How did an entire state price itself out for entry-level home buyers? • Hacker News Board

Re: How did an entire state price itself out for entry-level home buyers?

#31

Post by jvm » Fri, Oct 21, 2016, 7:23 PM UTC

aplomb wrote: post #9

Started out with an every-man appealing headline and quickly showed its stripes of being a developer funded prop 13 hit article - totally separate from the horror show environmental impact has turned into. The examples given are completely out of whack and strawmen. prop 13 allows for effective tax increase through reassessment of value, but that reassessment is capped so when the market goes crazy people aren't driv…

> that reassessment is capped so when the market goes crazy people aren't driven out of their homes

By definition, the people who would be "driven out" have seen their home values wildly appreciate and they have by that token become substantially wealthy. This is like saying that if someone is on food stamps but then becomes a millionaire, it's unfair to take away their foodstamps or raise their tax rate.

Re: How did an entire state price itself out for entry-level home buyers?

#32

Post by zeveb » Fri, Oct 21, 2016, 7:23 PM UTC

vadym909 wrote: post #5

The problem is when Californians start to move elsewhere, they raise prices in those cities too. e.g. Portland, Bend, Seattle.

Yup, and they tend to have the politics whose practical effects ended up driving them from California in the first place. I'd like to see an amendment to the Constitution which provided for internal immigration, such that there's a multi-year waiting period to become a state citizen after moving to a new state. The idea would be to give folks a period of time to acclimate & acculturate to their new state's politics. They would, of course, still be able to vote in their old states during that time period.

This might even be good for states that people move from: as their former residents retain voting rights for a period of time while acclimating to better states, they are likely to vote for better policies, to the betterment of those net-emmigrant states.

Re: How did an entire state price itself out for entry-level home buyers?

#33

Post by ThrustVectoring » Fri, Oct 21, 2016, 7:24 PM UTC

landryraccoon wrote: post #15

aplomb wrote: post #9

Started out with an every-man appealing headline and quickly showed its stripes of being a developer funded prop 13 hit article - totally separate from the horror show environmental impact has turned into. The examples given are completely out of whack and strawmen. prop 13 allows for effective tax increase through reassessment of value, but that reassessment is capped so when the market goes crazy people aren't driv…

Prop 13 creates an incentive for homeowners to oppose development, since their housing values will rise with no drawback on property taxes. It also means that the government is forced to raise sales and income taxes in order to raise revenue. It is harmful for society to have high housing prices which falls especially on younger workers and workers moving into an area, in order to benefit a small number of incumbents…

The bigger issue, IMO, is the mis-allocation of resources that happens when people aren't able to transmit information through prices and market mechanisms.

Like, the empty-nester who works in downtown SF and happens to own a 4BR townhouse in Mountain View should really trade places with the family of four commuting from a 1BR condo in SF and commuting down to Mountain View. If they both bought their place at a tenth of the current price, the savings on property taxes can justify staying locked in with long commutes and incorrectly sized living spaces.

Note that this sort of example is also one of the strongest arguments against rent control. If you're paying $400/mo for an apartment in downtown SF or NYC, it's worth keeping it as a place to occasionally go to on weekends or vacations or in case you decide to move back into the city. It's classic mis-allocation - even in the midst of a severe shortage, there's under-used resources that don't get used because people aren't allowed to compete on price to get them.

Re: How did an entire state price itself out for entry-level home buyers?

#34

Post by talmand » Fri, Oct 21, 2016, 7:24 PM UTC

dangravell wrote: post #13

Anecdotal evidence from small scale builders suggest building to higher performance standards, even to Passivhaus, add only up to (sometimes no more than) 10℅ build cost. It's all down to design, and this is where volume builders baulk. They can't pay minimum wage to cheapest labour to throw up 'standard' builds - in the UK that's cavity wall, but in the US no doubt you have your own standard approaches with performa…

So, is it possible for a local government to ever reach a limit on fees necessary for building in their area before it creates a problem?

>> "our profits are lower, can government do something about it?"

Seems the complaint is that government is directly responsible for the problem as they see it. Isn't it reasonable for the companies to complain to the government concerning that topic? What if the local government started tacking on fees to your paycheck that reduced your take home pay to what you felt was unreasonable amount? Do you have the right to complain?

Re: How did an entire state price itself out for entry-level home buyers?

#35

Post by pascalxus » Fri, Oct 21, 2016, 7:25 PM UTC

laurentoget wrote: post #20

I do not know much about real estate cost but it is interesting to see someone blaming a $50,000 regulatory fee for the $400,000 or so difference in median house cost between CA and other states.

It's not just about the 50K. There's an additional 20% for building impact fees. And all these regulations prevent builders from using more cost effective means for building.

And, by far, the worst part of it is, it makes innovation in housing a complete non-starter. It's tantamount to: if in the 1980s (before the shape of the internet was known) the government had decided to tax every page download 20 cents. Imagine how much that would have stifled innovation - everything internet would've come to a screeching halt before even seeing what's possible.

Personally, I think these laws are a major crime against humanity. Housing makes up such large percentage of people's spending (50%-65% when you take into account property taxes for 50 years). It keeps you a wage slave for at least 30 years. It doesn't have to be this way - housing can cost a fraction of what it does now without all these regulations, with the right land use policy, the right building materials, using manufactured homes, etc.

Re: How did an entire state price itself out for entry-level home buyers?

#36

Post by StillBored » Fri, Oct 21, 2016, 7:27 PM UTC

talmand wrote: post #27

cjensen wrote: post #6

Earlier quoted context omitted.

50K isn't that much if we are talking about a development where that cost is spread over dozens of homes. It's possible they just misspoke, but the quote about Chico did not say "per home." Meanwhile in my home town of Fremont, a developer is putting in hundreds of new homes in North Fremont, and the school district has no way to charge those homes enough to actually build a school for them. The four nearest elementa…

>> but the quote about Chico did not say "per home." And yet the next sentences are: "Typical fees in San Francisco are $72,600 per home; in Sacramento, they’re $62,000. And for the six California markets highlighted in the Zelman & Associates report, the average is $51,650."

But then it takes them a few more paragraphs to point out that is for a $600k+ house.

Which doesn't make it sound all that bad after all. Particularly when they point out the land itself is about 1/2 the cost.

Not that any of it is good for anyone under 40...

Re: How did an entire state price itself out for entry-level home buyers?

#37

Post by dangravell » Fri, Oct 21, 2016, 7:28 PM UTC

talmand wrote: post #34

dangravell wrote: post #13

Anecdotal evidence from small scale builders suggest building to higher performance standards, even to Passivhaus, add only up to (sometimes no more than) 10℅ build cost. It's all down to design, and this is where volume builders baulk. They can't pay minimum wage to cheapest labour to throw up 'standard' builds - in the UK that's cavity wall, but in the US no doubt you have your own standard approaches with performa…

So, is it possible for a local government to ever reach a limit on fees necessary for building in their area before it creates a problem? >> "our profits are lower, can government do something about it?" Seems the complaint is that government is directly responsible for the problem as they see it. Isn't it reasonable for the companies to complain to the government concerning that topic? What if the local government s…

I'm addressing performance standards specifically so I can't speak for other fees.

But regards performance targets these exist such that suitable quality housing is built - there are numerous market problems here, so leaving it to the market will not end with a high quality building stock. Performance regulations are too lax by a long way, not too strict.

Re: How did an entire state price itself out for entry-level home buyers?

#38

Post by toomuchtodo » Fri, Oct 21, 2016, 7:29 PM UTC

moultano wrote: post #29

toomuchtodo wrote: post #19

Earlier quoted context omitted.

The problem is, when you move somewhere else, and you buy your home, you become the person that wants their home value maintained/protected. Are you going to vote against your own interests? If so, I applaud you. Otherwise, you're just distributing the problem across the country, as tech money flows through workers in secondary cities (inflating property prices in Austin, Denver, Boulder, Nashville, Portland, Seattle…

It isn't their home value they are protecting though. Increasing the zoning limit on a plot only causes its value to increase. It's the "character" of their neighborhood. Somehow we've gotten into a cultural state where everyone expects the place they live to stay exactly as it is for their lifetime. It's totally implausible and destructive, but people fight for it anyways, even when it isn't in their financial inter…

> It's the "character" of their neighborhood.

> Somehow we've gotten into a cultural state where everyone expects the place they live to stay exactly as it is for their lifetime.

I think this is just human nature.

> It's totally implausible and destructive, but people fight for it anyways, even when it isn't in their financial interest.

I disagree. Simply look at Europe or historical districts in the US. Its definitely not implausible, and only destructive to new citizens who want to live there (that don't have an existing vested interest in the area).

All politics is local, as they say. If local citizens want to keep their neighborhood the same, that's up to them, and its their choice.

Re: How did an entire state price itself out for entry-level home buyers?

#39

Post by thefalcon » Fri, Oct 21, 2016, 7:31 PM UTC

twothamendment wrote: post #28

lambdasquirrel wrote: post #7

On the flip side, does this state have enough water for the other 10-odd million people who'd be living in those 3.6 million homes?

I keep waiting for California to go the way of Israel and have more fresh water than they need. It would really help out the West if the coast could make use of the water that is right next to them. https://www.scientificamerican.com/article/israel-proves-the...

How do we go from waiting to doing?

Re: How did an entire state price itself out for entry-level home buyers?

#40

Post by moultano » Fri, Oct 21, 2016, 7:33 PM UTC

toomuchtodo wrote: post #38

moultano wrote: post #29

Earlier quoted context omitted.

It isn't their home value they are protecting though. Increasing the zoning limit on a plot only causes its value to increase. It's the "character" of their neighborhood. Somehow we've gotten into a cultural state where everyone expects the place they live to stay exactly as it is for their lifetime. It's totally implausible and destructive, but people fight for it anyways, even when it isn't in their financial inter…

> It's the "character" of their neighborhood. > Somehow we've gotten into a cultural state where everyone expects the place they live to stay exactly as it is for their lifetime. I think this is just human nature. > It's totally implausible and destructive, but people fight for it anyways, even when it isn't in their financial interest. I disagree. Simply look at Europe or historical districts in the US. Its definite…

>I think this is just human nature.

Probably, but I suspect we can trace the triumph of NIMBYism to the baby-boom reaching the "get off my lawn" age.

>I disagree. Simply look at Europe or historical districts in the US. Its definitely not implausible, and only destructive to new citizens who want to live there (that don't have an existing vested interest in the area).

If the area being "preserved" was limited in some way, then sure. But the reality is that new housing is simply illegal in every positive population growth city in the country. You cannot live in a city as a young person without displacing someone else because we've legislated it that way, and that's insane.