
San Francisco Has a People Problem - prostoalex
https://www.wsj.com/articles/san-francisco-has-a-people-problem-1521691260
======
tptacek
From @sallykuchar's thread today:

\- In the last 30 days, 413 houses sold in SF proper with a median selling
price of $1.5MM.

\- 33 homes sold in Menlo Park, median $2.59MM.

\- Just 20 homes are for sale in Cupertino, with median selling price of
$2.3MM.

\- Of the 38 homes for sale in Palo Alto, just one, a 1bdr condo, costs less
than $1.5MM. 30 day median sale price: $3.08MM.

\- 263 houses sold in Oakland. Median: $735k.

I live in a nice, relatively upscale part of Chicagoland, and you could buy 4
of my houses for the median price of a home in San Francisco.

I'm sure it's not the case for all software jobs, but I know it's increasingly
the case for security roles: you can get the SF rate even if you don't live in
SF. If you have that option, it seems batshit crazy to move to SF. Really,
unless you have serious roots in your SFBA community, it seems batshit crazy
to _stay_ in SFBA with that opportunity on the table.

~~~
pcwalton
I live in SF, having been in the Bay Area for nearly a decade. I like it here
and don't feel a desire to move (and I've lived in Texas and Chicago before,
so I do know what it's like outside California). I have many friends here, but
I don't know if they qualify as "serious roots". Am I "batshit crazy" because
I really enjoy the area and want to stay?

Respectfully, I would like to suggest that there can be many valid reasons to
choose to live in one area or another. It's fine if you don't like SF, and I
think it's great that you like where you live, as Chicago is very nice! I like
where I live too.

~~~
tptacek
If your friends are worth paying SFBA mortgages --- with your eyes open to how
expensive that is --- to stick around, then, yes, I would call those pretty
serious roots. I understand why many people stay.

I also have an implicit mental bias towards families, since I'm at an age
where most of my close peers have families. I understand how different the
equation is for single people in their late 20s and early 30s --- I wasn't any
more rational about my personal finances back then (despite having 2 kids)
than anyone paying to live in SFBA is now.

I think though that a lot people out there should leave; it's not a good deal.

~~~
dionidium
It's the "eyes open" part of this that matters. Opinions and personal desires
can't be argued with, but my experience is that a lot of people are plainly
ignorant of basic facts about a lot of the U.S.

If you're staying in the SFBA because you imagine, say, the Midwest to have no
culture and no jobs and no future, then I'd propose that you're operating on
incorrect information (not just subjective feelings).

Software developers are very well paid in the middle of the country. And
_every_ medium-sized American city is (more or less) a liberal outpost, with
gay bars and music festivals and meetups and tech scenes and Wolfpack Hustles
and craft beer and on and on, even in what many imagine to be farm country.

Look, I get it, I live in NYC now, because _I wanted that experience_ and I
was _willing to pay for it._ But I'm _not_ here because I think Cincinnati or
St. Louis or Nashville are culturally-deficient wastelands with nothing going
for them.

I think folks are really underestimating what kind of life they could be
living by leaving the most expensive parts of the country behind.

If you're in your 20s and dating? Sheesh, by all means, _pay_ to experience
the wonders of San Francisco or NYC. But if what you want is a family and
kids, then you owe it to yourself to know what your options are. They're
better and more diverse than you might expect.

------
rbranson
This is a pretty pedestrian article. Very little background. That might make
sense for the average WSJ reader, but I would guess most HN viewers are
already aware of the tiny amount of data shared in this piece.

If you are interested in actually learning more than surface-level details
about this topic, I highly suggest starting with Kim Mai-Cutler's excellent
"How Burrowing Owls Lead to Vomiting Anarchists":

[https://techcrunch.com/2014/04/14/sf-
housing/](https://techcrunch.com/2014/04/14/sf-housing/)

------
swang720
This link to the article via Reddit wasn't behind a WSJ paywall for me.

Go to Reddit link => Click on link via Reddit.

[https://www.reddit.com/r/sanfrancisco/comments/86bdeg/san_fr...](https://www.reddit.com/r/sanfrancisco/comments/86bdeg/san_francisco_has_a_people_problem/?st=jf8ooovx&sh=32908547)

~~~
evanmarshall
thanks, this worked for me

------
api
San Francisco has a NIMBY problem.

~~~
isostatic
Land owners in SF benefit massively from the infrastructure that society has
created, yet don't pay for it.

A Land Value Tax would ensure that people monopolizing a limited resource that
owes it's value to the society that has been built in San Francisco actually
pay their fair share.

~~~
kevinliang
How is that different from the property taxes homeowners pay today?

~~~
yonran
California’s Proposition 13 (1978) is the anti-Land Value Tax. Instead of
taxing away the land rent and encouraging improvements, it does the opposite
by protecting private land rent and taxing turnover and improvements.

• Under Proposition 13, the statutory tax rate is only about 1.2% (1%, plus
voter supermajority-approved bonds). Ideally, a land value tax would be
higher.

• You’re taxed according to acquisition value plus an inflation adjustment
(instead of current fair market value), so the average effective tax rate is
only about 0.7%. What this means is that property investors (instead of the
community) pocket 100% of the unearned value increase until they sell.

• But it also causes reassessment when you renovate or rebuild. So if you
construct an addition, the effective tax rate on the addition is actually
_greater_ than the effective tax rate on the land. (Contrast to land value
tax, in which the tax rate on improvements is 0%.)

~~~
kevinliang
That proposition exists as a protection from homeowners being screwed by the
government being unfair about the value of their land. Yes I agree many
homeowners are paying less taxes than what the land is actually worth, but
hey, does property tax really even make sense? This person PURCHASED the land
but still has to owe the government taxes even though they own it?

Secondly, it is really important to think of real estate as an investment more
than a physical asset. These people got in the market early and their
investment is giving them great returns. I think that is fair. They purchased
these homes maybe 40 years ago when SF was full of crime and property was
worthless. Their "penny stock" or whatever you'd like to call it popped off
because tech decided to be in the bay area. I think it is right that they are
rewarded greatly for picking a great investment.

~~~
yonran
Now you’re asking normative questions instead of the positive question I
responded to above. So I can give my opinion, but of course you are free to
disagree.

> That proposition exists as a protection from homeowners being screwed by the
> government being unfair about the value of their land

According to The Permanent Tax Revolt ([https://www.amazon.com/Permanent-Tax-
Revolt-Property-Transfo...](https://www.amazon.com/Permanent-Tax-Revolt-
Property-Transformed/dp/0804758719)), Proposition 13 was largely the opposite.
Previously, homeowners benefited from informal and corrupt tax assessments
that lagged market values. After assessment practices were modernized and
standardized, homeowners demanded protection from the market. And while many
states created protections (e.g. low-income circuit breakers, elderly
exemptions, and homeowner exemptions), California’s Proposition 13 protections
(along with the later Proposition 58/193 hereditary privileges) are probably
the most regressive among the states.

> does property tax really even make sense? This person PURCHASED the land but
> still has to owe the government taxes even though they own it?

Yes, a property tax (particularly, on the _unearned_ portion which is the land
value) makes sense as a progressive way to enable the fruits of the community
to be used to benefit the community. For one thing, a private owner should not
reap all the benefits from the economic activity around him that he did not
earn. For another thing, private ownership should not last forever because
that leads to concentration of wealth; one could similarly ask whether
copyright and patents should last forever.

> Secondly, it is really important to think of real estate as an investment
> more than a physical asset. These people got in the market early and their
> investment is giving them great returns. I think that is fair.

I disagree. The economic justification for investing in capital is that
investors help to make the country more productive. Driving up the price of
land does the opposite; investment in land crowds out investment in capital.
The value of land comes from the neighborhood’s economic activity and public
investments, not from the individual landowner. Now, you could argue that
giving the landowner _some_ incentive will encourage more civic-minded
engagement, but I think it’s a far cry from justifying giving him 100% of the
increase in ground rents.

For a recent book on the moral foundations of land ownership, I recommend
Rethinking the Economics of Land and Housing by Josh Ryan-Collins,‎ Toby
Lloyd,‎ Laurie Macfarlane ([https://www.amazon.com/Rethinking-Economics-Land-
Housing-Rya...](https://www.amazon.com/Rethinking-Economics-Land-Housing-Ryan-
Collins-ebook/dp/B06XCL9S2T))

~~~
kevinliang
I just wanted to post here that I read and acknowledge your claims. I would
like to respectfully agree to disagree as I don't think this conversation is
going to convince either one of us what we currently believe.

