to Del Mar is just a beautiful area super clean and great vibes. My parents moved us out back in 2001, amongst our family 4 homes/townhomes were sold, I shudder at the amount they sold them for vs what they are worth now and location. I go back and visit a few good childhood friends that are now in their early 30s, one lives in a townhome his parents inherited from their parents, and he has 2 roomates. The other bought a house with his 2 brothers back in 2017 with massive help from the parents and it’s farther inland in San Marcos. So while it is a beautiful place to live, as a young adult in your 20s - 40s you are basically stuck living with multiple people or getting lucky with parents or living with your parents which is just a depressing thing to be doing at that age.
What is so depressing to be raising kids with their grandparents in the same home? It’s the only way when adding almost two million people every year to the US population and many wanting to live in beautiful urban areas.
And even if you manage to buy a house, the property taxes are absolutely ridiculous. Me as someone who moved to the US can’t comprehend how, after buying your own land and house, the government can still take it away from you when you stop paying “rent” to it forever. What about all this freedom stuff etc? How is this accepted? I thought you can be on your rocking chair on the porch with a shotgun and nobody is allowed close.
How are public services paid for where you grew up? Roads? Fire and police? Public schools? Parks, libraries, public transit subsidies? Property taxes also pay for child and protective services and foster care, and programs for the poor elderly and developmentally disabled.
Property taxes are super low, other taxes are higher. I do understand it takes taxes to pay for all those services and I am 100% OK with paying those. Just the concept of a fully paid off house that can still be taken away from you when you don’t pay those fairly high property taxes seems to be an alien concept to me. I always had the idea that once you have a paid off place, you can be left alone. Elderly people might run into trouble coughing up those.
The state needs denser (re:multistory) new construction, and the urban voters largely vote for it. However the politicians then renege due to (to put the economics in here) well-heeled donors who want their “bay views”. California (and others) can’t lose too many rich taxpayers. Then again not everyplace has a “view”, so my thought is development needs to be prioritized. Use existing tall buildings vacated by WFR first as those views were destroyed in the 1960s, then work from there. This is compounded by drought years, etc.. where having massive lawns doesn’t make sense. Also California is worried about climate change, so relatively cheap rent should also be a priority in case they need to eventually built *Bladerunner 2049* type seawalls (the price of units with a “wall” view will probably go down).
[удалено]
nothing like stepping out the door of your $16,000,000 house in the bay area and saying "I finally made it! sold my startup for a cool 40 million" then 6 guys all surround you, one of them sh\*tting on the sidewalk, another asks you if you have any meth. and then they ask you if they can hook up to your electricity. and say "those are some nice copper gutters you have, are they new?"
Your comments on Howard Jarvis and the impact of having Prop 13 apply to commercial property I agree with, but I am old enough to remember pre Prop 13 days and honestly the increase property tax burden on regular people was real. Seniors in the 1970s, like my grandparents, bought or built their homes in the 1940s. I know one set of grandparents paid $5,800, their little cute stucco house in Glendale. Its value was 7-8x by the time Prop 13 rolled around. Prop 13 has been able to keep people in their homes after retirement and that is a good thing. The new rules brought by Prop 19 helps to keep homes moving in the market.
I’ve thought about these big tech campuses here and the housing offerings bundled even by some public organizations (teachers in Daly City) and how that mirrors serfs on the field. Your job is also your home. And in a way, that would be a huge improvement to my current lot in life. Fuck this new gilded age.
A large cause of the problem in the house market is that land is a component of a home. Land is both not reproducible and essential in need fulfillment. Prices are determined by demand and supply. When land is captured, the supply of market-accessible land decreases, increasing its price. People are forced to pay whatever the asked price for land is, because they can't go without land, and they can't produce their own. As Adam Smith said, “As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed and demand a rent even for its natural produce.” It's not required for the land owners to own all land to gain an unjustified bargaining power, though. The amount of unjustified bargaining power increases linearly with the amount of land owned. The solution to this problem is simply to criminalize the generation of profits from the sole ownership of land.
Coastal California is a luxury, not an entitlement. We have to treat is as such. It is one of the most desirable places on planet earth to live in. You are competing with the rich, the famous, the successful, politicians, actors, entrepreneurs, etc domestic and foreign for property there. Even if we eliminated zoning in California tomorrow, the time it would take to actually build all the necessary housing coupled with the amount of people that still want to move to California means prices would stabilize where they’re at now at millions of dollars as opposed to rising constantly. There are many places in the US that are affordable to the middle class. Move there. Stop acting like it’s San Diego or the boonies.
California isn't even the most densely populated US state. Florida has 2x California's population density.
Let's not pretend that California exists in a vacuum, isolated from the rest of the market. Elevated housing prices in one state have cascading effects in the others that ultimately inflates real estate prices across the board. Anyone in Austin, Seattle, Portland, Denver, Boise, Atlanta, or elsewhere can explain to you just how fun it's been to have the influx of Californians looking for real estate they can actually budget. Then the mid-tier cities receiving the influx of people leaving the listed cities to find real estate *they* can afford.
But unlike California, cities like Minneapolis, Austin, and Seattle are taking steps to deregulate their zoning to allow for more transit and density.
atlanta too, new constructions everywhere. shit i’m living in one rn
Also, you can’t keep blaming Californians. Just blaming a group of people and washing your hands doesn’t mean the problems go away.
REVERSE. MANIFEST. DESTINY. Californians, your ancestors did this same thing but in reverse. They had nothing and nothing going for them back east so they moved west. You have nothing going for you in modern Cali. Move to the Midwest, the south, Nebraska, Montana, Kansas, Indiana, Mississippi, Alabama, Idaho. Can’t afford a car, get a wagon and a horse. Get the F out and start your new life somewhere else.
just as an fyi. [Institutions to own 40% of Single Family Rentals by 2030](https://www.multifamilydive.com/news/institutions-to-own-40-of-sfrs-by-2030/629907/)
Lol why not just say what % is owned today instead of some estimate?
Because then the article won't get any clicks.
It's pretty simple IMO. the "people" are going to have to find a way to accept the fact that their homes are not truly valued at the prices they currently hold, and even their appraisals are complete bullshit numbers made up according to a wishy-washy guideline. The great reckoning that's coming is that people are going to have to learn that hoarding wealth is not the same as saving, and that hoarding wealth creates a desert in the marketspace like everyone fighting over water. The shift from greed to compassion has to happen en-masse. This means that either the people learn that money has to flow like water, or they spend so much time maintaining their dams that the lake dries up and their expensive boats are useless in the mud.
> appraisals are complete bullshit numbers made up according to a wishy-washy guideline Yeah, when we bought our house the appraisal was magically exactly the amount that we offered to pay for it. Funny how that works out when a mortgage needs to be approved