| It's path dependent. Many things happened in the SF Bay area that led to this. Here are factors in a rough order of importance. 1) Most people's savings are in housing. I do not know if this is the case in Switzerland, but in Anglo countries, the majority of most people's money lies in housing. So right there is an enormous incentive to not increase the supply of housing. This is also heavily influenced by the fact that American schools are funded by local property taxes, so not only does the value of your home determine your savings, but also the quality of your child's education. I think this is the fundamental issue, but not the only one. 2) Strong property rights, etc. covered above. It seems like you have this in Switzerland 3) Now, historical reasons. In the 1950s - 70s there was major development of American "inner cities", which mostly consisted of destroying minority neighborhoods and replacing them with freeways. This was a legacy of the fact that at the time the only urban planners where all transportation engineers, and viscous racism. This is important as it led to minority groups deciding that most "development plans" are actually plans to evict them (historically, not that far off). That things were handled so badly led to the first anti-development movement [1]. See the Fillmore District for such an example, although they didn't build a highway through it. See also [2]. 4) The next thing to think about is prop 13. Prop 13 basically limited the amount that property taxes on residential areas to roughly 1~2% no matter what. This also brings up an important distinction between Switzerland and California: to my understanding you have citizen initiatives, but they are consulted on and shaped by the legislator. California's are... not. They are often poorly designed. This had many knock on effects, the most important of which for our story is that now cities have little incentive to build more residential housing, since corporate property tax rates are not so capped. 5) In the '60s and '70s, as alluded the anti-growth movement began. This movement reacted to justifiable worries about the destruction of communities, environmental, and historical damage by demanding little growth. 6) Both the anti-growth movement and Prop 13. came about in the '70s, when rent control was also passed in SF. Rent Control means that there is little incentive to invest in an already owned property, and it means that if a new building is built, it likely won't be affordable for low income people who are on rent control. 7) Racism. This is touchy, but in the 1950s and 1960s, many many white Americans left the cities to live in new suburbs, so called "White Flight", with government loan help which blacks could not receive. This was coupled with laws passed against obvious housing discrimination (such as so called "compacts" which made it illegal to sell to non-whites), so moving to a suburb with high housing prices meant that mostly poorer blacks could not buy houses there. It's difficult to say how much this plays out today, but it had a really strong founder effect in most outlying communities, leading to a culture opposed to mass transit ("it'll bring those people here") and multi-person housing ("I love my community of single family homes. It's not my problem if people can't afford housing here. We're full"). So basically everyone is opposed to more building. Minorities are convinced that more building will price them out (true) and that development is likely biased against them, preservation activists don't want new things built, suburban communities don't want to become any denser, municipalities prefer business over homes for tax reasons, and everyone who owns land has no desire to build more. [1] http://www.foundsf.org/index.php?title=The_Freeway_Revolt
[2] http://www.foundsf.org/index.php?title=Redevelopment_A-1_and... |
This causes long term property owners to pay very minimal property tax bills compared to recent owners and create effective property tax rates of %0.2 or less. Prop 13 also incentives owners to never sell, which causes supply problems and increases the price even more.
There are many US states that have property tax rates lower than california, but do not have the "prop 13" problem. King county in seattle is one example.