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San Francisco's solution to everything seems to be to just keep raising taxes, and throwing money at things which don't work. At some point you have to realize that more money isn't always the solution, you actually have to fix your beurocracy. It's insane to me that the city with so many rich people and incredibly valuable companies is such a mess, your telling me that a small city with an incredibly wealthy population can't figure out how to keep the tenderloin from being full of tents and open drug use? Or get some form of functioning public transit? Pretty pathetic.
Luckily a San Franciscan figured it all out over one hundred years ago so we don't have to wonder about this:
> THE GREAT PROBLEM IS SOLVED. We are able to explain social phenomena that have appalled philanthropists and perplexed statesmen all over the civilized world. We have found the reason why wages constantly tend to a minimum, giving but a bare living, despite increase in productive power:
> As productive power increases, rent tends to increase even more â constantly forcing down wages.
> Advancing civilization tends to increase the power of human labor to satisfy human desires. We should be able to eliminate poverty. But workers cannot reap these benefits because they are intercepted. Land is necessary to labor. When it has been reduced to private ownership, the increased productivity of labor only increases rent. Thus, all the advantages of progress go to those who own land. Wages do not increase â wages cannot increase. The more labor produces, the more it must pay for the opportunity to make anything at all.
A land value tax fixes our problems but Californians went and voted in Prop 13 which is about as far from that as you can get.
http://www.henrygeorge.org/pchp23.htm
Housing is literally exclusively a supply and demand problem. If you want rent to go down, allow more building. End of story. There's actually nothing else to it. Lower property values caused by an increase in supply will yield lower rents because rents are generally indexed to mortgage rates which are indexed to property values.
The problem is twofold.
1. Americans view property as an investment while also wanting it to be affordable. These are mutually exclusive. If you want something to be a good investment you want it to become less affordable over time.
2. Renters tend to be younger, transient, non-voters with weaker ties to the community. Landowners tend to be older, established voters with strong ties to the community. This means the city council panders to landowners, and they pass policies which prevent development.
SF is the worst for this, the city is basically unchanged since the 1970s to the absolute and sole benefit of landowners.
There are wonderful examples of cities which pretty much default-allow building housing, like Tokyo. Tokyo is _incredibly affordable_, downtown starter-home/condos cost $200K USD, and people in Japan do not view property as an investment but rather as somewhere to live. More like a car.
Yes, prop 13 sucks, yes a land value tax is pointing in the right direction, yes rent control isn't helping, but none of these things are a substitute for the simple unit economics of supply and demand. Anything other than permitting tons of new building is at best a band-aid over a hole in the dam.
> 1. Americans view property as an investment while also wanting it to be affordable. These are mutually exclusive. If you want something to be a good investment you want it to become less affordable over time.
This comes up a lot, but is false. It's easy to have every single home become more expensive over time while the average unit remains affordable. Let me paint a picture of how it would work in a city where you can actually build new housing at higher density.
Family buys single family home in year A for $100k. Lives there for a while, then sells in year B for $200k. The buyer is a developer, who then constructs a larger building on that same lot consisting of 4 apartments that now each sell for $100k again. Original family gains in wealth, developer makes tidy profit, new families can still buy a place to live for $100k. All numbers inflation-adjusted, you pick A and B to make whatever return you think is reasonable.
This is how density increases happened almost everywhere, until zoning laws became the new way to keep racial minorities out of white neighborhoods, roughly mid-century, after restrictive racial covenants (i.e., "when you buy this house you agree not to sell it to anyone non-white") became illegal.
Note what you donât get out of this arrangement: a neighborhood that doesnât change for 40 years; the ability to live in the same type of house your parents did, in the same neighborhood, for the same price. But you could have the same amount of (indoor) space they did, and outdoor space through public parks and the like.
Whatâs not sustainable is everyone having a suburban style detached single family home without increasing density in perpetuity. That is what leads to this contradiction.
The non-density alternative is sprawl, where prices rise in long-established neighborhoods, and outlying new developments are where you can buy new houses for lessâwhich is what you observe all over California.
I see what you're saying, that densification and building up vertically means each unit represents a smaller proportion of the footprint of the building. This in turn means that the ground under the building becomes progressively more valuable as the average density of construction increases. This can happen either by permitting smaller units or by building taller, or both.
This feels transient to an extent no? At some point your building is tall enough and your unit as small as people are willing to accept.
But does this not apply primarily to the land underneath the building? Once you reach a certain plateau a 700sqft apartment on the 10th floor of a 50 story building isn't worth any more than an apartment on the 10th floor of a 70 story building is it?
> This feels transient to an extent no? At some point your building is tall enough and your unit as small as people are willing to accept.
Yes, there is an endgame here -- and also, truth be told, construction costs per unit start to go up once you pass 4 or 5 stories, so there's other economics at play.
But that endgame is Tokyo or midtown Manhattan, and we're not close to those levels of density basically anywhere on Earth -- and certainly not in the USA, where you can count with one finger the number of cities that might not be able to increase density because the buildings are so tall it's hard to imagine building more-attractive taller ones.
> But does this not apply primarily to the land underneath the building? Once you reach a certain plateau a 700sqft apartment on the 10th floor of a 50 story building isn't worth any more than an apartment on the 10th floor of a 70 story building is it?
This is an interesting question -- in my example, you might think it's pretty clear that a single condo in a 4-plex would be less valuable than the same land area with a single family home (even if all 4 units together are worth more). But it's not clear why a single condo in a 25-story doorman building is inherently more valuable than a similar condo in a 50-story doorman building, which is basically the only density increase that's realistic -- and in fact, maybe the larger building supports more amenities, making the individual units more expensive as density increases? Also, this level of density supports rapid transit that allows for more effective geographical distribution than the "freeways choked with traffic" sprawl we're seeing today.
That said, this is not the situation that SF (or really, any market in the USA outside of Manhattan) finds itself in. In all these cities, developers could build a larger number of less-expensive units to replace more-expensive lower-density units on a given land area (and still profit! And increase housing supply!), if they were allowed to by zoning and other (typically local) policy.
> Housing is literally exclusively a supply and demand problem. If you want rent to go down, allow more building
Wrong. Without Land Value Tax the housing market simply doesn't clear. If there is no force to make house and land owners to sell to those who would actually utilize it better, they will sit on it forever until a huge ass corp or gov eventually buys them out for ridiculous price. As an owner you just have to wait while not paying virtually anything. Everybody else who actually needs to live, work or produce something in that location has to rely on new housing in ever increasing urban sprawling cities.
San Francisco is a prime example of this and apparently always has been as Henry George showed more than a century ago.
> If you want rent to go down, allow more building. End of story. There's actually nothing else to it.
There's actually another solution, but people don't talk about it: reduce demand. Break some windows. Have a few organized robbery parties. Hold monthly "Stabby Sundays" where you just stab people randomly. That'll drive down demand, and prices will drop like a rock.
Obviously, I'm joking. Building more houses is the only solution to the problem of "a lot of people want to live here" and "it's almost impossible to build new houses."
I would argue the solution is build a lot of _affordable_ housing. I've noticed in Berlin, a lot of new development follows a pattern: small footprint apartments with luxury amenities. This is great if you're a landlord, and you want to maximize the revenue of your property. But it's terrible if you're just looking for a safe, clean place to live, and you end up paying double the rent because luxury units are the only thing available.
Small, luxury apartments are going to be more profitable than something more affordable. Landlords will build the most affordable thing they can, to do anything else would be irrational. If only luxury apartments are being built, that means demand for such apartments hasn't been satisfied yet. The solution is to allow MUCH more building, so that something affordable will eventually be built. Even without that, having luxury apartments prevents the renters from competing on more affordable units, so it likely does have a positive impact.
I don't know anything about Berlin, but in San Francisco, there are plenty of affordable housing requirements placed on developers of new apartment buildings. This ends up just making new construction MUCH more expensive, as a single unit has to support itself as well as some fraction of an affordable unit. The result is that it's even less profitable to build new housing.
I don't agree that the free market is the _only_ way to allow for more affordable housing, or even a good one. To some extent, housing has inflexible demand. If you work in a city, you _need_ to find housing at least within commuting distance of that city. Because of this, landlords can build tiny palaces, and people will pay 50% of their income or more to live there, even if they really want affordable housing. In some sense, you could argue that real-estate developers can operate like a cartel and control the supply of affordable housing.
One clear alternative to this public housing. In Vienna, for example, about a quarter of the population lives in social housing. And these are poorly maintained slums, these are nice, well-located and affordable apartments. The city/state can optimize for the actual housing needs of the city rather than for profit.
I would argue that housing, much like healthcare, can function better when managed as a public good, as there are too many perverse incentives at play when there is a profit motive involved.
Have you looked at Marzahn? Or was that too unsafe for you? :)
No I live in a beautiful Altbau in Kreuzkoln, but I wish more of the housing built would be in this style, not luxury shoe-boxes.
Encouraging businesses to move elsewhere seems like it should help reduce demand. Why not do some load balancing? There are other places that need more businesses.
Climate change is going to do that to California.
I'm sad you got downvoted for that, I really enjoyed it haha.
Isn't that what was happening in the states the last half a year? You guys seem to have a whole respected tradition of rioting.
> Housing is literally exclusively a supply and demand problem. If you want rent to go down, allow more building. End of story.
Uh, no? Suburbs reaching further out, without the infrastructure to support them, are not a happy ending. High risers in the wrong places cause infrastructure overload too. Putting high risers in the right places will ruin someone's vista. Hardly unsolvable, but far from "just build more".
> Uh, no? Suburbs reaching further out, without the infrastructure to support them, are not a happy ending.
So cap how far out you can build. Generally, of course, that already exists.
> High risers in the wrong places cause infrastructure overload too.
More houses means more residents means more jobs means more tax revenue. This revenue can then be plowed into shoring up the infrastructure to fit. That's what a city is.
> Putting high risers in the right places will ruin someone's vista.
And that sucks for them, but they've no right to a view.
Yes. Because of policies that favor landowners housing in California has become primarily an investment instead of a place to live.
However it's not simple supply and demand. We have a ton of "speculative demand" which increases when prices rise and we can't reasonably stop that by building more. Yes California needs to build but even if we started Shanghai levels of growth today it's unlikely we'd get affordable cities before climate change renders the state unlivable.
We need to kill land speculation and taxes are the right way to do that.
I agree that a land tax is great policy if anyone wants to argue about fairness and outcomes. (And therefore I suspect politicians talking about land taxes will by a sign of the end times.)
But it is very easy to have cheap housing and lots of it without a land tax. If I could sign a 50 years lease with strong protections that might even be better for me than buying, and landlords would have the usual incentives to build lots of houses if there is demand.
The problem in California sounds like the landholders who are being rewarded are the ones who choose not to build more dwellings. Greedy landlords in high-demand areas would build more, because then they make more money. I'd rather rent to an apartment building of people than a wealthy middle class family. And they'd be making generational fortunes doing that.
> non-voters ... Landowners tend to be older, established voters ... city council panders to [voters]
surprise, surprise, if you don't vote and assert your civic duty and rights, you don't get included in the process to decide the direction of society.
> view property as an investment while also wanting it to be affordable. These are mutually exclusive.
they aren't - investment is supposed to increase the efficiency of production, thus increasing the availability of said product. The issue here is that land is scarce, and can be made more scarce by various laws. Building/construction costs have decreased somewhat, but the major cost is the land, and lack of density leads to lower supply.
> Anything other than permitting tons of new building is at best a band-aid over a hole in the dam.
yes, this is exactly it. However the people _want_ low density, but affordable! Both cannot be true. And thus, here there is conflict.
> they aren't - investment is supposed to increase the efficiency of production, thus increasing the availability of said product. The issue here is that land is scarce, and can be made more scarce by various laws. Building/construction costs have decreased somewhat, but the major cost is the land, and lack of density leads to lower supply.
You may have misunderstood, I'm suggesting it's not possible for something to remain perpetually affordable and be a good investment. A good investment becomes _less_ affordable over time. A bad investment does the opposite.
For instance, nobody complains about how unaffordable AAPL shares are do they? That wouldn't make a lick of sense because that's the desired outcome. That's _why_ you invest.
If you want housing to be affordable you don't invest, you buy. Like a car.
You can purchase a 5K sqft lot outside of Austin for $2,200 and we still have a growing homeless problem. I'd look more into providing mental health, relocation, and incentives to stay off heavy drugs.
SF has a $360 million dollar a year budget for addressing the homeless situation. I'm not sure what funding they may also get in addition from the County and State Level.
As someone who once earned money from a CA public project the wastes are gross negligence. All that money which is paid is almost certainly misappropriated.
It was upped to about $600m. Good luck getting an audit.
Okay, that is something on the order of $10,000 per person if there's a homeless population of 60,000 people. I doubt if SF has such a large homeless population.
Does this $600 million cover things like Churches sheltering the homeless, pantries, and such? Or is it _in addition_ to the the $600 million? Something is very rotten here.
You're off by almost an order of magnitude [1]. Even if we say the official estimates are off by a huge margin and there are actually 20,000 homeless in SF, that's $30K per person, on top of however many millions are given out via begging and other programs. It's insanity.
[1]
https://sfgov.org/scorecards/safety-net/homeless-population
Oh my. I feel like I will never understand California politics. Such blatant corruption and such a large vulnerable population, but also such a huge 'woke' electorate. It would take some crazy mental gymnastics to reconcile these things.
It's because CA voters are bombarded with propositions every election. At least a half dozen. People barely have time to study the issues, so they go off what makes sense from the headline or the title of the measure on the ballot. Hence being fleeced by Prop 22 and the new privacy laws, which sure looked pretty when they were sitting there in the ballot.
Prop 22 passing is what I simply can't square with the woke/liberal politics of CA. Workers' rights, whether they are cabbies, schoolteachers, government workers, construction crews, or really any other large workforce that can be unionized should be sacred to people of this persuasion. Yet, dispiritingly, it passed.
Not only that, all these props are just propaganda to me. I see a bunch of youtube videos constantly telling me that people are gonna die if I don't vote for prop something. No information, just appeals to emotions.
Said electorate is gradually moving elsewhere due to the issues and voting for the same policies that cause the same problems.
Yes. I have lived in the Bay Area for a long time now, but never really liked the general holier-than-thou attitude (interestingly, I keep meeting older people who have never turned conservative, but have instead turned even more rabidly leftist.) It's dispiriting to realise that moving elsewhere, to Texas, say, is no guarantee of being rid of this. The same cycle will likely be repeated, perhaps in the next decade or so!
Being woke doesnât translate to voting for good policies. Youâre even more susceptible to voting for heartstrings boondoggles when youâre extra woke.
Completely agree with everything you said. But how does woke and liberal politics square with almost complete apathy to the the plight of the homeless (or of those verging on homelessness)? Almost nothing has been done to make housing affordable (even very modest, incremental bills in this regard have been shot down). If you consider the plight of agricultural workers and housing for them, you would be even more befuddled. 9.2% sales tax? Regressive tax on the poor. Gasoline tax? Again, hurts the poor the most. What am I missing here?
What you're missing is the "left" has long since transferred its affections away from poor people who are not wards of the state.
"Woke" politics magically appeared in 2008 when leftists were manning occupy wall street, which pretty much immediately degenerated into escalating virtue signalling instead of, you know, making some reforms to wall street. I'm sure that was a total coincidence.
Well, it did appear to result in the CFPB (the thing that Elizabeth Warren was heading?) and Dodd-Frank, perhaps (one can never attribute these things to some particular movement or event, I feel). I don't know if they have been defanged already.
Anyhoo, so what is the pet constituency of the left? They do appear to be falling over themselves to regularise illegal immigrants (perhaps the Latinos in Texas handing Trump a win will give them pause?), while doing nothing for legal immigrants (who power the only growth sector America has going for it, technology.) They certainly don't care much for the working poor, as you have rightly pointed out.
SF does have a huge homeless population. Yes it go's to homeless shelters and other charities/programs. We sometimes forget that not all homeless are chronic homeless which is what most people associate as homeless.
Someone may be having hard times making rent and go to a church or other organization for financial help and other services. Battered women, at risk children also exist and may require a shelter with more security or women only shelters - which are funded too. There are many other services that exist that use that funding.
I didn't see waste. Actually, I would go so far as say most charities that receive federal and state funding rely on reporting to receive those grants and funding and things are very transparent. HMIS is the tech side of things that build the systems to track and report on everything.
I don't have the bandwidth right now to consider the actual numbers, but one thing worth noting - as it's often overlooked in these discussions - is that much of the money spent on homelessness is spent keeping people in housing such that they're _not_ homeless. Dividing by the number that still remain homeless isn't the right choice of denominator for anything meaningful.
Looks like 8k or 10k as of January [1], depending on which standard you consider, though obviously that may have gone up with recent events.
[1]
https://sfgov.org/scorecards/safety-net/homeless-population
SF has 10k homeless people. You can give everyone $60k a year outright right now and they would live a very comfortable life on that in the midwest.
My take is that homelessness is a nationwide issue in the US more than anywhere else in the world, and its more visible in states that have more funding to address the issue. Knowing that, 360M$ is nowhere near enough to alleviate the symptoms, and nothing compared to what needs to be invested to cure the actual root cause.
360 Million is cute, NYC spends over 3 Billion and still hasn't cracked it.
Maybe if other states could be blocked from buying one way bus tickets for their homeless citizens and instead be responsible that would help.
California buses the homeless out as much as they're bused in. It's complicated[1].
[1]
https://www.theguardian.com/us-news/ng-interactive/2017/dec/...
This is an urban legend and gets claimed in every major city.
San Francisco has great weather, lots of well off people to panhandle from, and treats the homeless relatively better than its neighbors. It really is that simple.
Itâs not an urban legend. Mayor Bloomberg had a well funded, well documented program in NYC. Quick duck duck go.
Many others have piled on, so the burden has shifted to you. What support do you have for this being an urban legend?
Literally one search shows sources from across the ideological spectrum covering this:
https://www.nytimes.com/2019/09/14/us/homeless-busing-seattl...
https://www.breitbart.com/politics/2019/10/27/nyc-exports-ho...
And other cities are bussing their homeless to NYC as well. How can NYC fund the entire countries homeless population?
Itâs real. There are plenty of articles about it. The cities are playing hot potato with the homeless because thereâs no federal program to deal with it. 80% of the homeless get back on their feet in months. Itâs only 20% who are chronically homeless. Itâs a mental health and drug abuse issue.
Absolutely not an urban legend.
https://www.sacbee.com/news/investigations/nevada-patient-bu...
> This is an urban legend and gets claimed in every major city.
It's not an urban legend, it's well documented and there have been lawsuits based on it.
> You can purchase a 5K sqft lot outside of Austin for $2,200 and we still have a growing homeless problem.
But not actually near Austin enough for it to be a sane place to live and commute to Austin from (especially if you depend on public transit).
If you depend on public transit in Austin, you're not going to be able to commute reliably no matter where you live.
When I lived in Austin I took the bus almost every day without issue. Austin has the best public transit in all of Texas (though thatâs admittedly a low bar).
30 mins east of downtown is farmland
Fort Worth is in the same state, almost the same population, growing just as fast, and has similar taxes. Yet Fort Worth doesnât have the visible homeless problem that Austin and San Francisco do.
This is partly because the private security force employed by the wealthy Bass brothers forcefully (and sometimes violently) discourage the homeless from existing in downtown Fort Worth, especially the Sundance Square area.
I used to work downtown (Oil & Gas Commerce building) and became friends with the night-shift security guard, who told some really shocking stories about how the Bass goons would drag the homeless into alleys and beat them, simply for existing in downtown Ft. Worth.
If your security guard at the O&G/C Building said that, then you were being told a wild story.
There is NO WAY Sundance Security would do that. I personally know the security team members and how professionally they are trained, and I know the Basses and how they operate.
That's a horrible thing to say. And it is sad that you or anyone would actually believe it.
It's a tall tale that a late shift guard might enjoy telling, but it isn't the truth.
That might be 0.1% of the cityâs land area. Not really a significant cause. If you applied that exact same factor to Austin there would still be a ton of homeless people everywhere.
The homeless tend to congregate where they're treated better.
The cities that treat the homeless better, when confronted with a new influx of homeless, work to confront the problem with more spending and social programs, and the cycle continues.
Surely that number is not right - probably lacking two digits?
Live in Austin. Yes that's BS, unless you're talking about a 5.5k sf lot out carved out of a rural farmland (which are plentiful right outside of Austin).
Odd thing to argue about that is easily provable with a Zillow search. Plenty of half acre lots that sold int he last year for ~$5K east of downtown but certainly before farm country. And capital metro goes past it all the way to the toll road.
I always hear bay area friends tell me how it's not that bad there if you have room mates. Mean while the engineers here in their 30s are collecting income from their 3rd rental property already.
I know lots of people under 30 in the Bay Area who could have much more than 3 rental properties if they wanted to. Especially outside of the bay area.
It's just that living with roommates is pretty frugal, and before the pandemic, it was a good way to save an extra $10k a year living in a more central location. Every single person I know who is a bay area SWE makes enough to afford renting a 1bed apartment in a good area, they just don't think it's worth it.
Yes if your main goal in life is to live in a large house on a large lot in a nice area without spending much, you will not find it there, but your characterization makes it seem like bay area engineers are poor which is... not true
>> makes enough to afford renting a 1bed apartment in a good area
In most cities in the US this is not the definition of wealthy or even well off. living with roommates to save 10K a year does sound like one step above poverty.
When I lived in the bay area, lots of my friends lived in shared accommodation because they actually liked living with other people. Saving money was a side effect. They usually bought a place when they got married or not long after. That's not poverty.
This is common when you're a kid out of college, but a few years go by and living with other people sucks.
Maybe I am just a frugal person, but to me, if you told me I could get a post-tax extra 10k a year switching from a 1bed apartment to a roommate situation I would always take it as long as I could find reasonable people to live with. I was pretty far from poverty when I made that decision in the SF bay area. And again, I just said they could afford a 1bed apartment, not that this was the max they could afford. You're not being charitable with interpreting my reply.
> living with roommates to save 10K a year does sound like one step above poverty.
Sounds like every college student and recent grad I've ever known.
One of the problems is that every person wants to live in some trendy neighborhood in "The City". Naturally, that means landlords can get away with charging exorbitant rents (the bulk of the inventory is under rent control, which reduces incentives for folks to move out). Because of this, you end up with ridiculous startups that rent beds out to people, folks paying $2000+ for a small room in a small house, and so on.
Meanwhile, in the majority of places that aren't the Bay Area (or urban CA), folks in professions like engineering are set up with nice suburban homes and additional properties by their mid-thirties.
I have seen many east-coast transplants move back after realizing that the madness is not going to end in the past ten years. Giving up access to the Bay Area job market, or existing social or family circles are perhaps the only thing holding folks back from getting the hell out of this area, I feel.
Not everyone wants "nice suburban homes" or being a landlord. Many people like city life. It's really that simple.
I agree. A lot of this stuff is a function of age and marital status. Older people tend to get married and have kids, and once that happens they clearly prefer the suburbs.
There are many folks who prefer city life, but I bet they would be found in much greater numbers in the 'real' cities: New York, Chicago, Los Angeles, Dallas, Houston, Washington D.C... San Francisco just feels like a slightly overgrown town with hardly any cultural amenities one would expect from a world-class city. It does have almost unparalleled access to very pretty coast, woodland, and desert all in three hours' range, though.
40% of SF residents are married. That is just slightly lower than nearby mostly suburban Sonoma County at 47%. And the median age of an SF resident is actually higher than the state median.
How many with young (K-12) children?
I don't know what exactly you consider "city life," but Los Angeles does not come anywhere close to San Francisco by my definition.
The second-class treatment of public transit over car-driving alone is awful. I don't have to worry about being stranded ANYWHERE in the bay because I didn't finish what I was doing by 5pm, unlike my last trip to Santa Monica.
How many billion dollar start ups came out of the Austin ecosystem? SF is expensive because it is productive. Itâs producing wealth so prices go up. If you want to raise money, recruit talent SF adds value which is paid for with hire expenses. I would rather own equity in a high growth start up than 3 rental houses; at least from a growth perspective.
> I would rather own equity in a high growth start up than 3 rental houses; at least from a growth perspective.
But that isn't the choice, the choice is between three rental houses and a maybe 1 in 20 chance of owning equity in a high growth startup that may or may not IPO in the next 15 years.
The third option in west coast cities is probably more common than your startup option : working for an established company, possibly a FAANG, and accumulating enough wealth to retire early.
It is the choice because the ecosystem is in SF. And because of the demand of people wanting to participate in the SF ecosystem, prices are higher. Itâs a gold rush dynamic. YCs are the new 49ers.
That's a false dichotomy. A startup engineer could easily afford three rental properties in most flyover states after 8 years of working from their salary alone.
It's more important and more achievable to become financially independent rather than to become outrageously wealthy. Someone with a tech job and 3 rental properties has a lot more flexibility in life than someone with a tech job and some stock/options in the same tech company they work for.
You can get out of Austin pretty quick. 30 mins in some directions can get you out of the metro area. Also, 5k sqft is 1/10 of an acre.
That said, I donât know anything about land prices in Texas right now.
>You can get out of Austin pretty quick. 30 mins in some directions can get you out of the metro area. Also, 5k sqft is 1/10 of an acre.
During the normal busy hours in which people commute, no way. I can only hope all the construction going on along 183 will speed things up on the East side. The 290/71 junction is another nightmare during rush hour.
30 minutes won't take you from the river to North Loop. And even Redbud is slow in the opposite direction.
north-south commute? You must be new here.
Nah. I arrived when it was too easy to speed on Mopac. I left town before a north-south was totally inconceivable. Dunno if the behind-Pease-on-Parkway trick still helps. I had an east-west when I bailed.
Or that figure is the monthly mortgage payment heh
No... In _most_ parts of the country, a tenth of an acre of dirt past the edge of town does not run $200k.
> You can purchase a 5K sqft lot outside of Austin for $2,200
How many miles away from the city though?
Quite a few, and not somewhere most would probably choose to live
Can you build on that? Is there water, electricity, gas and cable?
Yes. If you want to drive 50 miles outside the city you can get 10 acres for $50k.
50 miles is really far. You can get the exact same prices in California if you're willing to drive 50 miles outside SF / Bay Area proper.
Social problems exist in degrees. San Francisco, with the most stringent land-use restrictions in the US, and largely as a consequence of that, the highest rental rates in the world, experiences the problem of homelessness to a much higher degree.
A pet crusade of mine: California can pass a 100% (or close to that) land _appreciation_ tax (capital gains tax on land), and that wouldn't violate Prop 13. High land appreciation taxes are essentially indistinguishable from Georgist LVT. China taxes land appreciation between 30-60%.
> High land appreciation taxes are essentially indistinguishable from Georgist LVT
A capital gains tax is not âessentially indistinguishableâ from a land value tax if rents rise and the owner never sells the property. The owner gets to collect increased rents for as long as his family owns it, and even his heirs donât have to pay the tax on transfer (since capital gains are untaxed on inheritance in America due to the step-up basis and apparently also for the Chinese Land Appreciation Tax). Kevin Erdmann has written a good series of articles on focusing on the rental value of land rather than only sales prices:
âA Conceptual Starting Point for Housing Affordability and Public Policyâ <
https://www.mercatus.org/bridge/commentary/conceptual-starti...
>
>China taxes land appreciation between 30-60%.
Doesn't the government technically own all the land in China and then just lease it to individuals? Slightly different system.
Not quite relevant, because we already tax land appreciation in the US today, it's just the capital gains tax. The capital gains tax is also low because (in theory) we want to incentivize investment in the name of growth. There's no reason why we ought to apply the same incentive in favor of investment in real asset growth. A Land Appreciation Tax is just a capital gains tax just on real estate.
In fact, LVT would be unconstitutional at the Federal level today, but a Land Appreciation Tax would not.
Why capital gains tax rate is lower
[..] The justification for a lower tax rate on capital gains relative to ordinary income is threefold: it is not indexed for inflation, it is a double tax, and it encourages present consumption over future consumption. ... Finally, a capital gains tax, like nearly all of the federal tax code, is a tax on future consumption.[..]
Yup, that too. Itâs another consideration that I donât think ought to be made for land appreciation. In fact, because it doesnât account for inflation, for the longest holders of land, a high LAT functions like a very mild LVT in practice, while also neutralizing the attractiveness of land as an investment vehicle in general.
Most homeowners don't pay capital gains taxes when they sell their home.
https://www.investopedia.com/ask/answers/06/capitalgainhomes...
No, they are different.
Unlike LVT, an appreciation tax is a transaction tax, which can be shifted to the purchasers.
I would argue that as a transaction tax, it reduces the demand for the land. The net effect is the same: curbing land speculation.
A transaction tax does not reduce the demand. It reduces the quantity of transactions that matches the demand and supply. That means it adds friction to the reallocation of resources for more efficient use. It literally encourages hoarding. That is even worse than speculation.
Why is it that traditional capital gains tax doesnât function as a transaction tax on equities and securities?
I am not sure what you mean by "doesn't function as a traction tax". It does create the same incentive for hoarding. I don't see any advantage of it compared with LVT.
Nobody would ever sell. They'd just use the increased value as borrowing power if they ever needed cash. Housing prices would skyrocket.
If your idea were put on the ballot it'd probably pass.
It would just become another variable in pricing land. It would actually slow down appreciation because taxes would have to be priced into every transaction. You can't borrow against collateral you don't have, so lenders would obviously calculate the appreciation taxes due if they need to foreclose.
Thatâs not true, because appreciation isnât uniform in a housing market. Not everyone experienced the same value gain, so your tax bill might be hundreds of thousands of dollars while your neighborâs tax bill might just be thousands of dollars.
This is also why capital gains taxes donât get priced into equities and securities.
Markets don't move by magic. They move by the aggregation of thousands and millions of transactions. And yeah, sellers and lenders absolutely incorporate their taxes into prices.
I see what you are trying to say about capital gains taxes not being in the "price" of securities. But they are in aggregate because taxes inevitably have to be paid. The whole market can't go up without transactions pushing it higher. And all transactions that make profit get a portion pulled out for taxes. They quite literally act as a damper on how fast a market can move.
But would the lenders adjustments offset the huge rise in prices from people not selling?
Prop 13 already locks people in. With this law they'd have an even bigger reason to bank land forever.
I don't follow that. Suppose the tax was 100%. Real estate would effectively never appreciate, so no one would hoard it. If the tax is 0%, then it's a completely "free" market. Anything between the two just reduces the ROI.
Since a high ROI in the short term promotes speculation (and _not_ development), it seems like this would reduce speculation and the likelihood of bubbles forming.
Of course that's a ridiculously oversimplified view. There are a zillion different ways to stack this, which is what would happen in any case. To spur development and not just buy-and-hold, the law might be written to exempt certain kinds of improvement costs.
Wait are you seriously suggesting we adopt a taxation policy the CCP utilizes? Did I miss something?
A policy being associated with the CCP doesn't automatically mean it's wrong or that we can't learn something from it.
This one is
Then explain why so we can actually have a productive conversation. Making bare assertions just wastes everyoneâs time, including yours.
> China taxes land appreciation between 30-60%.
If you want support for your causes in the US, you probably donât want to compare it to a communist regime that scares the crap out of people.
Unless this was sarcastic...?
China does absolutely scare the crap out of both itâs own people and people abroad, but economically itâs clear theyâve done a lot of things right over the last 40 years. The US could learn a thing or two from the communists when it comes to Capitalism.
I donât think theyâve done things right; they were granted access to the global trade network and had wages at pennies on the dollar from other countries. It would be almost impossible not to grow under those circumstances. Letâs see if their decisions are as effective when wages are more on parity and they are competing as peer economic levels.
Yikes
I think it's fair that comparing something to China doesn't win adherents, but just because China does it, doesn't mean that it's "communist". China has shopping malls â does that make shopping malls communist?
Also, a Land Appreciation Tax isn't really radically different from the status quo in the US today. Land appreciation is already taxed as capital gains, it's just that the capital gains tax is intentionally set to be low to incentivize investment. The argument here is that we should not only NOT incentivize speculation on land, we should deter it by carving out a "special" capital gains tax on land.
Depends who owns the shopping mall
Everyone works but the empty lot.
I was not aware that Henry George was from San Francisco.
HG was born in Philadelphia (1839); arrived in San Francisco by 1860 or so, and lived in California until early 1880. He wrote "Our Land and Land Policy" and "Progress and Poverty" during that period, as well as owning and editing the SF Daily Evening Post for 4 years between those books. He then moved to NYC, where he lived until his death in 1897.
For an introduction to his ideas, see wealthandwant.com. For more contemporary references, see
https://schalkenbach.org/introductionto-the-ideas-ofhenry-ge...
and that entire site.
Most visible in restaurants. They came in and made a dangerous neighborhood a trendy hotspot and then got booted out because VC and law firms outbid them on rent.
I used to live in the Tenderloin in 2013 and it has actually improved a lot since marijuana was legalized and public restrooms added in - back then, there was a guy on every street corner trying to sell you something, and certain alleyways/corners where there was daily cleaning for piles of human waste. It's become much less dangerous but still quite depressing to walk through.
I started talking to people living on the streets and my opinion is that the problem can't be fixed by throwing money at it. Some people don't want to get free treatment, a shelter bed, or transitionary housing because of drug addiction, mental illness, a dog who can't accompany them, etc. A lot of them travel to SF _because_ of how much we spend on homeless people, and it used to be pretty common to find people reselling food bank donations on the street for a fraction of grocery-store prices.
If it was up to me, I would tell people that they either need to accept help to get back on their feet (I've witnessed the Homeless Outreach Team doing great work) or leave the city. However, espousing a "get tough on homelessness" attitude would be vilified by our political climate, so it won't ever be up to me.
> "get tough on homelessness" attitude would be vilified by our political climate, so it won't ever be up to me.
You and me both, the solution is really straightforward. I feel like homeless in general falls into 4 camps:
camp 1 - drug addiction, this one would be to get people off the streets, Open rehab clinics, get them clean, and back into a functioning society.
camp 2 - mental illness, This one would be opening mental institutions(Reagan closed these in the 70's which led to our current culture of homelessness in alot of large california cities). Money would go towards either medication to get people in a functioning state or full time commitment based on severity.
camp 3 - Those down on their luck, this one would be the easiest as job skills could be taught along with temporary free housing and counselors to ease the individual back into a job, once a job is found a stipend towards rent can be given until the person is fully independent again.
camp 4 - Those that want to stay homeless. This is the most difficult group to deal with, and having them escorted out of the city would most likely be the only solution.
I met a guy walking home in the TL, he had hitchhiked from a trailer park in North Carolina to SF. His neighbor in the trailer park made amateur porn websites, so he pretty much learned web development purely in the context of pornography. He was addicted to meth and came to SF looking for a job and the free methodone treatment. His laptop got stolen so I gave him an old Macbook I had lying around and told him to check out Codecademy.
I was hoping to get a feel-good story out of it after reading about Leo (
https://www.businessinsider.com/leo-the-homeless-coder-2015-...
), but the truth of the situation is he simply wasn't skilled or educated enough to actually learn computer science or even get past a phone interview (meth really ruins one's ability to maintain a train of thought). Somebody told him the legends of high-paying tech jobs in SF, and reality was a harsh teacher _like it is to many people everywhere_. He lived in shelters and on the streets for a while until he lost his phone, which was my only way of connecting with him. Haven't seen him on the streets for years and no idea what ended up happening with him.
My point being that people have really complex reasons for being homeless in SF and it's hard to put everyone into distinct groups, but for the most part your camps describe at least 90% of homeless people I've seen.
I am currently a web developer earning 6 figures in the Seattle area. I learned the skill in the Front End development course in Noisebridgeâa hacker space in the Mission. They provided a free course, every Tuesday (or was it Monday) evening. I was living in a van at the time (what many people consider homeless). I know I might have learned the craft without this resource but I feel like this course made things significantly easier for me. And I definitely owe a dept of gratitude to the Noisebridge community (and Jeffrey in particular) for providing this to me.
Now just to be clear Iâm not saying that any homeless person can learn how to code and get a job. Iâm just saying that in my case I was what many people consider homeless, learned how to code, moved away from the city to Northern Europe, and then happened to get a job in the industry.
This is such a wonderful story, thank you for sharing it! I have plenty of stories of how Noisebridge has affected many people, itâs a truly wonderful place.
You forgot to include the ones who have 2 jobs and live in their car and bathe at an YMCA. Theyâre also homeless, maybe not as visible as the other categories and need help too!
I met a guy who fit all of the above. Did some drugs, had some mental issues (but not to the point of being insane), was down on his luck. He didn't exactly want to stay homeless, but he preferred it to his other alternatives (which included job skill program with free housing). After a while his luck turned and he found a job that suited him and a place to stay. He probably still has some mental issues and does some drugs.
Idk where I'm going with this except to say it's complicated.
Itâs not so simple.
1 and 2 are either your largest groups or at least very large groups.
Getting addicts âcleanâ is a sub problem at least almost as hard as the general, and itâs somewhere between hard and impossible to keep someone in a rehab or a mental facility against their will, and I doubt Reagan is to blame for that.
Basically, a large proportion of 1 and 2 are effectively in camp 4.
For groups 1 and 2, who gets to decide if a homeless person is to be committed? This seems like a non-trivial question, or am I missing something?
A person's social worker can make that decision. It is based on documented observations, interactions, interviews with neighbors, police reports, and hospitalization reports. Local and national laws provide a legal basis and rules for it.
I wonder what the distribution is between these four camps? My hunch is solving for the first three camps as you've described would lead to a much higher quality of living for the average city dweller.
1,2,4 have a lot of overlap or are the same group (you need to be mentally ill to want to be homeless and drug addiction is a symptom of trauma thatâs basically untreated mental illness).
Need to find ways to help the mentally ill, and shovelling pills wonât cut it, we need comprehensive programs.
Another problem is that SF shelters have schedules that exclude working people.
Shelters require folks to line up for entry in the early afternoon. Many unskilled jobs require late evening work (restaurant dishwasher, line cook, bus boy, janitor, etc). So folks leaving work at 11pm cannot get into the shelters.
Shelters kick everyone out in the early morning. Folks who work at night cannot get in to shelters at all. Night shift work is very important for unskilled folks (security guard, janitor, warehouse, etc).
Also, many shelters are run by religious organizations and require guests to spend time attending religious presentations every day.
I think 80% of the homelessness problem can be solved by providing free housing for these extremely poor people. Housing will not turn them all into successful citizens, but it will stop them from sleeping on the streets. Comprehensive health care (including therapy and long-term psychiatric care) can solve another 10%. The last 10% are folks who just prefer to live on the streets.
Unfortunately, free housing in SF is very expensive because of the housing shortage. The city already houses many formerly homeless folks, spending $200M/year. Housing the remaining 8,000 would take at least $200M/year more. This would be a 4% increase in SF's $5B annual budget.
I'll vote for you. Setting up a welfare magnet for the homeless in one of the most expensive real estate markets in the country is cruelty, not compassion.
If I ever campaign for something you'll know it's me after recognizing that cruelty/compassion line ;)
Excellent point
We should talk and listen. They donât want to be homeless. They want something else. What? Provide that.
In many cases? Drugs.
In that case Portugal and Sweden have show some success in treatment rather than the approach we have been taking. We should learn from evidence based outcomes rather than normative based appeals to tradition.
We really need comprehensive addiction treatment. Addicts should be offered jail or court ordered rehab, but in either case there is no option but to sober up and get well. It is just so depressing how often I see people slowly killing themselves on the street smoking crack or finding a vein these days, openly on the sidewalk, in broad daylight. This needs to be coupled with mental health treatment, which often leads to drug use in the first place.
>I used to live in the Tenderloin in 2013 and it has actually improved a lot since marijuana was legalized and public restrooms added in
The TL is a lot worse than in 2013. There are more needles, more open drug use, more break ins, and on and on.
>back then, there was a guy on every street corner trying to sell you something, and certain alleyways/corners where there was daily cleaning for piles of human waste.
Literally nothing has changed. This is still the reality.
I am so sorry to hear that. I got mugged by some of the corner drug dealers in 2013 and they were at least nice enough to throw my drivers license out while running away, presumably to save me a trip to the DMV. I was thrilled to see the legal dispensaries put those guys out of business, I had long moved out by then but the area felt way less dangerous to walk around in.
Plenty of people are still buying and selling weed. Dispensaries are not a great prospect when tax alone is 30%. There is a reason why there are more black market dispensaries than licensed ones, in LA at least.
> or leave the city
I would like it that we can as a society find ways to help homeless with their issues and manage their lives in a way that isn't just each city tossing them out.
That said, I'm not against someone's honest decision to say, well I don't know how, and in the mean time, I want them out of sight so kick them out.
But, and this is the but I feel is never discussed by those who propose that solution is HOW?
How do you kick them out? What if they resist? Arrest? Jail? Now who pays for that? Should we just fire gunshots at them? Force relocate them, and if they come back? Erect barriers? What else?
Jailing them would actually be cheaper than what they currently do, as long as they are jailed outside of California, which spends much more per prisoners than other states.
To clarify, I don't consider these ethical options. I just want to point out that without a concrete way to "kick them out", this solution is easier said than done. And so I feel it lacks a path forward.
"It's insane to me that the city with so many rich people and incredibly valuable companies is such a mess, your telling me that a small city with an incredibly wealthy population can't figure out how to keep the tenderloin from being full of tents and open drug use? Or get some form of functioning public transit? Pretty pathetic."
SF resident for 15 years until I left.
I walked around and talked to homeless. From the dozens I have talked with:
1. They are not from SF.
2. They were homeless somewhere else and it sucked.
3. Pan handling cash is easy. $100+ a day.
4. The SF programs kick ass. Suboxone clinics, Free cell phones, free bus passes, monthly stipends $, even occasional housing
5. The police do not hassle much, you can shoot up on the street no problem.
It is a system designed to create more homelessness.
So we have:
1. A lot of rich residents and rich companies which supply the city budget with sweet sweet tax money
2. A lot of programs and NGOs that draw large budgets to helping the homeless
3. Political climate that encourages spending money on helping the homeless without requiring anything from them, basically free money
4. Generous programs providing various freebies for homeless people, and no consequences for any behavior short of major robbery (yes, shoplifting is allowed too unless it's over $900)
5. Mild weather that makes living on the street possible year around
And we're wondering why homelessness has not disappeared? There's nobody that is interested in it disappearing, that's why. Well, at least nobody whose opinion matters, anyway. There's a lot of people interested in allocating and spending budgets on fighting homelessness, these aren't people interested in doing something that will make it stop once and for all.
I downvoted this because as someone that has been what many consider homeless in San Francisco, I am a little insulted by this attitude. It comes across as someone that has never lived this life claiming that it is a good life and generalizing over the homeless population as freebies and criminals.
If there exists a complicated social problem that involves thousands of human beings and someone on the internet claims to have an explanation for it in 10 paragraphs or less, that explanation is probably overly simplistic.
I downvoted you because I am insulted by this attitude. As someone who comes from a country of starvation deaths, I can easily see how the homeless in SF would be considered the 1% of the world.
If the milk of human kindness is all about spreading the wealth..how about spreading the wealth to other countries?
Why should I pay for the homeless in SF when they live in the richest country in the world when I can send the money to Kenya or Vietnam or India and truly create meaningful impact. And so thatâs what I do. My taxes already pay towards the healthcare, food and if in SF..smart phone and BART tickets for the homeless. No more tax hikes without an explanation for the $350 million dollars spent in just one year for SF homeless population.
I actually upvoted that because I glad you left this comment. It provides an essential perspective for the global distribution of wealth. USA is the richest and the most powerful nation in the world and it is a ridiculous power dynamic that has no justification. The USA cannot provide housing option for some of its population, but even worse, the USA consistently steals wealth from other nations leaving them impoverished just so they can provide cheap goods for their own citizens.
It is always good to get a reminder that for every USA resident the government leaves behind there are hundreds of impoverished non-USA citizen that still has to pay for it.
Thanks. I agree. But there needs to be no justification.
The USA does not steal wealth from other nations. Please substantiate this comment with an example.
Wealth is not an indicator of quality of life. I have seen this over and over again amongst the rich and the poor. All we can do is live well so we are not a burden to others. The next best thing to do is help when we can.
What I am against..on principle..is that we look to someone else for our happiness. Or survival. I am an immigrant too. I left my country of origin for one reason and one reason only..upper economic mobility. Many immigrants cause reverse brain drain. I have a better quality of life and I can uplift people within my circle of influence. I can do better as an American than as a citizen of my country of origin. And I enjoy the comforts of my new life. And thatâs fine with me. I donât believe we can heal the world by squeezing the hearts of the collective rich.
I donât understand why I should support someone who doesnât want to leave SF because itâs chill while I had to leave behind my native country, my family and friends and all things familiar because I wanted the same thing as them. Comfort and quality of life. Only..I was willing to make sacrifices and trade offs. Itâs difficult to empathize because it would make a mockery of the sacrifices that I had to make because I wanted something. We canât ask others to sacrifice their money because some people donât want to make any sacrifices for their own desires.
We have seen that money doesnât solve problems. In SF alone..350+ million did not solve homelessness or drug addiction or mental illness or despair due to poverty.
So what is the answer. If the pitchforks against the rich are laid down and the energy is properly channelized to find meaningful solutions, we will get somewhere.
My motto: Do what you have to do. Others are not a measure. What I am NOT is a fan of guilty self flagellation. If I am not going to flagellate myself, why would I allow others to do it to me?
> Itâs difficult to empathize because it would make a mockery of the sacrifices that I had to make because I wanted something.
This is a really good and important point. I immigrated from one of the wealthiest countries in the world to the USA. Off course I made sacrifices while immigrating but those sacrifices were not nearly on the same scale as someone immigrating from a place of poverty. I can still visit my family regularly and they can visit me (even though they are of working class; if it were not for a global pandemic off course; for me itâs not that expensive even if it is a little expensive for them). If anything I should be trying harder to empathize with you.
In honesty me and my partner always had the option of moving to my place of origin, they could enjoy the free education we provide there and get a degree there instead. If I were not from a rich nation that would not be an option. In honesty we choice to live in a van. Sure we were underprivileged to the average San Franciscan, but as an immigrant I had it pretty good. And it wouldnât have been the end of the world if we were forced to live in my country of origin.
We actually ended up moving there anyway. But it turns out that even though USA is officially pretty hostile towards immigrants, my country of origin is far more xenophobic then Americans are, so we ended up moving back (me being a white person probably has a lot to say about the acceptance though).
I know I didnât really answer you in a meaningful way here. I really only said that your voice matters as muchâif not moreâas mine. After all I am a person of privilege by virtue of both my skin color and my place of origin (even though Iâm born of working class). So to third party readers I guess Iâm saying: Read the parent carefully, and understand their perspective. I might have a lot to say because of my experience of living in a van in San Francisco, but there are other peopleâlike the parentâthat also have a lot to say, and their perspective is just as valuableâif not moreâthen mine.
Thanks for your reply. Fwiw, I donât think you are privileged as you feel from my perspective. I think I would have to know you better, but I hear that you feel privileged.
It cuts both ways. I canât make any assumption about anyoneâs privilege or lack of simply because itâs none of my business and your privilege(or lack of, as the case might be) doesnât impact my life at all.
However your actions directed towards me and itâs impact on my life would be subject to observation. There are concentric circles of influence for every individual. Yours and mine might never meet.
We can do both. This post is not helpful or productive as it trivializes the argument it responds to and serves as a diversion rather than a productive response; itâs a red herring argument.
if you spend some money one place, you can't spend that money elsewhere as well.
You could argue there's enough money to solve both problems, and a tax on the wealthiest would help accomplish that. that is a view I'm very sympathetic to.
But I think the comment you're responding to is making the first point, rather than the latter.
No, we canât do both.
Imagine you walk into a theatre thinking itâs going to be a Hitchcock movie. After the 12th minute, they start showing Groundhog Day.
They ask you to come back the next day.
You return. Again, after the 12th minute, Groundhog Day. Again, they ask you to come back the next day.
And they donât return the money you paid for your ticket. Or a credit. You have to pay for a ticket again. Everyday.
Now. How often are you going to keep returning to someone who steals from you and knows you will return. Meanwhile, any theatre next street is playing the Hitchcock flick.
What would a reasonable rational person do?
Your response doesnât show that we canât do both. We do have the resources and social science knowledge to accomplish both objectives.
I donât really follow your theater analogy, perhaps you can provide an alternate argument so I, and others can understand why you feel that resources are scarce, limited, and the objectives are mutually exclusive.
We donât have âresourcesâ. We have a mechanism for instituting punitive taxes on a minority just because they are wealthy for a spending plan that has no clear path to success.
And who is âweâ? Peter and Paul want to tax Bob to hand over $ to Jack and Jill.
1. Please define âbothâ
2. Please elaborate â..we can do bothâ
I downvoted you because I am insulted by your being insulted by his attitude while being insulted. (I didnât really downvote you)
Yes, people from all walks of life may end up homeless but I'm tired of hearing stories of my friends being robbed at gunpoint/knifepoint or straight up assaulted for a phone and a wallet. People walk into stores and steal without impunity, shoot up drugs, shit in the middle of a street, etc. It's truly appalling. As far as being homeless goes, the homeless here are free to fuck things up for the rest of us.
No doubt there is substantial overlap between thieves / violent criminals and the homeless, but Iâm not sure the bulk of the criminals are homeless. Iâd also point out that often the homeless are the most likely to step in to help when needed - while people whoâre busy going about their lives will often succumb to the bystander effect and continue going wherever theyâre going.
Iâd want to focus enforcement on criminals (homeless or otherwise) and people who are a danger to public health rather than the homeless in general.
Honest question why are you blaming the homeless for fucking up things for the rest of us? In my experience the rich are far more guilty (as a generalized group) of fucking things up for me.
The rich have polluted the planet, raised the global temperature up a whole degree. The damage is that now I canât go outside in late summer, if it doesnât rain the week before, because the air is poisoned by soot from forest fires. The rich are the reason I couldnât afford a place to rent in San Francisco, their speculative housing investment and gentrification raised the marked rate so much that a working class person from one of the richest country in the world couldnât afford to live there. The rich are the reasonâunless you are one of themâthat you are not making significantly more money from your current job, they consistently take away from your contribution to the wealth you generate in your current job without contributing anything of value.
> The rich are the reasonâunless you are one of themâthat you are not making significantly more money from your current job
Actually, for a significant part of Bay Area - anybody who is working in a startup or a company that has been a startup (including Google, Facebook, Amazon, Twitter, etc.) "the rich" are the reason they have a job and a salary with which they can afford not being homeless. Who do you think makes up VC capital from which startup investments are made? I don't idealize rich people - as a whole, they have the same percent of assholes and criminals as any other group, and as people with many resources their assholery has an outsized impact sometimes - but claiming "the rich are the reason" for all problems and without them we'd all be paid tons of money of of somewhere magic - is just sheer idiocy. Sorry, I lived in a country where (almost) nobody was rich, at least legally - and it was shitty. I do not recommend it to anybody.
I lived in a country where almost nobody was rich and it was fine. Then in the nineteens regonomics happened national resources were privatized and we had millionaires popping up until they almost literlly bankrupted the nation in the great recession of 2008.
Sorry but in my experience nothing ever good comes out of K shaped economy. I have a good reason to be salty towards the rich. I know that currently they are paying my salaries, but I am also aware that I am contributing more towards the wealth they are retrieving then I am. So strictly speaking I donât need them. But even so, I would be fine if my entire industry would collapse and would leave me unemployed if it meant that the wealth the rich folks are accumulating at record pace would be distributed towards the working classes of every nation. I would rather make minimum wage in a world where that was the norm then to be taken advantage of by a wealthy class who consistently adds to their own wealth while the rest either stays the same or gets poorer.
> up until they almost literlly bankrupted the nation in the great recession of 2008
Iceland I guess? If you like what you've got, don't try real actual socialism. Believe me, it sucks. You'd regret it.
> I have a good reason to be salty towards the rich
If my guess is correct, you experience is an unique result of a very bad situation which was manufactured by some dirty politicians, some PhD'ed idiots and some greedy bastards (see my comment about the assholes above). That doesn't mean everybody who is rich is a bastard. Having money is a wrong marker, and your saltiness is way off target.
> it meant that the wealth the rich folks are accumulating at record pace would be distributed
That never ever happens. I mean, even if it happened it would amount to tiny crumbs for you ("you livelihood and all you've done for living are gone and you have no means to support you family or procure food, but here's your check for $275, enjoy it!") - you can't both whine about "tiny number of people owning stuff" and expect taking their stuff would make you rich - "tiny number" means you only get a tiny part of it. Arithmetics is a cruel science.
But in fact there's no "distribution" ever possible. Never happened, never will. There's only destruction and desolation. It is possible to target Bill Gates's wealth and destroy it. Shut down Microsoft, make all its workers unemployed, blow up the campuses and wipe out the backups. Can be done. You won't be even $275 richer from that though. Nothing will be "distributed", just destroyed. This is the only way it has ever worked or can work. Revolutions do not make anyone richer, but they do make a lot of people starve and die.
> I would rather make minimum wage in a world where that was the norm
No you wouldn't. I lived in that world, and I haven't seen any single person who after experiencing both wanted to remain in the minimum wage world. Millions wanted to move out and took extraordinary efforts - often risking their lives - to do it. Remember the Berlin wall? Why do you think they needed the wall - is it to hold out the West Germans itching to experience the blessings of the East German minimal wage? How many South Koreans you think want to move to North Korea to enjoy the guaranteed rice rations?
> a world where that was the norm then to be taken advantage of by a wealthy class who consistently adds to their own wealth while the rest either stays the same or gets poorer.
But that's not true. The rest doesn't get poorer - in fact, the number of people living in poverty is declining steadily. Yes, I know you had a bad experience in 2008, but if you're willing to have a broader look you can easily see it:
https://ourworldindata.org/extreme-poverty
I agree that the scale of damage is greater. I just caution anyone grouping people based on belonging to a category. Being rich doesnât mean you polluted more than others. Al Gore is rich, but he was kind of focused on that issue.
So for every 100 rich folks that have screwed you over you have an Al Gore that doesnât. Please have the perspective also that for every homeless person that mugs someone you heard of, there are thousands that wouldnât even think of doing anything even close to that.
I do have that perspective which was my exact point. Donât group people and make broad generalizations.
To be fair though, Al Gore likely has a a carbon footprint orders of magnitude higher than the average person.
I don't fear for my families safety just walking outside our front door because of rich people, I fear a homeless, drugged up person assaulting them.
Seriously? Do you have reason to be afraid of the homeless or are you simply experiencing prejudice? If the former is the case I recommend you move somewhere where there are fewer homeless.
But this dichotomy of homeless vs. the rich is really silly. You have less to fear around the rich because they are rich, the homeless might be in a desperate situation and behave accordingly, or as put in the Movie _Parasite_:
> Ki-taek: They are rich but still nice.
> Chung-sook: They are nice because they are rich.
The danger the rich pose is not something they do to you as you are walking home. It is something they do to the planet (like spilling oil or emitting massive amount of carbon), what they do through the legal system (like evict you), or even just fire you, paying you unfairly, stealing from or influencing your government, etc.
> The rich have polluted the planet
Rich people aren't tipping over trashcans or shitting on my sidewalk.
> raised the global temperature up a whole degree
This doesn't actually affect you, you've just been brainwashed into thinking it's the most important thing ever. Emissions are going down in all of the most highly developed countries. As technology improves, this will improve as well. You're complaining about progress that has lifted billions of people out of squalor to having powerful computers in their pockets and being able to transport goods across the globe.
> The damage is that now I canât go outside in late summer, if it doesnât rain the week before, because the air is poisoned by soot from forest fires.
Maybe they should do some forest management with the billions in taxes they take every year, instead of giving it to street-shitting, drugged-out hobos.
> The rich are the reason I couldnât afford a place to rent in San Francisco, their speculative housing investment and gentrification raised the marked rate so much that a working class person from one of the richest country in the world couldnât afford to live there.
When demand goes up, and supply doesn't, the price goes up. This isn't rich people's fault, it's basic supply and demand.
> The rich are the reasonâunless you are one of themâthat you are not making significantly more money from your current job, they consistently take away from your contribution to the wealth you generate in your current job without contributing anything of value.
They provide you with a job. You are free to start your own business. Rich people can't stop you.
No one owes you anything.
> Rich people aren't tipping over trashcans or shitting on my sidewalk.
Are you seriously equating globally warming the planet with littering? Yes the latter is annoying but the former is literally killing a significant number of people around the world every day. You canât blame the fires solely on bad forest management. Yes forests in California could (and should) be managed better, but with the climate disaster fueling them I think those effort would be futile.
> They provide you with a job. You are free to start your own business. Rich people can't stop you.
Again, seriously? Reality check, if this were an actual option more people would do it. How many people get rich (or are able to at least make a living) after starting a business from a working wage? In the real world, normal folks canât afford to start a business, and even if we could, the risk of failure is too great for us to risk loosing everything and ending up in debt for it.
> if this were an actual option more people would do it.
How much more? US has over 31M small businesses. How many do you need to conclude it's an option? 99.9% of businesses in the US are small businesses (obviously, since you only need one person to make a small business and 100K persons to make a Walmart). If normal folks can't afford it, who are all those? I know several people having businesses, in what way they are not "normal"? Not all of them are rich (in fact, most of them aren't, most are making a good living, some better than others, but none I know are billionaires so far) but how this is not normal? I think your picture here is very skewed.
I never claimed it is a good life. I never generalized anything. I am not sure where you found it. What I claimed is many of the people who spend billions of dollars on this problem have incentive to not have it actually solved (as in gone, no problem anymore) - for reasons both political and selfish. I also never claimed I have an explanation for the problem of homelessness. I only have an explanation for why the government of San Francisco does not appear to be able to make any progress in solving it despite spending a real lot of money on it.
Just as an aside, I don't know the stats for SF, but in Seattle the "invisible" homeless outnumbered the street-homeless 2:1. Street-homeless people tend to cause the most problems and put the most strain on the system, but there are a lot more people sleeping in cars, shelters, temporary housing, and couchsurfing, who _are_ still homeless and need help.
I honestly think SF and Seattle need to be tougher on the street-homeless but IMO it's important to remember that there are a lot more homeless people than the obnoxious ones. Those are just the ones you notice, because they are obnoxious.
Its funny you should say this, I have a sibling comment providing an anecdote about my (non obnoxious) [generally perceived] homelessness in San Francisco, while currently living in Seattle (well Vashon Island). Generally I get the a little lacking vibe in Seattle then San Francisco. Never having lived without a house in Seattle I feel like it would be similar except for the superior weather in San Francisco. I also doubt that I would be able to find as welcoming neighbors in Seattle as I did in San Francisco (although that is just a speculation).
To be honest I think there is a bit of semantic trickery here by homeless advocates. In colloquial parlance, âhomelessâ means âunshelteredâ rather than âlacking a long term living arrangementâ.
If you look at the link I posted below, people living in shelters and transitional housing and cars (not couch surfers which I think were not counted) still outnumber those sleeping outside.
Again, the people sleeping in homeless shelters are still homeless, you probably just donât notice them because they arenât causing trouble
Do you have a source for the 2:1 ratio in Seattle? I ask not because I think itâs false, but because I was looking for similar data earlier and couldnât find it.
Check out page 7 of this:
https://regionalhomelesssystem.org/wp-content/uploads/2020/0...
Actually the ratio seems higher if you compare street/outside/tent/encampment/abandoned building vs. the other options.
Speaking as someone that lived in van in SF for 6 month before I left for immigration reasons:
1. Iâm not from SF, I came there to live with my partner who was in school there but we couldnât afford a place to rent.
2. Iâve never been homeless anywhere else and I wouldnât have been homeless in SF if rent was fair.
3. Iâve never pan handled, but I didnât need to. Dumpster diving is easy, there is plenty of free food options (including free farm stand with organic vegetables; I also cooked for food not bombs but that was more for the fun then the food).
4. Didnât get any free phones, paid for my own bus fairs (or just jumped the muni).
5. Police never hassled me too much. Only one time when I parked near Dolores Park too see if they had their porta potties open all night (they didnât). Police advised us to stay out of this neighborhood. We did and moved back to a friendlier neighborhood in the lower mission.
6. Showering is impossible for the homeless. I could really only shower and shave once a week. I had to wait in a line for a ticket at a charity and then wait there for an hour or two at a cramped space for my turn. Sometimes I would sneak at my the campus of my partnerâs school and steal a shower.
Speaking from experience the only thing that is creating the homelessness in SF is lack of reasonable, affordable, and accessible housing options.
In summation, you chose to be homeless by choosing to move to SF. This is _exactly_ the problem.
Why did you feel the need to live in SF if you couldn't afford it?
I said it right there in the same sentence. My partner was in school there.
To provide a more detailed explanation. They were already renting a room when we met, and their landlord (who was them self subletting from another landlord because they couldnât afford their own rent even though they have rent controlled price from the 80s) didnât want us both living there.
My partner had a year left in school but they finished quickly because we didnât want to push my immigration status.
"They" is third person, plural, subjective in English.
Imagine patronisingly correcting someone's grammar only to be completely wrong.
"They" is perfectly valid referring to a singular person.
> Used to refer to the one previously mentioned or implied, especially as a substitute for generic he.
The usual term for the thing you call "subjective" is "the nominative case".
This is the best example of âspeaking from experienceâ Iâve ever read.
The question how representative are you of the general homeless population in SF. I would guess not much. Am I wrong?
No, you are not wrong. I am not at all representative of the general homeless population in SF. I doubt anyone is. The homeless is probably one of the most diverse of any classifiable group in San Francisco. People are homeless for numerous reasons, and I bet any similarity you find is only superficial.
Note that I never considered my self homeless. My 1981 VW vanagonâwhich we named Sunnyâwas a plenty good home for me. It was the first home I bought with my partner and we had a really good life in it. We would have stayed in it longer if it wasnât so difficult to immigrate into the USA. But I knowâand understand whyâmany people consider that homelessness.
Do you realize that a tax paying citizen would have to pay a pretty hefty fee if they parked anywhere for an emergency?
Street parking everywhere because parking garages are being converted into affordable homes for people who canât afford to live in one of the most expensive zip codes in the USA.
Homeless people who park their RVs and vans in public parks and open spaces are removing them from public consumption for those who paid taxes to maintain these spaces and commons.
The housing options are there, just not the city option.
I have hired people in the farm who were getting homeless benefits. I have also hired juvenile girls who lived in a half way house as part of their rehabilitation.
The homeless worker ..one of them..had more benefits than the young girls. I wish I could have worked more with them. People need help. The right help at the right time for the right people is more effective than blanket free for alls.
He was living in his grandmotherâs two million dollar Mountain View home and the first thing he asked me was if he could smoke his pot because granny wouldnât approve...while the girls were huddled and chaperoned at all times.
I would pay more in social taxes if I could choose the programs and if there were more transparency as to where that extra money went.
I read this as:
_[The homeless worker] was living in his grandmotherâs two million dollar Mountain View home_
and I have a hard time imagining why anyone would consider that "homeless". Could you elaborate/clarify?
Definition of homelessness in California:
California defines homelessness if you come out of an institution(jail in this case..but also includes substance abuse rehab, mental institution etc) after a 90 day stay and donât have a place to stay. If you donât have a utility bill in your name, then you can be called homeless.
Because he was in jail twice consecutively and was out on bail, if he could claim mental disability he doesnât have to go back. But if he can claim mental disability and homelessness..citing them as a reason not to work, he could get benefits for life.
He skipped something legal and was at risk for going back to jail. So he just claimed that he was sleeping on the streets and didnât have an address.
Look..he was really smart. At that point, I really wanted to help him and I can even appreciate some lateral thinking for problem solving. I didnât mind that he was using a break to get back on his feet. If someone says they are mentally disabled, I am going to believe them and not question it.
But he was doing things that made me feel unsafe because he was setting up the stage for me vouching for his mental instability if I were questioned. Like fire. He would get the blow torch for everything..wasp, weeds, gophers. I have worked previously with the homeless and previously incarcerated. And the most harrowing, addicts. With the former, itâs easy to integrate them back into society. A lot of times you know when you are being lied to and thatâs ok too.
But our loopholes are so gaping in CA that people who need help are not getting the right kind of help. And itâs nuts to keep doing the same thing again and again ..and keep expecting the same results. And just throwing more money at it is not doing it differently. A lot of organizations, non profits and sub contractors who win bids are making more money than what actually goes to the homeless people. Homelessness alleviation is an industry of its own. Without the homeless, there would be a lot of jobs that do homelessness outreach. Which by itself could be a way to prevent future homelessness. But thatâs just creating jobs to give people money..those needing other kinds of help are not getting it. Because at the end of the day, money doesnât solve the problem entirely.
https://www.provost.usc.edu/initiatives/wicked-problems/home...
I want to add another story. At my orchard farm, there was a homeless lady whoâd come by to use the packing shed. She was an older person and had a dog with her at all times. She was clearly mentally unstable. She used the shed to hold meetings with her imaginary friends. After I pull in, I have to wait while she opens the swing door and tells each one of her imaginary friends at the meeting..âthank you. Please come againâ. Like 5-7 times. Then sheâd give me a withering look and leave with her dog.
I played along because I knew she was harmless. Then one day the dog disappeared and my general rule at the farm was not to leave any tools outside unlocked. Someone must have left a shears outside one evening. When I came back, she had gone on a rampage at the lavender field and shredded the greenhouse plastic. I donât know if she was ill or she had lost her meds.
I had to call the cops and I had to check with insurance. I did not want her in jail. I only wanted her to get her meds.
But the cops(they were remarkably kind and they were already frazzled by this kind of issue in a semi rural area) said their hands are tied. They literally canât help her or get her meds or even find out if she has any next of kin without arresting her. Because of fourth amendment and privacy issues. If booked, she could get fingerprinted. And then they can find out if she is a missing person or if she has any prior history etc.
This was difficult for me. I agreed that the next time I will file a complaint because I didnât want her to be in the system and on police records. But she never came back. Weâd never know what happened to her. She disappeared..just like that. Did I do the right thing? I donât know! Did the cops have enough authority? I donât know! There are homeless advocates.
Because I have a story for that too. There were a bunch of young homeless people who became squatters in my farm. They stole things. Used the place to sell drugs. Stole electricity. Destroyed my property and fencing multiple times. Again the cops couldnât do anything. They had to go via the homeless advocates and non profits because cops are not allowed to deal with this issue. But are they drug dealers(and we are not talking marijuana here) or homeless people? Net net, I have to absorb the losses on a farm that was not making much anyways. Worse, they were cutting the trees by the creek, build bridges from the greenhouse lumber they cut, made make shift âapartmentsâ and cottages with plywood and tarp... and pooping in the creek and I would go every weekend and pick up poop, condoms, needles because I grow food. I canât have stuff like this around. And the homeless advocates did nothing while they continued to trash my farm and made it their sales HQ.
And start ups. Donât get me started. A billion dollar company that could have provided safe solutions to mentally ill and homeless population BACKED off from selling their product because they didnât want to work with the police. Because it would affect future funding and the woke progressive climate in SV wonât look favourably on anyone who works with cops and law enforcement. The clowns had taken over the circus when the employees tender woke feelings matter more than delivering actual solutions to the needy. This is tragic. And I will not pay any more taxes to enable this lunacy that is The California Democratic Goat Rodeo.
Oh! And the time the squattersâs clients backed up their truck into my fence and the squatters offered to pay for it. With beer. For life.
In terms of showering, I've heard some homeless people buy gym memberships to access a clean shower every day.
Yep, unfortunately people living there are too dumb to see they create their own problems by excusing the elected politicians (same for decades). Maybe some people are so nice they would rather step on human waste than make someone else uncomfortable for some of the decisions they made.
well, a system designed to attract the homeless to sf anyway
Maybe itâs good to see these issues rather than pretend they donât exist.
Government is a beast whose appetite is never satiated. Such is the consequence of Pournelle's Iron Law of Bureaucracy:
_First, there will be those who are devoted to the goals of the organization. Examples are dedicated classroom teachers in an educational bureaucracy, many of the engineers and launch technicians and scientists at NASA, even some agricultural scientists and advisors in the former Soviet Union collective farming administration.
Secondly, there will be those dedicated to the organization itself. Examples are many of the administrators in the education system, many professors of education, many teachers union officials, much of the NASA headquarters staff, etc.
The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization._
Big Govt thrives on bloat. All unionized public sector employees rely on unfunded pension liabilities after their retirement. To continue with the pyramid scheme, you need more people to keep voting tax increases. That group is cultivated in public schools from when they are kids and then with social programs for the youth.
If we socialize education and then young people and then the middle aged who canât find affordable homes and yet need to be home owners and then the retired public sector community. And then special groups. Who is left? I guess the ones who are actually paying more into the system than they are taking out. Itâs like the oxen that plows an entire field with the poor farmer whipping itâs hide. Why not?
All the jobs out there except a handful are fluff jobs with no real production value. Yes, I am glad someone is making my latte at Starbucks but at the end of the day, I am also paying for that. To maintain jobs so that everyone can be employed. As the pandemic proved, we can do without Starbucks. The value of most of the non productive job is to provide the public a wage so they can be consumers to purchase from the producers. Like smart phones. Or a car. See the pattern?
So all this cultivated vote base need to be cared for and fed. This is when you bleed the tiny tech community by injecting them with guilt and self loathing for being b productive and wealthy. This is usually done with clickbaitey articles and outrage porn publishing farms and social justice yellers.
Now you have a large vote bank that will keep voting yes to taxing the tiny little taxable sector(many of whom probably donât even vote if tech employees come as immigrants and are not voting citizens).
San Francisco keeps throwing money at problems that donât get solved because itâs not their money. When there are 12 people in the room and the vote is yes or no for taxing just the top two wage earners in the group, why should it be surprising that itâs at least 10-12 for YES on taxation.
Jesus. There is a lot of elitism embedded in here.
For one, youâre not paying the Starbucks employee so they can be consumers out of the goodness of your heart. Theyâre charging what youâll pay because that is capitalism.
If you donât want to pay the Starbucks employee, you donât have to. You can go brew your own coffee, but you probably figure $2 isnât worth your time so instead youâd rather just pay them for the convenience.
The other great thing about all this is if you donât like how San Francisco wants to tax you, you can leave. And itâs not even like leaving the country or even leaving the state. You donât actually even lost anything of substance.
Yes. I think more people should strive to be elite than ordinary. Or not. It is the elite and the wannabe elites and those who want to be wealthy and powerful that make the world go round. Ambition that drives people to stand out is why they are motivated to Create. Thatâs why we are not an equal nation of peasants.
There is a reason tax havens exist. And why socialist Europe has Riviera and why we have Jackson Hole. Itâs this jealousy towards elitism thatâs creating WIDE gaps in inequality.
There will always be inequality. What we need to offer is opportunity for the willing and ambitious. Slamming it as âelitismâ is shaming the ones have what we donât.
This is ruinous. We should instead create a more driven and ambitious society. Not one that wants a piece of someone elseâs cake. Starting with..stop shaming the rich. And stop taxing them.
I want the rich to love obscene gorgeous insanely hedonistic lives. Because such a lifestyle will infuse spending and profit back into our economy.
Wow, you are a selfish person. Wish you could live tax free in a world where all the inhabitants is just you
Yes, I am a selfish person. You are free to pay my share of the taxes to increase the budget from 360 million/year to $600 million/year etc. Have a nice day.
It's much harder to repeal laws, remove committees, stop wasteful procedures etc. than it is to introduce those things.
This is a big problem at all levels of government, but particularly in California where the voters can (and do) directly create policies and programs via propositions.
If we were half as good at removing unhelpful laws and programs as we were at creating them, we'd all be a lot happier.
I think this is a common line of thinking that doesn't actually reflect the reality of how much the city is spending per year.
SF's spending in 2019 was 12b dollars (roughly $12,000 per resident).
Of that, 1.6b went to MTA ($1600 per resident, or 13% of total spending)
and 360m went to addressing homelessness ($360 per resident, or 3% of total spending)
Comparatively, SF's GDP was 500b (500,000 per resident).
To conclude that we're spending all our money on this and getting no results seems wrong when we're spending so little of our budget, and our budget is so little comparatively to the economic activity.
*(these numbers are from
http://openbook.sfgov.org/portalpagehelp.html#sfopenbook
2019 spending)
One number you're missing there is the total homeless population estimated in 2019 to be around 8000 people [1], which works out to around $45k per homeless resident.
1.
https://hsh.sfgov.org/wp-content/uploads/2020/01/2019HIRDRep...
Yes the point-in-time count is 8000, but a lot of homelessness services go to preventing people who are on the edge of homelessness.
If you use the estimate here (
https://sf.curbed.com/2019/11/20/20973811/sf-homeless-count-...
) that 18,000 people are homeless at some time in a given year then the figure goes down to 20,000 per homeless.
Also consider that an additional estimated 9,500 each year would be homeless if not for SF's existing supportive housing services (
https://sf.curbed.com/2020/3/4/21152501/san-francisco-homele...
)
Plus people being evicted. In 2019 there were 1600 eviction notices (
https://sfrb.org/sites/default/files/Document/Statistics/18-...
). If we assume that even just 25% of those are 4-person families, that's bringing us to around 10k a year per homeless/at-risk resident (and that's not even counting those who are at-risk of eviction but did not get evicted thanks to SF's existing eviction prevention resources.
This is a really good point, thank you for providing the links!
This is a misleading metric.
Say you had a $100k homeless budget, and 100 homeless folks. Youâre spending $1k per resident.
But say your program REALLY works, and now you only have 10 homeless folks. Then, your program is spending $10k per resident!
the program didnât get worse. As your program gets better, you should be spending MORE per resident, not less.
Another great point, it is entirely likely that happened in SF since Iâve heard the homeless population quoted as 20,000 a couple years ago. As the commenter above also pointed out, my original math was indeed misleading.
My understanding is that the city spends quite a bit of money on the homeless indirectly in various forms. The bigger problem is the growth in the budget:
2012: 7.3 billion for 829,027 people = 8805/resident
2020: 13.7 billion for 896,047 people = 15289/resident
Why did the budget increase 51% in 8 years when the population increased by 8% (1.13% inflation)?
The economic context has also changed a lot. In 2012 SF's total GDP was 350b, today it's 500b (a 40% increase). It shouldn't necessarily be that surprising that as the economy grows the government's spending does as well.
Thatâs 51/40 in favor of spending more over those 8 years and in 2012 SF wasnât frugal. Some increase is justified but not more than 1 to 1.
This does explain quite a bit! Although I'd assume there are economies of scale in running a city (or else they wouldn't exist in general).
What do you think is the right amount of local revenue for a city to collect? SF by your numbers is collecting 2.4% of its local GDP which is about double what my cityseems to be doing. I also feel like having high state taxes would squeeze out what localities can justify collecting.
500 billion is substantially off, that figure is not for San Francisco the city, it's for the combined SF-Oakland-Hayward, CA metropolitan statistical area, which has a total population of around 4.7 million people.
https://fred.stlouisfed.org/series/NGMP41860
I agree.
And also in general I am not sure if it makes sense to tax millionaires or billionaires at the city or state. They'll just move some place else. Just ask New York[1]. After NY imposed a tax on the uber rich. All of them moved to Miami and maintain two residences. One in NYC and one in Florida. IF you tax its best to do it at the country level
https://www.nytimes.com/2020/09/07/nyregion/wealth-tax-budge...
If instead of taxing wages, we collect the rental value of the land on which their residences and businesses are located, it is highly unlikely that the land will leave town.
This isnât a tax on the CEOâs individually, itâs a tax on the businesses that have high paid CEOs.
This isnât rocket science. When taxes were high American Main Street did well.
Whatâs pathetic is social mediaâs projecting ignorance and air gapped criticism. I see little to no alternative options offered, despite all the economic huff and puff and engineering wisdom supposedly possessed by that community. Same banal political speak.
A little less âMonday Morning quarterbackâ and a bit more connection to facts would be great.
America is a bit into sitting on its butt complaining at the screen though. IMO thatâs the real credibility issue in this nation; so called exceptional, gritty people sitting around complaining about systems from afar.
You think they canât figure it out? Or do you think more people are pushing protectionism of their luxury.
Portugal showed us how to deal with a number is drug issues. Where are the sustainable programs? Mired in American identity of absolute free choice, despite a heavily gerrymandered electorate.
How come the residents of CA voted to legalize drug use?
Years after other states and nations.
Exceptional.
Gritty.
Mercia.
Why is homeless people in the tenderloin so bad?
Is there a safety issue? Do they Rob or murder? (Genuinely asking)
If not, than why is it so bad?
Because you don't like seeing the poor?
I mean sure people _forced_ to homelessness is a problem from their view point. This is usually related to their upbringing and could be avoided if you have a strong welfare state that don't let children grow in crappy situations with bad education and poverty, with a sense of security in the future.
When you don't have that, most of the time, you'll grow up and be homeless, or your kids will be.
But the homeless of today are just a symptom of deep rooted problems, throwning money on taking care of them now won't make them disappear.
> Do they Rob or murder?
Yes they do.
Have you ever parked on the streets of SF?
I once spoke with a woman who grew up in SF, and she told me about a warming shelter they spent a lot of money building for outdoors people. Once the money was spent, the building developed a crack, was closed down and never repaired or reopened...
I pay more in taxes than most of my friends and SF has little to show for it. How many times does one have to call 311 to have garbage cleaned up or a disturbance investigated?
An institution can both grow revenues and increase efficiency at the same time.
The ideal solution to being more efficient is also usually not by cutting budgets.
Fixing policy issues especially doesnât come from changing budgets.
Part of the problem is the rich people donât use the city services the way they do in New York. City services serve the underclass and the professional class uses private vendors.
I keep hearing this, but I live in SF and I never felt that the taxes were that annoying, and considering the misery in the streets I'd be willing to pay much much more for things to improve.
People need to see taxes as a monthly subscription that makes life around you better
Who buys products when 1% of the population has most of the resources? Henry Ford was a capitalist, be he recognized that production required buyers. Buyers need money. Income inequality concentrates that money.
I am excited to see a new generation of corporate leaders rediscover stakeholder capitalism and reject shareholder primacy. Pay employees more, reduce leadership pay and watch markets expand as a result.
Once, there was a French city planning department that couldn't decide what to do with all the fresh water that they had. So they voted to BURy the WATER, which was CRAzy.
Bur + eau + cracy
It's this way because American individualism is a cult of selfishness. People are dogmatic when they need to be logical.
Have you considered that the non-homeowner population might be voting for policies that increase the tent cities and open drug use, in the hopes of making the city unlivable for the rich and getting them to flee and put their properties on the market?
> a small city with an incredibly wealthy population can't figure out how to keep the tenderloin from being full of tents and open drug use?
The wealthy people avoid walking through the Tenderloin. They spend their time in the Battery and the Modernist. They have no incentive to fix the situation there. None. Zero.
This isn't Europe where wealthy people enjoy a stroll downtown, and have some incentive to want to keep their downtown nice. The wealthy people in SF just go to Napa and take their stroll in a vineyard over there instead.
> Or get some form of functioning public transit?
The wealthy people don't use public transit, they just drive everywhere or Uber everywhere. Again, they have zero incentive.
To be clear, I _really_ want these issues to be fixed, just stating the facts of the situation.
It is understandable that you want these issues fixed. But do you think those who donât use these services should be burdened with the cost of fixing them?
In Europe, social costs are borne by the middle class to provide a safety net for the middle class. In the USA, we expect the wealthy to provide for all of society. It is highly irrational.
> But do you think those who donât use these services should be burdened with the cost of fixing them?
Yes. In /most/ cases, the wealthy are only wealthy because they have (directly or indirectly) profited from the middle class. The wealthy should be paying a fair share of taxes in return, for upkeep of the public services the middle class use, and which the wealthy are perfectly entitled to also use.
The middle class should pay their fair share of taxes as well, of course, but for the most part, they do. They pay less taxes than the wealthy, because a significant fraction of their income does go toward basic necessities, whereas for the wealthy, basic necessities is a negligible fraction of income.
The middle classes are getting goods and services in return. The jobs for the middle class is also being provided by the big companies. Thereby creating a tax base for a govt whose only job is to maintain law and order, build infrastructure and maintain public utilities while conducting fair elections.
But we see so much bloat that they canât ever get out of a deficit. That only keeps growing. A hungry maw that never shuts without ever solving any problem.
If 350 million dollars spent over 12 months canât solve homelessness in SF. How much will it take? 600 million? 1 billion? 1.5 billion? Whatâs that âmagicâ number?
In a capitalist economy, we create Capital. It is capital that funds industry. You canât take capital and make it spending money.
What do you think the wealthy spend their money on other than âbasic necessitiesâ? Why would anyone be wealthy and only spend on basic necessities? They spend on luxury. They spend on high living and expensive things.
So there are resorts. And staff that work in resorts. There are sports cars and people who work in those factories and mechanics who specialize in fixing them. There are private planes. And so pilots, stewardess, fancy cheese plates and catering services. If the wealthy arenât allowed to be wealthy, we wonât have a whole swath of jobs.
If we want a healthy middle class, we should stop guilting the wealthy. We should allow them to spend their millions. Itâs their money. Letâs hope and pray that they spend it and spend it well and spend it in all the stupid and obscene and wasteful ways. Because that would create a healthy working middle class.
Just allow CA zillionaires BE zilloinaires and watch the job markets flourish. Equality doesnât mean everyone is equal, it simply means that everyone in their category is equal to each other. If we had economic equality for all, weâd be Cuba, not CA.
Instead of punishing the wealthy with higher taxes that go into Big Govtâs Maw, if we let them actually spend it...weâd have more circulation of money in the economy. Inequality of wealth occurs because there isnât enough circulation.
Most money that wealthy people have is not spent on consumer goods. It is plowed into more investment.
Who spends more of their income? A paycheck-to-paycheck worker, or a wealthy person? The wealthy person puts most of their money into retirement accounts, college accounts, real estate equity, investment accounts, trusts, tax havens, shell companies... If you have 5 million paycheck-to-paycheck workers they will spend every cent; while if you have a single billionaire making exactly the same amount, almost none of it will be recirculated.
Once there's enough of it, it turns into political power. Which has a tendency to benefit the wealthy class, almost always at the expense of everyone else. At the other end of every single massive failure of government there is a very wealthy person reaping the benefits of the power their wealth has enabled: healthcare, military, housing, transportation, education... etc etc.
Just praying that they'll spend their money on charity or something that benefits everyone is not enough.
Investment does benefit other people. That's the primary point of investment.
Let's also not forget that many wealthy people only pay at most 15% on taxes because the tax structure has more or less been lobbied by the wealthy in favor of the wealthy. Most middle class people pay 25-35%, and have neither time nor resources to lobby otherwise.
15% on a million net is more than taxes from middle class wage which actually goes towards negative tax if one takes the benefits of a living in an incorporated city and if there are children using public schools etc.
Money taxed from capital gains isnât really the same as taxes levied on wages. This is very fundamental tax logic. Would you like me to explain why?
[..] The justification for a lower tax rate on capital gains relative to ordinary income is threefold: it is not indexed for inflation, it is a double tax, and it encourages present consumption over future consumption. ... Finally, a capital gains tax, like nearly all of the federal tax code, is a tax on future consumption.[..]
Of course, itâs plowed back into investment. The prime directive of a capitalistic system is to create CAPITAL. Capital creates industry and jobs and money circulation. Taxes are the bloat in the beast called Big Govt. it sits there like inside the belly of a constipated beached whale.
Even pension funds and unions invest in the companies that make the profit. Chicago Teachers Union, iirc, has over 45k shares of AMZN. They also took a guillotine outside a Jeff Bezos building to make a âpointâ. Itâs just hypocrisy if one believes it and ignorance if one parrots the âeat the richâ line.
So when exactly do people start becoming responsible for their own lives? Social net is for those who genuinely need help. The weak, unfortunate, disabled and for those who need a helping hand. Society cannot shoulder the responsibility to take care of individuals whose are supposed to know better.
Political power does not benefit the wealthy class at all. This is absolutely untrue, but is often parroted over and over without people questioning the meaning of it.
A lot of the attitude comes from people without looking into the homes of people who have means and wondering why they canât have what someone else does..what they donât see is the countless hours of hard work and sacrifice and time away from family and other things that people take for granted. Why do they do it? To be wealthy is one of the goals. It is absolutely cruel to punish people for chasing their dreams. Taxes on the wealthy is punitive because they have to pay the troll under the bridge to cross it.
When I see someone railing against millionaires about the drug addicts and homeless on SF, I want to ask if they ever asked the parents of these model citizens? Their blood relatives? Their so called friends? Their community? Their high school friends?
If everyone took care of 1. Themselves 2. Their immediate family 3. Their extended family 4. Their friends 5. Their community 6. Their extended community FIRST, we wouldnât have to knock on the doors of millionaires. Who cares how the rich live...most of us should look at how we ourselves live and how our loved ones and those we care about live.
Itâs like watching a child in a park watching a rich kid hack into an obscenely large cake. Another parent who is feeding his own kid a modest snack drags the starving kid to the rich kidâs parents and demands that they share their big fat cake with the starving kid. Hey! Isnât it always easier to make plans for how others should generously share their wealth?
The problem is not âthe wealthyâ. The problem is lack of healthy community and healthy supportive families. No amount of wealth sharing or stealing from the rich or taxes or plain old money will fix it.
"Just solve homelessness" - GhostVII
Why didn't we think of that?! Thanks GhostVII we'll get right on that.
As upper-middle-class professionals we tend to assume that city institutions are here to serve _us_, and that the things _we_ find unpleasant must be failures.
The ability to pitch a tent almost anywhere, free from police harassment, is pretty great if youâre homeless.
Likewise the public transit system is pretty great if youâre a transit worker, or someone who wants an indoor third space but whose appearance/behavior/smell would tend to get you thrown out of Starbucks, or if your best alternative is to walk.
San Francisco isnât failing. It just values these people and their needs a lot more than it values the comfort and convenience of tech workers. If you donât like it, vote for a moderate instead of a progressive in your next BoS election.
> Likewise the public transit system is pretty great if youâre a transit worker, or someone who wants an indoor third space but whose appearance/behavior/smell would tend to get you thrown out of Starbucks, or if your best alternative is to walk.
A public transit system is a huge advantage for upper middle class professionals, and even more so when them homeless are housed. This can be seen in developed countries that have good public transit systems.
I for one is not content with my city having enough money to build and maintain expensive infrastructure. I care more about living in an equal society where the rich donât constantly dunk on the less fortunate, where the rich donât hold disproportionate power and are frequently causing issues that disproportional effect people like me.
I want to tax the hell out of the rich, not just to get money to manage our shared spaces, but also to take their money away from them. In my eyes they donât deserve this money. Me and my fellow laborers worked for that money, but they get to keep it. For me this is unfair, and unjust. In my perfect world the rich would not only pay marginally higher taxes, but they would pay _most_ of their income in taxes. A person making a million a month should receive less after taxes then a person that makes a thousand. That for me is a fair economy. And that is the reason why Iâand many like meâwant to see the tax rate of rich CEO raised to 100%.
How much will you be willing to see your tax rate go up?
If I make the mean wage I wouldnât mind seeing it go to 50%, provided that if someone that makes one standard deviation above the mean wage go up to 73.1058579%.
_I hope you see which taxation function I prefer from this_ ;)
You can always pay more in "taxes" if you want. The government is not going to refuse your money. If you want to donate money to the city and county of San Francisco, go here:
To reiterate: _âI want to tax the hell out of the rich, not just to get money to manage our shared spaces, but also to take their money away from themâ_
Sounds like business will be booming for temp agencies as well as janitorial and facilities maintenance contractors.
Whatever the net positive here is wholly negated by the number of stable long term jobs that are going to go away and be replaced by whoever the body shop chooses to send that day. Working for these middle men really sucks compared to working for whoever the service is being provided for (and I say that from experience).
More likely, this will just result in businesses continuing to leave San Francisco.
The pandemic has given most companies a good reason to do so already and my bet is on most of them not returning to their overpriced San Francisco headquarters when this is eventually over.
I have lived in San Francisco since 2005. Over the time I've lived here, we've had the opposite problem: lots of highly paid tech firms moving into SF. This has changed the nature of San Francisco in a way that many dislike, including me. I was initially attracted to San Francisco because, it was chill, it was beautiful, and it had a lot of eccentric, really interesting people. Many of our good friends had to leave over the years as SF has becoming more unlivable because rents have gone up so much, and also it's just not as fun, it's crowded and stressed.
I am aware that I am a part of the problem: my wife and I are white, yuppie, dink tech workers. :)
These issues are complex.
I voted yes on Proposition L: the tax is quite small and I think the tech firms are unlikely to leave, meanwhile SF can get more taxes from them (many of them were historically given tax breaks, like Twitter, to move into the mid-market area). If they do leave, I don't see that as a bad thing.
Meanwhile socioeconomic disparity is an oozing sore in San Francisco, we have billionaires rubbing elbows with homeless people every day. Nationally, we've had round after round of tax cuts for the wealthiest, if SF wants to tax excessive income disparity, I say, fair enough.
>we've had the opposite problem: lots of highly paid tech firms moving into SF.
Quite the problem ... the kind of problem that multitudes of cities and regions in the world are desperately trying to recreate.
>This has changed the nature of San Francisco in a way that many dislike, including me.
This is where progressives don't live up to their name. The nature of cities is constant change. Meanwhile the activists are desperately trying to keep change to a minimum so that the character of neighborhoods never changes. It's an interesting dichotomy.
>because rents have gone up so much, and also it's just not as fun, it's crowded and stressed.
Rents will drop if you increase density ... but that would mean building higher density housing and thereby accepting that the character of cities and neighborhoods change.
>I am aware that I am a part of the problem: my wife and I are white, yuppie, dink tech workers. :)
The fact that you're white and a tech worker isn't the problem. It's that you had the opportunity to move to San Fransciso for work due to the tech boom, and now you're trying to pull the ladder up so others cannot do the same.
I see nothing in the OP's post that suggests that they're against re-zoning, building high density housing, or other measures to remove barriers against cheaper housing.
I didn't say he was but he used language that evoked San Francisco losing its character due to tech professionals moving it. It brought to my mind the language that anti-housing activists use to prevent new housing development in districts like 'The Mission'.
I have never seen a high density city have low rents. Mumbai, Hong Kong, London, NYC. Is there any factual and proven example of a city that has increased density and housing became affordable and cheaper as a result of more units?
I'm glad you pointed this out. I've had this thought floating around in my head for a long while. The only affordable high-density cities I can think of are in Thailand, Africa, and maybe Eastern Europe? I think NYC is our best comparison though... it's actually much more expensive per square foot to buy in Manhattan than it is in SF, and the rental prices are approximately the same.
Auckland, NZ is another example of a high density real estate hub gone bad. Mortgages are lower than rents but lack of housing stock.
Singapore
https://m.youtube.com/watch?v=3dBaEo4QplQ
Singapore has public housing. You donât own the unit. You lease it from the govt. I think itâs 99 year lease transferable.
Most residential units are not used or traded as a speculative asset.
[..] The majority of the residential housing developments in Singapore are publicly governed and developed, and home to approximately 78.7% of the resident population.[..]
https://en.m.wikipedia.org/wiki/Public_housing_in_Singapore
Tokyo
Tokyo is consistently ranked as one of the most expensive cities in the world.
yet rent is less than half of that of San Francisco or New York
Japan has falling birth rate.
The rents in high-density areas of Seattle before the pandemic were about 30-50% less.
>Rents will drop if you increase density ... but that would mean building higher density housing and thereby accepting that the character of cities and neighborhoods change.
I keep hearing proponents of strict exclusionary zoning laws arguing that they don't like the risk of having the value of their investment decrease because of this. SF will be a great example of how change happens weather you like it or not and allowing dense housing is what makes the change good or bad. You either sacrifice some of the view or sacrifice not having homeless camps.
I have never seen rents drop due to high density. If anything, rents are cheaper in sparsely populated areas. Examples abound. Rents wonât become cheaper if we build more. However, building more will certainly mean more property taxes for the government.
San Francisco gets several millions of dollars to spend from which they spend a measly amount on the homeless(and thatâs over 350 million/annum)..where is the rest? Even the money spent on homeless solutions is mostly going to contracted non profits(look at their board..probably has ex-city employees as board members) or more public sector employees.
With 350 million, I would have created a new sustainable village to house 1000 people with jobs inside. Instead, SF still huffs and puffs and spends tax dollars on piffle and squat.
>I have never seen rents drop due to high density.
You think housing is somehow immune to supply and demand? If that's the case, you can't claim rents are rising due to increase demand from young professionals. Which then raises the question: "What does affect rental prices?"
I am questioning the claim that we need to build more affordable housing by going high density.
I live in one of the most wealthy counties in the US and rent here stays low because they push for building high density housing constantly.
which city?
> the kind of problem that multitudes of cities and regions in the world are desperately trying to recreate
I always tell people that, "it is a nice problem to have." Totally agree with you.
But it is still a problem nonetheless. It's fair enough to raise taxes to try to solve some of the problems which hugely successful businesses have created by displacing people.
Building more housing: YES, more dense housing: YES, programs for homeless people: YES -- on the back of such success, we should have all the money we need to maintain San Francisco.
YES my presence is symptomatic of the problem but, being self-aware, I try to address that by genuinely loving San Francisco, paying more taxes myself when I am asked to do so, participating in local art and culture, and not treating it like a transient place but rather my home and a treasure.
Regarding your statement that I'm trying to block others' advancement: proposition L is about taxing companies whose CEOs make 100-600x more than the median at their company. I am not hurting other regular folks by supporting this, furthermore I'm not even hurting the CEOs (they make 100x more than normal folks). If you benefit from society to the point where you're the leader of such a company, for goodness sake, give a little back gracefully, that's progressive taxation and it has been one of the foundations of our society since 1862.
SF is a liberal, expensive place, because supporting such population density and giving everyone a high quality of life is hard and requires work and money. If we categorically define all taxation as bad, we lose all basis for collective action. America is getting lost in the labyrinth of its own arguments.
> If you benefit from society to the point where you're the leader of such a company, for goodness sake, give a little back gracefully, that's progressive taxation and it has been one of the foundations of our society since 1862.
100%. I think we agree on more that we disagree about, but we happen to be talking about Prop L.
The question on L is what's any of this have to do with the amount of money made by a CEO's employees? Should a CEO of a small number of highly paid employees be taxed less than the CEO of a large number of blue collar employees? That doesn't make any sense.
People talk about the ratio of employee to CEO pay because it's a quantifiable indicator of underlying causes. Trying to change the indicator directly misses the point. Why is the city so unaffordable to the working class? That's not being solved by this.
> The fact that you're white and a tech worker isn't the problem. It's that you had the opportunity to move to San Fransciso for work due to the tech boom, and now you're trying to pull the ladder up so others cannot do the same.
This is quite the ad hominem. I may have missed it, but I'm not sure where OP said anything about density or housing. Is there something wrong with not wanting the city that you love to be invaded by the human version of a swarm of locusts?
Ah yes, men and women who look at human needs and decide to serve them in exchange for compensation on the basis of voluntary exchange are just like insects that being multitudes into destitution and misery.
>Is there something wrong with not wanting the city that you love to be invaded by the human version of a swarm of locusts?
He is, by his own admission, one of those locusts.
As it turns out, not everyone who works in tech in SF is an opportunist. There are plenty of kind folks who just want to make a life for their family, but like any boom, it also attracts a multitude of people who are just here for the money and don't give a damn about the city or region.
Around 2007, a gentleman named Steve Jobs invented the iPhone and unleashed another tech boom, driven primarily by the increased adoption and use of the smartphone and apps within them.
The spoils from this boom primarily benefited companies and people based in and around the Bay Area. People there didn't realize that the rest of the country (and much of the developed world) were still struggling and haven't fully recovered from the 2008-10 recession. The increased prosperity and resulting tax base growth papered over the fundamental mismanagement and poor governance in that area. Some of the highest incomes and highest taxes in the country and yet some of the most dilapidated infrastructure, highest poverty rates and poorest quality of life in the country. "European taxes and third world quality of life" is how I describe the area to people.
Yet, people moved here for the jobs and then new jobs followed the people.
14 years (i.e. half a generation) since then and at the beginning of what is another major recession and economic reset, it's perhaps difficult for most people to imaging that the appeal of the area has diminished and that things aren't magically going back to 2019. People have moved out, companies are hiring elsewhere, the tax base is down >50% and budgets are deep in the red. The local governments can try and raise taxes to squeeze a few million more here and there, but fundamentally, they will have to cut waste and cut spending in the next few years to survive.
I'm not saying SF is going to become the next Detroit, but I remember NYC in the 70s or Seattle post-Boeing (also, early 70s) as an example of what happens to cities when a major industry leaves town. It's a death spiral of lower tax collection -> poorer services -> more people leaving.
>The increased prosperity and resulting tax base growth papered over the fundamental mismanagement and poor governance in that area
This applies to sooooo many cities. I think money beyond the level required to provide basic services just gets wasted and the citizens see nearly nothing from it. It's so common it seems like some fundamental law of the universe.
Your description made me think of California as the Xerox of the US
I've seen people take that position and I see a fundamental mistake. Look at rust belt cities. Look at NYC in the 70s. When employers leave the people left behind are not better off. This doesn't mean we need to kiss big tech ass, but we have a city where getting a job is a solved problem. Very few places on earth have that.
Rent prices are the underlying problem pushing people out. Underlying _that_ problem is a lack of supply. SF zoned for and issued permits for a large number of offices, but not the corresponding residential structures to house those new workers. So they came here and were forced to compete with existing residents for a place to live.
The fix is to keep the economic prosperity and build more housing.
> Meanwhile socioeconomic disparity is an oozing sore in San Francisco
I'd argue that mixed income neighborhoods are the best kind. Many of the mechanisms for disadvantaging poor communities require geographic segregation. School quality, policing practices, etc
> Underlying _that_ problem is a lack of supply
And underlying that problem is Prop 13 - the insane multi billion dollar tax break that Californians bestowed on all land speculators. Until it's gone nothing will change.
Prop 13 is fucking horrible. We can't blame it for everything, though. It doesn't stop SF from zoning for more residential units or allowing the existing ones to be subdivided. All of those new units pay full freight.
Zoning laws aren't laws of physics. People make those up to align with what works best for them. Prop 13 strongly incentivizes less housing (because it boosts voters asset values with no downside to homeowners) and more commercial (because cities now rely on sales taxes to stay functional).
Until the landowners start to feel some downside from the housing disaster don't expect anything to change.
Landowners are a minority in the city. The divide is deeper than just property values because 100% BMR units are obstructed the same way.
if landowners are a minority of the city, then how do laws pass that benefit them so much at the cost of the majority?
Look at this year's no on 15 campaign. If you lie, but lie loud enough, even people who are hurt by your tax cut will support it.
> The fix is to keep the economic prosperity and build more housing.
That makes sense to me. I don't keep up with exact SF policies but I'm guessing there are zoning and the NIMBY factor to deal with.
Underlying this problem is? Money, influence and power? I know a soon to be ex-POTUS that might be the perfect man for the job! He can come in and cut all deals needed. Then SF is saved and then he goes from city to city and country to country to redeem himself.
Yes, NIMBY zoning and a planning process that makes even zoning compliant projects difficult to impossible.
The Board of Supervisors are elected from districts instead of city wide. This means they're heavily influenced by neighborhood associations with a vested interest in maintaining the status quo. Throw in the normal, human fear of change and... the result isn't pretty.
Proposition L is not enough tax to take away the economic prosperity.
I am all for building more and more dense housing. I'm not sure how to accomplish it. The way I see it, SF either becomes more dense, or it becomes even more of "a toy city for rich people" & loses all hope of economic diversity.
I grew up in Michigan. I am well aware of how cities can fall into decline. My wife on the other hand grew up in Minnesota. So in my mind, I often compare Detroit with Minneapolis. I think the problem with Detroit is that, it never diversified. It was all auto industry. Minneapolis's economy has several pillars: finance, insurance, healthcare, industry. You can ask yourself whether or not SF is either Detroit or Minneapolis in this example. I tend to think of SF as the New York of the West coast. It has very unique geographical advantages. It will have ups and downs, but will continue to be reborn.
> we have a city where getting a job is a solved problem.
This is the case for the tech industry, not categorically. Important distinction there.
I'm not saying it's _easy_ to find a job, but the city's unemployment rate was 2%. That's unheard of.
https://fred.stlouisfed.org/series/CASANF0URN
> if SF wants to tax excessive income disparity, I say, fair enough.
None of the billionaires here made that money from their salary. This will not touch them at all.
> If they do leave, I don't see that as a bad thing.
Chasing away jobs and the tax base will not end well. There is a decent chance SF enters a financial death spiral from its pension obligations. At the very least, massive cuts are in order. SF will not be transformed magically back to the year 2005, but it could very well wind up back in the 70s.
The text of the measure refers to "compensation", of which it gives a specific definition that includes commissions, bonuses, and equity (specifically mentioning stock options). The $1 salary CEO isn't excluded if they also have a huge equity package.
Although it doesn't mention capital gains, so if the CEO owns a significant part of their company already and doesn't have an additional vesting schedule, then they could make personal income from appreciation of the business that wouldn't be counted towards this bill.
Our billionaires are billionaires from their ownership stakes in the companies they founded. For instance, Jeff Besos only makes ~2 million per year in total compensation! He would pay no more in taxes if he were to move to SF (from this particular bill, anyway).
Paper gains are not realized gains. So itâs all about timing. At what point in time do they check to do the math?
Thatâs fine. The SF people think is SF, that used to be SF, does really well with 700,000 people and everyone with a shitty job.
_Over the time I've lived here, we've had the opposite problem: lots of highly paid tech firms moving into SF. This has changed the nature of San Francisco in a way that many dislike,_
San Francisco's huge, number one problem has been and still is that it makes building new housing illegal:
https://techcrunch.com/2014/04/14/sf-housing/
.
Increase supply and prices will eventually fall. This is not a complicated problem and the relationship between supply, demand, and price has been known since the time of Adam Smith.
https://news.ycombinator.com/item?id=16704501
Your comment seems to lack understanding of both the tax and San Francisco's problems. The tax would not apply to Twitter, and the Mid-Market tax break was tiny at about ~$50m over its entire life. In addition, all the inequality issues in San Francisco are of its own making: the city began pricing out median income households 40 years ago while the Federal government was simultaneously subsidizing long commutes. Therefore, the only people left are those who benefit from proximity to high paying jobs or those who benefit from the city's social services more than they value moving to lower COL places like, e.g., Phoenix.
Taxes tend to increase price levels, not reduce them. Costs are passed through to every level.
Likely true of most taxes, but not true of a tax on land value. Taxing land value heavily causes underused land to either be put to good use or sold, at a reasonable price, to someone who will build on it.
Taxing land value -- that is, collecting the lion's share of the annual rental value of the land for public purposes -- removes the speculative element, and makes it worth only what it is worth FOR USE.
That almost always creates jobs, first for construction, and then to utilize the space. It may create housing, and goodness knows, much of California is in desperate need of housing. And housing creates jobs -- houses and highrises don't maintain themselves.
Virtuous circle --- the opposite of the vicious one that Proposition has created (and which was easy to predict before it was enacted).
If you want jobs and housing, tax land value.
Otherwise, keep California doing what it does now.
I agree land value tax is a far more efficient tax than property or revenue taxes. The goal should be to raise revenue with minimal impact on commercial decisions. Punitive revenue/wealth taxes are essentially a form of sin taxes and distort the marketplace.
Itâs not that simple. You canât pass on taxes on profits. If hypothetically charging 57$ maximizes profits then raising prices just lowers profits.
Alternatively, if some aspect of your process like
sugar is taxed then companies seek alternatives like corn syrup. That extends to property taxes, executive pay, etc where companies seek alternatives to better utilize resources. Though in the case of salaries that my end up as various executive perks.
Prices are not determined by costs, but what the market will bear.
not 1-1.
a personal wealth tax is not felt or distributed down lane. As long as it is not a company tax, it will not be directly pointed to the buyer.
> The tax will levy an extra 0.1% to 0.6% on gross receipts made in San Francisco for companies ...
> personal wealth tax is not felt
Yes it would be. A tax on salaries, would force companies to have to pay more to attract talent.
And these are additional costs that the company would have to pay.
Same. I think it's fine if some businesses leave SF, and even more fine if their staff spread out. Given all our talk of internet-driven disruption and the world-changing nature of electronic communication, it's always been ridiculous that we had to cram everybody together in 0.01% of the US's land area.
If you think white yuppie tech workers are part of the problem, then you are indeed part of the problem.
> the tech firms are unlikely to leave, meanwhile SF can get more taxes from them (many of them were historically given tax breaks, like Twitter, to move into the mid-market area).
Twitter's highest paid executive looks like they make something in the $7M range (Dorsey's total comp is approximately zero for several years, as he is counting entirely on capital returns on his investment, not compensation from the firm); I'm doubting that their median SF pay is below ~$70K.
But they voted to screw low paid uber drivers out of employment rights - talk about "presentism"
A law firm I use has been in SF for over 20 years. They just moved to a rough part of Oakland. The move was challenging for them and I know they would not have done it if they didn't have to.
Why did they have to move? This new law, or something else?
This was in the middle of Covid, around the time many businesses and renters were leaving SF. They would not give me specifics, but I assume it no longer made financial sense to be in that expensive high-rise, as all the parking was locked down, forcing all the customers to take BART. I am not sure what affect this new law will have for those that remain.
Another reason SF companies are leaving: restrictions mandating lower maximum elevator occupancy (e.g. 4 persons) is causing long lines at some high-rises, making it hard to get in and out of the building -- esp for quick breaks, food pickups, lunch, etc.
I noticed that as well. The building had really tiny elevators, but many of them. You could fit maybe 3 people in them. I had never seen anything like that in my life.
I doubt it. The purported reasons to leave were already on the table before the pandemic hit, but they were not enough to do so when compared to the reasons for staying. The pandemic is relatively temporary, and once it is over, those reasons for staying will still be on the table.
> The pandemic is relatively temporary
Until the next ones comes. That could be in 1 year or 100 years. No one knows.
Reminds me of the repeated hurricanes that drive people out of coastal areas.
> _Reminds me of the repeated hurricanes that drive people out of coastal areas._
People still live in coastal areas, and rich people continue to build lavish vacation homes on the coast despite the fact that they're washed away by storms every couple of decades. Part of being rich is not having to worry about money, which is why many rich people live in cities, states and countries that tax them more: the benefits of doing so outweigh the costs. I think you can draw parallels between that and companies choosing to remain in cities for similar reasons despite some drawbacks existing.
Sorry you focused on my comment about coasts. I was really just trying to point out that another pandemic can happen and can happen soon.
I didn't focus on it because I agree with you.
Maybe but outsourcing is much easier solution than relocating.
Think about hedge funds, bond traders, etc. For example, they will be all firing desk support people and replacing them with RobertHalf.
I don't understand why this is said as a negative.
Tech needs to expand to other parts of the country. If SF wants high taxes, so be it, let all participate in the competition of where to be located.
Or just move it to a smaller office somewhere else in the Bay Area.
Itâs hard to determine whatâll happen due to pandemic + remote work, but historically nearby counties with lower taxes have always been the biggest risk for high tax municipalities. Think less âIâm leaving NYC to go to Michiganâ and more âIâll move to New Jersey and commute into NYCâ.
But again, the pandemic and rise of remote work makes this hard to predict.
They said SF, not SF Bay area. I'm certain the city of SF will be seeing a loss of jobs as they move to Oakland, East Bay, Peninsula and South Bay.
Maybe, but is the rest of the Bay area enough better that they can trust they won't end up the same way in the near future.
Yes, they are better. Also, this isn't the only silly tax law that SF has.
Contra Costa is full of open space and I believe that many of the cities from Walnut Creek out would bend over backwards to pull in these types of jobs.
There's a mini-silicon valley shaping up in the East Bay along the 580/680 corridor - towns like Dublin, Pleasanton etc are growing rapidly with existing companies and new ones - Oracle, Workday, Snowflake etc are all there.
It helps that they are also much more new housing friendly than SF and SV.
Right! I wasn't thinking about stuff like Bishop Ranch being down there. Yeah, it really does seem like most of the freeway/transit-connected East Bay towns beyond the hills would be very amendable to this type of growth. It really seems like the only exception would be the arc from Orinda to Danville.
Damn! Pretty sure that the rest of the Bay Area isnât a dumpster fire either.
CEO compensation historically wasnât orders of magnitude greater than worker pay like it has ballooned to today and there were plenty of long term jobs. This just formalizes the idea that there shouldnât be an egregious difference in compensation that was commonplace before the idea that a corporationâs sole purpose is to maximize shareholder value became the main driver of CEO compensation.
I think you missed parentâs point, which is that companies will have (yet another) incentive to replace their lowest paid workers with contractors.
First they came for the janitors, but I did not speak up, for I was not a janitor...
So how does one "speak up" as a janitor then? I think as long as maximizing shareholder value is the dominant incentive of corporations, your job will always be at risk of being outsourced unless you have either a clear competitive advantage or a strong collective bargaining ability.
One would have been voting down on this stupid measure. SF has a child's notion of how to fix problems. Rich CEO bad? Tax companies for rich CEOs. Tenderloin full of shit? Create a whole new division of people with more taxes to clean up shit. It never addresses the root cause.
There won't be a Bay Area exodus anytime soon but you bet a startup is going to move out of SF when it starts to get big. The additional taxes will only hurt the companies that have a firm root here and will discourage future companies from forming in SF.
Sf wants everything to remain exactly the same in a world that's changing faster than ever. It's time to encourage new residential units, properly tax land/property, and start actually proactively fixing its problematic neighborhoods.
It would be good if they said something like "staff from other companies who spend more than 50% of their work week at your office will be included in your company average wages, even if hired through a subcontractor" â like residency requirements but for employees â to cover catering/security/reception jobs etc. that may get outsourced.
I'm completely at a loss as to why they wouldn't have already done as much of this as it was conceivably possible to do right now - or wouldn't get there eventually.
Companies don't pay you more money because they CEO looks at his salary and goes "yeah I think I have enough".
Because outsource vs in house is not a simple decision. there are many factors each with a set of pros and cons.
Sometimes outsourcing lets "them" focus on efficiency and getting the details right and so you are better off. Sometimes out sourcing cuts quality to get better costs.
There are many accountants, it is relatively standard across industries, and so you can outsource it all easily - but most big companies have it in house anyway. (though they will hire out some of the grunt work) This is one area where messing up will kill your company so you better keep a close eye on it. (An accountant can easily steel enough money that you can't maintain cash flow - you might get the accountant in prison but your great company is bankrupt anyway). This is but one example of many cases where out sourcing is bad.
On the other side power utilities outsource most tree trimming around power lines. The companies that do this work give the utility a great deal because the contract that keeps their crews busy 3/4ths of the year which is important because most of this type of work is right after a storm and employees are easier to keep when they aren't laid off 3/4ths of the year waiting on the next job.
When an out sourcing is borderline not worth it because of risks above it, it may become worth it after this change.
How many SF companies have FT in-house janitorial and facilities now?
I've worked for a lot of (admittedly, tech startup) companies, and none of them have.
For that matter, companies I've worked for who needed telephone-answerers or other low-compensation service workers have already spun that off into separate companies, for a similar reason - google '401K highly compensated employee' to see why.
Wait until a commercial robot-vacuum/robot cook provider comes along and underbids the temp agency.
You can rent a robotic fry cook for 1'500$ a month from Miso Robotics [0]. I know somewhere someone is looking at a commercial-grade surface cleaner and trash-picking robot.
[0]
https://www.theverge.com/2020/10/6/21503892/miso-robotics-fl...
Sounds like you donât live in the Bay Area. Almost every tech job that isnât salary, and plenty of salary jobs, already are.
It is standard practice in the Bay Area to use staffing agencies for everything but executives and core talent with all signs pointing to the practice becoming even more common well before this.
The total amount is so small I have a hard time believing that anyone would restructure their operations around it.
It will work out well fiscally because giant companies will suck it up and pay, but it looks like a bad strategy from a forward-looking point of view.
You want to incentivize future growth too, and you want to make sure that 20 years down the line, you have the new FAANGs of the world giving you millions in tax dollars, because history has shown that the largest of companies can eventually die out, and tech is full of graveyards.
What this does is, it collects money from today's FAANGs while disincentivizing future startups from starting here.
This is akin to the boiling frog fable (yes I know it's fake but the point of the fable stands), except the city is the one putting itself in the cauldron and raising the temperature by chipping away bit by bit the things that make the bay area a good place to live and invest in.
I agree companies will just suck it up and pay it if they want to be in SF.
But I don't think it will disincentive new companies starting out. They have a hundred other concerns more important than how the CEO will be taxed if they one day become huge and the CEO has extremely high compensation. It won't even factor into the decision of where to locate the company. Also, you should notice most highly compensated CEOs are not founders. Founders don't need to compensate themselves that heavily because they own a large chunk of the equity. Simple capital gains or dividends are the favourite forms of compensation for founders.
Since founders, by definition, are the ones deciding where to found the company, they won't care at all about this law.
> _Simple capital gains or dividends are the favourite forms of compensation for founders._
The new law includes equity comp in the calculation. Not sure how or if they'll amortize founder equity over many years, though; they may just consider the value in the year it's granted or the year it vests.
Does founder equity even count as "comp"?
The founder's original equity shouldn't count as compensation (it's purchased at time of incorporation at fair market value).
The bill isn't about how CEOs will be taxed. It's about how their entire company will be taxed.
It's based on CEO pay, which doesn't apply to CEOs who are founders and get most of their "pay" in the form of appreciation of stock (rather than stock options/grants).
Would it be different if they liquidated and exchanged for an index fund or publicly traded ETF?
On the other hand, the law does cover gross receipts, so the act of âpayingâ the CEO in stocks is subject to taxation at the point in time the CEO receives it as part of their income.
>the act of âpayingâ the CEO in stocks is subject to taxation at the point in time the CEO receives it as part of their income
That is technically true, but this is where it gets tricky.
If you joined a public company (this will work with private too, if you weren't the founder, but let's not thing about it for the sake of simplicity for now) as the CEO, this will work out perfectly just like you described. You got all those shares at joining, you pay tax on their value at the time. As you get more shares, you get taxed on their value as soon as you receive them. If you decide to sell those shares, you don't get taxed on the initial value of them (since you already got taxed on it when you received the shares), only on the profits you made at the moment of sale (or you get your taxable income reduced due to losses, in case the share price went down between the moment you received the shares and the moment you sold them). So far so good.
If you started your own company, you initially hold the shares that are worth nothing, so you aren't really taxed on them. If you don't continue receiving new shares, but instead just hold onto the initial ones, you only get taxed on them when you sell them (since when you "received" them originally, they were worth nothing). Does Zucc receive more shares over time? I don't think so, he is just holding onto his original shares (while, no doubt, selling some and getting taxed on them), so this law will not affect him one bit unless he receives more shares.
Not trying to discredit your theory, your overall point is correct, I just wanted to add more nuance.
P.S. I am not an expert on this by any means, so if someone can correct me (especially on the "starting your own company" scenario), please do so. I find this a fascinating topic, and I try to answer as accurately as I can. But since I didn't experience that scenario myself, I can definitely be wrong or missing some details.
> What this does is, it collects money from today's FAANGs while disincentivizing future startups from starting here.
How many startups are there where the executives make 100x to 200x the median employee pay? That only happens via stock-based compensation at public companies. If that's the case, they're not a startup.
Is the tax assessed on options/grants even if there isn't a market to sell them?
If there is no market, either because it is pre-IPO or unvested then the value is unrealized, and therefore not a form of compensation, so no. You don't own equity that haven't vested. They are just a contract between you and the employer to transfer them to you upon vest, which either party can probably walk back on if they choose to.
It probably depends on how those options and grants vest. Earlier stage companies are more likely to set them up so that they vest at IPO.
This assumes that the performance of companies is driven by the CEO much more than the employees. If the Bay Area has great FANG companies because of talented workforce here, then CEOs will gladly take a pay cut to be able to employ the best workers.
Yep. Founders would likely be on the board and just give themselves different titles from CEO if they really cared, so it shouldn't impact startups.
The measure wasn't to tax based on CEO pay. It was based on the highest paid managerial employee. So title doesn't matter.
Just want to comment that thank god we can actually build rules that can't be loopholed.
Not sure if this was sarcastic, but this law will absolutely be loop-holed.
Prediction: Many lower-paid staff will be outsourced (Think Apple and Foxconn; Think big companies and their outsourced cleaning company).
Currently, typically things like cleaning staff, internal mail, dining get outsourced. Expect customer support to also start getting outsourced. The unfortunate thing is that now there would be a middle-person also collecting a spread from the company/worker (but to the company, the spread will be lower than the tax.)
Create a secondary company to house all the low-wage employees.
All new executives are now hired as LLCs
It's "highest paid managerial employee" in the text, not CEO:
https://sfelections.sfgov.org/sites/default/files/Documents/...
> just give themselves different titles from CEO
"Lead executor"
"Company Chief"
"Dear Leader"
"Head Director"
"Paramount Leader"
"Viceroy"
"Corporate Emperor"
More like âAdvanced Master Individual Contributor LOLâ
Lord High Muckety-Muck
Emperor for Life
Grand PoohBah
> If the Bay Area has great FANG companies because of talented workforce here
The talented workforce is there because of the companies. Why would someone deliberately choose to live in San Fran when given the choice of many cleaner, nicer cities with a lower cost of living?
I guess if you really like fog and hills
San Francisco is a well known culture hub. The startup industry started source of it in Silicon Valley but shifted north because of the appeal of living in San Francisco.
True, but none of these things exist in isolation. Culture is created by people, it is not a geographical feature like mountains or lakes.
The Silicon Valley wasn't nominated as the tech hub overnight, it became one through an organic process thanks to a mix of good weather, access to capital, a pool of talented employees etc.
Don't take any of that for granted (well except the weather I guess, but with Global Warming and earthquakes who knows).
One thing about the world cities is that you find that they remain the world cities through thousands of years of civilization. London has been a city for 2000 years, Damascus 4000... San Francisco had appeal before the tech industry was here and will have it after itâs long gone.
People will attempt to prove the counter with theoretical, I have an actual to support your claim.
Years ago, Denver placed a tax on companies that create software. By "magic", companies decided to found outside the county lines including Boulder. Boulder has an active software scene. Denver is getting there, but still not the advanced companies Boulder has. I believe Denver recalled the tax, but unsure.
Also consider the inverse example of Twitter: SF offered tax breaks to companies setting up on mid market street, and low and behold startups moved in and gentrified the area.
When looking to rent an office in the Los Angeles area, my wife discovered that the city of Beverly Hills taxes a percentage of your business income, so she decided not to locate there. If I recall it was a flat tax, not a "luxury" tax either. Yet plenty of businesses thrive in Beverly Hills. So this example is an "actual" which does not support the claim :)
While I don't disagree that my suggestion is what will happen - in speaking with many founders they cited the egregious tax (it was more than 0.5%) as a reason for setting up shop outside the city. Which leads me to believe it was impactful - the amount was 3.62%
> What this does is, it collects money from today's FAANGs while disincentivizing future startups from starting here.
Does it? Startups probably start out with a fairly small Executive Pay Ratio because they start out without a lot of low-paid grunts, and its already not common for them to open satellite facilities or move HQs for grunt work when they scale out to more jobs where they aren't trying to attract locally-concentrated elite talent. Because its triggered on the ratio between the highest paid managerial employee _anywere_ in the firm and the median pay of employees _in the City_, it really just adds further incentives to do low-level gruntwork outside of the city, but doesn't seem otherwise to really change the structural incentives much for startups.
OTOH, it _does_ make it more expensive for any widespread organization whose headquarters and elite labor are elsewhere to operate a facility with mostly low-level labor in the City; a tech startup headquartered in the City might never be hit by it even as they scaled up if they are focussed on automation, as they might never have a low-paid workforce. OTOH, retail, etc., outlets, hotels, etc., of firms with highly-paid executives with their main executive and high-paid labor force outside of the city _would_ be hit hard (as far as compared to other firms, I don't think the tax rate is ever high enough to really be "hit hard") by it on their operations in the City.
> You want to incentivize future growth too
I would say that SF doesnât want to incentivize future growth. Thatâs the source of the inequality, right?
I'd say you're right - they're trying to make everyone equal, not to grow further.
What makes you think the very slight disincentive to future startups outweighs the hundreds of millions in health services funding? Remember that healthcare has a compounding positive effect, because healthy people have an easier time contributing to society, and unhealthy people are more likely to need public services.
You're assuming health services has a funding problem already. The US spends more per person than any country already.
It's dis-incentivizing future growth to make up for people and companies that barely pay any tax at all. The only thing this subsidizes are long time land owners.
I'm saying that this will have benefits beyond finance, and people who "barely pay any tax at all" are worth helping.
I think you're focusing on where the money goes. That doesn't change the fact that this is a uniquely bad way to raise it. Transfer taxes are not like capital gains or income taxes. There is no value being created when something is transferred.
> people who "barely pay any tax at all" are worth helping
Millionaire property owners are barely paying any taxes. Disneyland and every other large commercial building is barely paying any taxes. Why are they worth helping?
Is there an economic term for the different types of taxes you're referring to? It's not obvious to me why income taxes create value but this tax doesn't, but I don't really know anything about economics.
Similarly, while I do think everyone is worth helping, I'm not yet seeing how this helps millionaires and large landlords.
I wish I remembered. What I'm referring to, though, is that income and cap gains tax things based on the amount of money being made.
A transfer tax says, "oh, the owner change - here's the same tax for a money losing project as an extremely profitable one". It's just disincentivizing change.
This tax is even being talked about because things like CA Prop 15 being voted down leave schools/cities underfunded by giving long time land owners a massive tax break.
We need to make the system more fair not just tax everything that moves.
> What this does is, it collects money from today's FAANGs while disincentivizing future startups from starting here.
So you're saying entrepreneurs wouldn't start companies in SF because some day their companies will pay 0.1% tax if they make 100x the average employee?
That's all it takes for founders to get discouraged? Well then maybe they should not start up in the first place.
> What this does is, it collects money from today's FAANGs while disincentivizing future startups from starting here.
Come on... There's a million reasons why new startups shouldn't start here, the salary of a CEO is not one of them.
>> It will work out well fiscally because giant companies will suck it up and pay
I think that if companies do suck it up and pay, it will be declared an effective law _and then...the there will be proposals to expand it. It might dip down to also include SVPs, then VPs, and so on_
I ask this as a non American who has never lived in SF. Does SF need or even want FAANGs? From what I've read the tech boom has brought a load of issues driven by inequality and they're taxing so much to fix these issues. If the tax discouraged tech companies then might that actually help the issues?
As I say I'm asking from ignorance. I also realise I'm likely to get somewhat biased answers to that view point on HN.
> What this does is, it collects money from today's FAANGs
I suspect that this would collect a lot more money from today's Hiltons and Marriots than FAANGs; its not like FAANGs employ a lot of people at bottom-of-the-barrel wages in SF.
So they show do nothing about today's inequality because this will get them more taxes in 20 years? (Unless someone makes the same point 20 years in that they should better wait another 20 years)
One thing I'd like to see them do is radically simplify the ability for regular people to start regular businesses. One thing we could do is pick some small industry and run experiments with it. An example might be food trucks. There's a lot of regulations around these today. As a thought experiment we could eliminate all sales tax, special licensing, etc. for food truck companies under a certain size (We don't McDonalds food trucks to count). We could see what happened, is there wide spread food poisoning? Are families brought out of the lower class?
It doesn't have to be food trucks exactly, that's just an industry that people like in a business that's relatively simple and imo has low systemic risk.
Concentration of market power and lack of risk capital, not regulation, is the primary inhibitor to normal people starting businesses.
If you could open up a "food truck" on the weekends with a Walmart camp stove and a trip to Costco you'd eliminate the concentration fo market power and lack of risk capital as problems.
That's one way of eliminating a market altogether. Without health checks every food truck becomes suspect (market for lemons dynamic) and people will eventually stop playing food poisoning roulette.
Those that don't will expect a steep discount.
Meanwhile those people who take the risk and it doesn't work out will still have bills and rent to pay.
Food stands in countries without licensing or oversight inform me that this isn't a real concern.
but then if you did so, and the food had issues, where do the customer complain and get compensation from?
How do you prevent over-crowding of a location, and flow-on effect of crowds from said truck?
How do you make sure the waste products are sanely disposed?
And a million other concerns from third parties unrelated to the business, but is affected by its existence?
I don't believe I could provide any response that would persuade you.
What do you mean by risk capital? Legal shark loans?
Spare cash. Money you don't need for feeding, educating, clothing and housing your family.
Proposition H (passed) was designed to do exactly that:
https://www.sfchronicle.com/bayarea/article/S-F-s-Propositio...
I don't think you're getting it. I'm talking about radical deregulation and exemption from taxation. Prop H reduces the time to get a permit. I'm talking about not needing a permit. I'm talking about no business taxes, no licenses, no health department inspections, nothing. If you've got a grill you can put it up and sell hot dogs on any private property that gives you permission.
What about all those regular people who do not have the skills, knowledge or risk capital to start a business?
With a couple hundred bucks you could buy a camp stove and some groceries to start a food truck on the weekends.
I'm definitely open to discussions about how to help people incapable of raising a couple hundred bucks and lacking the skills to cook a hot dog. I'm not claiming to attempt to solve every problem.
OC didn't claim they should do nothing. He just said that this specific way was short-sided.
Maybe a tax like this is not the only way to address inequality?
Weâre still waiting for the Census results to hit, but there have been some indications that California is going to lose some of the choicer parts of our tax base between the SALT deduction cap, all the new taxes weâre looking to implement, laws governing the makeup of board rooms and of course the pandemic.
We shall see though, and hopefully sooner rather than later.
Cities consistently outlast Kings and Empires.
But to build empire you have to be in denial of that fact.
Cities may stick around for millenia but their governments don't. Those come and go.
> What this does is, it collects money from today's FAANGs while disincentivizing future startups from starting here.
I think itâs gonna disincentivize FAANGs from making future investments in the city. This is BAAAAD timing for a tax hike like this, coming off tech companies doing a seven month experiment in whole-company WFH, and finding out itâs working pretty well.
Does SF really need investment from FAANGs? SF was a pretty awesome city before the tech boom of the 90's + 00's, and currently none of the FAANGs have a major office presence here... FB in Menlo, Apple in Cupertino, Amazon in Seattle, Netflix in Los Gatos, and Google in MV.
They certainly view the money brought in by FAANGs as theirs.
Could this work as a loophole, pay the CEO something nominally sane. Give them the rest in stocks held in a trust they are beneficiaries of?
This raises some interesting questions / side effects:
1) Companies may now have a direct incentive to have their lowest income earners be outsourced/contracted out to boost the median pay amount.
2) It was smart of them to include compensation such as stock options. However if a city starts to expect this income, it will all go away in recessions when CEO's stock options are not valuable. ie more money to the city in boom periods and not much in bust cycles.
CEOs are all just going to move out of San Francisco.
And/Or move their companies too. Particularly all the "tech startups" that think they don't need physical office buildings anymore. For a lot of companies, SF is becoming difficult to justify.
Well-intended ideas, not fully thought out, leading to unintended consequences... nothing really new for SF.
People in San Francisco have long been angry at tech workers for driving up prices... Driving them out may be on purpose!
And then wonder why the city's tax base dies and turn into detroit.
If thatâs the goal then I think this is a good initiative.
That would be a foolish goal, SF is part of Silicon Valley, that will be like a suicide.
Thatâs because the âmostest wokestâ dont live in SF long enough to be bothered by the consequences of their votes.
I understood this to be the primary intended consequence!
San Francisco is overheated and a majority of residents would expect to benefit from CEOs or tech companies reducing their pressure on housing and services.
Then they will realize the majority of landlords already don't live there: domestic and foreign investors.
getting tech out of SF would actually do a lot of people good. I've worked at countless software companies and always wondered why the companies had to be located in the most expensive city in the US.
Isnât it the most expensive city because of all the tech workers? Wherever you get a congregation youâll get that effect (as Austin and Colorado are finding out), and companies generally start where workers are available (thatâa why film and entertainment industries are still largely is in LA, New York, London even if they film around the world)
Only partially. You are correct that congregation does drive up prices. However congregation drives building more housing and other things which drives prices back down. SF has done less to drive prices back down than any other city and as a result has the most expensive housing. Eventually an equilibrium is reached (in practice this is false as things are always changing, but close enough)
The tax doesn't care about where the CEO lives. It applies to any company that does business in San Francisco which has a CEO that meets the criteria.
And to be clear, it's only on business _that is done in San Francisco_. Essentially, it's going to turn into a sales tax for SF.
> The tax will levy an extra 0.1% to 0.6% on gross receipts made in San Francisco for companies whose highest paid executive makes 100 times or more its median workerâs salary. The amount levied will increase in 0.1% brackets proportionally to the pay ratio. A company whose highest paid employee earns 200 times more than its median San Francisco worker will get a extra 0.2% charge on its gross receipts. For companies whose CEO makes 300 more, the charge jumps to 0.3% and son on. The tax caps at 0.6%, and only companies with gross receipts over $1.17 million will be targeted.
The interesting question, in my opinion, is whether Stripe's revenue from other San Francisco companies is considered gross receipts within the city or someplace in Delaware or Ireland.
I'm sure they could figure out a way to get that revenue to be transferred elsewhere. That said, Stripe doesn't likely pay its CEO 100x the average employee wage since it's a pre-IPO company. The CEO likely earns a few million in raw $$ and the average salary at Stripe is likely past $100k. So, I doubt it's a real issue.
So, for now, it's probably a non-issue... and they have time to adjust.
That makes it even more unlikely that there will be much revenue at all generated by this tax. Seems like the beneficiaries of this new plan will be tax accountants and lawyers creating new complicated business structures to bypass the tax...
or just use hollywood accounting. You have a parent company with high paid employees. You have a separate company with low paid employees. Or move. Or change title.
I see the headlines now: Darling Startup Raises $20 million Series-A As First CEO-less Company
There are rules such as Common Ownership or Common Control that prevent that kind of avoidance. I'm sure SF can come up with something similar.
https://www.law.cornell.edu/cfr/text/26/1.414(c)-4
https://healthcareexchange.com/article/common-ownership-what...
http://wkins.com/aca-common-ownership-rules-explained/
I wonder whether blocking any/all avoidance of this tax truly* what they want though.
Haven't read the law, but if the impact is large enough wouldn't some companies think about outsourcing their decision making to a different company? I'm sure the lawyers can come up with an agreement that in day to day operations is the same as the management team being employees but that doesn't trigger the extra tax because the decision makers aren't really employees. You just bifurcate the company into two separate companies, the highly paid people and everyone else.
> CEOs are all just going to move out of San Francisco.
Doesn't help at all to move high-paying managers out of SF the way this is structured.
Moving low-payed workers out of SF while keeping high-paid workers in SF, OTOH.
It's about the business location not the CEO, but the point stands. I'm not that familiar with US law, but can't a business be incorporated anywhere in the US/California and still do basically all its activity in SF?
The tax is based on entities "engaging in business within the City as an administrative office" as defined elsewhere in city law (for the payroll tax component) or just plain "engaging in business in the City" (for the tax on gross receipts attributable to the City portion), not by place of incorporation, so, yes, a business can be incorporated anywhere else on the planet, and do basically all of its activity in San Francisco, but that's not going to limit its exposure to the tax.
The law doesn't care for the work location of the CEO. It could even be outside of the US, where exchange rates and different laws around stock based compensation could make this a nightmare.
No they aren't. Part of being rich is not having to worry about money, which is why plenty of rich people live in cities, states and countries that tax them more: the benefits of doing so outweigh the costs.
Maybe not a bad thing really
Yeah, let the city collect taxes from all the woke millenials who are neck-deep in student debt and the homeless...
Or, move some of the obscene wealth away so the residents aren't gentrified out of existence, like they already have been? It won't just be CEOs, it'll be all the software engineers and the like too.
and five years from now i get to hear how it is everyone else's fault that real estate property prices fell in san francisco, which destroyed people's equity and retirement plans.
Not to mention how they will be complaining about the underfunded schools, the lack of investment in infrastructure, social programs, free clinics, "no one is there to help the homeless", etc, etc...
It has been 5 years since France tried and failed to put 75% taxes on the "super rich" and they ended up with less tax revenue than previous years. _Those who don't learn History are bound to repeat it..._
How naive to think salaries are not paid out of that wealth
> Companies may now have a direct incentive to have their lowest income earners be outsourced/contracted
The median was presumably chosen because it's relatively harder to shift in this way. Although this depends on the exact pay distribution of your company, you'd expect getting rid of people from the bottom to change the median person but not typically change the median value.
(This is also a mature enough problem that I'd expect other provision in the law to prevent this - are we sure it doesn't include outsourced workforce pay?)
I bet it's actually easier to change the median. Often you'll scale a sales or support team (much lower cost than engineer) and these teams can often balloon especially if the company has a direct positive margin on their work (generally the case in sales). Now, 30% of the company is sales/support and there are quite a few options for outsourcing your sales team to a "professional sales company."
1) Lowest-income jobs that can easily be outsourced _are_ very likely already outsourced. If the company has the option to do this, why should it hold off doing so?
Like janitors, yes. However you can still go a level up, perhaps to support people. And then another level up, like to entry level sales people.
Then why didn't they already do that before?
Presumably because there was no significant advantage, or no sufficient incentive to do so. If the executive team is trying to raise the median salary of their employee base, however, there's now a strong incentive to outsource the lowest-paid portion of your employee base to contract work (even if contractors might cost marginally more), since it'll raise the median wage of your employees.
e.g. let's say my employees' wages are:
[1, 1, 1, 1, 1, 10, 10, 10, 10]
Now let's say I could replace each employee with a contractor by paying 0.5 more than the salary of an FTE.
In the above example, let's say I want to raise the median salary of my employees to 10. I could do that by either:
* Paying one of my employees 9 more (boosting them from 1 to 10), at a total cost of 9
* Replacing all my 1-salaried workers with 1.5-salaried contractors, at a total cost of 2.5 (five workers, each getting a 0.5 bump)
It's clear that I'd never want to do this if contract workers and full-time workers were just as favorable for me (since I'd be paying more to get the same work done). If all of a sudden the company were incentivized to raise their median employee's salary, though, all sorts of non-common-sense solutions can come out of the woodwork, and replacing FTEs with contractors (even at a cost) could be the incentivized solution.
We can stop the thread here, it's like bleating about the minimum wage or child labor laws, rich people crying that they have to cough up.
How exactly will SFO know how much the CEO's compensation is? And maybe companies can get rid of the CEO title and just call her Chairman of the Executive Council or something?
2 is true of most forms of taxes though, although I agree this will likely add even more volatility to revenues
San Francisco is the 16th largest city by population and has a budget of around 14 billion which is like 6 or 7 times larger than many cities with much bigger population. This is just a badly run city and throwing more money at their problems isn't going to help them.
San Francisco is a combined city and county (the only one in California), so its budget includes things that would be in county budgets for places like Los Angeles and San Jose.
For example, SF MTA is part of the SF budget, but LA MTA is a county agency, and isn't part of the LA city budget.
Seems like a fair comparison to make would be with NYC, whose city government similarly subsumes the counties/boroughs. NYC's per capita budget is about 2/3 of SF's; there may be economies of scale and other non-linear contributors at play with NYC's 10x larger population, or maybe SF is just less efficient.
edit: NYC's MTA is funded separately, including huge state contributions, so this is a terrible comparison. Let this comment be a reminder of the difficulty in comparing municipal budgets.
Even accounting for MTA, SFâs per-capita spending remains much higher than most other US cities. DC is the only other city that is comparable.
A fair comparison would be Philadelphia which is a city and county and has an airport.
Their per capita budget is half of SF's.
Even if you don't account for anything else, the high cost of living here translates to expensive city employees and expensive services. If you account for the "exchange rate" between San Francisco dollars and other city dollars, I wonder how the per capita spending stacks up. I expect it still doesn't look good, but I bet it looks a lot less ridiculous.
It is the city's fault the housing is expensive, which is the reason for the high cost of living.
Maybe if San Francisco did things differently, costs might look like other cities and counties in the Bay Area. Either way, it's going to be much more expensive than your typical city.
> costs might look like other cities and counties in the Bay Area
True, but most likely in a way that also reduced the cost in other cities and counties, because the high cost of SF has pushed people out to lower cost areas in the outskirts. If SF wasn't so expensive, more people from the surrounding area would live there, having the desire if price wasn't the issue, therefore reducing demand and thus costs for the outer areas.
The point has never been to fix problems - itâs to minimize the amount of money rich people have.
Even if the money was burned that would be okay.
It's surprising that you can't conceive of a tax being _confiscatory_ instead of merely being for the paying of something.
From:
https://calmatters.org/california-divide/2020/11/san-francis...
The tax will levy an extra 0.1% to 0.6% on gross receipts made in San Francisco for companies whose highest paid executive makes 100 times or more its median workerâs salary. The amount levied will increase in 0.1% brackets proportionally to the pay ratio. A company whose highest paid employee earns 200 times more than its median San Francisco worker will get a extra 0.2% charge on its gross receipts. For companies whose CEO makes 300 more, the charge jumps to 0.3% and son on. The tax caps at 0.6%, and only companies with gross receipts over $1.17 million will be targeted.
Under the measure, gross receipts and CEO compensation will include money made from stock options, bonuses, tax refunds, and property, a caveat seen by many as a way to target the tech sector where CEOs are often compensated in non-salaried bonuses. Tech is expected to account for 17% of the tax revenues, according to an estimate by the cityâs chief economist, while retail and financial firms are expected to account for 23% of the revenues each.
The CEO tax is expected to generate between $60 million to $140 million per year.
Doesn't seem that big in comparison to what SF annual budget is.
From (because the article doesn't give exact figures on transfer taxes):
https://sfcontroller.org/sites/default/files/Documents/Econo...
?
Proposed legislation would raise the Transfer Tax rate on properties in
the city that sell for more than $10 million. For properties selling for
between $10 million and $25 million, the rate would rise from 2.75% to
5.5%. For properties selling for over $25 million, the rate would rise
from 3% to 6%.
I'd also be surprised if it brings in anywhere near the quoted amount since the SF supervisors have proven themselves incapable of considering second order effects such as companies contracting out their low-pay roles or simply leaving SF.
Pretty hard to claim this when Visa decided to massively expand their Global HQ in San Francisco after Prop C passed.
The pandemic has thrown things in a wrench, but prior to the pandemic, San Francisco businesses were constrained only by commercial real estate. There was literally no space left to put any new businesses.
We've been collecting Prop C revenues since March 2019, and they are exactly as forecast.
A gross receipt tax is relatively difficult to evade. A company generally cannot avoid the SF tax without also foregoing the associated SF revenue.
> SF supervisors have proven themselves incapable of considering second order effects
Correct. SF and its politics cannot be saved, just let them slowly eat themselves.
this is a tax on high pay roles, so I don't understand your concern. Also I hope and pray that it would cause companies to move, that is essentially working towards the same goal.
if it was profitable, it would have happened already.
Two economists walk down a road and they see a twenty dollar bill lying on the side-walk. One of them asks âis that a twenty dollar bill?â Then the other one answers âIt canât be, because someone would have picked it up already,â and they keep walking.
Do you have a link of what you're referring to? I know some of the supervisors personally and that strikes me as an extremely distant view of them. I think it's a lot more likely that you're projecting strawmen intentions onto policies.
Additionally, tech companies use outsource their low paid labor. I don't see how they'll pay this tax.
>Doesn't seem that big in comparison to what SF annual budget is.
There are no singled-out pockets that you can tap into and make up SF annual budget. It's all about cumulating a lot fo long-tail small pockets + 1-2 large pockets.
sounds like a bunch of full-time roles are about to get converted to contractor positions.
The bottom of the percentile graph will be outsourced to save in taxes for the top percentiles.
Agreed, this is problematic if the executive is compensated primarily in stock options.
Why do you think it is problematic? According to my reading of OP, the measures includes stock options in calculating comp.
I tried to look up the actual bill, but it doesn't provide any information on how stock options are valued [0]
I am curious how you would determine what the fair value of a stock option is when it is granted. Assume the option's strike price is for the current stock price. Theoretically, that stock option has a current value of "0" (assuming that it is non-transferrable so we don't have to worry about market price)
That stock option is expected to increase in value if the stock price increases (which then aligns the CEO's salary with shareholder value). So in five years, those stock options might be worth millions of dollars. But would you then say the CEO got paid millions of dollars five years ago? But the stock options when they were granted were 0 - they increased in value when they were the property of the CEO. If the CEO bought artwork 5 years ago and the value increased 10x in 5 years, would you also add that to his taxable income?
I am sure there are ways to value these options. But I can't find the details in this bill. Do you know how it might work?
0:
https://sfelections.sfgov.org/sites/default/files/Documents/...
I have no idea how far fetched this is, but there are clearly ways to price options given current share price, the stock price, expiry, etc. Black-Scholes comes to mind, but I am not an expert at this and don't know how reasonable of a valuation you could get this way. Just pointing out that there exists a mathematical framework for option valuation, which is presumably what Wall Street uses as the basis for pricing call/puts on the open market.
It's hard to calculate this accurately. Look at all the news articles greatly exaggerating Elon's stock compensation plan at Tesla.
Keep in mind they also have to calculate this for certain employees.
Seems like the solution is directly compensate your CEOs very little and outsource executive services to a third party company that aggregates CEO compensation as a "contracted entity". This company will mostly be paying CEOs, so its median employee salary will be relatively high.
No board of directors anywhere is going to allow this.
Also depending on how this is structured, disregarded entities still consolidate to the individual so the measure could be flipped to be measured at the (trust ignored) individual level and it would still work.
To everyone saying, "this will kill low wage jobs", most companies already outsource their low wage jobs. Their janitors and cooks and maintenance people are already via contractors. Their lowest paid employees are most likely their admin assistants at $50K a year.
So basically this is targeting companies whose CEOs make over $50M a year, which is basically Twitter, Pinterest, Google, Facebook, Uber and a few others that actually have an office in San Francisco.
And I'm sure Google and Facebook et. al will fight them over how much money they "make" in San Francisco.
Google and Facebook are in the SF Bay Area and not in SF City. Also, Zuckerberg gets a $1 salary. Unless this law targets full compensation (stocks included), it's not going to touch him. FB is too big to accept a 0.1% or 0.6% gross tax. This law is targeting smaller companies (think Stripe and similar).
San Jose is an alternative for the CEO/Headquarters. There could be a minor office in the city where tech workers prefer to live, or they could commute down instead of up. Imo, SF City is overplaying their hand here and might be in a bit of a shock for the reality of how business works. The last bubble and good times might have distorted their understanding.
Yes, it includes stock options, property, etc. Basically all compensation.
Source:
https://calmatters.org/california-divide/2020/11/san-francis...
Is Facebook still giving Zuck bonuses or new stock issues? Isn't Zuckerberg's wealth composed entirely of stock that he already owns? So how is this going to affect Facebook?
His income in 2020 was listed at $23M, all under "other income", mostly for the costs Facebook paid for his personal security and personal air travel on the corporate jet.
But he wasn't the highest paid exec. Sheryl Sandberg was, at $30M. Probably still not high enough to trigger the tax.
The law says any company operating in SF, which would include FB and Google, who have offices there.
Also the law says all compensation, including stocks and bonuses. So Zuck would definitely qualify.
Thanks for the clarification. But any company operating in SF is a bit crazy. So if a bank has a branch/office in SF, then it's liable for this tax? For all their gross income or just for the income generated within city boundaries?
The law says just money they make in the city. But it's kind of vague and I'm sure there will be a lot of debate between the companies and the city about how much they are making in the city.
The medium size businesses that only operate in SF will be screwed the worst.
I foresee some real estate companies that have office buildings just next to SF municipal border are going to make a nice profit.
_The law says any company operating in SF, which would include FB and Google, who have offices there._
Very interesting, but, does that mean that execs who don't personally work in SF are subject to the tax? Ie, will Citibank's Michael Corbat, working out of Citigroup's New York offices, need to pay the tax because Citibank has bank branches in SF?
I'm not a lawyer or accountant, but my layman's reading of the law says it is a tax on gross receipts for the company in San Francisco, not the CEO directly. But applies if anyone who works for the company makes more than 100x the median.
I'm really not sure how they plan to enforce this at all.
BTW, Stripe has already left San Francisco for South San Francisco (which is a different city).
That was fast. Unless this tax targets all of the bay area, the moving cost is not really much and your workers could still commute with a WFH option. Imo, San Jose is in prime position to build a real city with the possible exodus from SF.
> San Jose is in prime position to build a real city
San Jose is already 25% bigger than SF. It's the third largest city in California after Los Angeles and San Diego.
Population essentially doesn't matter - people are talking about density here. For example, Phoenix is essentially an enormous suburb with giant malls, and you never hear of despite its population numbers. Boston is a small city with rich urban life that occupies an outsize role in the American psyche.
SJ is big by population but it's essentially a tiny downtown and a huge spread of suburban single-family homes and strip malls. And (before the covid mess) the traffic was already not great. So if we ever get back to in-person office working, and after Google sets up their new office in SJ and others will consider doing the same it probably is going to suck big time. But if it will be "mostly remote" setup then SJ has plenty of space and opportunity to accommodate more business.
The suburbs in San Jose are more developed than the city itself, where there isn't much action. That's what attract people to SF.
Not all of them. Some baristas and cooks were directly employed by the company, but certainly there is even less incentive to do that now.
Brings to mind the last paragraph here (see my comment below for the ending):
By the time of Platoâs death (347 B.C.) his hostile analysis of Athenian democracy was approaching apparent confirmation by history. Athens recovered wealth, but this was now commercial rather than landed wealth; industrialists, merchants, and bankers were at the top of the reshuffled heap. The change produced a feverish struggle for money, a pleonexia, as the Greeks called itâan appetite for more and more.
The nouveaux riches (neoplutoi) built gaudy mansions, bedecked their women with costly robes and jewelry, spoiled them with dozens of servants, rivaled one another in the feasts with which they regaled their guests. The gap between the rich and the poor widened; Athens was divided, as Plato put it, into âtwo cities:⊠one the city of the poor, the other of the rich, the one at war with the other. The poor schemed to despoil the rich by legislation, taxation, and revolution; the rich organized themselves for protection against the poor. The members of some oligarchic organizations, says Aristotle, took a solemn oath: âI will be an adversary of the peopleâ (i.e., the commonalty), âand in the Council I will do it all the evil that I can."
"The rich have become so unsocial,â wrote Isocrates about 366 B.C., âthat those who own property had rather throw their possessions into the sea than lend aid to the needy, while those who are in poorer circumstances would less gladly find a treasure than seize the possessions of the rich.â
The poorer citizens captured control of the Assembly, and began to vote the money of the rich into the coffers of the state, for redistribution among the people through governmental enterprises and subsidies. The politicians strained their ingenuity to discover new sources of public revenue. In some cities the decentralizing of wealth was more direct: the debtors in Mytilene massacred their creditors en masse; the democrats of Argos fell upon the rich, killed hundreds of them, and confiscated their property. The moneyed families of otherwise hostile Greek states leagued themselves secretly for mutual aid against popular revolts.
[1] Will Durant. âThe Lessons of History.â p. 58-60
One thing to keep in mind is that most of our primary sources are incredibly hostile towards the merchant class. (For much of history, the merchant class had an incredible stigma attached to them.)
Maybe there's a good reason for that? (and not anti-semitism)
Well, there is _a_ reason for that. The vast majority of primary sources were written by members of a nobility who inherited their wealth, and the nobility viewed wealth that wasn't inherited as ill-gotten. There's also the fact that pre-modern societies didn't have modern economic theories to help them understand exactly what value the merchant class was providing to society.
I'm not necessarily siding with the nobility here. Simply pointing out that when our aristocratic sources write about the terrible upheaval that occurred when people outside the nobility acquired great wealth, we should be pretty skeptical.
How did the poor fare in the end?
Sorry, didn't want to spam, but here is the last paragraph of that thought:
> The middle classes, as well as the rich, began to distrust democracy as empowered envy, and the poor distrusted it as a sham equality of votes nullified by a gaping inequality of wealth. The rising bitterness of the class war left Greece internally as well as internationally divided when Philip of Macedon pounced down upon it in 338 B.C., and many rich Greeks welcomed his coming as preferable to revolution. Athenian democracy disappeared under Macedonian dictatorship.
TLDR on this whole thing: this never ends well for the poor.
Feels like a great way to encourage companies to leave the state.
I left California many years ago. Every single part of my life is much better. Fiscally , romantically, mentally. SF over values how essential location is. With Covid it's clear remote work is the future, base the company out of Delaware and go full remote
> Feels like a great way to encourage companies to leave the state.
Well, leave the City and County of San Francisco, maybe. But it wasn't that long ago that SF proper wasn't even considered part of Silicon Valley and the associated tech hub, anyway, though it was close enough that a lot of the conferences, etc., were there. And most of the big SV firms _still_ aren't actually in SF.
This kind of taxes are easily gamed (outsource low paid employees, etc.). It might actually be good for a big business because all ânormalâ employees will be via temp agencies.
This is the eternal objection to measures like this. But if every city and every state implement this, where will they go? And even if not, will they actually move? Will companies move? Time will tell but it seems very doubtful.
Base the company out of a conservative State. The employees can work wherever.
The other issue is how much complying with this regulation is going to cost. California is already very very anti business after all
Most cities are giving incentives to grow. The exact opposite of what SF is doing.
> This is the eternal objection to measures like this. But if every city and every state implement this, where will they go?
To another country. The world is a big place, there are also a number of tax havens that are relics of the British Empire, there will be other countries which will quite happily have large tech business move there.
None of these measures have the intended consequence (usually the opposite happens). All it ever does it make it look like the politicians are doing something.
I keep waiting for the tech scene to explode in Grand Cayman or something, but it doesn't seem to be happening for some reason. It's all just lawyers and scammers.
Gibraltar has plenty of tech companies for financial and gambling. Singapore is the same but I am not sure about how the tax works there.
In any event I am not saying companies will move there necessarily (it was just an example I took off the top of my head) but they will move parts of the business around to be tax efficient. I do it with my own tiny business to be tax efficient.
As I said the world is a big place and companies will just move somewhere else if they deem it to be worth the move.
This design seems really odd. Why target business and CEOs in particular? Why not just have a straightforward high progressive tax? It also seems like it will reward the practice of outsourcing lower-paid job functions, or discourage employers from hiring lower-paid workers generally. The whole thing seems designed as a punitive measure, without really thinking about what incentives it creates.
State law prohibits local governments from using progressive income taxes <
https://leginfo.legislature.ca.gov/faces/codes_displaySectio...
.>. San Francisco therefore uses a combination of gross receipts taxes (whose rates vary depending on business NAICS industry code and are graduated), payroll taxes (now repealed), real estate transfer taxes, sales taxes, and parcel taxes.
In my opinion, the state legislature should amend RTC 17041.5 to allow local income taxes, but only on rent, imputed rent, and capital gains within the city. Rents are the thing that local governments can tax without distorting the market.
As for this performative CEO tax, I think that the only positive effect that it will have, if any, would be to raise awareness of an issue whose solution has to come at the national and state level.
You do not want to hurt politician revenues.
_"Critics call the surcharge a blatant attempt at redistribution of wealth..."_
Um, yes? "Critics call John Travolta 'blatantly an actor, playing parts in movies.'"
that was my reaction too. I don't live in the US, so this is an honest question. Most of the comments here are disparaging about the policy. Is that because:
1. you agree with the principle of addressing wealth polarisation, but don't agree with tax as the mechanism? (in general or the proposed model specifically)
2. you don't agree that increasing wealth polarisation needs to be stopped/reversed?
3. something else?
Thanks.
--
Edit: fixed the numbering, forgot I wasn't writing markdown!
I think there are essentially three schools of thought.
1.) wealth/income inequality is inherently wrong, so redistribution is automatically good. private property is theft!
2.) whatever people get paid is theirs, fair and square. therefore redistribution is automatically bad. taxation is theft!
3.) some people are genuinely much more productive than others, and their pay may reflect that. at the same time, people can acquire more than their "fair share" by exploiting vulnerabilities in the system.
from the perspective of 3.), redistribution via tax looks like a dirty hack to mitigate the consequences of a deeper problem. it makes things a little better in the short term, but it doesn't address the root question: why are some people able to capture outsized compensation for their work? but hey, sometimes you have an urgent issue and the quick fix is all you have time to implement.
> from the perspective of 3.), redistribution via tax looks like a dirty hack to mitigate the consequences of a deeper problem.
Scenarios 1 and 2 don't exist in the real world. They are just theoretical models.
Every law is a "dirty" hack, because the deeper problem is the nature of humans - which is to hoard privilege, wealth, power, and security - and the way that influences their societies.
Almost every non natural constraint civilization has imposed on humans has been to either support one group's hold on power and security (i.e primogeniture in feudal societies, taxes imposed on non-believers in the state religion) or the opposite: to redistribute power and security across the broader population (Magna Carta, The New Deal, Social Security / Medicare in the US).
> 1.) wealth/income inequality is inherently wrong, so redistribution is automatically good. private property is theft!
There is a version of this that doesn't care about "right and wrong": Wealth inequality may happen for good and natural reasons, but too large quantities lead to a worse society for wveyone, and so redistribution is one way to reduce it.
I think #3 is close, but it's not just that some users concentrate a disproportionate amount of wealth. It's also the quirk of human society that great hoarding of wealth winds up distorting it such that economic worth becomes directly tied to human worth. This is undesirable generally, and taxes are the main mechanism for the government to regulate this tendency.
You can see how Islam addresses this issue in a very pragmatic and moderate manner. People are heavily encouraged to work and generate wealth, at the same time, it acknowledges that there will be a poorer segment of the population due to different factors (opportunity, luck, hard work, inheritance, etc.).
Islam requires a form of "charity tax" called Zakat. Its proceedings goes to the poor and needy, among others (e.g. freeing slaves, wayfarers, etc.). The percentage is different based on the commodity (e.g. livestock is taxed differently from cash), but the percentage is fixed (only 2.5% in the case of cash money annually).
However, and extremely importantly, it also prohibits exploitative and parasitic practices that cause very unfair advantages to some at the expense of others. Obvious things like lying and cheating (e.g. false advertising), but also very important issues of lending money with interest, selling what you don't own, selling debt for debt, etc. Most of which you'll find on Wall St. as normal behavior. Everything inside these boundaries is up for grabs. Remove these horrible practices, and things will get better almost by definition without having to start taxing people even more.
In a basic way, all taxes are "wealth redistribution". If you tax every taxpayer $0.02 for public roads and non-tax payers get to use them, well, that's redistribution - and nobody (seriously) has problems with this.
The problem comes with policies of the form "We're going to tax [some wealthy group] and redistribute the money to [some other group]". There's a few sets of issues:
1. The money never gets to the downstream group. It gets eaten up by fees and processing, etc. Great for the middleman but not anyone else. If it does get to the downstream group, the total amount is gravely reduced.
2. You have to make a very strong case for taxing [some wealthy group]. Simply having wealth doesn't seem a good basis for taxation - "You're successful so we're going to charge you more taxes, maybe next time you won't be so successful" Obviously there are other arguments that can be made - the wealthy stole their money, or gained it illictly, etc - but those arguments tend to be individual cases and don't allow acting against an entire class of people unless you go into weird theoretical territory.
3. Solving "wealth disparity" isn't a meaningful goal. A thousand homeless folks all in the same campground have no wealth disparity - that doesn't mean you've improved their life. Simply funneling money doesn't solve problems, and making the end goal to shift around bits of paper is mistaking a process for a goal. If your goal is "We should provide a base level of healthcare to those who can't afford it" and can name an actual price for that, then that's a meaningful goal and you can tax appropriately if voters approve it.
The people posting here are the ones who are going to be taxed, that's why they are complaining.
I find it interesting that you frame income inequality as "wealth polarisation." Are you implying a bimodal distribution of some sort?
My personal theory of "inequality" is that it isn't necessarily a bad thing. A distribution of income levels will always have a long right tail as you cannot make negative income but there is no theoretical limit to the maximum income. If all wages grow by the same relative amount, you would see increased inequality.
I think it is a problem if wages aren't growing for all portions of the distribution, but that is precisely because of the lack of growth for some and not because of the existence of growth for others. So, yes, I do think that growing income inequality may be a societal issue, but only if it is an effect of wage stagnation for middle and lower classes (which it is).
I do not believe that the rich getting richer is the cause of the stagnation, though. If anything, automation and globalization have been the main reasons for stagnation among middle and lower income levels. Automation and globalization may also be the cause of the continued growth in the very high wages. Even if they share the same underlying cause, one didn't cause the other.
I understand, but don't agree with, the argument that increased inequality causes social problems on its own. According to this theory, as I understand it, you can't have the differences among people be too great because it will cause too much power imbalance and resentment and eventually the masses will rise up and destroy the system from within. I don't agree, I think social problems come from the difference in reality compared to expectations of how one thought their future would go -- in other words, it is much worse for someone to see low wage growth in a stagnant economy where their standard of living is declining relative to their parents than it is to see moderate wage growth in a growing economy but there are some other people getting super, super rich. I don't think one's life relative to rich people is that important compared to one's life relative to personal expectations.
So, in that sense, I don't agree with redistribution schemes that intend on fixing a symptom of a problem (that rich people exist) rather than fixing a cause (wages are stagnant).
If the idea isn't to just reduce the inequality, but rather to supplement lower incomes -- there is absolutely no version of "taxing the mega rich" that we could do which would raise enough money to redistribute to the rest of workers such that it compensates them for the lack of wage growth at the lower end. It can't be done, there's not enough money. Eventually you have to tax the (productive) middle class.
From that perspective, I prefer policies that focus on wage growth for the lower and middle classes, even if that's a harder problem to solve.
> According to this theory, as I understand it, you can't have the differences among people be too great because it will cause too much power imbalance and resentment and eventually the masses will rise up and destroy the system from within.
You shouldn't think of the destruction of the system from within as the problem. Some might fear that, but afterall, its unlikely that the people without power would beat those that have it.
The problem is the power zero sum game in itself. Wealth and power are both ways to gather even more wealth and power. In a simple society without a government you could simply use the power to buy weapons and soldiers to coerce the wealth of others. In our society you can use power to shape the rules more favorably for your own group.
As the wealth ratio of one group converges to 100%, the other groups have gradually less influence, unless allowed by those in power because of ideology or their good hearts.
Either you see this as fine and natural, or your ideology prefers everyone to have some amount of freedom over their own lives.
In the later case you may look at ways to reduce the wealth and power inequality, by weeding out rules particularly favorable to the powerful, or by trying to spread wealth more evenly.
> I do not believe that the rich getting richer is the cause of the stagnation, though. If anything, automation and globalization have been the main reasons for stagnation among middle and lower income levels.
Who disproportionately benefitted financially from automation and globalization?
> From that perspective, I prefer policies that focus on wage growth for the lower and middle classes, even if that's a harder problem to solve.
You need to do both. No one was talking about this 20 years ago because most people were participating in the "good economy", even if some benefitted far more than others. Now people are being told the economy is good (by both major polities), but it doesn't match reality, which you noted is a major cause of angst.
Additionally, if your goal is to create more jobs and wage growth for low and middle income people, the best way to do that is to reduce economic concentration and create more opportunity for competition and small business. It will be less cost efficient, but the economy will be more resilient and the wealth would be more broadly distributed, even though some people could still achieve obscene wealth.
Thanks for the comment. One point to clarify on my post:
> I find it interesting that you frame income inequality as "wealth polarisation." Are you implying a bimodal distribution of some sort?
I wasn't intending to equate distribution and polarisation. By the latter, I meant the steady shift of wealth to a smaller population who have become progressively wealthier. While, at the other end, the majority have beome comparatively less wealthy compared to equivalent social cohorts over time.
Perhaps more succinctly, it's the _change_ in distribution, not the _presence_ of a distribution.
I'm no economist and I know there are a variety of opinions on distribution, but I understand there's reasonable agreement that globalisation has increased polarisation [0].
[0]:
https://en.wikipedia.org/wiki/Economic_inequality
Most motivated people with the means to scrape enough cash together to even try to start something dislike legislation and the idea of "redistribution" because usually these plans raise far less money than politicians think, but moreover the politicians coming up with these plans have already proven they have no clue how to spend taxpayer dollars.
To be frank, as a supporter of capitalism - I generally support the notion of high taxes in europe because the populations who pay these taxes clearly see HUGE societal benefits as a result of half their income evaporating. There also seems to be more respect of the people's money from these gov'ts regarding how they spend taxpayer money is spent and with a clear aim to help the people NOT partisan goals, wars etc. I may be incorrect here (open to correction) but it seems like US politicians (federally at least) seem entitled to taxpayer dollars. Most forget that until WW2 the idea of federal witholding simply wasn't a thing and many middle class families were flushed with savings.
Unfortunately, both sides are at fault in the US. The only way this is going to change for the better is to cease the cycle of one political party only pandering to it's base instead of motivated and able americans.
> to cease the cycle
sooo ranked choice voting? :D
I don't really agree with you characterization of where our taxes go -- federally, 64% of the government budget is related to mandatory spending, almost all of which is social security, medicare, and medicaid.
15% of the budget goes to the military. That makes the U.S. the largest military spender in the world.
15% of the budget may seem expensive, but it's not fair to compare it to Western Europe. NATO is a big reason why western europe does not need to spend more on their own defense.
I believe that's a good thing - it's in the United States' best interest to avoid rearmament in Europe, and Europe has never been at (relative) peace for so long as it has been since the emergence of the post-WWII consensus -- but they do in fact have more money for more non-defense discretionary spending than we do as a result. The Euro area spends 1.4% of GDP on military spending while being protected by an umbrella of security provided by the U.S., which spends 3.7% of GDP on the military.
Again, I think this is good for the U.S., we benefit from the liberal world order that we enforce, but I think it has to be taken into context when the EU is described as a great example of how to spend tax money on wise social programs.
"mandatory spending" - right
I take a bigger issue with programs like student loan debt forgiveness which would be a slap in the face to poor people like myself who worked their way through college in order to no longer be burdened by loans. Not to mention the fact that without a refresh of regulation on universities (specifically graduate degrees) loan forgiveness would just further embolden universities to increase tuition.
The issue with taxes in this country is that the budget is expected to always be met WITH excess. That's the disgusting part, the assumption that "well we can go over and shell out benefits to our beneficiaries (people who voted for us) and the american tax payer will foot the bill" _is_ atrocious.
Both parties are guilty of this, however I also find it ironic that Americans (specifically privileged americans) seem to think that "taxing the rich" is a solution, when a) rich people already pay an overwhelming majority of taxes, b) the rich will always find ways to out-smart the government and avoid taxes they deem as unfit and c) even if you taxed earners above $400k 95% of their income it would only amount to maybe a trillion dollars - so not even close to bringing the national deficit down.
> _I take a bigger issue with programs like student loan debt forgiveness which would be a slap in the face to poor people like myself who worked their way through college in order to no longer be burdened by loans_
This is like saying that a cheap cure for cancer would be a slap in the face to people who drained their life savings battling cancer, and to the families of those who lost.
To be frank, conflating healthcare and higher education is quite a mental leap. Yes, they both have problems and are "free" in other countries - in either case, nothing is really "free".
Taking away from productive people, and giving to unproductive people is not a recipe for success.
Well, they could decide to burn the collected tax money while achieving this same goal.
It's funny/sad that people act like "redistribution of wealth" is a scary concept. Wealth is constantly being redistributed by commerce, and mostly it is being redistributed to the people with the biggest piles already. Overpricing products, underpaying workers, lotteries, taxes, rents, and investor/borrower arrangements are all mechanisms to shift wealth around.
A trade between two parties is not a redistribution of wealth .
If I buy a car for $10,000, then I now have a car worth $10,000, and the seller has $10,000. Wealth was not redistributed, weâre both where we started.
When the price isn't optimal, which it never really is, it's not an equal exchange of value.
The typical tautology toted that if you spend X then it's worth X is just willfully missing the point that there's such thing as a bad deal. When you build bad deals into a system such that some group of people only has bad deals as options, you are able to extract wealth from them. That's what life is for many people -- a series of bad deals with no other options.
Having the pay ratio be relative to the "Median San Francisco worker" might have some interesting effects - for financial/tech firms who want to avoid the tax they might just shift their ~25% lowest paid workers to an office in Oakland (though any corps with a mandatory physical presence like retail won't be able to do this).
City that depends on high paid tech workers to pay for their inefficient public sector approves law to encourage those tech workers to leave...
Does anyone have the text of the law, or a detailed description of it?
_Under a newly approved law, any company whose top executive earns 100 times more than its average worker will pay an extra 0.1% surcharge on its annual business-tax payment. If a CEO makes 200 times more than the average employee, the surcharge increases to 0.2%, and so on per multiple of 100._
What do they mean by "earns," are bonuses included? Nonmonetary compensation like having your car or mortgage paid for directly? Increase in stock value that's part of your comp package?
I'm sure folks will try to game this to get around it, I'm just curious how.
Also it sounds like this is a surcharge on _taxes paid_, not actually a new tax on revenue. So if you pay $1 million to the city of San Francisco in taxes, and your CEO earns exactly 100x more than the average worker, you now have to pay... $1,001,000?
> _I'm sure folks will try to game this to get around it, I'm just curious how_
Lay off everyone making less than 200x the top earner. Move to remote workers where possible, outside contractors where not.
Fire low paid workers such as support staff and outsource that to staffing agencies. Thatâs the easiest way to game this number.
Ensure your outsourcing is not in SF. The outsourcing firm CEO pays themself whatever damn multiple they like. Voila, SF keeps all the cushy jobs they like, makes the working poor someone else's problem.
He dismisses fears that the surcharge will drive companies out of the city, saying the tax is modest in comparison to the cost of moving a business.
Perhaps - but it will discourage new businesses from locating there, and new businesses are the future.
Let me weigh the pros/cons here:
Pros: lots of funding, lots of experienced employees who have taken companies from seed to IPO, probably a higher chance than some other areas to go from well off to ridiculously rich
Cons: I get taxed more if I start making 200x what the average employee in my company makes.
Can you see how no one would care unless they're 100% sure they're gonna be making 200x what their average employee makes regardless of where they put their business?
They don't need to be 100% sure at all. The whole point of the startup is to get ridiculously rich.
This reminds me of that episode of South Park where they form a band but refuse to play until internet music piracy stops. I doubt that someone talented enough to build that kind of company is going to factor this into their decision to run it from SF.
I suspect a big part of Jeff Bezos relocating to Seattle to start Amazon was Washington does not have a state income tax.
The alternative is not having the office in SF.
I'm sure companies will find a way to avoid the tax. Splitting the company (low income workers are already rarely employed directly), finding compensation forms that don't count,...
The real estate transfer tax sounds rather misguided as well. I expect it to distort the already unhealthy real estate market in harmful ways.
I'd rather go for higher ground value taxes with reductions for high density occupancy or people who live in that building themselves.
hopes the tax will drive companies to reexamine their compensation structures
Outsource the lowest paid workers to a subcontractor to raise your average employee wage. Iâm not sure that has a desirable effect, but it seems this law certainly financially encourages that.
It will do more to force them to reconsider where they domicile their businesses than it will force them to reconsider their comp structures.
> Outsource the lowest paid workers to a subcontractor
So, then the sub contractor pays the taxes and invoice you with mark-up?
Because those companies have ceos too?
I think this is rather fascinating. Assume a de-facto minimum wage of 10 dollars an hour, 2000 hours/year for 20k/year lower bound. 200 times that is 4M usd/year in compensation for a single individual. Does seem wierd to see such a big difference in campensation. If nothing else, seems to illustrate a broken labour market with horribly skewed bargaining power.
I don't see the reason that the contracting firm CEO would likely clear $2M/yr as a low-risk, mostly undifferentiated supplier of office services. (Thatâs where the markup to the clients comes from, not the tax.)
But if the tax does become a problem, split into OfficeServicesA and OfficeServicesB corps and let your clients pick which one they'd like to hire. Or have your spouse or family member do some of the administrative work (for business continuity reasons) and split the comp.
Or just leave San Francisco. Stripe left.
Bechtel, McKesson, Petrovich, Jamba Juice, Core-Mark, Houzz, Lyft, Xero, Pandora, Robin Hood, and hundreds others have moved their HQ to somewhere other than California.
You can pay lower paid workers a higher effective wage in pretty much anywhere but California.
"The tax will levy an extra 0.1% to 0.6% on gross receipts made in San Francisco"
What counts as "made in San Francisco"? It doesn't seem like that definition would apply to online revenue for e.g. a SAAS company or social media site. It would still apply to some tech companies, those with a physical presence like Uber or AirBnb are more clear.
So is Salesforce in the clear for this tax, or perhaps they are only taxed on the revenue that comes from sales to other businesses who are themselves in SF? (And what if those businesses have multiple offices?). Seems quite complex and probably pretty easy to get out of with some accounting tricks. I guess this is a progressive SF law that really isn't targeting tech companies, for once?
On the other hand, it clearly will apply to every national chain retail store, restaurant, etc. And if so, all of their local mom-and-pop competitors will get a slight leg up from this in addition to raising the revenue from the tax. If I'm understanding this right I guess it might not be the worse idea.
Yeah, that won't have any unexpected effects. U-Haul is 20x what it was 20 years ago. How much higher can it go.
Could you share a bit more context? What happened with U-Haul?
In a society that has reasonably established freedom of movement, which the US Constitution does fairly well, sufficiently onerous policies, where the sufficiently part is decided by those who bear the payment burden and not by the levier, eventually result in the target actively deciding to exercise that right to just leave. It's a big country, and there are many nice places in it where a decent life can be lived with less burden. U-Haul's stock price increase over the last two decades can be viewed as fairly reflecting such inter-state movement.
...why? The last 4x increase was 2012-2015, then it's been pretty stagnant since then. So has inter-state movement been stagnant for the last 5 years?
2006-2011 was the housing crash and recovery; it doesn't seem like an outlier from the overall stock market. Before that, it collapsed from 2000 to 2003, then gained 5x over its previous highs from 2003-2006.
I am not OP but my take is that hordes have been movin out of California to escape from taxes and regulations. Often they leave in a U-Haul, making it a booming business.
Some of these city measures are carefully created to funnel money into the general fund. Our Prop I says itâs for something, but the board of supervisor whoâs pushing the idea admitted thereâs no guarantee the funds will go to what it was put on the ballot for. The money from Prop I will go into the general fund. Why is this important? The city has a huge pension liability theyâre not able to renegotiate and keep from obligations to keep paying it. The cityâs budget for next year is somewhere near $13b. Yes billion. For a city of 800k, our budget is $13b.
Why do these discussions always revolve around the collection of taxes instead of how the taxes will be used? Would anyone be complaining if they knew the taxes would be more beneficial? Conversely, wouldn't we reject these new taxes if we knew they weren't going to be a greater benefit? Does anyone even know how the taxes will be used?
_Does anyone even know how the taxes will be used?_
To fund currently unfunded pension liabilities? To hire more city employees at above-market rates? To build new parks and roads? To fund public transportation?
The money will be used for what it always is - some of it will be good and some of it won't be very good. Once it's in the pot, it gets stirred around and all sorts of people and projects get a full bowl. That's not what's interesting about this story - taxes get raised all the time by all sorts of authorities. What's interesting is that the tax is full of perverse incentives and may very well lead to lower, not higher tax receipts.
> The money will be used for what it always is - some of it will be good and some of it won't be very good. Once it's in the pot, it gets stirred around and all sorts of people and projects get a full bowl. That's not what's interesting about this story - taxes get raised all the time by all sorts of authorities.
Why is this not interesting to you? Just because it's the status quo of how things are done doesn't make it less of an issue to me. Maybe if we knew what pot of taxes were used for what causes, we could reason about their worthiness better. Just raising taxes for the sake of raising taxes seems like a meaningless and potentially regressive goal otherwise.
> What's interesting is that the tax is full of perverse incentives and may very well lead to lower, not higher tax receipts.
These things can both be interesting.
This is such a good point. It's as if the argument is that more taxes is good no matter what rather than knowing what/why you're taxing in the first place.
Yes exactly, it's like everyone is arguing past each other with different assumptions about how taxes will be used. Take this quote from the article:
> âWe need the wealth that has been generated in the city to be shared more broadly with workers and residentsâ
This person seems to assume the taxes will be shared with the workers and residents. Would they still support these taxes if that were not the case?
Others (in this discussion) seem to think the taxes will be thrown at things that don't benefit the city. Maybe so? Would they be more supportive if they knew it was for something they believed in?
I absolutely love the historic example of taxes that Benjamin Franklin talks about in his biography: he says he went to all his neighbors' houses and asked if they wanted to chip in a nickel a week and have one of the neighborhood boys sweep the street for everyone's benefit every week. Most said yes and paid the fee. This is literally what tax is in the most simplistic form (let's pool our money to get something we couldn't otherwise have - military, roads, other infrastructure).
Unfortunately, now we live in a world where we just talk about taxation for the sake of putting money into the pot and have no real idea or influence over how that pot of money is spent. A government that can move towards this Benjamin Franklin kind of simplicity of taxes would make its country such a better place.
Wow what a great example. I hadn't heard this story before but I will be certainly be referencing it. Thank you.
Article I found about it:
https://founders.archives.gov/documents/Franklin/01-07-02-01...
Amazing, thanks for sharing a source!
This is a strange bill. It targets companies based on the delta between CEO compensation and median worker.
This means companies that have larger workforces - mostly determined by industry - are less likely to set up shop in San Francisco. Of those that do, they are strongly incentivized to use contractors instead of employees to ensure the salary gap is within reason.
In other words this just created an arbitrary set of incentives for companies to adjust their behavior, likely to the detriment of non-high income workers in the city.
I doubt it has the intended effect as SF tech companies are already moving to distributed locations. Workers have had the past 8 months to enjoy avoiding long commutes and stepping over needles and feces.
The cynical side of me thinks that exec pay packages will just change to workaround this tax.
For example, an exec's pay will be capped at 100x median worker salary, but just spread out across multiple years. As others have mentioned, temp agencies/contractors will also probably be utilized.
With policies like this, why would anyone in their right mind (I say this as a staunch progressive) start a business in SF or even consider traveling to the Bay Area for the benefits of huge equity packages? Even if you choose to willingly ignore that CA state taxes are also increasing substantially.
I hate to say it, but when you do things like this to Big Business TM it DOES have trickle down effects that negatively affect small business owners and business services alike.
> He dismisses fears that the surcharge will drive companies out of the city, saying the tax is modest in comparison to the cost of moving a business.
It doesn't seem like they're too worried about new businesses, they're just trying to hold the current ones hostage.
I actually think things like this might be really good for the business culture of San Francisco.
For a while, SF was a popular place to start a new company, but all established CA tech firms were down on the peninsula or in the south bay.
Some of those startups got big, and some of the big firms opened SF offices to compete for talent.
Now, it's hard to compete for talent in SF if you're starting out - you have to compete with the Ubers and Airbnb's as well as Google and FB.
Taxes like this will push more of "big tech" out of the city (eg Stripe moving to South San Francisco) and free up more breathing room for young startups.
I guess I take it as a given that this is better for SF, but others may disagree or need convincing.
This is a terrible law. How exactly do you measure the compensation of the CEO of Ikea (moving into SF soon at 6th and Market), Adidas, DJI, Atlassian, Spotify etc? Exchange rates fluctuate a lot and stock based compensation is tricky.
You're arguing that modern finance is so complicated that it should be exempt from taxation.
The cost of compliance is never factored into the making of law.
What would you do instead?
I would recognize that taxing pay ratio is a ridiculous concept because temp agencies can be used (and already are used) for lowest-wage jobs like janitors. These are not independent contractors, these are W2 employees of a temp firm.
What I would do instead is tax highly paid executives. This does not have the side-effect of making companies only use temp firms (as described above) if they need a barista or receptionist.
> _What I would do instead is tax highly paid executives_
How do you define who is a highly paid executive?
You could use any definition including their own (but tax the person, not the whole company), or any alternative definition like income > $1M.
For people who point out that this incentivizes companies to leave San Francisco, that's probably not a coincidence. Many SF politicians see tech as the enemy and would be happy to see companies go elsewhere.
Based on the article, they hate finance even more (at 23%, versus 17% for tech).
Pissing off both of those industries doesn't seem like the smartest approach when they have 12 million sq. ft. of unused office space [0].
I think SF's pain is only beginning.
[0] -
https://socketsite.com/archives/2020/10/nearly-12-million-sq...
The financial success of San Francisco has covered for a lot of bad policies. I feel like the tech boom is somewhat like a "resource curse". Obviously tech has a lot more positive economic development associated with it, but a lot of it can just pick up and move to the peninsula or south bay.
It seems like a potentially bad mix where a lot of people live in SF just for the money, and as soon as a downturn hits amd the bad policies start to have consequences it will just hollow out. That may be happening now.
Several of the comments here entertain the idea you can get wealthy in the Bay Area working working for an established company, not equity. I have never understood the math.
Letâs say you earn an outrageous salary working for a FAANG of about $450,000. That is about 3x the equivalent where I live for the same work but taxes are substantially higher and housing costs 6-10x. Numerically it doesnât make any sense when the current value of my house (after doubling in value) is barely the downpayment of a house in the valley. Apartments are also ridiculously expensive and I would want to live in a tiny apartment with kids (my own, not roommates).
Then the other argument is that the valley is where the jobs are. My experience is that if you are an experienced and half competent software engineer there are plenty of jobs in every major metro.
So if I already have a high paying job and own real estate what is the pull to move to the Bay Area?
What a massive incentive for companies to not classify people who do their work as employees. You don't have to pay extra CEO taxes, and you don't have to provide benefits!
This raises some interesting questions / side effects:
1) Companies may now have a direct incentive to have their lowest income earners be outsourced/contracted out to boost the median pay amount.
2) It was smart of them to include compensation such as stock options. However if a city starts to expect this income, it will all go away in recessions when CEO's stock options are not valuable. ie more money to the city in boom periods and not much in bust cycles.
The lowest income earners that can easily be outsourced are very likely already outsourced.
Barring federal help, it's possible, or even likely, that we will see greater taxation in many local jurisdictions (cities, counties, states) in coming months, because they are close to running out of cash as a result of the pandemic's impact on tax collections.
The Wall Street Journal recently published a good summary of the potential cash crisis at
https://www.wsj.com/articles/u-s-states-face-biggest-cash-cr...
Quoting from the article:
_"US States Face Biggest Cash Crisis Since the Great Depression: The drop in tax revenue has led to a total shortfall expected in the hundreds of billions of dollarsâgreater than 2019âs K-12 education budget for every state combined, or more than twice the amount spent that year on state roads and other transportation infrastructure."_
This is where I'm legitimately confused: the city is an expensive city, land prices are high and housing is expensive, rent is high and so forth. We're told that that is the major problem, and the major reason for the homelessness issue of SF (mentioned many times below in this thread by numerous commenters).
But other cities have lower land prices and cheaper housing. San Francisco has the highest land and rent prices of the entire country. The argument that "we need to lower the price of housing to address the homeless problem" sounds very appealing, until you consider: wait, why are they going there? The indications are that they're not from there.
Is the problem that they're coming from places that don't have social programs, and drug legalization, which SF kind of has? There are needle exchange programs and if you start to convulse in the street someone will run over right away and give you Narcan. There's free food. Showers and bathrooms are ... apparently a problem ... but it's warm out. It's not Chicago in winter.
So maybe it just make sense for homeless to hang out in Tenderloin. As in, if a magic wand made us homeless, we'd just logically go there because it'd be good and healthy for us to do that.
Going back to the article. Someone mentioned the Laffer Curve: if you tax the rich to get revenue, they'll leave and you'll get less revenue. Well maybe there's another curve: if you make it extremely comfortable and desirable for homeless people in order to solve the homeless problem, you'll have a bigger and bigger homeless problem?
Maybe the problem isn't "high land prices" in San Francisco. Or even, "inequality." Maybe the issue is that the rest of the state / country don't have the same degree and quality of social programs and drug legalization as SF, and so SF is a natural place to go.
The politicians have shown their hand by not designing this legislation to instead have companies pay their employees more. Why do I say that? It's currently cheaper to pay the tax than give the raises to your employees. So politicians have shown it's just a money grab _For the Government_ more than for the employees.
Let's say I make $100 and the mean is $1. I'll pay 0.1% on tax payments.
It's a gross receipts tax on the business. E.g. so if you make $100, but the business has $1,000,000 in gross receipts, then 0.1% would be $1000 in taxes or 10x your total compensation. It's got teeth.
its a function of number employees and gross receipts. So
companies with more employees relative to gross receipts will have less incentive to increase wages.
also increasing the taxes by an additive 0.1 points (ie not multiplied by 1.001) disproportionately targets the lower gross receipts companies (such as restaurants, which would more than double their GR tax)
Still seems like bad policy
EDIT ^^ And to be clear i mean the actual policy, not the intended goal of the policy (to help shrink Exec pay gap w/ average pay)
SF and Cali in general just love to chase businesses out of their state.
This appears to just target salaries, not SBC. [1] Considering how large a role SBC plays in executive comp, it seems like this law will not be as impactful as if it looked at total comp. Am I reading this incorrectly?
I would note that it would be difficult to assess the FMV of different SBC for the purposes of these calculations. For example, engineers might get RSUs, and the CEO might get options with a particular strike price, or different amounts of RSUs based on hitting revenue/profitability targets. It wouldn't be simple to value each of these things a priori, and companies wouldn't just accept whatever value the SF govt employees come up if it means huge amounts of additional tax.
1:
https://ballotpedia.org/San_Francisco,_California,_Propositi...
The fundamental problem is California is Prop 13. They can try to patch it up however they want these one off measures, but until you address the massive amount of wealth extraction going on by the landed class, all these attempts for improvements will just flow right into land. This principle was discovered 200 years ago:
When there is no accessible rent-free land, any improvements in the condition of society, be they in the form of civilizational progress or local improvement, are recaptured in the form of higher land values, and the leftover wages after rent is paid will tend towards subsistence, as described by David Ricardo's Law of Rent.
From
https://en.wikipedia.org/wiki/Rack-rent
Imagine being so incompetent that you think the solution to San Francisco's problems is a property _transfer_ tax. Not a property tax. A transfer tax.
Transfer taxes disincentivize transfers. What do we need more of in property constrained places like SF? Transfers.
What a shockingly stupid policy.
This is quite a small tax, even in the âworstâ case (maxes out at 0.6%, if your top exec makes 600x the average employee). And it only impacts companies with massively overpaid executives - thereâs no change for most companies, who have nowhere remotely close to a 100x discrepancy between top paid and average employees.
In reality, this will create a bit of extra tax revenue, and push down SF exec salaries ever so slightly. Both good things. No company is moving out of SF, replacing their staff with contractors, etc. over such a tiny tax. Itâs a very small step in the right direction IMO.
SF has so much tax revenue, but where is it spent?
https://sfmayor.org/sites/default/files/CSF_Budget_Book_June...
Trains, streets, cops, hospitals, public works, 31k employees, and so on.
Homeless services takes a big cut.
What happens when other cities want to do the same thing to large companies with a national footprint? Is Sundar Pichai going to have to pay 0.6% to every city Google operates in who wants in on this?
Text of the measure:
https://sfelections.sfgov.org/sites/default/files/Documents/...
Note that it's "highest paid managerial employee" and not "CEO" or "highest paid executive".
One thing I don't get - what's the point of having an office in SF now? (Almost) nobody is going to the office anymore, everyone switching to remove. All meetings are online. The city itself is dirty and unsafe and smelly. And you've got insane prices and taxes. What's the point of staying there? Is it just inertia? Is it too expensive to move?
To those who say it will disincentivise companies from new companies being found in SF: Perhaps we are in a situation where CEOs expect to be paid 100 times more than the median pay but this should not be so. In what world is this uneven distribution fair? Legislation more frequently should be bold like this and aim to create a world that is better as opposed to being dictated by immediate side effects. Perhaps it will take a long time for this legislation to become nationwide and perhaps fewer startups will be created in SF, but someone should lead the way in trying to create a fairer world.
If companies wish to renumerate their CEOs more highly they should do so by also increasing the pay of the rest of their workers as this piece of legislation encourages. Sharing the benefits of good performance with the employees may have positive flow on effects as employees may feel rewarded for their positive work and consequently feel more motivated to continue working hard. Additionally it increases the sense of fairness and trust in the economic system and perhaps in society as well as more people that work hard reap the benefits of their work.
Overall this of legislation in my opinion is a good first step towards making employee owned businesses a more widely adopted model and creating a more equitable economic system.
EDIT: discouraging excessive payouts to CEOs, encourages directing that capital back into the company. Large corporate payouts do take away money that the company generated (not only the CEO) and I think this legislation recognises that CEOs also need to be held more accountable (in terms of renumeration) to the companies they lead as large renumeration is not always in the company's best interest (even when performing well)
Sigh... more ill-thought "policies" voted as propositions.
I wonder, when will the balance change such that it no longer makes sense for any relevant company to be based off of San Francisco.
I wonder, how many bad regulations does San Francisco have to come up with before it finds itself in Detroit's shoes? It is harder for San Francisco, since the weather here is phenomenal, but not impossible.
A lot of people here misinterpreting the CEO tax â- it applies to revenue made within San Francisco, and is not dependent on the location of the company. So no, it should not impact the decision of a founder to base their company in SF.
The doubling of transfer tax on property over $10m however... that has a very real impact on a founder who has already made some money.
How is it even working? How a city is going to tax a company registered in, say, Delaware? What if every municipality in the world decide to tax every company created everywhere?
The article mentions another city where it's working - Portland, afair. How's it possible?
I wonder how many low margin businesses will leave SF because of this. If I understand it right, this is up to a 0.6% tax on gross receipts. What if a business runs on very thin margins? I can imagine someone like Waste Management ($50b company, $11m in CEO comp, median employee probably makes waaaay less than that) deciding that operating in SF is no longer worth it.
Remote work wasn't as big of a thing when this was drafted, but it will be interesting to see how it plays out as SF-based tech workers relocate to lower cost of living parts of the country/world.
Some companies have already said that they will reduce pay of employees who relocate, which affect the way that the average pay vs CEO pay shakes out.
I doubt the city will see a penny from this. There's nothing in place to do an audit to figure out who should be taxed.
Based on the title I expected to be more offended. But it seems like a reasonable percentage to encourage wage equality.
Critics call the surcharge a blatant attempt at redistribution of wealth.
Said with zero irony, as if this is the worst thing ever.
Doesn't this type of tax violate the Equal Protection Clause of the Fourteenth Amendment to The Constitution,
https://en.wikipedia.org/wiki/Equal_Protection_Clause
?
IMO that's the same question as 'does a progressive tax violate the 14th'; here's a Quora:
https://www.quora.com/Does-the-federal-government-violate-th...
There's some thoughtful analysis of the proposition from SPUR:
https://www.spur.org/voter-guide/san-francisco-2020-11/prop-...
Is this just salary or total compensation? If it's just salary then it's easy enough to compensate the CEO in one of many other possible ways.
I wonder if the median CEO will start making more. The going rate will become 99x approximately the SF average salary of 98k, or just under 10mm.
So lay off all non professional workers and replace them with temps and contractors?
If you want to read the actual text of the law, go here [0] and scroll down to the letter "L".
[0] -
https://sfelections.sfgov.org/measures
Agree with it or not, at least this will add some data to the discussion. I have a feeling the result will be somewhere in the middle of the speculation and have both good and bad consequences that werenât intended.
CEO pays self $1 salary and a ton of stock options. CEO is now the lowest paid employee in the company. Problem solved.
This is a small tax and should be considered a pilot program for an idea that's been around a long time. Are all of the criticism on here valid? We'll find out soon enough. Will a tax like this actually change behavior in desired ways, or provide a useful amount of revenue? We'll find that out, too.
But what this tax will _not_ do is change the very nature of San Francisco or dramatically alter its business environment. The tax is just too small for that to be the case. It's a tiny addition to a vast and complex and ever-changing web of taxes and regulations that large businesses in SF have been successfully dealing with for generations.
> But what this tax will not do is change the very nature of San Francisco or dramatically alter its business environment.
Businesses are _already_ leaving SF. If they haven't seen the writing on the wall, they're ignorant.
SF has itself to blame. They squandered revenue, didn't fix real issues, and pandered to land owners.
Businesses will move to more business friendly cities, and they will become more distributed - it's cheaper and easier to negotiate that way.
SF is done.
"Businesses are already leaving SF"
San Francisco has been a global epicenter of new business creation in the past couple decades. Some of the most massive corporations on the planet have come to and expanded in SF in that time. Office rents have _skyrocketed_ as a result, as has new office construction.
You're entitled to your own opinion, but don't lie.
> _You're entitled to your own opinion, but don't lie._
Don't be so accusational. I'm not lying. [1,2]
> _San Francisco has been a global epicenter of new business creation in the past couple decades. Some of the most massive corporations on the planet have come to and expanded in SF in that time._
Don't ignore or discount change. Nothing stays the same forever. Companies are starting up elsewhere and plenty of SF headquarters are pulling up roots.
[1]
https://www.sfchronicle.com/business/article/2nd-most-valuab...
[2]
https://www.bizjournals.com/sanfrancisco/news/2020/05/29/sta...
I continue to accumulate stocks in companies that jettison their W2's for 1099 workers under the backdrop of "Work from home."
"dismisses fears that the surcharge will drive companies out of the city, saying the tax is modest in comparison to the cost of moving a business."
...until it's not. Amazon has shown us there are lots of attractive jurisdictions ready to shower companies with tax incentives to relocate; SF feels like a city that's enjoyed the benefits of many factors not directly of their making and they could be in for a strict reckoning. We will see...
What I took away from the Amazon pageant was that companies choose locations mostly by access to natural or social resources (educated workers, in Amazon's case). Same as always. But big companies can humor more towns to gin up bidding wars.
And where exactly these taxes will go? From pockets of CEOs to pockets of ... municipal bureaucrats, whose median salary floats at a humble mark of 175K/year?
https://www.city-journal.org/san-franciscos-municipal-budget
If you spent time reading the article instead of leaving lies, maybe you'd know:
> The CEO tax is expected to generate between $60 million to $140 million per year. Haney said he wants most of the money directed towards health services.
Where exactly I âleave liesâ? Thatâs a serious allegation and is thrown very casually here, as if it is self-obvious.
What he says and what will actually happen is two different things, especially
in politics.
If you have actually examined the URL Iâve posted, you might (maybe?) realize that money isnât exactly the problem in the SF municipal budget. Maybe it is something else, like ehm.. actual governance?
How do they determine that, does the CEO has to be a SF resident or the company's HQ has to be SF based?
Neither. It's just the CEO's compensation (no idea how they compute this, given global exchange rates and stock options) vs the median pay of SF-based employees.
This is such a smart thing to do in the middle of a pandemic that showed that distributed teams can work.
Every CEO will just move out of San Francisco city limits... This doesn't really do anything.
Since this is transparently easy to game, i wonder which people is it supposed to be pandering to?
With the way tax brackets work couldn't this result in a net loss of revenue for the city?
on gross receipts made in San Francisco
How much does this really apply to SF tech companies?
A number of those taxed are just being incentivized to move elsewhere.
Yes. Please move elsewhere.
That will get the human poop off the sidewalks.
A great way to push companies out of your state.
San Franciso is a city, so I imagine what will happen is that companies will move out of the city limits and this new tax will be completely ineffective.
Seriously, how hard is it to find a new office in Oakland or San Jose?
Might be effective in reducing rents though!
Probably office rents only, not residential
When Connecticut hiked its taxes, even long-standing businesses headquartered there, like GE, packed up and moved to Massachusetts. (You know you're doing something wrong when "Taxachusetts" is a relative tax haven compared to your state.)
So even if these changes were implemented statewide, it can be an impetus to leave. Laffer's curve is a bitch for the eat-the-rich crowd.
'Which companies' does this rule apply to? Companies that have HQ in SF? That's rather an easy thing to change, no? 'Majority of Employees'?
What if the CEO has 'an office' in South Bay but spends their time in the city?
This seems like the wrong tranche of government to be flirting with such a law.
Honestly this not a bad move. It incentivizes the right behavior and the extra levy isnât ludicrous.
I am as libertarian as it comes but this looks like a proportionate response to pay disparity and a way to generate extra $.
That being said I am skeptical of it being very successful in either of its goals.
"libertarian as it comes" : "proportionate response" : "pay disparity"
Wikipedia: "In modern politics, liberty is the state of being free within society from control or oppressive restrictions imposed by authority on one's way of life, behavior, or political views."
I lived in SF from 2009 to 2019 and just moved out of the Bay Area entirely. SF is about to kill its golden goose. Tech companies don't have to be in SF Bay Area anymore and now that there's a mass exodus fleeing the area due to cost of living and quality of life, SF government is going to hit a massive budget crunch. It'll be interesting to see how it plays out. Chesa Boudin and the rest of the ideological extremists who sabotaged the city will finally get what they wanted.
There are multiple issues as play with plenty of guilty parties:
The city of SF: Its horribly run to put it mildly, it gets an absolute fortune from taxes and the money "disappears". See the myriad homeless everywhere, think why doesn't the city spend any money on fixing the problem? They do, they spend 300M dollars a year on the homeless [1]. Lets talk about their budget, 13.7B[2], yes that Billion for a city with 883k residents. Looking elsewhere in CA at San Diego with has 1.3M residents, it has a budget of 4.3B[3] and although there are homeless in SD its not an apocalyptic scene like SF is.
Tech Companies: Having a huge number of offices in SF with everyone making 2-4x what an average family makes in a year in the US is going to bring in some serious money. While its fine they make that much, what is not is having a extreme concentration of companies that can run their business anywhere in the US or World. With Covid we are seeing record numbers leaving the city as they are no longer shackled to the SF offices.
Residents: Alot of SF housing owners are extremely resistant to building(as more housing supply reduces their home value). There is a fierce nimby movement that would like nothing more but to halt all development in the city as it changes the 'character' of the city[4].
Strict zoning/environment laws: These laws are typically voted in by alot of residents but some have been around a long time and plague california stifling development and housing. A very long read article that goes into depth can be found here -
https://techcrunch.com/2014/11/02/so-you-want-to-fix-the-hou...
Summary: Add an incompetent local govt. mix in a huge influx of wealth and a splash of laws that stifle housing development in a city bound by 3 sides by water and you get the disaster that SF is.
[1] -
https://townhall.com/tipsheet/timothymeads/2019/05/18/san-fr...
[2] -
https://sfmayor.org/sites/default/files/CSF_Proposed_Budget_...
[3] -
https://www.sandiego.gov/sites/default/files/legacy/iba/pdf/...
[4] -
https://reason.com/2018/01/05/nimbyism-in-san-francisco-reac...
Otherwise known as the "fire your lowest paid San Francisco employees" bill.
"Average worker" sounds like such an easy metric to game. They just should have used "lowest paid worker".
how low seems more interesting.
they should have approved taxes on landlords charging crazy high rents.
I'd like to see Los Angeles do the same thing for highly compensated entertainers. If they make more than a multiple vs. average service worker, tax them.
I'm glad to see San Francisco is deciding which voluntary arrangements among private citizens should be penalized. Their governance has been consistently Solomonic.
Brilliant idea: introduce a city tax in the middle of a pandemic which makes everyone work remotely from anywhere they want. Couldn't possibly backfire /s.
In other news, highly paid CEOs and big businesses approve moves out of San Francisco.
Did you think it would end any other way?
"saying the tax is modest in comparison to the cost of moving a business."
Basically admitting that the thought process is charging as much taxes as you can possible get away with.
I agree they shouldn't be seeking to grow their budget endlessly. Why do we accept that behavior from businesses? IME, they often effectively ruin their own products and do harm to society by attempting to extract the maximum benefit from market position. It seems that in many people's opinions they're just behaving as they should.
The business is making money by a voluntary exchange: the tax is not a voluntary contribution. Maximizing lack of consent is not the same as maximizing voluntary exchanges.
That is the point of optimal tax theory: maximize revenues while minimizing downside.
I see plenty of downsides in SF's tax structure.
does this target only CEOs? what about COOs, CTOs, and other C-level executives? Board members?
> does this target only CEOs?
No, "CEO Tax" is a popular term for this style of tax, but its not tied to CEOs specifically; its triggered by the pay ratio between the "highest paid managerial employee" of the firm and the median full-time-equivalent pay of full-time and part-time employees based in the City.
_highest paid executive makes 100 times or more its median workerâs salary_
2 months from now: nation's first executiveless company
The only executive is the CEO's mother making $50K/year
isn't that what Valve pretends to be?
Board member comp should rarely be that high given their part time status.
Why doesnât anyone want to address the elephant in the room, which is affordable housing?
Why not convert vacant offices to apartments?
Why not loosen building restrictions and allow to build new and high outside of a narrow downtown area? Why not loosen restrictions to build smaller, tenement-style units of there is demand?
That doesn't seem all that relevant to the topic of taxes, and even if it did, I don't believe there's a very good correlation between increases in CA taxes and improvements in the housing situation.
The amount of money that this is expected to bring is â to the size of SF's homelessness budget so it's not the biggest stretch to link them (although you could bring up lots of other issues to)
In what way is nobody addressing the elephant in the room? That was a solid chunk of the propositions this year.
If offices become vacant, what is the motivation to live in the city anyway?
Plenty of people commute in to work in non-tech jobs. Some of those folks would love to live in SF if rent was cheaper.
So, effectively kick the productive people out of offices and move the homeless in? Sounds wise.
there are many political reasons. i'll list some logistical ones:
fire codes?
not enough bathrooms?
lack of showers?
> not enough bathrooms?
lack of showers?
Err, plumbers exist, and showers and bathrooms are added to commercial buildings all the time. Nobody is suggesting simply telling people to live in existing office space as-is - converting them would include accounting for these things.
It is not easy to do this in most buildings. There are some examples (eg. 100 Van Ness) but it takes years and really was not as simple as people make it out to be.
Don't CEOs only take $1 in salary anyways to keep their income taxes as low as possible and optimize for long-term capital gains through stock compensation instead?
Please at least try and read the article before commenting.
"Under the measure, gross receipts and CEO compensation will include money made from stock options, bonuses, tax refunds, and property, a caveat seen by many as a way to target the tech sector where CEOs are often compensated in non-salaried bonuses."
It's still a valid point that stock-based compensation is not easy to compute. RSU's might be, but options are not.
At this rate in 20 years California will be competing with Mississipi for the title of the poorest state in the country
The worst case scenario is a democratic super majority where CA and it's insanely mis-managed cities are bailed out by the federal government. Think GM Auto Bailout, but this time for an entire state...
This is coming from someone who's never voted for a single republican. Let's remember that [0] SF also just elected a DA who's parents were literally complicit in the Weather Underground bombings...
[0] -
https://californiaglobe.com/section-2/san-francisco-voters-e...
As a California outsider, I had a very difficult time making it to the end of the article you linked. Maybe Chesa Boudin is a terrible person, but that article alone just reads like someone's angry rant and told me very little about Boudin himself.