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PaperclipPerfector  1yr ago (text post)   31307 thread views

Culture War Roundup for the week of May 15, 2023

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There's the first important issue: California property tax laws are insane.

from https://en.wikipedia.org/wiki/1978_California_Proposition_13

Under Proposition 13, the annual real estate tax on a parcel of property is limited to 1% of its assessed value. This "assessed value" may be increased only by a maximum of 2% per year until, and unless, the property has a change of ownership.[15] At the time of the change in ownership the low assessed value may be reassessed to complete current market value that will produce a new base year value for the property, but future assessments are likewise restricted to the 2% annual maximum increase of the new base year value.

So your property taxes can only increase by 2% a year from your date of purchase. As a result anyone who has owned a home for 10+ years is locked into property taxes far below what they'd pay if they'd move.

So there's a strong incentive to never sell. A retiree might think about selling their house and downsizing, but while they'd get a lump of cash their property taxes will be significantly higher for the rest of their lives. That affects calculations.

Other issues benefitting SF...

The weather is quite pleasant and unique. Many people are heat bugs and dislike it. But it rarely rains in the summer. The weather never gets muggy. It never really gets cold. Sort of year round light jacket weather. There's a big market for that, and there are only a handful of cities like that in the world.

Demographically it's 78.8% asian & non-hispanic white. That's extremely high for a rich costal city in the US.

Really the biggest downside to SF is the incompetent management of the drug addicted & mentally ill homeless population.

It's never going to be a party town, but it's going to be a desirable place for the wealthy and bookish to live for the foreseeable future.

Other issues benefitting SF...

And it actually has nice streets, mentally unstable hobos notwithstanding. That's where all that missing middle housing in the US has gone to. Drop a pin anywhere west of the mountain or in Pacific Heights and it will look like a real city: streets with houses instead of setbacks and/or parking lots. It just needs some more trees.

Good summary. There are simply too many structural factors favouring SF in a way that e.g. Detroit never had. Moreover, it helps that firms like OpenAI are vocally supporting of the city even while they criticise the leadership.

One final point. Even many people who move don't move far. There was one VC who made a big splash on Twitter a few months ago about how he's moving out of SF due to spiralling crime. Where did he move? To Palo Alto. SF mostly rose as a cheaper alternative but the wider Bay Area isn't losing its luster as much as people think. Moreover, even alternatives like Seattle are seeing a rise in similar problems, but with substantially worse weather.

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