California housing crisis affecting middle class the most: It's 'a broken system'

[ansible]

For all of its claims of being an economic paradise, California is a failure when it comes to housing.

Not just low-income, affordable housing, but middle-income, working-class housing for teachers, firemen and long-time residents hoping to live anywhere near work.

"California has a housing crisis. We can't provide housing to our citizens," said Rita Brandin, with San Diego developer Newland Communities. "In Georgia, Texas and Florida, it can take a year and a half from concept to permits. In California, just the process from concept to approvals, is five years – that does not include the environmental lawsuits faced by 90 percent of projects."

Numbers tell the story of California's housing crisis.

* 75 percent of Southern Californians can't afford to buy a home, according to the state realtors association.

* 16 of the 25 least affordable communities in the US are in California, according to 24/7 Wall Street.

* Officials this year declared a homeless emergency in San Francisco, Los Angeles, San Diego and Orange counties.

* 56 percent of state voters say they may have to move because of a lack of affordable housing. One in four say they will relocate out of state, according to University of California Berkeley's Institute of Governmental Studies.

* A median price home in the Golden State is $561,000, according to the realtors association. A household would need to earn $115,000 a year to reasonably afford a home at that price, assuming a 20 percent down payment. Yet, two thirds of Californians earns less $80,000, according to the U.S. Census Bureau.

* The household income needed to afford a median-priced home in the Silicon Valley town of Palo Alto is $450,000.

* In San Francisco, a median priced home is $1.5 million, according to the Paragon Real Estate Group.

* Home prices in California are twice the national average, and 70 percent can't afford to buy a home, according to state figures.

* Median household income in L.A. is $64,000. That's half what is necessary to buy a home.

*1 in 10 residents are considering leaving because they can't afford a place to live, according to a state legislative study, while US Census figures show 2 million residents, 25 and older, have already left the state since 2010.

* In 2016, 30 percent of California tenants put more than 50 percent of their income toward rent and utilities, according to the California Budget & Policy Center. Economists consider 30 percent the limit.

* California needs to double the number of homes built each year to keep prices from rising faster than the national average, according to the Legislative Analyst's Office.

"The biggest tragedy of California is we have stopped building houses for the middle class," said Borre Winkle with the Building Industry Association of San Diego. "Think of California's housing market as a martini class. We're building some affordable housing at the low end. Absolutely nothing in the middle and the top end is high-income housing, which subsidizes low-income housing. So that is a broken system."

http://www.foxnews.com/us/2017/12/14/california-housing-crisis-affecting-middle-class-most-its-broken-system.html

[Igel]

1. But SALT. n/t

[demosincebirth]

2. Only ones loving this market in California are the realtors and their agents. Six percent on each

sale...that's some pretty good chicken scratch

[pnwmom]

30. They actually don't benefit from such a tight market, because there are many fewer sales. n/t

[demosincebirth]

34. You make four sales a year of one million five and up, you should be doing pretty good. Don't

you think?

[pnwmom]

35. You think that's typical? It isn't. And most sales have split commissions between 2 agents,

and many have negotiated commissions. When the market is tight, the sellers negotiate to lower them.

Also, real estate agents (for the buyer and seller) usually can't keep their half (their 2.5 - 3%.) They have to share some with their brokerage.

https://www.zillow.com/advice-thread/What-is-the-going-real-estate-commission-rate-in-Seattle-WA/441737/

If you and your realtor decide that staging is beneficial for your sale (sometimes it's not achievable if you or tenants are living at the property during the sale), it is an expensive item that should be considered in the calculation for commission rate. For example, a 4.75% commission rate on a $1million home without staging services isn't really a "saving" if you compare that to a 5% commission rate that includes staging services presuming the staging services cost $2000/month. Most experienced real estate agents have connections with stagers who offer their services at a discount, so it can be a win-win situation if your real estate agent includes staging services in the overall commission rate.

Another complexity relating to real estate commission is that most if not all real estate agents must share a percentage of their earnings with their brokerages. Some agents have to share a large portion and others a small portion (or none if they own their own firm), thus some are in a better position to negotiate than others. One key fact – most real estate agents are a lot more willing to lower their commission rate if you're going to use them for your next home purchase. If you're an investor or own multiple properties, an agent is also more likely to lower his/her commission rate because of potential repeat business.

[Demsrule86]

60. In general...you don't make the full 6% on expensive houses...

[CreekDog]

83. you didn't do any research on it, you didn't present any evidence, but you threw out some numbers

so I imagine you're pretty satisfied with yourself.

[Cicada]

3. We can make this better

We need more housing units. Nice areas don’t permit affordable housing. We need to fix that. If an application is not processed within 90 days it should be auto approved. If too few permits are approved the locality should lose its rights to issue permits, replaced by a regional body. Land should be taxed on the value of maximum permitted density whether structures are built or not. Tax on maximum permitted density will provide incentive to build. If you can’t afford to build you will sell to someone who will build.

This is important. We need affordable housing. We can make it happen.

[sarah FAILIN]

4. OR

Those people that don't have equal legislative representation along with the lack of housing opportunities could move. There are lots of places that would be more welcoming financially than California.

[ansible]

6. I just can't stand snow, sorry

[sarah FAILIN]

8. We RARELY have snow and it's gone by lunch most the time.

I was on the back patio barefoot today, so it's not that cold either.

But it is Alabama... Good thing though is Roy Moore is not our Senator. Times are changing. The cost of living is low and the job market is wide open.

If you own a home in a different market like Ca, you could sell it and buy something nicer here most likely and still have money left over to stick in your retirement account.

The door is open.

[Demsrule86]

62. I lived in Georgia for a number of years and heard how awful Alabama was on a daily basis...

but my brother brought some property there and it is gorgeous. And the people were very nice too.

[sarah FAILIN]

82. MOST of us are very nice

Sometimes you get a jerk, but I don't think those are limited to Alabama.

It is a great place for people to retire to if you're coming from a high tax state with high property values. Your retirement dollars will go much further. The people I rented to were looking for an assisted living for their mom and said the one in our town was less than half what they would pay in Ca and was nicer.

[Demsrule86]

84. There are jerks everywhere. I thought it was a nice state with friendly people.

I believe in time Democrats will win in Alabama and other 'red' states once more.

[sarah FAILIN]

88. Thank you

We still have hope.

[Cicada]

15. Leaving CA costs the economy a super ton

The great businesses of CA could create huge economic gains if they could find more highly skilled workers. Those workers do not now have residences available. This is not a small matter. The national economic growth rate would be significantly higher, by a lot not a little, if we could fix the shortage of housing in SF, LA, San Diego, silicon Valley. And leaving friends and family is costly in noneconomic ways. And the economic welfare of those who stay rather than leave can be greatly improved. Those who own land and get rich from it did not make the land. Paying them more does not increase the amount of land.

With a huge spike in economic growth in CA and other places, which lower home prices would create, provides more funds to protect social security, medical care, schools throughout the country.

I think I read we could almost double national economic growth if we fixed this. It’s not just fair, it would improve our lives.

[sarah FAILIN]

17. What you're talking about sounds like land seizure to me

I don't really like that. If someone owns land, it is theirs to use as they wish. If they want to charge a high price for it, that is their right Nobody made the land.. but nobody IS making land, so those that own it can charge what they want if they're willing to sell.

The housing it sounds like you're wanting to force them to build doesn't sound like anything I would want to live in either.

It might improve your lives to encourage business to move to more rural areas.

[Cicada]

19. All tax is seizure. So what? Tax can improve general welfare.

Current laws ram boatloads of money into the hands of land owners by artificially limiting the supply of buildings. Would it be fair to limit the practice of medicine to those whose last names are A thru R? Those permitted to practice would get richer for no good reason.

But we can find a solution, you and I. The huge extra profits from extra economic growth can be paid as compensation to those who have loss from paying more than the newly adjusted sale price. We can give a break for the principal residences of those with limited income. For instance Donald Trump gets a big tax break for the property tax he pays on his Trump Tower home. If your NYState tax return shows your income is below $500,000 then your property tax is automatically lowered. For at least five years before 2017 Trump got that break.

There is enough economic gain from what I propose to buy off any who suffer and deserve compensation. We really really should do this.

[sarah FAILIN]

28. This is the funniest thing I've read here.

Artificially limiting the supply of buildings??? I hate to tell you this, but just because you have land does not mean it is getting you boatloads of money rammed into your hands. Some people just want to have it as it is, part of natures beauty.

What if I just want to keep my land? What if my great grandfather bought this land and it is all that is left of our family farm? What if I choose to grow vegetables on my land to feed my family? You can't force me to sell it to a developer to build high rise apartments, Sorry. You want to use the economic gain to pay people off? Are you from a communist country or are you a troll trying to say insane things to get people to argue?

This is literally the most bizarre thing I've ever heard. Try moving to a less densly populated area.

[Cicada]

37. The king of England used to grant monopolies, we do that with land

Once upon a time the King limited the right to do certain businesses. Tom owned a company which made boots. The king might grant him a royal patent so only Tom could make and sell boots. That system led to economic inefficiency, to a low standard of living. Governments do that with building permits. They do not permit a land owner to build 1000 apartments on his hand. In effect they have granted current land owners a royal patent for residences. You can have a residence and rent it out, or use it, but the owner of raw land may not compete with you. You own a royal patent which harms the economy. You find that funny only because you have never had that explained to you. Why exactly do you think the rich are getting richer while the rest of us stagnate? It is not primarily because of changes in tax laws. It is primarily because the rich have in effect royal patents. The consolidation of cell phone companies to a small number blocks others from competing. They get rich, we don’t. Laws could fix that. The home owners of Atherton are given through zoning and building permit regulation a royal patent on nsupplying residences in Atherton. They get rich, we don’t. Laws could fix that. And these modern versions of royal patents keep the economy from growing, they keep property owners rich while nonowners, legally blocked from competing, stagnate.

I know this is a novel idea to you. That novelty is why you think what I said is funny. But does it matter to you that the rich get richer while the others don’t. If you want to stop our descent into
a tiny number having all the wealth you need to educate yourself about the problem of “rent”
In the general sense of the word rent. Land use rules are just one part of our bigger royal patent problem.

[sarah FAILIN]

87. Are you aware of this thing we had with England..a Revolutionary war????

We do not follow any royal laws here. There are no royal patents in this country.

I have already told you how you can get a home of your own. Move to a less expensive area. You do not have to live in Ca.

As for other people getting rich and you not getting rich, you have to take the initiative to either go to school and work hard for the money you want or invent something everyone will want then find a way to produce and sell it. Laws are not going to "fix" other people getting rich while you only complain about it.

I was wrong when I said these posts were funny. They are insane.

[Cicada]

112. But we DO follow those old royal laws, thats my point

Those old rules sucked. But we have reinstituted them in modern form. They still suck.

[sarah FAILIN]

113. No we do not

Honestly, you perception of reality is more than just a bit off.

[Cicada]

114. Is the small number of cell phone providers reality?

Is the increasing concentration of ownership in various industries reality?

Is the zoning law in Atherton California limiting multi family structures reality?

All those restraints on free competition are bolstered by laws, regulations, government policies.

They are modern day versions of limits on free competition, not very different in effect that limitations enacted as royal patents. Helping affluent property owners restrict competition, at the expense of the rest of us, is a long government tradition.

Paul Krugman thinks this is the primary cause of the rich getting richer while the rest of us stagnate. If he is correct we can make life better by returning to the trust buster glory days of old.

[sarah FAILIN]

115. There are LOTS of cell phone providers.

I was with one for years that was just a little local company headquartered the next county over from me. Anyone can start up a cell phone company.

"Industries" and by that I assume you mean corporations or factories are owned by multitudes of people. This does not make any sense at all.

I'm sure there is a zoning law against apartment buildings in Atherton Ca, even though I've never been there. The residents of a city can make rules as to how many trees and what kind you can plant in your front yard if they want to. I'm sure the people of that town as a majority have voted to not have their town taken over by massive apartment buildings 50 stories tall like you say you would like. My town used to be a sleepy little town that didn't allow any store to open on Sunday, but they decided they wanted to grow and now it is a chore to drive from one end of it to the other because of all the crazy traffic we have now. That is what happens when a small town grows too much. I guess Atherton chose to continue to be a small town a family could feel safe in.

What free competition are you talking about? There are no restraints on competition or "royal patents". You problem is jealousy. You see others that own houses as having "royal patents" when in reality it is all your imagination. If you want the same things, go somewhere else. If all the land is in use where you are in Ca, go somewhere else. Go to another state. I hear they are begging people to help revitalize old homes in Detroit. Go there, create a job for yourself and then buy yourself a home. You do not get to steal another persons house to put a 50 story tall apartment building on the spot where the single family home stood.

I don't care what you think Paul Krugman thinks. The cause of you stagnating is you not working to get ahead on your own and being unwilling to do anything about it except complain that you want to take other peoples homes away from them so someone could build a 50 story monstrosity apartment building.

[Cicada]

117. There are only 4 national mobile networks plus a regional one

There are “virtual” cell phone firms which market access to the small number of “real” mobile phone companies. And concentration will continue until the number is smaller.

The government chooses not to block concentration.

If I own a three acre plot in Atherton I am not permitted to build 25 residences on it. Whether I am free to move to Lubbock does not negate that an Atherton land owner is blocked from competing against existing providers of residences.

The people in Atherton did not create the land. The government assigned owners to that land in the Spanish land grants. They provided a royal patent for that land, blocking use by all others.

The people of Atherton do not own the three acre parcel. The govt of Atherton grants them freedom from competition. When numerous towns and cities do that the rich get richer and the rest get screwed. We need changes to permit an increase in the supply of residences. We have not run out of land. We have run out of permission to build multiple residences on that land. We can zone to maintain open areas AND have other areas with far more residences. Personally, I resent those granted patents by the king, or restrictions against competition from governments, getting obscenely rich not from anything they have produced but solely from being able to corrupt government to give them unearned advantage.

This land is your land, this land is my land...

Well once it was.

[Sophia4]

46. Eminent domain. The owner of the land is entitled to just compensation.

It's the law.

Happens all the time. And I believe that a few years ago, the Supreme Court decided that a government can exercise eminent domain and then sell the property to a private company. Maybe that ruling has changed, but under redevelopment law, California cities used to "take" property legally and redevelop it. The property taken was theoretically not being kept up. There are lots of those kinds of properties even at today's prices.

Read the Constitution regarding takings.

U.S. Constitution - Amendment 5
Amendment 5 - Trial and Punishment, Compensation for Takings

<<Back | Table of Contents | Next>>

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

https://www.usconstitution.net/xconst_Am5.html

5th Amendment -- Takings Clause

[Cicada]

53. Interesting argument

I vaguely recall a recent case where a zoning change reducing permitted use was held a taking.

Increased taxes? No, taxes are raised all the time.

But thanks for bringing this to my attention.

[Sophia4]

78. The original owner gets paid in a taking, but the taking happens.

nothing new about it.

that is how we build freeways and how inner cities changed from slums to decent places to work and live

elementary, dear Watson

not even worth a capital letter

[sarah FAILIN]

81. I know all about eminent domain, but this is different

To force a person to sell their land to private people to develop into apartments is not the same as forcing them to give it up for roads to be built by the government for the good of society. It is also not the same as taking abandoned properties and slums to be revitalized by cities. Private companies do not have the right to declare eminent domain on citizens.

Also, according to what I have read, their taxes are capped to 1978 amounts in Ca to keep people from losing their homes due to high taxes unless the land is developed the way I read it.

[Sophia4]

90. The government takes the land and then either builds the apartments or sells it

to someone who will build the apartments. It is community redevelopment -- and that law is no longer in California I believe.

http://www.dof.ca.gov/Programs/Redevelopment/

Taxes are not capped to 1978 amounts for people who buy. Property taxes continue to increase annually but at a specific, limited percentage of the purchase value for people once they have purchased the property. As I understand it, that limitation also applies to corporations for properties they already own -- at least it used to.

But people who buy houses now will pay the property tax on the purchase amount they paid for the house.

You are correct that a private party cannot directly exercise eminent domain. But they can and do offer high prices for properties and then build on them.

[sarah FAILIN]

94. I'm going by what someone who lives there said here, but

Is the link you posted not talking about dissolving redevelopment agencies? That doesn't sound like they are seizing property to me.

Look at this post as reference to prop 13 still existing
https://www.democraticunderground.com/?com=view_post&forum=1002&pid=10038358

[Sophia4]

95. They dissolved the redevelopment agencies, but the Fifth Amendment which

permits government takings is alive and well. I don't know why they ended the redevelopment law. Maybe it had served its purpose. Downtown LA looks great now.

[sarah FAILIN]

97. The 5th doesn't actually say that

It says private land can't be taken for public use without just compensation. Nothing about private land being taken for private use of different people.

I edited my last post to add a link to the fellow that is talking about prop 13 still existing and how it would affect people if repealed. It's just a bit lower in this thread.

[Sophia4]

98. I agree. The 5th doesn't say that.

But a few years back, the Supreme Court ruled that it was OK. Personally, I don't agree with that ruling, but then . . . .

Prop. 13 still exists and, if repealed, would mean that people relying on Social Security as income could not live much of anywhere in California.

It created its own Hell. A very Republican measure. My husband and I would be forced to sell our house and move to someplace we have never lived at our ages, in our 70s, if Prop. 13 were repealed. It has helped to raise the cost of housing in California in my humble opinion. Had it not existed, I think that the housing market here would be more sane. As it is, older people who own their homes but have very low incomes can to some extent take their low tax base with them, but can't find housing they could afford where they want to live.

Today it is sunny and in the 70s. Think about the temperatures back east. Everyone wants to live here or so it seems.

We came here because the area had lots of jobs.

[sarah FAILIN]

100. I don't agree with it either

I'm glad older folks can stay in their homes without worrying about losing their homes to the tax man. Here even though taxes are low, the elderly are exempt from paying tax once they hit 65 I think.

Here in Alabama, I have 2 houses. I live in the one that is just under 5k sq feet with about 7 acres of land and rent out the one in a subdivision on a half acre. My tax bill for both places was $1260 this year. This is why I encourage people to consider retiring here. All the costs are low from actual housing to utilities and groceries. The more like minded people I can interest in retiring here, the more likely this state goes and stays blue. I'd like to see that happen. The weather isn't really that bad either. It's 40 right now, but I walked out in the back barefoot earlier. People that actually own a home and could sell out in a state like Ca to make a large amount on the house could make their nest egg go a long way in a state like Al.

[Sophia4]

101. Very true. But I went to high school in Alabama and a team of horses

and a very large semi truck could neve get me to go back there again.

But it might be OK for others if they had a blue community to live in.

[sarah FAILIN]

103. I understand

High school was the worst part of my life

[Sophia4]

104. High points were Dauphin Island and the music programs in my school and church.

Low points -- pretty much everything else except working in day care and as a soda jerk. The latter was good because I got to eat what the customers ordered but did not want.

Everything else was pretty awful. High school is an awful time of life for a lot of people. It's a shame.

[Demsrule86]

63. I agree with you...It is stealing.

[politicaljunkie41910]

32. Where is all this magical land people are talking about building on? I've lived in California all

Last edited Sat Dec 30, 2017, 03:22 AM - Edit history (1)

my life except for the 5 years I spent in the military. I can recall as a child when you could drive out of LA headed East to Pomona and it was all green grass and hills. Try and find some vacant land between LA and Pomona today. It doesn't exist. I was stationed at Fort Ord when I got out of the military. I remember when you could drive from Monterey to San Jose and it was mostly agriculture and vacant land in between. Now it's wall to wall housing.

I can recall going to a college football came in Fresno at Cal State Fresno in 1999 and there was one main street and not much else. It was mostly an agricultural town. Now all that was once farmland is housing. You have houses costing almost a half million dollars on 5000sf lots. I know what I'm talking about because my son and my grandkids live there.

When I left Monterey to return to a more affordable Southern California in 1981, I bought a house in Ontario and there was still lots of land there for development. I can still remember the drive from Ontario to Riverside when there was lots of vacant land in between. Not so much any more. There is a lack of affordable housing throughout the state, but it's not a result of building permits taking such a long time. It's because a lot of people enjoy living here in spite of the high costs and the long commutes.

[Cicada]

38. No. Developers would happily build a thousand 50 story apartment buildings in San Francisco.

We have underused as well as vacant land.

[Sen. Walter Sobchak]

48. You are aware most of San Francisco is a sand dune right?

[Cicada]

50. I did not know that more than a small part is a sand dune.

I thought that the part created by dumping sand in the bay was less than 20% of the city.

I am sure developers can find a solution. High rise apartments can be built in Oakland with catapults on the roof launching workers into a giant net built on the sand dunes in San Francisco or something. Amazon can drone deliver people to offices in San Francisco where bosses can use their smart phones to tell the drones when to drop the employees into the net.

Driverless busses from the Oakland apartments. We might need to build another dozen or so bridges across the bay. People can be permitted to live in their offices. While in grad school I lived in my lab for 3 months. It was actually great. My former girlfriend slept in Thurgood Marshall’s bathtub at the Supreme Court the year she clerked for him (to save time not money).

We are Democrats. We can figure out good solutions to help people. I really believe that.

[Fla_Democrat]

61. Bravo

Good solutions to help people........

" High rise apartments can be built in Oakland with catapults on the roof launching workers into a giant net built on the sand dunes in San Francisco or something. Amazon can drone deliver people to offices in San Francisco where bosses can use their smart phones to tell the drones when to drop the employees into the net. "


Nailed it......

[Queen of the Iceni]

118. This is the most sensible thing I have ever read here.

Well done.

[Demsrule86]

64. Places in demand come with high price tags.

[Sophia4]

43. In spite of the housing crisis, people like to live in California because it's

warm and liberal.

Who wants to live in a red state?

No sane person. But housing is far too expensive in LA.

Nevertheless, there are empty lots in my neighborhood that could be built on. One of them is on a commercial street and could be used for an apartment building.

[Codeine]

116. But those places arent California.

Not the same culture. Not the same weather. Not the same diversity.

[Sen. Walter Sobchak]

9. I'm just going to guess you're unfamiliar with Prop 13

The insistence on increasing density is what has stoked the NIMBY fires in the first place. We need more commuter rail and more lanes such that commuting from inland suburbs isn't so unpalatable.

The infrastructure required for the type of intensification some people advocate just doesn't exist.

[Cicada]

16. Prop 13 is a disaster and should be repealed

58% of the benefit went to out is state owners, at least initially. It is unfair, two owners in identical homes can pay vastly different amounts. Repealing prop 13 will not cause the cost of real estate to rise. The price of real estate includes the cost of taxes. If taxes go up then real estate price will fall to compensate. For instance, if mortgage interest stops being deductible then the purchase price will fall to reflect that. What I propose harms current real estate owners and helps future real estate buyers. Current owners in many cases have unearned windfall gains they do not deserve, they did nothing to cause increased value. I am open to ways to compensate those who bought recently and sell at a loss.

[Sen. Walter Sobchak]

18. Prop 13 is more essential now than ever

Using forty million people are guinea pigs to see if you can bludgeon the real estate market into behaving like it should on a blackboard is insane and the single greatest lifeline you could ever throw to the California Republicans.

Repealing Prop 13 will force people of modest means out of homes they have owned for decades and not a great deal else.

[Cicada]

22. How many out of state corporations will be homeless? We can exempt based on income.

The number who would be forced to sell is very small. We can exempt principal residences of those with incomes below four times the federal poverty level. We can lower sales tax by enough to leave limited income home owners in the same economic position. There are many ways to save those you describe in ways other than the insanely stupid prop 13. The benefits of prop 13 go overwhelmingly to rich non humans. Some to rich humans. Very little of the benefits go to people who will be forced to sell for economic reasons. We do not need a sledge hammer to put in a nail to hang a picture.

[Sen. Walter Sobchak]

25. Taxing out commercial and industrial land uses is hardly desirable

The beneficiaries of Prop 13 are individuals and businesses who aren't land speculators and don't derive any practical benefit from the appreciation of land they're already employing in the only way they intend to.

Mess with this status quo and you will elect Republicans to the legislature from San Francisco, you're the one proposing to swing the sledge hammer.

[Cicada]

27. The beneficiaries of prop 13 are mostly out of state corporations and rich people

Apple Corporation pays a federal income tax of one percent of its income. Why in God’s name do we need to limit their property tax to a crazy low level? Donald Trump owns real estate in California. Why in God’s name do we need to limit his property tax to a crazy low level? At the time prop 13 passed 58% of the benefit went to out of state corporations. I assume that is still true. Why do I have to pay more for a higher sales tax so General Motors or the Sony Corporation can pay a crazy low property tax? And the California residents who get a crazy low property tax rate, forcing CA to charge me more sales tax ? The vast majority of The tax savings from prop 13 which go to resident humans goes to really rich people. The tax saved on a home bought for $150,000 is trivial compared to what Beyoncé will save on her new $90 million dollar home in Los Angeles. Why should I be forced to pay more in sales tax to save her from paying fair tax on her home?

As stupid as the new Republican tax bill is, it’s stupidity pales compared to the stupidity of prop 13. It forces us all to pay higher sales tax, gas tax, income tax just so the rich, the non humans, the out of state businesses can pay less than a fair tax. We can limit the property tax for principal residences of those who are have low or moderate or even double moderate incomes without shoveling billions of dollars down the throats of those who don’t need nor deserve it.

And the lack of benefit from getting rich from appreciation you had zero to do with? Just write me a check for that. I will gladly take that non benefit. Why do we have to spare from tax windfall gains which are the result of nothing productive? I think those who get rich can fairly be asked to pay fair taxes, even if they choose to delay sale.

[Sen. Walter Sobchak]

47. The beneficiaries of Prop 13 are anyone not flipping real estate

If you squeeze companies on property tax they will just move to lower cost jurisdictions and take the jobs with them.

Conveniently enough we need look no further than the cities of the majestic Rust Belt to see just how well chasing business away works.

My home in Costa Mesa is theoretically worth about a million dollars and that does nothing for me. I'm not planning on selling it, taking out a HELOC or using it as collateral.

[Cicada]

80. How about deferring extra property tax until you sell?

Making corporations pay normal property tax will not drive them away. Raising property taxes will lower sales prices. The total cost, purchase price plus present value of all future property tax will stay the same. Raising property tax hurts current owners, like you. It does not hurt new buyers. I am happy to let you defer higher property tax until you sell.

If we take some of your unearned profit from your future gain, we can help current people who have not been made richer by this govt granted bonanza. I think that’s fair.

I am not being selfish. I am an old hippie with little interest in money. But I grieve for poor young people who need a break. I think this could help them out.

[Sen. Walter Sobchak]

89. And if my house is worth significantly less when I sell...

am I still on the hook for all the years it was assessed at a million dollars? Good things I don't have any kids. "Sorry Son, I have to leave everything in my will to the tax assessor because crazy Chinese people were paying millions of dollars for houses around here back in the twenty-teens."

Capital appreciation and capital gain are not the same thing.

Making corporations pay substantially more in property taxes will just see them move to less expensive locations either somewhere along the Interstate or to another state. And if your idea of "normal" property taxes is taxing industrial and commercial land as thought it were developed at it's highest residential density, well then Rust Belt here we come.

I am also sympathetic to young people who have been priced out and I would like nothing more than to see the housing market crash hard and permanently.

There have been housing pressures in the past too and we did build our way out of them, but we don't need to build skyscrapers on the most expensive land on the planet and fight the community every step of the way through the process, we need new suburbs, new transit lines and new roads. Young people also have to broaden their horizons and realize there is a great big country outside of the half-dozen cool cities they disproportionately migrate too.

[Cicada]

24. Trump gets lower property tax on his home, we can adopt same exemption in CA

If you report less than $500,000 income on your New York State income tax return then the property tax you pay on your principal residence is automatically reduced. For the 5 years before 2017 Donald Trump got that automatic reduction on the property tax he pays on his home in Trump Tower. This break is a public record so we did not need to see his tax returns to know this.

We can easily protect homeowners who genuinely need the help you describe. But that protection is trivial compared to the massive unneeded and unfair tax reductions the non human, non rich, non home owners get from prop 13. Howard Jarvis pulled off one of the greatest con jobs of all times when he sold the bill of goods that prop 13 was a break for home owners hurt by rising property tax. That is NOT what prop 13 is really about. Jeez.

[Demsrule86]

65. That is true...California is a remarkable place...

And salaries are generally much higher too.

[Sophia4]

44. Doing away with Prop 13 with today's California housing prices would force

many older homeowners to move. The property taxes would be just too high for people living on fixed incomes like Social Security.

[Cicada]

49. We can exempt the old, those humans not rich from repeal

Almost all benefits from prop 13 go to those from out of state, or corporations, or landlords or the rich. Only a very small part of the lower property taxes benefit non rich humans who pay tax for where they live. We certainly should protect non rich humans who would be hurt by repeal of prop 13. New York does that. Those who report less than $500,000 income on their New York State income tax return get an automatic reduction on the property tax on their principal residence. Thus Donald Trump for the five years before 2017 got an automatic reduction on his Trump Tower residence. It is a public record so we did not need his tax return to see his reduced property tax.

Also, we should pair repeal of prop 13 with a reduction of sales tax to help renters. And we should also pair it’s repeal with bringing back the former refundable property tax rebate for home owners and renters with low and moderate income.

Your concerns are valid and can be solved.

[Demsrule86]

67. Bad idea. You would shut out more people than you would help.

[Cicada]

72. So what if corporations and the rich pay a fair tax on their real estate?

The crazy low property tax paid by out of state corporations, in state corporations, rich landlords, rich home owners comprises the vast majority of the benefits of prop 13. This irrational tax break for them forces CA to impose a higher sales tax, a higher gas tax paid for by regular people.

Please explain why I should pay higher sales, gas, car taxes so the Sony Corporation can pay unrealistically low property tax. Apple Corp pays a federal income tax of one percent of their income. Again, please explain why I am forced to pay perhaps 4% of my income for sales and gas tax, rather than 2% of my income, so they can pay property tax at a rate about the lowest on planet Earth.

We can easily spare from higher property tax the humans who are not rich pay on their residences with exemptions, refundable renters credits so they pay nothing more from our making Donald Trump pay his fair property tax on property he owns in California.

If you don’t agree with that, then feel free to forego exemptions, feel free to pay current high rates of sales tax. But please let the rest of us get a break.

[Demsrule86]

85. California's economy is doing well. I think that maybe they must be doing something right...

and the real estate is pricey because people want to live there.

[demosincebirth]

36. Cities have laws making affordable housing mandatory when condominiums and other developments

are given permits to build. I live in the Bay Area and this is what most cities, here, require. Problem is that apartment rents are sky high and that adds to the dilemma. Studio apartments in South Bay going for 1800 hundred a month. Thanks to the I T industry and the big bucks they pay.

[sarah FAILIN]

5. I rented to some people from Ca once

They were loony toons, but that is beside the point.

They rented this house by having a relative come look at it but took it immediately. I asked for a $700 deposit and the same rent. They thought it must be a dive, but it's not. Very nice 3br/2ba house with a garage. When the husband finally came out he told me if my house and lot were in Ca in the Nappa area they had previously lived in, it would be a 5k/month rental. He said all the homes were being rented out to Europeans and that there was nothing regular people could afford that was a decent home.

I say pack up your bags and go. People in Ca do not get adequate representation anyway. Spread those democrat votes through the red states and make a difference in more areas. Enjoy our lower taxes and lower expenses in general. Nobody wants to just keep building apartments taller and taller to make enough rooms. They could have more somewhere else.

[The River]

14. No Thanks

Living in California is worth the extra expense.
You could give me a free mansion and a new car and
I still wouldn't live in the south again.

[still_one]

56. ++++++++++++++++++++++++++++++++++++++++++++++++++++++++

[Demsrule86]

68. That is a bit unfair...you have police shootings in California...lots of them.

California is not exempt from problems. I lived in the South and I lived in the North...know where I saw the most racism? Boston.

[snooper2]

121. California's poor flock to Texas as West Coast homes and jobs fall out of reach

They got tired of California dreamin'.

Skyrocketing home prices and fierce competition for jobs in the Golden State are prodding poor families to pack up and head to Texas. Our state was the top destination for low-income residents leaving California between 2005 and 2015, according to a recent data analysis by the Sacramento Bee.

In that time period, about 293,000 impoverished people left California for Texas and nearly half that figure moved into California from our state, for a net loss of 156,000 people, the Bee reported.

The fact that people are moving in large numbers to Texas is an indicator that the state has economic growth and opportunity, said state demographer Lloyd Potter.


https://www.dallasnews.com/business/economy/2017/03/15/californias-poor-flock-texas-west-coast-homes-jobs-fall-reach


https://interactives.dallasnews.com/chartwerk/2.0/nLGlDsof.html

https://interactives.dallasnews.com/chartwerk/2.0/2o4kK6j9.html

[still_one]

55. Then why mention that they were "loony toons" if that is besides the point? unless of course that

is your subtle way to take a swipe at those of us who live in California.

Don't tell Californians that we do not get adequate representation. Worry about the representation in your own state.

By the way, it is Napa, California, NOT "nappa", and that was one of the areas that was devastated by the recent fires

California is a melting pot, and while California has its problems, compared to a lot of other areas in the country, I will take California any day.

California is sure as hell a lot more tolerant of different voices than most places in the country, especially compared to the red states.

[sarah FAILIN]

91. They were republicans..

But the real reason I think they (mom and daughter) were looney toons is that after just a couple of days they wanted to paint my house a different color. It was freshly painted a neutral color that went well with just about any furniture. They wanted "vibrant" colors.. said they would pay a professional to do it but I was not wanting to get stuck with orange walls when they moved. Then they decided they wanted to buy the house. I told them 120k and they could have it. Then they wanted me to do owner financing with the daughter who had no job or education... No.
So a couple of days later they told me they had decided to buy the house next door to mine. They kept me on the hook till the 1st of the month saying the elderly mom was going to live in my house instead of being put in an assisted living situation then they would all have privacy. They moved what junk they had brought and some they didn't, including the remotes to my ceiling fans, lol.
So this whole month, the husband had yet to show up. He was a physical therapist and he was supposed to be packing up their stuff while he worked out his notice. She was supposed to be finding a home for the mom. He never brought anything but a suitcase. They decided it was too much to deal with and rented furniture. He passed away a couple of months later and the rental companies called me wanting in my house to recover the furniture because they never paid. They never told the rental company they moved.
I thought it was all a scam and wanted no part of a owner financing deal, but the neighbor fell for it. I think the women moved on and left them with a mess from what I heard.
I'm sorry I offended you. I am constantly trying to convince people that our way of electing a POTUS doesn't give your residents as equal a voice as other states. I often try to get demo to move here in hopes of changing our state to be more like yours.

[Yavin4]

7. Wanna know what can relieve the housing crunch in CA?

High Speed Rail. If there was High Speed Rail in CA, folks could live further out from the major cities like SF, LA, and SD, which are cheaper and commute to work and home within minutes.

[Sen. Walter Sobchak]

10. Not with the system we're proposing to build

[Yavin4]

11. Then re-do the proposal. n/t

[Sen. Walter Sobchak]

12. Godspeed to whoever takes that on

[Nevernose]

20. +1

There’s an article somewhere out there that did the math.

It would actually be cheaper (long run) and time saving if tech workers commuted from Las Vegas to San Jose, as opposed to actually living in California.

[Yavin4]

21. There are really cheap areas north of San Jose as well.

It would broaden the CA tax base and improve the overall quality of life for the entire state.

[DonaldsRump]

45. Really cheap areas north of San Jose?

North of San Jose is:

-Silicon Valley
-the Bay
-San Francisco
-Oakland and Berkeley

None of these are cheap. Are you referring to Fremont and Hayward?

[still_one]

57. no they aren't. A good number of people comute from Stockton, Lodi, etc, and those places are

considerably lower compared to the bay area, but not compared to other areas of the country.

Fremont is not cheap at all, and while Hayward is more reasonable than SF, it is high

[Yavin4]

74. Farther North. Think Stockton. Think Sacramento.

Think big.

[shanti]

107. Ha, not so much anymore

The Sacramento area is in a RE boom now, it's the fastest growing region in California. Rents are skyrocketing. What's happening, is a lot of the people from the Bay Area are moving east and driving up the rents and housing costs. I live here, but bought my home in 1996, way before it started going up. At the time, my mortgage was a bit less than renting a similar home, so it made sense to me as I also worked here and was raising a child. Empty nester now, but would like to move to Oregon. Much prefer the wetter climate there too.

[Cicada]

40. Excellent point

Driverless cars may help. Go to sleep in your car and it wakes you up in the morning when you arrive at work a hundred miles away. Or a driverless bus with sleeping compartments.

There are many ways to solve this problem but entrenched economic interests block them.

[Demsrule86]

69. That is true...we were supposed to get one in Ohio before Kasich...and of course he ended the it

like a good little Koch stooge.

[roamer65]

92. That is 100 percent true.

[jeffreyi]

13. I live in rural California.

No debt, acreage, nice house and shop, beautiful mountains and desert out any direction, clean water and air, no traffic because no people. Have lived here for almost 40 years. Property here is still cheap. Red part of CA, though. We could use some left leaning folks with money to spend locally!

[JI7]

29. i'm thinking of it

[Tavarious Jackson]

23. Portland OR is the same way nt

[PoindexterOglethorpe]

26. A couple of thoughts.

First is that the median household income is barely above the national median income. And with housing costs exponentially higher.

Essentially, an income that is middle class in most of the country isn't that in California.

Another thought: that people who bought a couple of decades ago in places like California or NYC are sitting on a gold mine.

My income is below the national median. I bought a home where I live, in Santa Fe, NM, in 2009. The price of my home is significantly below the median value and a great deal less than the median home price here. But at that I live in a perfectly acceptable (to me anyway) two bedroom, two bathroom, three skylight place with about 900 square feet. Suits me perfectly.

Having lived in various parts of the country I'm very aware of differential home prices. I've also lived through more than two boom and bust (or bubbles if you prefer) cycles in home prices. So I'm both hard-headed and skeptical of a lot of blanket claims.

Nearly 20 years ago my then husband got a job offer to Southern California and turned it down because even then we didn't think we could afford a home that would suit us, which included two young children. Perhaps we were wrong and perhaps we turned down the opportunity of a lifetime, but I don't think so.

I will say that I don't even begin to understand how a young couple can possibly buy a home in California given the numbers quoted in the OP.

[flamingdem]

31. The developers want prime real estate or nothing, they're happy to destroy communities

especially of older Californians to do so.

Many Millenials are they're co-conspirators. They want us boomers out so they can have.

But we don't have anywhere to go.

The developers want Santa Monica and Venice for example. They make sooo much profit
on condos and houses. They won't build where it makes sense, where working people
can afford to live. Their profit is too low.

Please don't fall for the BS - each case is different and there's a lot of greed going on
by the developers and corrupt pols

[Cicada]

41. If developers were permitted to build 100o 50 story apartment buildings in Santa Monica ..

Another 1000 in Venice, another 1000 in El Segundo, another 1000 in Torrance

Then you could afford to live in Santa Monica.

We need to allocate many more areas as super high density, with public transit. Developers would love to provide enough housing to drive rent down down down.

[Sen. Walter Sobchak]

51. I would actually love to see that in Santa Monica

If only as a monumental FUCK YOU to the opponents of Santa Monica Airport, give them something to really complain about.

[flamingdem]

76. I agree with you about the airport for reasons of history and also

we need a functioning airport on the Westside for fire, earthquakes.

Those with property in the area want to profit, and developers want to build though the game is to pretend it's for a park.

[flamingdem]

77. You are wrong on this. It's demographics plus Silicon Beach employees

who can pay any amount that are driving up prices.

There is no end to the demand. That's why it's false when developers talk about lowering rents. There is limited space and they should build elsewhere but then can't charge ridiculous prices.

You don't know much about Santa Monica if you think we can handle more density. As it is the downtown is gridlocked and not enough parking was put in for the Expo line. And there are some 40 projects still in the pipeline. All this has driven crime up and most of the residents are being ignored while the City Council plays games with the unions, getting them low cost housing while seniors are thrown out of their homes. They don't help them with subsidies, etc etc

[Cicada]

79. Demand raises prices but supply lowers them

Supply is restrained by government choices. Property owners screw us through their government granted ability to restrict competition. Same as with a small number of cell phone franchises causing prices to be artificially high. Same as with more and more industries consolidating to a smaller and smaller pool of sellers. This is the primary reason the rich are getting richer while most of us stagnate.

I used to live in Santa Monica. I almost bought the Circle Bar for $25,000. Back when the days when a man named Jack owned it and I brought a friend who ordered a pina colada. Jack snarled at him: we only serve American drinks here. I love Santa Monica deeply.

[flamingdem]

106. Not with a limited item that is sought after

First of all there is a lot of new construction and it's mostly tiny spaces that are overpriced. 400 square ft singles. We, the real Santa Monicans here for decades don't want to live there. There's an endless supply of foreign money wanting to buy in this area. Speculation. Then there's the school system. Nothing will lower prices other than an economic crash, and it won't last long

[Cicada]

111. You speak the real world, I dream of the future

[crazycatlady]

58. I can't speak for CA

But here, the developers are only building housing for boomers. If you want new construction in my neck of the woods, you have to be at least 55 or you're SOL. They're McMansions.

[Pachamama]

33. I would recommend your thread, except you use Fox News as a news source....

If you can please find another few sources to back up the info, it would have mine and others votes...

[Cicada]

39. I dont watch Fox News. My sources include Paul Krugman on this.

Why do the rich get richer and others stagnate. Paul Krugman has argued, as have other liberal economists, that it is not so much because tax laws have been changed to favor them. It is more because we have greater and greater monopolization in our economy. With only a few cell phone companies, prices rise. Our land use rules, and our property tax rules, are just another example.

Krugman points out the word rent can have a broad meaning, beyond real estate, where owners are paid not because they produce anything but because they own something in limited supply. He says that is probably the root of increasing inequality. And we can fix that with laws. Real estate prices, the cost of housing, is just one example. We should not be crucified upon a cross of government restrictions on supply.

[Pachamama]

42. You missed my point....

I don't disagree with anything you are saying and what I was trying to say is that you could back up your post and the points you make with data from other sources, including Paul Krugman (who I love!) and not being using an article of Fox News to be your source.

Its like using Wikipedia as a source for a term paper - it doesn't have credibility. And using Fox News as a source lends legitimacy to an organization that has no real credibility and is the true originator of "Fake News".

[Cicada]

54. Fox News? I didnt know they ever said anything about this.

We busted the trusts to cure the last gilded age. We need to do it again. But we need to define trusts to include concentrations of economic power which harm the general welfare, not just monopolies.

[still_one]

52. Unfortunately, this has been going on for some time. Unless someone got into the housing market

a long time ago, or have a lot of money, homes are unaffordable for many.

It isn't just homes either. In the SF bay area, unless you have been grandfathered in, expect to pay about 3000/month for rent. In SF, a 2 bedroom 1 bath is going to cost you around 1 million dollars.

Some of the problem is the result of foreign buyers willing to pay full cash price.

While the tech industry has provided jobs to people in California, most middle class people who didn't get a house decades ago, need to or more income earners in order to get one now.

New York City is bad, but I actually think San Francisco is far worse.

The atrocious republican tax plan is actually going to hurt a good number of folks in California, and other states where property and state income tax are high. Getting rid of the home equity interest rate deduction, which many have used for financing college for their kids, medical expenses, or home improvements, along with limiting the interest rate deduction to 750K for new house purchases will only make getting into or keeping a house that much more difficult. Whether the tax plan actually results in more defaults remains to be seen, but I am skeptical that it will lower the housing prices significantly in the bay area, because speculators will jump if the prices go low enough.

If companies start moving out of California because the cost business is too high, and as a result jobs dry up, I suspect that will be the catalyst that would cause housing prices to drop significantly, and a lot of people will be financially ruined as a result.

[Demsrule86]

59. Fox News? Are you serious?

California is successful which is why they have high prices for homes...it has been that way for years.

[ansible]

66. Successful for a handful of people while fucking over the rest of us

The insane cost of living here is inexcusable at this point now.

[Demsrule86]

70. New York is not much different...places in demand cost more.

[Demsrule86]

71. I think as some suggested a high speed rail is the answer...I went to High School in expensive

Connecticut near the New York border...it is insanely expensive as people want to live there...at least you have prop 13 which protects homeowners of modest means.

[Kilgore]

73. This is one of the reasons my employer moved out of CA

We had two west coast locations, one in CA the other in WA.

Three years ago the compant shut down the CA location and consolidated in WA. The reason given was housing costs, business space cost, taxes, regulations and utility rates. Out of 50, 42 employees took the move package.

We were told that the move paid for itself in one year due to lower operating costs. WA corporate income axes are zero, utilities are less than half of CA, rent was 2/3 the cost, and there were fewer regulations. So far the move seems to have no downside.

[Demsrule86]

86. I see a great downside when corporations pay zero corporate taxes.

[Kilgore]

96. Seems to work in WA state

[Demsrule86]

99. What is going on in California works too...but some say it isn't fair...

It may work but it is still wrong. And Washington State has some desperately poor areas too.

[Tikki]

102. Our utilities for all 12 months near the Coast in So Cal average

around $20.00 a month or less for natural gas..around $40.00 a month or less for electricity.

We have no need for A/C and no need for heating.

There are many places in CA where you can find a newer (<5yrs) 3bd/2bth home for around $200,000...just not along the Coast and
not with acreage.

I lived in both E. and W. Washington and it was either gray/ rainy /
or so cold or so hot.

Tikki

[shanti]

108. If you want to live inland, yes

Where can you still buy a $200 grand house in SoCal? Temecula is still fairly inexpensive for new construction, but it's way more than $200,000. You can find some at that level in NorCal though, but they're also inland. Forget it, if you want to live on the coast.

[Tikki]

109. Like I posted...not on the Coast and not with acreage...

Near Bakersfield and out in San Bernardino and Imperial County; yes it is possible.


Tikki

[ck4829]

75. Kick

[roamer65]

93. The emasculation of the SALT deduction may pop the CA housing bubble.

People may begin to leave CA en masse.

[Polly Hennessey]

105. We live in Northern California in the Sierra Nevada foothills.

We are an hour and forty-five from Lake Tahoe. We paid $560k for a two-story house on five acres. Our front and back yards are landscaped and we have two pastures. Our utilities are reasonable . We love California- it is beautiful and peaceful. Would not consider living anywhere else.

[roamer65]

110. What a beautiful area.

[Bayard]

119. Depends on where you live in CA

And how far you're willing to commute.

When I was out there, I bought a little farmhouse on 40 acres east of Fresno, for less than I would have paid in the Midwest. Heavily wooded, at about 2,000 ft. elevation, down the road from Kings Canyon and Sequoia National Parks. My ex commuted an hour and a half.

I ended up in a long and vicious legal battle with insane neighbors, but they were from Oklahoma.

[Duppers]

120. I know it had to be absolutely beautiful there.

So very sorry about your insane neighbors.