Without affordable housing, Vancouver risks becoming an economic ghost town • Hacker News Board

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#441

Post by vkou » Sat, Feb 13, 2016, 12:32 AM UTC

gearoidoc wrote: post #410

vkou wrote: post #395

Earlier quoted context omitted.

Those GlassDoor salaries are cash. Stock and bonus add another 50-100%. My anecdotal experience with Vancouver is that some employers will throw you 15%, on a good year. Microsoft pays a bit less, but also employs ~30,000 people in the area.

50-100% sounds high for stock and bonus when you're on 200k+ but my main point was these companies are the exception, not the rule.

The stock and bonus are included in the 200-400k number.

Microsoft and Amazon are hardly an exception in Seattle - now that Boeing is leaving, they are by far the biggest employers in the region.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#442

Post by rdlecler1 » Sat, Feb 13, 2016, 12:35 AM UTC

gorkemyurt wrote: post #211

One of the main reasons of the housing crisis in the Bay Area is Prop 13 ( https://en.wikipedia.org/wiki/California_Proposition_13_(197... ) Prop 13 basically keeps the property taxes constant (or 1% increase) as the value of your house increases (doubles or triples). Your tax gets re-calculated only if you sell your house and the new owner starts paying potentially multiples of what the previous owner has been payin…

Those house owning elderly you're feeling sorry benefitted from the biggest bull market it history. They may have saw 100x gains on their house while many youth will are spending 30-50% of their income on housing if they're lucky to get a good job. If they do, they can look forward to paying entitlements to these elderly people while they themselves may never see the same turn done to them because the system will be bankrupt by then. I don't see why the elderly should be any more immune to economic realities than everyone else. If you can't afford to live in your house or city any more, at least you had an opportunity to roll the dice and make the best of your life there. Others won't even get that. What about the people who will never afford to, people who might have made a positive net improvement to the economy if we weren't so concerned with protecting people. If it gets too expensive, let them sell their house and go live out their lives very comfortably in a low cost city and open the room for people who are going to contribute to the economy that has to pay for their entitlements.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#443

Post by JoshTriplett » Sat, Feb 13, 2016, 12:37 AM UTC

brc wrote: post #377

gorkemyurt wrote: post #211

One of the main reasons of the housing crisis in the Bay Area is Prop 13 ( https://en.wikipedia.org/wiki/California_Proposition_13_(197... ) Prop 13 basically keeps the property taxes constant (or 1% increase) as the value of your house increases (doubles or triples). Your tax gets re-calculated only if you sell your house and the new owner starts paying potentially multiples of what the previous owner has been payin…

It's even worse in Australia, which most properties do not have a yearly property tax. So you pay a 'stamp duty' when you purchase the property, based on a % of the sale price. This means you have people living in Sydney with multi-million dollar properties - which are just modest houses in now-desirable suburbs - who haven't paid any property tax since the 60's, and who can't move anywhere because they'd be up for s…

This sounds like an excellent argument for getting rid of property taxes altogether.

Property taxes have some major fundamental problems, not least of which that using them to pay for local services tends to make such services better in more affluent areas and worse in less affluent areas. They produce potentially unbounded and unexpected expenses long after paying off the house itself (which impacts retirees and others trying to predict future expenses). And on top of that, as mentioned in the comments here, attempts to control the growth of property taxes can create major supply issues in the housing market.

So why not get rid of property taxes altogether? Most states/countries already have either income tax, sales tax, or both. Why not settle on one tax, either income or sales, and use that for all government expenses?

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#444

Post by jpollock » Sat, Feb 13, 2016, 12:38 AM UTC

gorkemyurt wrote: post #211

One of the main reasons of the housing crisis in the Bay Area is Prop 13 ( https://en.wikipedia.org/wiki/California_Proposition_13_(197... ) Prop 13 basically keeps the property taxes constant (or 1% increase) as the value of your house increases (doubles or triples). Your tax gets re-calculated only if you sell your house and the new owner starts paying potentially multiples of what the previous owner has been payin…

How are property taxes calculated in... New Zealand.

1 The local government sets their budget.

2 Then a valuing company sets property values once every 3 years based on permits and local sales.

3 Then the mill rate (property tax percentage) is set at a rate to clear the budget.

Tax rates are stable as property prices increase. The only thing that wouldn't be under your democratic control would be if your neighborhood suddenly became very desirable, changing your house price substantially while leaving other areas unchanged.

If you cannot afford the tax bill, there are programs for low-income or retired persons to get debt forgiveness.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#445

Post by oftenwrong » Sat, Feb 13, 2016, 12:47 AM UTC

msvan wrote: post #82

It seems like many major cities of the world are experiencing this problem, and no city has been able to come up with a good solution. It always leads to displacement and newspaper articles about displacement, but no real solutions. Here are a couple of solutions: 1. Build really tall. Hasn't worked out all that great in Hong Kong, though. 2. Rent control. This is often unfair and inflates price of non-rent controlle…

You don't need to build tall to increase density.

Areas of Tokyo like Setagaya have population densities in excess of 14000 residents per square kilometer. There are few tall buildings; it is largely single-family homes.

Vancouver proper only has a density around 5000 residents per square kilometer. There's plenty of land to infill with housing without building tall.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#446

Post by pmorici » Sat, Feb 13, 2016, 12:48 AM UTC

gorkemyurt wrote: post #211

One of the main reasons of the housing crisis in the Bay Area is Prop 13 ( https://en.wikipedia.org/wiki/California_Proposition_13_(197... ) Prop 13 basically keeps the property taxes constant (or 1% increase) as the value of your house increases (doubles or triples). Your tax gets re-calculated only if you sell your house and the new owner starts paying potentially multiples of what the previous owner has been payin…

"This is such a hard problem to solve, no one wants to force elderly people to move"

Not really, in Maryland property taxes are reduced for house holds making under 60k and are zero for people who make under 10k. There are limits on the value of the home so you can't buy a mansion and then live in it retired and tax free but it protects poor people and old people.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#447

Post by rayiner » Sat, Feb 13, 2016, 12:57 AM UTC

rdlecler1 wrote: post #442

gorkemyurt wrote: post #211

One of the main reasons of the housing crisis in the Bay Area is Prop 13 ( https://en.wikipedia.org/wiki/California_Proposition_13_(197... ) Prop 13 basically keeps the property taxes constant (or 1% increase) as the value of your house increases (doubles or triples). Your tax gets re-calculated only if you sell your house and the new owner starts paying potentially multiples of what the previous owner has been payin…

Those house owning elderly you're feeling sorry benefitted from the biggest bull market it history. They may have saw 100x gains on their house while many youth will are spending 30-50% of their income on housing if they're lucky to get a good job. If they do, they can look forward to paying entitlements to these elderly people while they themselves may never see the same turn done to them because the system will be…

It's insane. The people who don't work live close to the business districts collecting social security paid for by the people who do work who have to commute in from afar for the privilege. Then the people who don't work vote themselves favorable property tax rules so they don't have to pay their fair share of keeping up the city.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#448

Post by ScottBurson » Sat, Feb 13, 2016, 12:58 AM UTC

gorkemyurt wrote: post #211

One of the main reasons of the housing crisis in the Bay Area is Prop 13 ( https://en.wikipedia.org/wiki/California_Proposition_13_(197... ) Prop 13 basically keeps the property taxes constant (or 1% increase) as the value of your house increases (doubles or triples). Your tax gets re-calculated only if you sell your house and the new owner starts paying potentially multiples of what the previous owner has been payin…

> This is such a hard problem to solve

Actually, it's an easy problem to solve technically; the hard part is selling the solution politically.

All you have to do is, instead of capping the growth of the tax rate, you cap the growth of the required payment against the tax. If the tax is greater than the required payment in a given year, the locality gets a lien on the property for the difference; but, critically, that lien does not become due until the property is sold.

This system would let localities collect, in the steady state, as much property tax as they would have before; it's just that they wouldn't actually receive part of the tax on a given property until it was sold, so the money coming in would be a little lumpy. But that doesn't seem like a serious problem.

Anyway, the point is, if localities could still collect the amount of property tax on residential properties that they need, they would be more inclined to encourage residential construction.

It's been done in places, and it should have been done in California. Prop. 13 is destroying the state.

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#449

Post by ScottBurson » Sat, Feb 13, 2016, 1:01 AM UTC

brc wrote: post #377

gorkemyurt wrote: post #211

One of the main reasons of the housing crisis in the Bay Area is Prop 13 ( https://en.wikipedia.org/wiki/California_Proposition_13_(197... ) Prop 13 basically keeps the property taxes constant (or 1% increase) as the value of your house increases (doubles or triples). Your tax gets re-calculated only if you sell your house and the new owner starts paying potentially multiples of what the previous owner has been payin…

It's even worse in Australia, which most properties do not have a yearly property tax. So you pay a 'stamp duty' when you purchase the property, based on a % of the sale price. This means you have people living in Sydney with multi-million dollar properties - which are just modest houses in now-desirable suburbs - who haven't paid any property tax since the 60's, and who can't move anywhere because they'd be up for s…

> This means you have people living in Sydney with multi-million dollar properties - which are just modest houses in now-desirable suburbs - who haven't paid any property tax since the 60's, and who can't move anywhere because they'd be up for so much stamp duty in one hit (easily 50-100k).

I don't understand. When you're making millions on the sale of the property, how is 100k in stamp duty a problem? It's on the same order as your agent's commission!

Re: Without affordable housing, Vancouver risks becoming an economic ghost town

#450

Post by ScottBurson » Sat, Feb 13, 2016, 1:04 AM UTC

fiatmoney wrote: post #217

gorkemyurt wrote: post #211

One of the main reasons of the housing crisis in the Bay Area is Prop 13 ( https://en.wikipedia.org/wiki/California_Proposition_13_(197... ) Prop 13 basically keeps the property taxes constant (or 1% increase) as the value of your house increases (doubles or triples). Your tax gets re-calculated only if you sell your house and the new owner starts paying potentially multiples of what the previous owner has been payin…

Prop 13 has nothing to do with real estate price inflation. If anything, shifting of property tax burdens from long-time homeowners to new homeowners would tend to suppress prices. Shifting that burden evenly across the population would tend to cause more churn as long-time homeowners get pushed out, but would do nothing to increase aggregate housing or lower aggregate prices. Although, you can get pretty far into th…

> Prop 13 has nothing to do with real estate price inflation.

Yes, it does, because it incentivizes municipalities to encourage commercial development (which tends to change hands more often) over residential. It's a classic unintended consequence.