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The Bay Area’s tech boom in historical and social context

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Re: The Bay Area’s tech boom in historical and social context

#111

Post by abc_lisper »

guiomie wrote: post #51

True story: 2 mid-level engineers both working at a FANG, and we can barely afford a 3bdr/2.5bath in Sunnyvale/Santa Clara without burning thru 30-40% of our monthly income (including RSUs). Having bid on a few houses, I'm amazed by how opaque the market is here. Houses will be listed 30% less than expected selling price and when you do make an offer, the seller will come back with a higher price to all those who mad…

You must be living in one of fancy new apartments on Lawrence exp-way or something. Let's assume your household income is 500k/pa which means you should get 300k net. You must be paying (30% of (300/12) is) 8.3k per month. Are you really paying that much?

I live in Fremont, work in south-bay and I pay 2.5k/per month for my own house on mortgage, bought a year ago. I think you are overpaying by a lot.

Re: The Bay Area’s tech boom in historical and social context

#112

Post by saltcured »

mavelikara wrote: post #73
sulam wrote: post #36

Earlier quoted context omitted.

Forget older Californians, you can get priced out of your house just from property value increases in the last decade! Also keep in mind that there's no great system for appraising houses. As someone who has bought two houses and sold one, the appraisal system comes down to "can I find a few houses in this neighborhood that have roughly equivalent room count and square footage that have sold in the last 6 months." So…

Locking in the property tax rate is a reasonable policy for reasons you explain. But it should not have been extended to non-residential, non-owner-occupied properties, and also it should not have been transferrable.

But, being non-transferrable would exacerbate the low-turnover problem by preventing those retirees from downsizing for fear of a big property tax increase.

Re: The Bay Area’s tech boom in historical and social context

#113

Post by mavelikara »

saltcured wrote: post #112
mavelikara wrote: post #73

Earlier quoted context omitted.

Locking in the property tax rate is a reasonable policy for reasons you explain. But it should not have been extended to non-residential, non-owner-occupied properties, and also it should not have been transferrable.

But, being non-transferrable would exacerbate the low-turnover problem by preventing those retirees from downsizing for fear of a big property tax increase.

I meant that the tax rate should not be transferrable to another person, say, a hier.

Re: The Bay Area’s tech boom in historical and social context

#114

Post by CamelCaseName »

losteric wrote: post #11
ohthehugemanate wrote: post #8

Very interesting read. When we discuss inequality, I think there are a lot of assumptions made that make it hard to really judge. For example, TFA trots out the high number of people on minimum wage, and the high percentage of people below the poverty line. This is misleading, because it misses out on some key ways that "capitalism raises all boats," which are tricky to measure. Off the top of my head... The first is…

12% is 40 million people in poverty. 40,000,000. Progress is good, but it's not victory. America is far from healthy. Medical costs have skyrocketted beyond reason, housing is rising, food costs are rising, and now we're starting a trade war with the nation that supplies cheap consumer goods possible. Netflix is cheap - so what? People in poverty were not complaining about boredom.

Wow, that's 110% of the population of Canada.

Simply staggering.

Re: The Bay Area’s tech boom in historical and social context

#115

Post by twblalock »

sulam wrote: post #109
twblalock wrote: post #42

Earlier quoted context omitted.

The problem is the last transaction might have been decades ago. This leads to some people paying several times as much property tax as their neighbors who own houses of similar market values, simply because their neighbors bought their homes years earlier. That's not reasonable. It also means you could sell your home, move across town into a home that costs the same as the one you sold, and your property tax could q…

Both of those things sound imminently reasonable compared to the alternatives, at least to me. Both of those things are a product of choices that a market-participant made. The alternative pre-Prop 13 was that a non-participant was financially affected by the behavior of their neighbors. In the scale of reasonableness, this is less reasonable than life under Prop 13.

Homeowners are market participants. They benefit from increased home equity caused by increased market prices. They get to capture that equity when they eventually sell their homes, and in the meantime they get to borrow against it. And the homeowners who rent out their properties get to charge more.

Re: The Bay Area’s tech boom in historical and social context

#116

Post by ThrustVectoring »

frgtpsswrdlame wrote: post #90
ThrustVectoring wrote: post #47

Earlier quoted context omitted.

You cannot escape the vicissitudes of the market - you can only externalize the costs onto other people. In Prop 13's case, it was largely a one-time benefit to property owners at the time of passage, at the expense of both future residents and the economy in general.

>you can only externalize the costs onto other people. For a marketeer this seems quite a lot like zero-sum thinking. Besides you absolutely can escape the market. Not everything has to be a market, for example healthcare can be provided using market or non-market logic. You can also shrink the impact of markets, for example look at this [1] example of food-banks run using a market-ish system. They removed the parts…

>Not everything has to be a market, for example healthcare can be provided using market or non-market logic.

There's still physical limitations on resources available; picking a different distribution doesn't lift the limit of how much stuff we have.

>we can just get rid of the parts we don't want through laws

Successful market design is quite a bit more complex than that. Every market intervention has all sorts of second-order effects.

>In homeownership we want to get rid of most of the frictions of the market that rub up against long-time asset holders.

I'm still quite aggrieved that homeowners in 1978 decided to vote themselves a structure that enriches themselves at the expense of newcomers to the area. More generally, it's a mistake to focus on the benefits of a policy without considering the costs - prop 13 does good for long-time homeowners in the region, but at the expense of literally everyone else. I don't think that's a tradeoff worth making, especially given the dead-weight losses from restricting sales and price communication.

Re: The Bay Area’s tech boom in historical and social context

#117

Post by TACIXAT »

rdiddly wrote: post #101
TACIXAT wrote: post #93

Earlier quoted context omitted.

>If you make widgets for $4.50 and sell them for $5 each to a million people You've identified a want and delivered a product to a million people. What is the proper compensation for that? Should people not be allowed to identify wants and address them for profit? I think the error in your view is that any sale is predatory, when in reality both the consumer and seller can profit. One gains something they need or wan…

I'm not trying to outrage you, nor do I necessarily care what's "proper" or "allowed" or "right/wrong" since literally nobody making policy decisions is asking me about it anyway. I'm saying quite literally, and as blandly as possible given my way of talking (and even more blandly after an earlier edit), that in selling to people, you extract wealth from them, which creates wealth inequality. The more you do it, the…

I'm not outraged and it's pretty silly to assume I am. That said, what if a factory owner in China makes widgets and sells them to Americans. Is that increasing inequality?

Re: The Bay Area’s tech boom in historical and social context

#118

Post by sulam »

twblalock wrote: post #115
sulam wrote: post #109

Earlier quoted context omitted.

Both of those things sound imminently reasonable compared to the alternatives, at least to me. Both of those things are a product of choices that a market-participant made. The alternative pre-Prop 13 was that a non-participant was financially affected by the behavior of their neighbors. In the scale of reasonableness, this is less reasonable than life under Prop 13.

Homeowners are market participants. They benefit from increased home equity caused by increased market prices. They get to capture that equity when they eventually sell their homes, and in the meantime they get to borrow against it. And the homeowners who rent out their properties get to charge more.

Listen, no offense, but you're not going to convince me that it's cool to price people out of the homes they live in simply because they've been in them for 10 years and the market has moved that much. There's an older minority couple that live across the street from us who have been in the neighborhood for over 30 years now. Community like that is part of why we bought here. If my wife and I moving in means suddenly everyone has higher property taxes, I'd have a serious problem with that.

Re: The Bay Area’s tech boom in historical and social context

#119

Post by andromeduck »

sulam wrote: post #118
twblalock wrote: post #115

Earlier quoted context omitted.

Homeowners are market participants. They benefit from increased home equity caused by increased market prices. They get to capture that equity when they eventually sell their homes, and in the meantime they get to borrow against it. And the homeowners who rent out their properties get to charge more.

Listen, no offense, but you're not going to convince me that it's cool to price people out of the homes they live in simply because they've been in them for 10 years and the market has moved that much. There's an older minority couple that live across the street from us who have been in the neighborhood for over 30 years now. Community like that is part of why we bought here. If my wife and I moving in means suddenly…

Well the solution for that would be to allow the taxes to be deferred in part or in whole in the form of a lien.

Re: The Bay Area’s tech boom in historical and social context

#120

Post by nradov »

rdiddly wrote: post #87
nradov wrote: post #82

Earlier quoted context omitted.

That's not how capitalism works. If you make a new widget for $4.50 and sell it for $5.00 then both the buyer and seller are enriched. You haven't impoverished anyone.

You're reacting to the word impoverished. You have "extracted 50 cents from them," is that better? I'll change it. Don't get distracted. Edit: Also, there's short-term and long-term enrichment. The widget I sell might be a capital good that earns an income for its buyer, or it might just as easily be something that only depreciates or even destroys other wealth. Whereas the money I've collected can reliably be made t…

I'm not distracted, you simply don't understand basic economics.
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