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The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

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Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#51

Post by bufordsharkley »

hkmurakami wrote: post #3

It seems that we made a pact with the devil by positioning housing as an investment asset. By doing so, we've encouraged people to commit a very large fraction of their net worth into a rather illiquid asset, tying their financial fates to the future assessment of that asset. As a result, protecting the price and appreciation of this asset has come to overshadow the other crucial roles that housing plays in our socie…

The "technically correct" way to fix this would be to remove the investment potential of housing by taxing away land value (the grand old panacea of the Land Value Tax[0]).

I think this is a good idea, but it's a disruptive one, and one unlikely to happen soon. But in the meantime, we might as well fix the policy that's in direct contradiction to this ideal:

1) Repeal prop 13. Full stop.

2) Intervene with exclusionary zoning on a state level. Zoning is, after all, a state power that is entrusted to cities. (Jerry Brown is already doing good work in this department[1])

3) Implement split-level property taxes a la Pennsylvania. There's work that demonstrates that this partial LVT had real benefits for Pittsburgh when it was under effect: [2]

[0] https://en.wikipedia.org/wiki/Land_value_tax [1] http://www.latimes.com/politics/la-pol-sac-jerry-brown-housi... [2] https://www.lincolninst.edu/subcenters/property-valuation-an...

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#52

Post by lindenksv1 »

ScottBurson wrote: post #41
fhrui wrote: post #31

I found these whining hypocritical and snobbish. I can't afford a house in Palo Alto even if I work there. I don't complain about it just like I don't complain about not being able to purchase a luxury car. I don't expect the people who CAN afford these things to just lower the price and give them to me. Many cities near Palo Alto have houses at a reasonable price, East Palo Alto, East Menlo Park, Mountain View, Redw…

Your theory doesn't explain why she's moving to Santa Cruz -- the schools are nothing special there.

We're moving to Santa Cruz because we wanted to live in a walkable area. If you travel up and down the peninsula, any house near the walkable downtown area is going to be $2M+. Yeah, sure, you can buy for less and have to travel by car absolutely everywhere. But why spend $1.5 to live in a dead cul de sac when you can spend the same money to live in a lively walkable area near the beach? If you're going to hang an albatross around your neck, you better think it's awesome. We're sick of driving everywhere and we want our kids to be able to go bike around the neighborhood safely.

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#53

Post by hkmurakami »

StanislavPetrov wrote: post #26
hkmurakami wrote: post #3

It seems that we made a pact with the devil by positioning housing as an investment asset. By doing so, we've encouraged people to commit a very large fraction of their net worth into a rather illiquid asset, tying their financial fates to the future assessment of that asset. As a result, protecting the price and appreciation of this asset has come to overshadow the other crucial roles that housing plays in our socie…

>It seems that we made a pact with the devil by positioning housing as an investment asset. That was certainly a mistake, but the much larger mistake was made (and continues to be made) by the FED (and other central banks at the FED's insistence). FED efforts to prop up the housing and equities markets through QEinfinity, Operation Twist, the FOMC, and countless other FED mechanisms designed to prop up markets (and o…

Re:AAPL

There's a market for $AAPL shares at $100+. Some people are happy paying this price. Some people think this is too high.

There's similarly a market for Palo alto houses at $2.5m. Some people are happy paying this price. Some people think this is too high.

When someone comes along asking AAPL to sell them shares of $AAPL for $65 when there's a market for them at $100+, you as the holder of other analogous $AAPL shares won't be happy since such an occurrence will diminish the value or your investment.

When someone comes along asking a city for as additional housing stock at $X << $2.5m, you as the owner of an analogous investment asset will respond to the threat of your investment coming under siege. Non-investment aspects of housing's role in society will be greatly diminished in the homeowner's mind, when the home represents 20-50% of their net worth (given that their minds have been conditioned to treat housing as an investment asset).

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#54

Post by JoshTriplett »

vadym909 wrote: post #29

I'm surprised that none of the YCs startups have tried to solve this problem. People really want 'affordable housing' and YC's motto to its startups is to 'make something people want'- so what gives?

Housing prices depend on availability, and housing density is controlled by regulation. No amount of innovation can fix a zoning problem.

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#55

Post by lindenksv1 »

youngButEager wrote: post #39

The east coast of the USA was settled first, recall. What did they do back east to 'solve' this problem of "we're running out of space"? They increased the density of occupants per unit of land -- they built UPWARD. That will have to happen here too. It's already happened in LA. There will always be crybabies like this attorney during the growing pains of a popular 'destination city.' For now, think of turning the Pe…

There is no free market in housing. Supply is very tightly constrained by the city via a system of very stringent zoning (3 stories max most of the city, only 3% of the city is even zone for multifamily housing) and taxes. What you see happening in the Bay Area isn't the result of the laws of supply and demand, it's the result of the laws passed by city councils. There's no developer in the world who wouldn't love to build more housing in one of the most booming places in the country. They're not not doing it because it doesn't make financial sense or because there's no demand there. They're not doing it because the housing market in the Bay Area has been regulated to death.

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#56

Post by vadym909 »

toomuchtodo wrote: post #11
arkadiyt wrote: post #8

Earlier quoted context omitted.

"They can move elsewhere" is not a reason to not build more housing - it is reasonable (and desirable) for people to live in the city that they work in. If your argument is that they can pay 3,000 a month for the privilege of living 50 (!) miles away from work in Gilroy then that still doesn't do anything for the "teachers, police officers, and other working and middle class people" - you know, the people who actuall…

Or move the jobs out of ridiculously high COL areas? An area of land has a carrying capacity dictated by the will of the people who live there through their votes. Why fight it when you can simply move work elsewhere?

The weather man. You get to 'live' almost twice as many hours because of the weather. Add top companies, upcoming companies, jobs, schools, colleges, city stuff, nature stuff, Sports and you just can't beat it. After all you only live once.

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#57

Post by [deleted] »

vadym909 wrote: post #56
toomuchtodo wrote: post #11

Earlier quoted context omitted.

Or move the jobs out of ridiculously high COL areas? An area of land has a carrying capacity dictated by the will of the people who live there through their votes. Why fight it when you can simply move work elsewhere?

The weather man. You get to 'live' almost twice as many hours because of the weather. Add top companies, upcoming companies, jobs, schools, colleges, city stuff, nature stuff, Sports and you just can't beat it. After all you only live once.

[deleted]

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#58

Post by jhanschoo »

maerF0x0 wrote: post #13

Seems to be the same old story we've long known. Government interference in markets leads to distortions. Yet year after year we act surprised. And when it comes time to setting up a government, we vote for the person who promises to spend others' money on our pet project.

I'm tired of hearing the ideological position that government interference is absolutely bad. I live in a city-state where government housing and policies and strict zoning at once makes housing affordable for the middle and lower class insulated from fluctuating rents, and protects public spaces from overdevelopment in a land-scarce island.

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#59

Post by lindenksv1 »

toomuchtodo wrote: post #11
arkadiyt wrote: post #8

Earlier quoted context omitted.

"They can move elsewhere" is not a reason to not build more housing - it is reasonable (and desirable) for people to live in the city that they work in. If your argument is that they can pay 3,000 a month for the privilege of living 50 (!) miles away from work in Gilroy then that still doesn't do anything for the "teachers, police officers, and other working and middle class people" - you know, the people who actuall…

Or move the jobs out of ridiculously high COL areas? An area of land has a carrying capacity dictated by the will of the people who live there through their votes. Why fight it when you can simply move work elsewhere?

Industries are successful when they cluster. It's why you see entertainment in LA, insurance in Chicago, biotech in North Carolina, banks in NY, and think tanks and defense contractors in DC. As we move away from manufacturing and into a knowledge economy, being able to quickly exchange and improve on ideas with other people becomes more and more valuable. It's why the entire world is seeing a massive movement toward urbanization. We are not going to see high tech companies set up in places with few potential employees, no research universities, no investors, and no potential partners. It's simply not going to happen even if it looks like the easy way out. If you consider your own fortunes and you consider joining a young up and coming company that is risky because it has a high chance of failure, I think you'll find you are much more comfortable with that risk if your town has hundreds of other employers for you to go to afterwards, rather than just a small handful. The Internet does not and cannot replace the connections you form by accidentally meeting people at coffee shops or parties. Knowing and seeing people on the street in real life has more value and builds more trust than a text message. Do you think that calling your mom is the same thing as visiting her in person? Do you think you could be a good parent via Skype? Of course not. So why do you think that business relationships are any different?

Re: The Shame of Palo Alto: An Interview with Kate Downing on Affordable Housing

#60

Post by StanislavPetrov »

ScottBurson wrote: post #40
StanislavPetrov wrote: post #26

Earlier quoted context omitted.

>It seems that we made a pact with the devil by positioning housing as an investment asset. That was certainly a mistake, but the much larger mistake was made (and continues to be made) by the FED (and other central banks at the FED's insistence). FED efforts to prop up the housing and equities markets through QEinfinity, Operation Twist, the FOMC, and countless other FED mechanisms designed to prop up markets (and o…

> If not for FED chicanery, housing prices would fall precipitously to meet real demand. Maybe in some places, but I don't think that would happen in Silicon Valley. As the article says, the population of Palo Alto doubles during work days. A lot of those people would rather live there than commute from wherever. Silicon Valley is not a creation of the Fed.

Where do you think VC money comes from? Massive profits from bond, equity, and real estate profits courtesy of the FED. Cheap money borrowed at 0% thanks to the FED.

Some of us older people were around to see a very similar situation in the 90's (although not nearly as bad). Greenspan debuted ~0% interest rates and the Clintons fully embraced the Reaganomic/trickle-down philosophy (now called "wealth effect"). They opened the borders via NAFTA and deregulated Wall Street via Rubinomics. It all fell apart when the tech bubble burst in 2000. Instead of fixing the problem, Bush doubled down on the same broken policies, which led to the collapse of the late 2000's. Again, Obama and the FED doubled down, trying to fix the broken, cheap money policies with even more cheap money. Here we are 8 years later and markets have basically ceased to exist. Central banks own far more bonds and equities in many counties then private parties do, and they are only increasing their buying. Growth is non-existent even by the manipulated, mostly-worthless metrics employed by the central banks. The insane wealth of Silicon Valley is not only a creation of the FED, its a good barometer for how out of whack our economic system is.

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