[klipt]

I think SF has already taken the hint that they can outsource their residents to Oakland.

Residents strain the city budget via things like public schools. Businesses put money into the city budget via gross receipts taxes.

SF wants the businesses but is very happy for residents to live elsewhere.

[lumost]

CT went this way as well, eventually the businesses look to follow residents - particularly younger residents who can't afford the inflated rent or down payments.

[lotsofpulp]

CT has a different problem, they kicked the labor expenses 30 to 50 years into the future via underfunded defined benefit pension benefit, retiree healthcare, and other deferred compensation.

They don’t have a tier 1 city which people are willing to pay a premium to live in, and the taxpayers today are balking at paying for labor performed decades ago.

I’d be wary of starting a business subject to a relatively deeply indebted government if I had other options.

[gen220]

Can you expand on this?

Did CT follow Oakland, where SF is NYC? Or if CT is SF, where is the corresponding Oakland?

I live in NYC, and my view of CT is that its modern identity is dominated by being a suburb to NYC, with a handful of big and old businesses in the big cities to keep domestic economy afloat.

The places in my mind that don't fit this model are all east of New Haven, at which point CT starts to be "Coastal New England", a region that, excepting Boston, continues up to Bar Harbor, ME.

But my view is obviously biased by my limited experience, I'm curious to hear more of your perspective.

[lumost]

During the suburban expansion of the last century many southern CT towns allowed in businesses but declined to expand housing and transit availability. This combined with strong NIMBYism drove up housing prices in southern CT.

A good modern analogue of southern CT from the 70s-90s would be the valley in the bay area e.g. Palo Alto, Mountain View etc.

[throwawaybbqed]

Not disagreeing with you but some additional points:

I don't think CT's housing issues are anywhere remotely as bad as the Bay area. Stamford is the tier 1 city in CT IMHO, which seemed kind of lame. i.e. we would have friends in places further east (almost as far as New Haven) who would come to Stamford for the "scene". I use quotes because the scene in Stamford was pretty muted. We (who lived in Stamford) would drive to Manhattan for our weekends and special weeknights. I thought it worked really well for us. For 2400 a month, we were living in Luxury apartments and life was car friendly. Housing didn't seem too overpriced (starter homes were 600K IIRC). IMO, Stamford was pretty neat a few years back .. not sure if it has changed.

Bay area housing just went stupid until the pandemic hit. I moved out and so did many people I know. It was just not "affordable" on a 200K salary if you have multiple kids and a stay at home spouse. The housing you could get for $2400 was terrible in most parts that were reasonable commuting distance. I also would take metro north over caltrain any day.

Taxes are bad in both places. Stamford seemed more affordable and a lot better culture to me. I love the Bay area but can't make the math work :(

[gota]

What is CT? Pardon my ignorance

[chub500]

Connecticut

[onecommentman]

Connecticut (CT)

https://en.wikipedia.org/wiki/List_of_U.S._state_and_territo...

You can’t follow the game if you don’t have a program.

And it’s even an ANSI standard...

[DoofusOfDeath]

I grew up in southeastern CT and visit there occasionally. It's hard to describe how dead it is for commercial software development, even compared to Boston.

Even if one was inclined to open a good software shop in CT, you'd have neither low property prices nor an existing pool of highly skilled labor.

[jeffe]

doesn't Greenwich have a good amount of quant shops?

[DoofusOfDeath]

I'm not sure, but that's an excellent counterpoint if so.

I shouldn't have presumed to speak for the parts of CT near NYC.

[lumost]

Westport is home to Bridgewater capital, and Fairfield was until recently home to GE headquarters ( which also used to mean a lot more ).

I haven't lived in the area for some time, but I haven't heard of many new businesses form in the last ~20 years.

[lostdog]

Anecdotally, I definitely came across more startups being located in the East Bay during my last job search. The founders already lived there, so they located the company there too.

[zapita]

This is true, and will remain true until prop 13 is repealed.

The same dynamic is at play between San Jose and Mountain View/Cupertino/Palo Alto.

[fortran77]

What does Prop 13 have to do with the fact that they're not building enough housing?

[epistasis]

Prop 13 gives huge tax benefits to using land less than productively. Both selling land, and building on it will massively increase taxes.

Property values are rising at 5%-10% per year, but bulidings themselves only depreciate without dumping more money into the building. So that 5%-10% is all land value gain. As a property owner, why increase taxes by using the land more productively with new buildings, when you can continue to profit just as much without that? Also, attempting to build is hugely risky, because the permitting process is fraught, long, and likely to fail.

If we didn't have Prop 13, every single property owner would have a lot more incentive to actually try to build.

[smegger001]

> As a property owner, why increase taxes by using the land more productively with new buildings, when you can continue to profit just as much without that?

because the bubble will pop eventually.

[epistasis]

Is it really a bubble if the overvaluation is created by law? The only way to pop the bubble would be to change the laws. And with Prop 13 being untouchable politically, and homeowners have an iron grip over city councils to keep cities underzoned, there's little chance of the systematic problem being eliminated any time soon.

[zapita]

Here’s what I replied to:

> Residents strain the city budget via things like public schools. Businesses put money into the city budget via gross receipts taxes.

Prop 13 was meant to drastically cap property taxes. It was very successful in doing so. As a result, tax revenue from property taxes has also been capped dramatically, and cities adapted by relying more heavily on taxing businesses. Hence the current situation where residents cost more in services than they bring in in property taxes, incentivizing cities to attract businesses and wiggle out of their responsibility to build more housing units.

A good illustration of this dynamic is “RHNA” process for allocating housing unit quotas to each city in California. it is a very conflictual process where city councils typically fight tooth and nail to get their quotas reduced. A recent example in Palo Alto: https://www.paloaltoonline.com/news/2020/11/18/palo-alto-ass...

[pound]

not enough housing to meet demand means raising property values, which is beneficial for property owners without having to pay more taxes

[fortran77]

I don't think every California home owner is some evil beast trying to keep others out. I support building more homes, and would love it if every single family detached home were automatically rezoned for two units on the parcel. But if it weren't for Prop 13, my home and my business would have been forced out by people moving in and paying too much money for homes next door to me.

And "raising property values" only raises my property tax, while giving me no real benefit.

[epistasis]

Prop 13 causers real estate values to rise much faster than they would have otherwise , by restricting the productive use of the land. It incentivizes land owners to not build and to not transfer land to someone who could make better use of it.

When it's a broad, general effect that covers an entire stateC that causes prices to rise much faster than they would have risen without Prop 13.

Prop 13 is one of the major causes of people "paying too much money," whatever that means. No purchaser wants to pay too much. The seller is the one setting the price when it is high, and Prop 13's incentives for speculation are what gives sellers so much market power to extort purchasers.

[sagarm]

By "forced out" you mean you could

1) sell, reaping a huge windfall. 2) use a HELOC or reverse mortgage to pay for the higher property taxes.

But of course you'd prefer both to keep the windfall and not move, a privilege afforded to you by prop 13. That is only natural.

Meanwhile, homelessness in the state continues to rise as high land values make housing production and anti-growth activists on planning committees exacerbate our housing shortage.

[watwut]

I find it acceptable that people want to stay at home where their social networks and memories are. You all act like it is OK to push people out from their homes, just because you have money and want that place.

[zapita]

> But if it weren't for Prop 13, my home and my business would have been forced out by people moving in and paying too much money for homes next door to me.

Prop 13 does not solve this problem. It merely shields historical homeowners from it, while amplifying it for everyone else. Many people and businesses were forced out by speculation because of prop 13, but you and a small group of people were exempted so you don’t care.

[fortran77]

How dare you say "I don't care." Who are you to speculate about what I think about?

[phenkdo]

I thought "there is no shortage if you pay enough" shibboleth is universally applicable. H1b/housing/healthcare ?

[klipt]

Actually no, land is the one thing you can't make more of, which is why economists say a land value tax is one of the most efficient taxes (since supply is fixed, taxes can't reduce supply).

It's true you can make more housing by building up, but only if city zoning allows, which NIMBYs don't want.

[random314]

Are you in favor of a wealth tax in general, or only property taxes?

[Kalium]

Wealth taxes in general are challenging to execute. Property taxes are much easier, as well as deal with the extra issues brought on by land ownership that cash-equivalent wealth does not.

[Tiktaalik]

A property tax is a type of wealth tax.

A wealth tax is no more difficult to execute than our existing property tax system.