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Silicon Valley's housing crisis, in one sentence

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Re: Silicon Valley's housing crisis, in one sentence

#151

Post by shostack »

gozur88 wrote: post #145
HarryHirsch wrote: post #40

Earlier quoted context omitted.

It is was only housing! But it's infrastructure, too. You need to put in extra sewage, electric, roads, schools &c to accommodate the rise in population, and that is going to be painful. With Proposition 13, how does a municipality raise funds for new schools or a sewage plant expansion?

Typically through Mello-Roos districts. It's pretty common for residents of newer developments to have an additional line item on their property tax bills. This is to service bonds that were taken out for things like new roads, schools, water, and sewage. Mello-Roos districts are pretty popular with existing residents, since they don't have to pay for new infrastructure to accommodate new residents. From the wiki pag…

I think Mello-Roos is awful in some ways. New owners in the area shouldn't have massively disproportionate tax burdens because they moved there a few years later (in some cases that is a very large difference). Especially when you consider things like the fact that people are still using the resources just as equally.

Areas change, and increasing taxes on all residents (even if it forces some out) is unfortunately part of the downward pressure of house prices that our market is missing.

Elsewhere in the country in saner real estate markets, if taxes increase too much and you need to move as a result, that's what happens. It absolutely sucks, but it helps balance the inventory.

Re: Silicon Valley's housing crisis, in one sentence

#152

Post by pjlegato »

jbooth wrote: post #143
pjlegato wrote: post #62

Earlier quoted context omitted.

There are lots of ways. Extremely high gasoline taxes seem to be popular in Europe. When driving costs $10 or $12 a gallon instead of $2 or 3, people want to drive a lot less. High property values also work, as in Europe. In a relatively small European country, there is just a lot less land supply, so it costs a lot and people tend to build much more densely. By contrast the US is huge and has an enormous amount of v…

Bit of a mischaracterization there comparing turn of the century tenements to high rise apartment buildings.

I wasn't comparing them. I was describing the historical circumstances that led to the zoning laws that still make it difficult to do profitable high density residential development in most of the US, and specifically how the paucity of non-tenement high density apartment buildings is an ongoing side effect of these laws.

Re: Silicon Valley's housing crisis, in one sentence

#153

Post by mosdave »

johan_larson wrote: post #30
xienze wrote: post #17

Earlier quoted context omitted.

Which was created to combat the problem of grandma kicked out of her house because she can't afford her property taxes. How do you get around that?

You don't. Grandma should move to someplace cheaper. The cures are worse than the disease, and if property taxes really have increased that much, she's in for a nice windfall when she sells and buys something cheaper elsewhere.

> Grandma should move to someplace cheaper.

..and somehow NIMBYs are painted as the heartless ones?

Re: Silicon Valley's housing crisis, in one sentence

#154

Post by flubert »

codemac wrote: post #72
johan_larson wrote: post #11

Earlier quoted context omitted.

Zoning laws. And existing owners who staunchly oppose increasing density by building larger buildings. A lot of people who bought their single-family homes years or decades ago now live in appealing low-density neighborhoods with home values that are sky-rocketing. They don't want their neighborhoods to change into concrete canyons, and the ever-rising values of their homes fund their retirements very nicely. They th…

The people who bought their houses 30+ years ago I really feel for. The change the area is experiencing is brutal, and imagine if everyone just kept asking you why you don't sell and move away from the very place you built? It's futile for them to fight things, and honestly it ruins a lot of people's lives that they do. However I completely understand why they would push back on density, most people don't have to dea…

>it ruins a lot of people's lives that they do.

Honest question. How does Party A, living in a house that Party B wishes to replace with an apartment, ruin the life for Party C? Or is it B whose life is ruined? Or A's? Or am I misunderstanding you?

Re: Silicon Valley's housing crisis, in one sentence

#155

Post by shostack »

johan_larson wrote: post #30
xienze wrote: post #17

Earlier quoted context omitted.

Which was created to combat the problem of grandma kicked out of her house because she can't afford her property taxes. How do you get around that?

You don't. Grandma should move to someplace cheaper. The cures are worse than the disease, and if property taxes really have increased that much, she's in for a nice windfall when she sells and buys something cheaper elsewhere.

People don't like to hear this because it is just a very non-PC narrative, but it is the truth.

In other real estate markets, this is a huge downward pressure on housing prices by the fact that if taxes get too high, it increases the inventory by the amount of people forced out. The Bay Area is almost entirely lacking in that pressure, which combined with other Prop 13-related issues and the area's popularity makes a perfect storm for this current fiasco.

Nobody wants ol' granny, or that single mom who has lived there forever, etc. to have to uproot their life and leave, but there simply is no way to have a happy outcome for everyone. And, to your point, if property taxes have increased that much, the increased home value should take some of the sting out of it when they go to sell.

There are very real emotional downsides to all of this, but ultimately I'm of the opinion that people being forced out of areas as they gentrify due to property taxes are a necessary part of a healthy real estate ecosystem.

Really curious to see what happens in the long game as the families who inherit homes that were locked into old tax levels are forced to sell as they can't pass them on to a second generation without the tax rate resetting.

Anyone have an estimate on when that may be? Perhaps we'll see a major correction in Bay Area house prices at that point as the inventory increases from that.

Re: Silicon Valley's housing crisis, in one sentence

#156

Post by johan_larson »

shostack wrote: post #155
johan_larson wrote: post #30

Earlier quoted context omitted.

You don't. Grandma should move to someplace cheaper. The cures are worse than the disease, and if property taxes really have increased that much, she's in for a nice windfall when she sells and buys something cheaper elsewhere.

People don't like to hear this because it is just a very non-PC narrative, but it is the truth. In other real estate markets, this is a huge downward pressure on housing prices by the fact that if taxes get too high, it increases the inventory by the amount of people forced out. The Bay Area is almost entirely lacking in that pressure, which combined with other Prop 13-related issues and the area's popularity makes a…

> Really curious to see what happens in the long game as the families who inherit homes that were locked into old tax levels are forced to sell as they can't pass them on to a second generation without the tax rate resetting.

That game has already been played. Transfers between generations do not cause reassessment.

http://www.boe.ca.gov/proptaxes/faqs/propositions58.htm#1

Congratulations, California voters. You made bad into worse.

Re: Silicon Valley's housing crisis, in one sentence

#157

Post by some-guy »

djcapelis wrote: post #139
WWKong wrote: post #130

Earlier quoted context omitted.

Why will home owners vote for pro-housing which reduces the ROI on their homes?

1) The majority of voters in SF aren't homeowners. 2) ROI isn't the most important thing about a home. 3) Even if you value property values over other values, affordable housing that can support a strong and diverse environment that is vital to maintaining the strength of the region. If you kill that engine, you kill the thing that created the high values to begin with. You can shoot the golden goose if you want, but…

2) ROI isn't the most important thing about a home.

I agree, though I imagine the people who can actually afford a home in SF in 2016 feel differently.

Edit: clarity

Re: Silicon Valley's housing crisis, in one sentence

#158

Post by Johnny555 »

ryfm wrote: post #127
hx87 wrote: post #122

Earlier quoted context omitted.

I have a hard time imagining HOA/condo rules working against soundproofing--if anything they'd be thrilled about it if you were willing to put in the money, since it improves the value of the property and community. Yeah, renters are out of luck, but too many landowners are too short-sighted to improve their properties and increase rent to capture the additional value. BTW, wooden frames can be very soundproof, as lo…

i mentioned it because i have an anecdotical evidence right now - a friend of mine is fighting with his HOA trying to replace windows in his appartments. The only solution he came up by today is to become a part of HOA committee and then change the rules they have. i have another solution in mind - to stay away from HOA in the first place. i bet they can be soundproof but what i see here is that the builders are tryi…

I suspect that they aren't objecting to the sound proofing itself, but an architectural change of using a different style of windows than the rest of the units.

Re: Silicon Valley's housing crisis, in one sentence

#159

Post by WalterSear »

WWKong wrote: post #130
xenadu02 wrote: post #113

Very few people bother to vote in non-presidential elections. I keep hammering this point to anyone I meet in the startup scene here in SF. If just 1% of you reading this right now (who live in SF) bothered to vote on a pro-housing basis, we'd immediately turn into a huge voting bloc that could not be ignored. You should shame your coworkers and remind people in slack channels too. A few thousand NIMBYs currently con…

Why will home owners vote for pro-housing which reduces the ROI on their homes?

Because this town is turning into shit all around us, because of the lack of housing, and we can't even move.

Re: Silicon Valley's housing crisis, in one sentence

#160

Post by palakchokshi »

guyzero wrote: post #129
ChuckMcM wrote: post #126

Earlier quoted context omitted.

FWIW that is the wrong question. People are opposed to change. So Sunnyvale has been building a number of apartment buildings and condos around. There has been tremendous back pressure for existing residents (not me but I'm a rarity it seems). The root of their concern is that they don't want the neighborhood experience to change from what they know (or knew) to something they don't know. I talked to some folks who h…

Well as an actual Sunnyvale resident the fears are slightly more rational: cars on roads, kids in schools and no increase in infrastructure to go along with the thousands of new residents. Some of the buildings have less than one parking spot per apartment which in theory is supposed to help encourage people to use transit, in practice people fear it will lead to more street parking in adjacent residential neighbourh…

I don't know why you're getting down voted either. will the down voters please address the following concerns?

1. Considering that some of the apartment dwellers will become homeowners and their place will be taken by new apartment dwellers, how will the overcrowded schools support the influx?

2. Considering people will take public transit to go to work, they still would use cars to move around locally in the area on evenings and weekends. How will the current streets support the greater density of cars? e.g. Central Expressway used to be an expressway now it is a parking lot.

3. Overburdened police and firemen will be exposed to further strain.

4. Parking is a nightmare not just on residential streets but even at local establishments. Space needed for parking is used to build more housing.

Unless you live here and face these issues it's easy to downvote rather than come up with solutions that are at pace with the housing construction boom.

If I paid over a million dollars to buy a house in a school district that has a good score what would you suggest I do when suddenly the student to teacher ratio is so skewed that the education of my children suffers?

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