Earlier quoted context omitted.
A great history professor I had at university was very interested in California politics. His take after years of research was that the thing holding California back is Prop 13, which has to do with taxation: https://en.wikipedia.org/wiki/1978_California_Proposition_13 Dear HNers, please note: I understand Prop 13 is hugely controversial and the "third rail" of California politics. I don't have a dog in this fight, I…
So the thing holding back California is that they don't get enough taxes? There must be something more nuanced i'm missing, but it almost feels like a comedy sketch thinking of a California college professor explaining to people that California not taxing it's citizens enough is the thing holding it back.
When property taxes don't rise, people are disincentivized from selling their home because if they buy a new home they must pay property taxes at the new rate, not the grandfathered one. This creates a bottlenecked supply of housing because no one sells. Growth stagnates and then you get these wild fights about who's allowed to build where, how much they're allowed to build, and what kinds of undesirables might move in and "change the community". It's really a clever ploy to use people's conservative instincts to juice the real estate market since scarcity brings about insanely high costs. Now those with Prop 13 homes are even less incentivized to move because their house's worth just keeps rising. They can use that and borrow against it to play financial games and make their money make money. All because they happened to have bought a home before this law passed: entirely luck, nothing to do with merit or skill.