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Average Rent in San Francisco Has Dropped $1k This Year

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Re: Average Rent in San Francisco Has Dropped $1k This Year

#511

Post by [deleted] »

TheOtherHobbes wrote: post #137
SllX wrote: post #76

Earlier quoted context omitted.

No but when figuring out what informs a price you want to look at supply and demand first . There’s room for other variables, but you normally start there. EDIT: While I’m inside the edit window, let me throw in another big variable as an example. Costs are another factor that inform a price, and a big one. You could make a case that it deserves higher billing than supply and demand, but if your costs are $X but you…

But property supply itself is a constrained effect of politics and the relative power of various social groups, not a unique and independent primary cause. If landlords can make a killing by constraining supply politically, they will. So the primary cause is the incentive system and the political environment which makes it possible for them to do that. It's all about how the reward functions are designed. So of cours…

[deleted]

Re: Average Rent in San Francisco Has Dropped $1k This Year

#512

Post by tdaltonc »

sagarm wrote: post #488
jrnichols wrote: post #479

Earlier quoted context omitted.

I thought this was interesting about San Francisco: https://www.sfchronicle.com/bayarea/article/Faster-and-cheap... They're building affordable housing, prefabricated.

Prefab won't be a solution for housing shortages in California because of trade union opposition. The fact that there is more than enough work to go around doesn't stop them from opposing efficiency improvements and extracting rents in the form of union labour requirements in housing bills.

What levers do construction trade unions have to stop prefab?

Re: Average Rent in San Francisco Has Dropped $1k This Year

#513

Post by [deleted] »

throwaway0a5e wrote: post #402
pydry wrote: post #346

Earlier quoted context omitted.

Seriously? There are two types of people in SF: * People who have watched their property appreciate in value by 4-10x for basically doing... nothing. * People who have taken out an eye watering loan for well over a million dollars and are kept up at night by the idea that theyll owe a million dollar loan on a $750,000 home. Of course they're going to be conservative! Of course they're going to try to avoid anybody ro…

I guess they "care about property rights" in the same sense that everyone right of die hard communists cares about property rights but that's kind of like saying it's a warm day out because it's 200-something degrees above absolute zero. If they care so much about property rights then why is it so hard for people there to do build on their own property that increase the value of that property? Saying SF cares about p…

[deleted]

Re: Average Rent in San Francisco Has Dropped $1k This Year

#514

Post by lumost »

nostrademons wrote: post #358
lotsofpulp wrote: post #332

Earlier quoted context omitted.

> One is that $15/hr is a dramatic underestimate of the opportunity cost for many of the people who would otherwise be eating out. Minimum wage in Mountain View & Sunnyvale is $16.05/hour. My wife & my salaries, if converted to hourly, would be several hundred / hour. We cook at home because we're salaried and so don't actually reap that opportunity cost in cash, You can’t say that your opportunity cost is $x and the…

Sure I can, because this post is not about me . I'm an example to illustrate a point. The point is actually about the economic rationality of centralized food production - whether it is more efficient for one person to cook for many, or for each person to cook for themselves, in aggregate . Economics doesn't care about individual people; it cares about incentives, efficiency, and the behavior of abstract firms in res…

taken to the extreme, I would wonder wether kitchenless apartments would become popular in SF, NYC, or LA given the opportunity. In a studio or 1-bedroom, you could offer 20-30% more space for living rooms or other activities.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#515

Post by renewiltord »

Apocryphon wrote: post #238
imtringued wrote: post #216

Earlier quoted context omitted.

The idea behind the LVT is not about making rent cheaper. It's to reward landlords for using land more efficiently. If the land costs a fixed amount you want to build as many units as possible and make each unit as attractive as possible. Compare that to a conventional property tax where you have to pay more tax for each unit of housing you build. You also have to pay property taxes for home improvement meaning old p…

Have LVT proponents ever considered augmenting it with tax credits on the LVT for property improvements? To really hammer home incentives towards development in especially supply-strained markets such as S.F.

Usually, the LVT on its own will be sufficient to provide an incentive to develop in an economically efficient manner. The real problem isn't that. The real problem is that people do not desire their neighbours to operate in an economically efficient manner. It is just risk aversion in a different sense except the asset is being paid for by someone else.

Imagine that the US government would buy you a bicycle, any bicycle, at any price, reallocating from things that you don't care about, so long as you tell it how important a bicycle is to you. You are likely to describe it as being a matter of life and death.

The amount any human would pay for a view is different from the amount they require someone else to pay to obscure the view. Economic efficiency is not a goal in any sense. And any incentives such as the ones you provide would be struck down in the court of popular opinion because it is the outcome that is not desired, not the process.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#516

Post by kelnos »

cwilkes wrote: post #80
pydry wrote: post #42

Earlier quoted context omitted.

It's a side effect of de-taxing land. The more land becomes an asset and the less it becomes a liability (e.g. by capping property taxes) , the greater incentive there is to hoard it and jealously guard its value with NIMBYism which leads to even less development, greater shortages and even higher prices on an upward spiral. Saying "it's about supply and demand" is not technically wrong but it glosses over the toxic…

But they are using land productively as they are making $3100 a month off of a small studio. Also I doubt if raising taxes will result in anything more than them passing that cost on to the renters.

When people talk about "using land productively", they aren't talking about a single person's profit. It's more of a "collective productivity".

You can only pass on so many costs before demand drops because the price you're asking just isn't feasible.

Non-resident landlords in SF, to my knowledge, aren't really anti-development. They recognize that 2x the number of units on the same parcel of land won't cut the per-unit rent in half, so higher density is still a better deal.

The problem, from the individual landlord's perspective, is that they can't redevelop their own land without triggering a tax reassessment, which can easily turn any profit into a loss, even after adjusting rent for the newly-developed property. The landlords who are making out like bandits right now are the ones who have owned their properties for decades. I wouldn't buy a duplex or a quad-plex in SF right now with the intention to rent it out; the cost of the property, plus 2020-assessed property taxes, would mean I'd barely break even at market rates (pre-pandemic market rates; current market rates might be a solid operating loss).

Large developers that are coming in and wanting to build apartment or condo complexes essentially have to build so-called "luxury units", because the economics won't work out otherwise, when you take into account high initial property taxes and the high, drawn-out cost of just building in SF.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#517

Post by fortran77 »

epistasis wrote: post #426
fortran77 wrote: post #405

Earlier quoted context omitted.

How dare you say "I don't care." Who are you to speculate about what I think about?

People are forced out of their home all the time, without the gigantic windfall of money that a property sale entails. Evictions happen all the time, and these poor folks do not get the windfall of a $1M investment paying out. They get the trouble of trying to find a place to rent with an eviction on their record, which means they will be paying higher rents with less ability to pay. Nobody should be forced from thei…

Nobody's getting forced out of "their" home -- unless they can no longer afford to pay the taxes.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#518

Post by fortran77 »

zapita wrote: post #401
fortran77 wrote: post #377

Earlier quoted context omitted.

What does Prop 13 have to do with the fact that they're not building enough housing?

Here’s what I replied to: > Residents strain the city budget via things like public schools. Businesses put money into the city budget via gross receipts taxes. Prop 13 was meant to drastically cap property taxes. It was very successful in doing so. As a result, tax revenue from property taxes has also been capped dramatically, and cities adapted by relying more heavily on taxing businesses. Hence the current situati…

Palo Alto is an interesting case. They don't want to build more housing, especially "affordable" housing, because they're racist.

They only approve "below market rate" housing if the applicants have masters degrees and no criminal record. They call this "teacher housing" but it's really to keep people they think are "undesirable" out.

Re: Average Rent in San Francisco Has Dropped $1k This Year

#519

Post by bollu »

nostrademons wrote: post #395
SllX wrote: post #373

Earlier quoted context omitted.

You missed out an important perspective that is neither purely politician nor purely economist: taxpayer. Taxes are paid on money earned, whether through labors, investments or rents. They are a taking, a legal one, of something that rightfully belongs to someone else, so if you are going to take it, then it had better go back to government services. Economists have found ways to reinterpret taxes and exploit their s…

I'm aware of the taxpayer perspective and it's a big problem with getting adoption for an LVT. It's the type of policy that makes most people better off but you can never really convince people to adopt, because it sounds worse than alternatives. There's actually an economic theorem (the "Henry George Theorem", discovered by Joseph Stiglitz in 1977 [1]) that states that under conditions of democracy & perfect informa…

Is there a textbook that teaches these sorts of theorems? I'd love to read economics from a theorem-proof perspective

Re: Average Rent in San Francisco Has Dropped $1k This Year

#520

Post by aegis4244 »

Kalium wrote: post #448
Tiktaalik wrote: post #442

Earlier quoted context omitted.

A property tax is a type of wealth tax. A wealth tax is no more difficult to execute than our existing property tax system.

You're absolutely right - a property tax is a type of wealth tax. I completely agree, which is why I attempted to differentiate between a general-purpose tax on all wealth in any form and a tax on real property. Please accept my humble apologies for my failures to be less clear than I could have been - my communication skills are a work in progress. With that said, I have been under the impression that countries that…

Setting a value is easy. Let the asset holder owing the tax set the value. Should the IRS disagree, let the IRS purchase the asset.
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