
A Long Game - alwaysdoit
http://techcrunch.com/2016/01/27/a-long-game/
======
cfcef
When I was younger, I didn't understand the appeal of
[https://en.wikipedia.org/wiki/Georgism](https://en.wikipedia.org/wiki/Georgism)
's
[https://en.wikipedia.org/wiki/Land_value_tax](https://en.wikipedia.org/wiki/Land_value_tax)
; proponents came off as cranks. But the more I learn about California and the
Bay Area and watch the rents (in both senses of the word) rise, the more I
think there may be something to it.

~~~
fweespeech
It is largely due to the fact property taxes were largely frozen by a funding
source under Reagan. Without that, really, the only place that would have an
issue is SF because its surrounded by water and doesn't want to change.

~~~
sbov
The idea that only SF would have an issue seems like fiction to me. Maybe
there would be no issue for tech workers. But for the median income, there
would still be issues. Prop 13 was passed because residents were being driven
out of their homes due to tax bills from rising property values - my parents
were nearly driven out of their house in San Jose before the passage of prop
13. And they bought it in 1972. I don't see how repealing prop 13 will
necessarily remove a problem that existed before prop 13.

~~~
ghaff
To the degree that there's a fixed amount of housing (or, more accurately, a
supply of housing that isn't increasing at a rate sufficient to meet demand),
it isn't. The only question is who gets to live in that housing and how much
they pay for it.

People who live in very expensive real estate that they own already have the
option to take their profits and move to Las Vegas or wherever. However, I'm
very hesitant to say that property taxes are a legitimate lever to force
people out of their homes for the benefit of tech workers moving to
California. Especially given that 50% or more of property taxes go to school
services which longtime owners aren't even using.

Perhaps the rate of allowable property tax increase in California should be
larger than it is or there should be other changes--including making it
possible to build more housing--but we should be skeptical of policies that
systematically force long-term residents to move away.

~~~
mjevans
The problem is that the old single family housing unit is occupying valuable
land which could better serve multiple families at a higher density.

City cores are about increasing the density of human population so that
network effects increase productivity, decrease cost, or both thus raising the
efficiency of limited resources.

The correct way of regulating the cost of a city is based on a combination of
the usable area occupied (probably a 2-dimensional area unless someone is able
to build above/beneath a given property), the number of tenants there and the
'useful floor space' (exclude hallways, balconies, etc) they receive for
whatever their rent is (property taxes are rent paid to the municipality for
use if it's commons resources; IE being close to other things and being able
to reach them).

The government should be driving /down/ the price of housing when it is too
high by pushing for the construction of denser housing in the urban core to
drive the market curves from the supply side.

The government should also have it's tax structure setup in a progressive way
(penalize rents not in the lower half of the equilibrium, including home
owners that outright own their home (and thus only pay property taxes)).

When the market is over-saturated (as it would be if an area is deflating), it
should be supporting the existing prices on the market by keeping taxes high,
buying back properties that are sub-standard, and focusing on their re-
development in to civic goods; some examples of which are parks, arts
facilities, or facilitating new small business experiments.

~~~
JoeAltmaier
Sounds like a hog confinement operation. I don't think that livable city cores
are about anything like that. Maybe less dense cities are a better goal.

~~~
mjevans
I suppose that it could be interpreted that way, however the point of the tax
rate being 'progressively' designed is to encourage /both/ low rents and more
space for rent (as a way of reducing the taxed assessed against the property
value).

Urban planing is also supposed to include parks, recreational facilities, and
a generally vibrant mix of entertainment types near a population. A utopic
city is supposed to be /better/ than rural lifestyle because of increased
opportunity of all types. Having grown up in the suburbs, the only opportunity
that affords is disenfranchisement; which is what I also hear of the rural
areas.

~~~
ghaff
>A utopic city is supposed to be /better/ than rural lifestyle because of
increased opportunity of all types.

I've got nothing against cities and have lived in them (and drive in currently
for various events). There's also nothing wrong with living on a number of
acres that give you a degree of privacy and separation that you don't get in a
city.

Personally, I'm not a fan of classic suburbs but cities aren't a utopia for
everyone either.

~~~
eru
If cities could be more dense, we could pack the same number (or even more)
urban-loving people in less space, and there would be more space left over for
the rural-lovers elsewhere.

What we get instead is low density sprawl.

~~~
JoeAltmaier
We are _not_ gonna run out of rural. That's a red herring.

Sprawl happens because its a free market, and people buy that stuff (suburban
housing).

~~~
eru
The US doesn't have a free market in housing. There's lots of stupid zoning
and covenants.

Yes, some people like suburban sprawl and buy it, but the alternatives are
pretty much illegal in most places. See eg
[http://cityobservatory.org/my_illegal_neighborhood/](http://cityobservatory.org/my_illegal_neighborhood/)
(The neighourhood featured there is still too sprawly for my tastes, but
already illegally dense.)

~~~
JoeAltmaier
Maybe where you live. I live in the country, where none of that happens. Good
luck with that superior city living!

------
brotherjerky
This is quite long, but very interesting. Make sure you check out part 2 here:
[http://techcrunch.com/2016/01/29/nothing-like-this-has-
ever-...](http://techcrunch.com/2016/01/29/nothing-like-this-has-ever-
happened-before/)

~~~
mjevans
After reading that I better understand what my own opinion is but what I was
having trouble articulating.

Quality of life is important, and different people will value different things
as different weights in their quality of life.

However one area that the governments we elect are failing us is improving
quality of life by creating a more fair playing field for all (as well as
generally using the bonuses from that to enrich the playing field for all).

------
jamespitts
How much value would be realized if this massive and complex problem is fully
addressed in the Bay Area (and the solver properly compensated)? $100B?

The scale of it all is huge, but so is mining asteroids.

~~~
ThrustVectoring
The Bay Area currently has 8 million and change people in it. A reasonable
estimate of "fixing the housing problem" would add another million. Assume
$1000/yr per additional resident in extractable economic value, and a net
present value of twenty times the yearly income, and you wind up with a
problem that's worth roughly $20 billion.

~~~
ghaff
>A reasonable estimate of "fixing the housing problem" would add another
million.

Another reasonable approach to "fixing the housing problem" is realizing that
not everyone can live in a handful of popular areas. Even if incremental
building happens. Even if tax policy changes. Not everyone in
web/social/mobile development can move to the Bay area. Indeed, many probably
don't want to.

~~~
eru
You could put a city like Hong Kong or Singapore in some part of the bay area,
and put quite a few willing people in there.

~~~
jamespitts
Definitely agree. Once any area starts to take on the characteristics of a
modern megacity, it becomes self-sustaining.

I would even go as far as to say that megacities attain the closest thing to a
singularity that human beings currently experience.

~~~
eru
I used to live in Singapore. Didn't feel very singular.

------
clock_tower
I don't know what to say to this, except that I'm glad I'm not in San
Francisco -- and my thoughts and sympathy are with everyone who is. (Except
the Boomer homeowners who've voted themselves an exemption to property tax.)

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erikpukinskis
It's amazing we spend 50% of our income on something which, from a first
principles perspective, could asymptotically approach free. Too bad housing
markets aren't actually efficient.

------
flinty
Kim is easily in the top 3 writers ever at techcrunch

