Hello, Dan, good to hear from you. You said,
> I agree with the points you're making here, but I think it's fair to say
> that renters do, indirectly, pay property taxes. Owners of rental
> housing pay property taxes; the costs show up somewhere.
Yes, I did recognize that later in my message to Tom. However, since
most land lords have owned their buildings for a _long_ time in San
Francisco, they are paying taxes far, far below market rate. Selling
these buildings to new owners (setting aside the question of whether or
not that is a good idea for other reasons) will _greatly_ increase the
financial income to the city. I stand by my statement that renters pay
very little of the city's real estate taxes, while home owners
(especially new ones) pay the vast majority.
> Was Vancouver's choice the right one? Hard to say. They achieved their
> policy goal, and they have lots of ugly highrise apartment buildings to
> show for it. I imagine that San Franciscans would have a variety of
> opinions about Vancouver's West End. It may not be pretty, but it is
> transit-friendly (to bring this conversation back around to transit).
> And everything a person could ask for is within walking distance.
> Denman Street is vibrant and interesting (despite a Starbuck's
> invasion); there are far worse places to live.
I think you answer your own question here. I believe that one of San
Francisco's enduring problems has been that it's density is just below
the threashold needed for a truly vibrant city. It is too easy to drive
here, there are too many neighborhoods where it is not possible to walk
to everything you need, and the economies of scale of having lots of
people close together are not fully realized. The "solution" to this is
more and taller housing. Which, does not _have_ to be ugly; how about a
"beauty contest" for housing (although most of the towers they're
building now are no advertisement for the financial district's beauty
contest!). The old Eastern European cities, which are gorgeous but
still have a pretty uniform housing height comparable to the Tenderloin,
might be a good model. For instance, I think whats-his-name's idea to
ease housing density and height restrictions, and parking requirements,
along major bus routes to increase the space for affordable housing, and
to decrease the per-person space for cars, is a _great_ idea that RM
should fully support.
> [Rent control i]s not needs-tested.
I agree. This is _the_ major problem with rent control. It does not
solve the problem because it wastes the city's limited income
subsidising the rich, who do not need help, while doing nothing to help
the poor, who still get out-bid for housing.
> From: Tom Wetzel <tom.wetzel@beasys.com>
> All taxes are ultimately a tax on production, where the value-added
> is ultimately produced by workers' efforts.
This may be true, in theory, but it ignores two things. First, many
renters in San Francisco earn their income outside of the city, and
therefore do not pay the employment tax. Second, it ignores the fact
that those of us in high-paid service industries (of which, both you an
I are examples, I believe) are "workers" producing "value-added" by
benefit of their "efforts." We pay taxes.
> >Renters pay essentially no taxes (except the sales tax on
> >cash purchases).
>
> Property taxes are simply passed on to renters.
Not true. See my message to Dan. Even if one assumes that the entire
tax is passed directly on to renters (which I accept), land lords (and
through them, renters) pay a far lower tax than new home owners.
> The monopoly
> nature of housing ensures that this will happen.
It strikes me that laws preventing the transfer of housing to
homeowners, and keeping it in the hands of land lords, is what creates,
or encourages, the monopoly of housing in the hands of land lords.
> Well, my approach here would be to municipalize residential
> building.
No thanks. Even if I have to go back to being a renter, I do not
volunteer to live in a home maintained by the same clowns who run MUNI.
> The idea
> would be to assign that responsibility to associations of
> residents, anlogous to, say, condo associations or housing
> coops.
It may surprise you, but I think that this is a _great_ idea. I am all
for worker ownership of businesses, as long as they buy it and compete
for customers along with everyone else. (In fact, until the current
dispute, I tried to fly United since it is partially employee owned.)
There is plenty of current rental housing on the market that "resident
associations" could buy and manage as they see fit. (In fact, that in
essence is what our tennants-in-common is.) However, the key problem
here is that most renters don't want the responsibility of maintaining
their rental home (this "non-handy" individual certainly didn't!), and
so have no desire to band together to buy and maintain a property. If
they do, there is nothing stopping them from doing so except the
up-front cost of getting a loan (I would be perfectly happy to vote for
a city fund to help with that). And, of course, the current rental laws
which seek to keep housing in the hands of landlords and renters.
> The commercial property tax makes some sense
> since land zoned for economic activity is a resource whose
> value reflects production in some way. But that rationale
> doesn't apply to property used for residence.
Huh? This implies that you believe a house, and shelter, are not
something that was produced and have no value. Even if you have the
state (in this case, the city) build and supply housing, it still has
value.
> Nor would the city actually build anything on my proposal.
> It would simply provide a voucher to prospective residents to arrange for
> construction with builders, on land provided by the city.
All you would get your proposal is a political or financial competition
for vouchers, resulting in -- guess what! -- high-priced housing. As
long as more people want to live in San Francisco than there is
available housing, people will find a way to compete for that housing,
and prices will remain high. There is no government intervention that
can change that fundamental equation, it can only "hide" it, making it
even harder for the un-connected poor to compete. Which does not mean
that I believe we should build no subsidised housing (e.g., for
artists). But we have to recognize that the city's means are very
limited, and that this is not the way to build large tracts of housing
for large numbers of middle class "rust belt" workers. In other words,
subsidised housing should be carefully targeted to the poor or small
groups that city voters consider vital to their future.
> The idea of the city owning its own land used for residence is not
> an idea that is incompatible with capitalism...Hong Kong
> has always owned its own land and has programs to arrange for
> required levels of residential construction.
But, how is this different than what San Francisco has now? Surely,
you're not going to tell me that Hong King gives parcels of land to
individual homeowners who build detached cottages. Hong Kong, like San
Francisco, doesn't have the land for that, and that's not the way Hong
Kong capitalism works. No, I strongly suspect that Hong Kong provides
land to huge construction companies who build really big buildings and
rent them out at market or subsidised rates to land lords or
individuals. I could be wrong.
> (Land is not a true commodity
> so neoliberal arguments from market efficiency don't work for
> land use.)
I agree that land is not a commodity, true or otherwise. If land were a
commodity, there wouldn't be a shortage of it, and everyone could have
some. Since there is an (increasingly) limited supply, it's value goes
up. I don't necessarily say that your suggestions would not result in
more housing, I'm just arguing that they won't really change the price,
they'll just hide that price from the people who most need to know what
that price really is.
> It is possible to build to a modest level of density without using up
> all the industrially zoned land, and without giving total leeway
> to builders to build ugly boxes wherever they want.
Not and have cheap housing. We have forty-nine square miles here. We
can build lots of dense housing with MUNI access, _or_ we have lots of
industry, _or_ we build a small amount of low-density housing with lots
of cars, _or_ we can build a relatively small amount of housing mixed
with industry. We have to choose. You are trying to get around that
choice, rather than making it. That is the problem with "solutions" to
problems that don't take "the market" into account -- they try to avoid
hard choices, rather than making them, and ignore what people will try
to do to get what they want.
> As a caveat here, I would add that I would be less opposed to housing
> construction in industrially zoned areas *if* (a) the city had
> some plan to allow only a certain proporti
> This fits in with the general idea that what we should aim at
> are moderately dense mixed use areas.
Fine, if that is what we choose, but if that is our choice, housing will
remain expensive.
> You are assuming that rental housing that working class people could
> afford would be built if it weren't for rent control. I see no reason
> whatsoever to believe that.
Agreed. The question is the solution. Banning high-density housing is
not it.
> >There are no easy solutions here. Subsidised housing costs money, lots
> >of it. To build it, the city has to get more money. The only sources
> >are home owners and businesses. To subsidise housing, we need to
> >attract and keep more of both.
>
> Look, how do builders finance construction of condos? They get a loan
> based on the probable sale value or rental value. The city can do
> the same thing.
But this will solve nothing. The problem is not that housing is not
being built (San Francisco's population grew two percent last year, an
amazing number), it is that not _enough_ is being built to meet demand.
Say, the city builds a house and gives it to ex-tenants. That new house
immediately attains the value of a house in San Francisco. Either the
person stays in it, or they sell it, neither choice decreases the cost
of housing in San Francisco for anyone but that one person. Since the
city had to pay for that housing, it takes tax money away from, say,
running MUNI, or, what is really needed, housing the homeless.
If you ban the re-sale of the house, or have the city retain ownership
of the house (a horrifying thought given the city's inability to
successfully manage much of anything at reasonable cost), or any of the
other ways you might attempt to keep this house from attaining it's
market value, you are increasingly limiting people's freedom of choice
to live where and how they can afford to. I support some such limits --
like green-belts, albeit through removing subsidies rather than
enforcing laws -- but that's a road I want to be very careful about.
The Founding Fathers (land owners all) were rightly very concerned about
the state's ability to take ones propery and thereby limit a person's
scope of action. We should do so only with the greatest of care, and
not for the relatively minor goal of making San Francisco a some kind of
mythical low density city. There are plenty of real low density cities
in the Bay Area, and people who want that are welcome to move to them.
There is only one dense inner city in the Western US, and I'd like it to
continue to grow in that direction.
> Unless some other form of taxation is found to replace the residential
> property tax, the city would have to include a lease price to the
> coop assoc. that is equal to the financing cost plus loss of tax
> income, minus subsidy.
"The market" determines this for us. Why should the city have to do it?
> I personally think it would be a real bad
> idea to make such subsidies subject to any "means" test. This is
> always death to the political viability of any program. It has to
> be a housing program for the great majority to be viable.
But, rich will find a way to take the most advantage of it. In the
wider Bay Area, there already is housing for the majority. It is the
poor that we are, or should be, concerned about. We should not be using
extremely limited city money to subsidise those who do not need
additional money.
> U.S. back to a pre-capitalist level of productivity growth, i.e.
> a level of growth so low it hasn't been this low since before
> the Civil War, when the country consisted of independent proprietors.
This is utter nonesense. We just don't measure the productivity of
computer-based industry. For example, both of us are writers. We add
value, a lot of value I think, to the paper and ink and electrons we
start out with. Yet none of this value is measured in the current
productivity statistics, which only measure the production of the paper
and ink that we start out with. And, surely, you are not going to argue
that writing and research are not far, far more efficient (productive)
processes now than they were before the advent of the word processor and
the Internet.
> The base of any economy is real production, production of real
> things that people need, the things that keep daily life going.
The whole history of civilization is that fewer and fewer people are
doing "production" and farming, so that more and more can do arts,
science, and optional services. You are trying to reverse this
seven-thousand-plus year old trend. I don't know about you, but I
_like_ being a writer and only having to dig in the dirt for fun. I see
no value whatsoever in preserving the latter type of job.
> Baking bread, making furniture, works of art, making solar water
> heaters, printing books....there are any number of things that could
> be made here other than software or "business services" (which
> is entirely parasitic on the real economy of production).
All of these things are done here, even in high rent San Francisco,
mostly by small businesses or hobbiests or independent contractors. (In
fact, essentially none of the trade books -- as opposed to "coffee table
books" -- consumed in the United States are made overseas.) Note that
most of these things (except maybe the water heaters) can be done in a
high-density environment intermixed with housing.
> Moreover, the knowledge or educational level of the workforce can
> most plausibly be increased by moving away from the Taylorist American
> model, which concentrates knowledge, expertise, design and decision-
> making in a professional/managerial elite, while draining the rest of
> the workforce of skill/responsibility. I think it would be better to
> follow the German model, based on increasing the skill and knowledge
> levels of workers (through things like their very rich
> matrix of apprentice pgograms, works councils, etc.).
I prefer the true emerging American model, which is a bunch of
self-employed indepenent contractors living in the lofts you so hate and
selling their wares to the highest bidder. That is the market San
Francisco should be aiming for. (As, note, is the new Mayor Brown's
Oakland.)
-- Donald
_________________________
Donald F. Robertson
San Francisco
donaldrf@hooked.net
Donald's Space Exploration page:
http://www.hooked.net/~donaldrf/index.html
The known is finite, the unknown is infinite; intellectually
we stand on an islet in the midst of an illimitable ocean of
inexplicability. Our business in every generation is to
reclaim a little more land. -- Thomas Huxley.