How California Became America’s Housing Market Nightmare • Hacker News Board

Re: How California Became America’s Housing Market Nightmare

#141

Post by cactus2093 » Thu, Nov 07, 2019, 1:51 AM UTC

ericmay wrote: post #122

cactus2093 wrote: post #120

Earlier quoted context omitted.

> I don’t buy for a second though, that if your home value doubles that your lifestyle doubles. That's just true by definition of how a price works though, it's not really up to each person to agree or disagree with. I get that you're not realizing the gains when your house goes up in value. But a property tax is not a capital gains tax, it's a wealth tax on a specific type of wealth (that happens to be very importan…

But it’s not true by definition. If my property value doubles tomorrow, whether I want it to or not, my salary doesn’t double. So taxing me means I make less money now. I think we can argue about it, but you can’t say that my “lifestyle doubles” it doesn’t.

I think we can argue about whether or not it's fair to you that this happened when you didn't necessarily want the value to double. But you really do have double the wealth, there's no two ways about it.

Another analogy, is imagine you paint for a hobby. If the price of paint doubles it's not going to double the value of your paintings, you don't realize any of thos gains. You could argue that it's unfair, you didn't ask for the price to increase, you should be able to go to the store with the same amount of money as you used to and buy the paints. But that would be silly, it's not how the world works.

In general people understand that it's not owed to them that everything will continue to work the same way it used to. But for some reason when it comes to home ownership, people think they are buying the right to keep everything about their home and neighborhood exactly the same, even the things that are not just affecting them individually but have a big impact on the rest of the community (like who else can live nearby, how much property tax they should pay, etc.)

Re: How California Became America’s Housing Market Nightmare

#142

Post by klipt » Thu, Nov 07, 2019, 2:02 AM UTC

tzs wrote: post #96

Kalium wrote: post #19

Earlier quoted context omitted.

> The alternative is that we basically force people out of houses they've bought by gouging them with taxes. That seems much more unfair than the alternative. Oh no! People with a multiple millions in assets have to choose between paying taxes on their immense wealth or selling it! Sarcasm aside, this is how it's done most places in the US. It works just fine in those places and isn't considered unfair. Why is paying…

> Why is paying taxes on your wealth considered unreasonable here? If I buy a painting from a young, unknown artist for $100, for example, and 30 years later the artist is well known and that painting could be sold for $1 million, we don't make me pay taxes on the $999900 my wealth has increased due to owning the painting. Instead, we keep track of what I paid for the painting, and when I eventually do sell it and so…

> Why should real estate wealth be treated different than other forms of wealth?

Because you can't make more land. You can easily make more paintings.

Re: How California Became America’s Housing Market Nightmare

#143

Post by Gibbon1 » Thu, Nov 07, 2019, 2:25 AM UTC

scarface74 wrote: post #139

Gibbon1 wrote: post #138

Earlier quoted context omitted.

> Well. No one is “entitled” to live in California. There are 49 other states in the US. Why stop there? Why not deport people to other countries?

Wow. So now leaving California is like leaving the country? So why stop there? Why not squeeze everyone in California into one city?

Why not? One of the arguments for forcing Native Americans onto reservations was that it would free up the land for more productive uses.

Re: How California Became America’s Housing Market Nightmare

#144

Post by ericmay » Thu, Nov 07, 2019, 2:45 AM UTC

rcpt wrote: post #125

ericmay wrote: post #108

Earlier quoted context omitted.

It’s also unrealized. Maybe just tax on the sale or transfer. Honestly the whole situation is a nightmare. I feel like whenever I think of a “solution” I just find problems with it.

> unrealized She can borrow against it and easily afford property taxes for the rest of her life.

And then die me not pay back loans? Or what if there is a market downturn and now the lenders are stuck holding it? Maybe they don’t lend I’m the first place?

Lots of unknowns here.

Re: How California Became America’s Housing Market Nightmare

#145

Post by scarface74 » Thu, Nov 07, 2019, 2:49 AM UTC

Gibbon1 wrote: post #143

scarface74 wrote: post #139

Earlier quoted context omitted.

Wow. So now leaving California is like leaving the country? So why stop there? Why not squeeze everyone in California into one city?

Why not? One of the arguments for forcing Native Americans onto reservations was that it would free up the land for more productive uses.

So using your analogy, the people who were there first that you are trying to displace by pricing them out of the market are the Native Americans.

How many young people trying to buy a house were born in California?

Re: How California Became America’s Housing Market Nightmare

#146

Post by ericmay » Thu, Nov 07, 2019, 2:51 AM UTC

cactus2093 wrote: post #141

ericmay wrote: post #122

Earlier quoted context omitted.

But it’s not true by definition. If my property value doubles tomorrow, whether I want it to or not, my salary doesn’t double. So taxing me means I make less money now. I think we can argue about it, but you can’t say that my “lifestyle doubles” it doesn’t.

I think we can argue about whether or not it's fair to you that this happened when you didn't necessarily want the value to double. But you really do have double the wealth, there's no two ways about it. Another analogy, is imagine you paint for a hobby. If the price of paint doubles it's not going to double the value of your paintings, you don't realize any of thos gains. You could argue that it's unfair, you didn't…

The problem is that it’s a mismatch between wealth and income. Property taxes are taken from income, and if your income doesn’t increase in line with property taxes that may rise completely out of your control, you essentially may have to sell your house to pay property taxes. That doesn’t seem like a good solution to me.

I was thinking on the way home that maybe you lock property taxes in but then you have to lock your home price as well, but that probably wouldn’t work.

With respect to your last sentence, I think one of the issues is that we actually mix public policy into home prices. You can’t want a free market and also not want a free market. It seems like many home owners have chosen to not have a free market when it comes to home prices. It’s also not helpful because, like medicine, your home is a big deal. Uprooting you’re family is a big deal. Think about how a family feels if they buy a house, all of a sudden their neighborhood is “cool” and then they have to uproot their family because rich people push them out?

Not a lot of good solutions to a big problem here.

Re: How California Became America’s Housing Market Nightmare

#147

Post by scarface74 » Thu, Nov 07, 2019, 3:01 AM UTC

BubRoss wrote: post #137

scarface74 wrote: post #130

Earlier quoted context omitted.

It sounds like you saying that it would be more fair to make them leave by pricing them out so other people can buy their homes.

Pricing property taxes to be consistent with the value of a home is not 'making someone leave'. In this case 'so someone else can buy their home' is actually 'they can decide to sell their house for an enormous profit of twenty times what they bought it for if that is their choice'. To be clear here, if someone else bought the house, that person would pay the proper property tax, so why is someone's inaction so valua…

So we should make them sell the house they’ve lived in for forty years and move to the Midwest somewhere so tech bros can buy them?

Re: How California Became America’s Housing Market Nightmare

#148

Post by nerfhammer » Thu, Nov 07, 2019, 3:03 AM UTC

malvosenior wrote: post #136

rcpt wrote: post #133

Earlier quoted context omitted.

Just because it's not a cash asset doesn't mean it's not an asset. There are myriad of financial instruments to work with. Increased property values translate to increased borrowing power.

Why should people be forced to get in debt to keep the house they've already paid for?

Why do they deserve permanently lower taxes?

Re: How California Became America’s Housing Market Nightmare

#149

Post by Gibbon1 » Thu, Nov 07, 2019, 3:08 AM UTC

scarface74 wrote: post #147

BubRoss wrote: post #137

Earlier quoted context omitted.

Pricing property taxes to be consistent with the value of a home is not 'making someone leave'. In this case 'so someone else can buy their home' is actually 'they can decide to sell their house for an enormous profit of twenty times what they bought it for if that is their choice'. To be clear here, if someone else bought the house, that person would pay the proper property tax, so why is someone's inaction so valua…

So we should make them sell the house they’ve lived in for forty years and move to the Midwest somewhere so tech bros can buy them?

You have to agree it makes a lot of economic sense for cities to use eminent domain to acquire underutilized housing stock and hand it over to FAANG companies to house their workers.

Re: How California Became America’s Housing Market Nightmare

#150

Post by BubRoss » Thu, Nov 07, 2019, 4:02 AM UTC

scarface74 wrote: post #147

BubRoss wrote: post #137

Earlier quoted context omitted.

Pricing property taxes to be consistent with the value of a home is not 'making someone leave'. In this case 'so someone else can buy their home' is actually 'they can decide to sell their house for an enormous profit of twenty times what they bought it for if that is their choice'. To be clear here, if someone else bought the house, that person would pay the proper property tax, so why is someone's inaction so valua…

So we should make them sell the house they’ve lived in for forty years and move to the Midwest somewhere so tech bros can buy them?

No one has to sell, everyone has to pay property taxes. Why do you keep saying they are 'forced to sell' and that they shouldn't pay the same property taxes as others?