Saturday, December 02, 2006

A Bayarian Takes the Red Pill

This rant was left on the Boycott Housing site and I think he makes some valid points. I can certainly understand his frustration. And I am glad that some people here are questioning the status quo. Maybe there will finally be change.
The previous post [on the Boycott Housing blog] is an excellent example of why this state is consistently bankrupt. Thanks to the outdated legislation of the 70s like proposition 13 and all the anti-development NIMBY measures that are in place, taxation levels from property is dismally low compared to other states. And thanks to the huge preponderance of anti-development and anti-business practices being employed by the state, housing prices are skyrocketting as the general wages of those in the business sectors are stagnant. Meanwhile, to combat the high cost of living, the state increases the salaries of its own employees (firefighters, teachers, etc) driving it further into debt and making the rest of us scratch are heads wondering why we took student loans and busted our asses in college just to make the same salary as some of the individuals the previous poster mentioned. Here is an interesting thing: when Ahhh-nold was voted into office, he sought the advice of Warren Buffett on how he can best balance the budget. You know what Warren's very first suggestion was? Increase property taxes and repeal prop 13. And of course, that idea was shot down faster than an Iraqi jet fighter. Now why is it that everyone and their mother in the world of economics and finance can see the unnecessary pressures being placed on the working middle class of this state just to basically pay for the retirement of some assholes who bought their houses 30 years ago? Our school system ranks amongst some of the worst in the country now. Our roads battered, torn, clogged and congested to nightmarish levels. Our housing is sky high and our income taxes are ridiculous. Meanwhile, a segment of the population lucky enough to be born at the right time sits back and enjoys a pleasant retirement at a cost to us. My personal opinion: this is a big country. And its a big planet too. Why sit here and wait for some POS 60 year old house to drop from $650k to $500k? Just do the math everyone. It could drop to $350k and you would still be getting screwed. Now I consistently hear about the repeated notion of "the fabulous bay area" and all it has to offer. Somebody, please enlighten me: WHAT EXACTLY AM I PAYING FOR AROUND HERE? The weather? And some nice cliffs with views of the Pacific. Well, that's swell. Certainly worth a premium of a home worth 10 times what it is anywhere else. (And by the way, that $650k home ain't anywhere near the ocean or the nice hills) Just wait and see what this place will be like 20 years from now. After continued outsourcing, both foreign and domestic, continues to send more and more high technology individuals to greener pastures elsewhere. I am sure your "fabulous bay area" will have a striking resemblance to Detroit in a few years. Except with slightly better weather.

10 Comments:

Anonymous Anonymous said...

Oh give me a break. While I can certainly understand this person's frustrations, I hardly think the SF Bay Area will resemble Detroit anytime soon, even after the next big quake. Like it or not, this is an expensive place to live and there is nothing to indicate that will not continue to be the case, even with ups and downs in the local housing prices. To limit the positive aspects of the area to the weather is, well, pretty naive.

Dec 2, 2006, 2:05:00 PM  
Anonymous Anonymous said...

Hey anon 2:05 -

You are more than welcome to list what makes the Bay Area so "special". It cannot be denied that weather is one of the primary reasons realtors and their ilk justify the high prices (and it should also be said that this same excuse is used in OC, SD, etc). Rarely does anyone admit to the failed taxation policies of CA at large.

Dec 2, 2006, 2:10:00 PM  
Anonymous tom stone said...

Just limiting prop 13 exemptions to the principal residence of homeowners would make a huge difference.Don't forget that commercial properties share the same benefits of a lower tax,which might have someting to do with why it hasn't been repealed or amended.

Dec 2, 2006, 2:31:00 PM  
Anonymous Anonymous said...

As soon as I heard the magic words "raise taxes" he lost me. All levels of government have proven their irresponsibility with money, giving them more is out of the question.
Eliminate all benefits to illegal aliens and reduce services to citizens, yes this means firing lots of government employees. Since the bay area was mentioned I'll point out an example here in San Jose. The city sponsored a grand prix race through downtown. They went through the streets repairing them so that 100+ mph cars could drive "safely". Meanwhile the streets around our house have been full of potholes for years. The garbage service is run by racketeers in cahoots with the lame duck mayor and we pay >$30/month for a service that was covered by taxes when I was a child in the pre-prop13 california. You don't give more money to people like that!

Dec 2, 2006, 10:46:00 PM  
Anonymous ross valley local said...

Since you mention San Jose, do you recall the fire at Santana Row during its construction? Reportedly, the city sent fire crews to save that burning $tructure, while downwind many homes caught fire from embers of that blaze. I don't recall what became of that, but I consider those actions criminal.

Dec 2, 2006, 11:29:00 PM  
Anonymous Anonymous said...

So another middle class, middle income person in the Bay Area has given up and you think that's something to applaud??? I agree 100% with the repeal or at least proper modification of Prop 13, but since this country is owned and operated by big bu$ine$$ it'll probably never happen, at least not while Arnold is emperor.

One thing that repeatedly fails to mention is this fact: more millionaires per capita live in the Bay Area than any other part of the country, including Ny, CT, Los Ang, FL and TX. And Silicon Valley mints more of them everyday with every new Apply/Google/Yahoo/YouTube/YouNameIt. Not to mention the investment bankers and lawyers who also cash in on each deal. And while the grunt work might be outsourced to places like India, the big ideas are being made here in CA. That drives up the cost of living for everyone. I've lived and travelled all over the world, and I can tell you that the Bay Area IS special, and it's not just the weather. What CA needs is better compensation and affordable housing for middle class jobs/people. The more the middle class drifts away, the greater the divide between rich and poor.

Dec 3, 2006, 3:15:00 AM  
Anonymous Anonymous said...

Two years ago I decided to take a new position in a Chicago Architecture firm that gave me almost double what my income was in Marin County. Selling my condo in Tiburon, I was able to buy a larger unit in a doorman building on Lake Shore Drive with about 400,000 left over to put in investments. When I feel nostalgic for California, I just take a cab to Ohare and am back in Big Sur, S.F. or Mendecino in hours. Recently my old employer in Marin asked me to come back, but looking at what is going on out there, is the Bay Area really worth the cost? If I were to move back I would not have any money left over for the trips down to Pebble Beach I am able to take from Chicago.

Dec 3, 2006, 9:06:00 AM  
Anonymous Anonymous said...

"the big ideas are being made here in CA."

Perhaps, but when college grads with those "big ideas" decide the costs here aren't worth it, they're going to fuel new development elsewhere. The notion that only the "big people" have the "big ideas" is placing too much confidence in too few people.

Suffice to say, quite a wide spread of incomes are pinched by housing costs here, and not just the so-called "little people". I've grown tired of the assertion that somehow justifies extreme housing costs to local business opportunity. Granted, housing has always been pricey in California, but not at the current levels. Despite all the hype, businesses will follow the opportunity--which could mean leaving California for many people. Some of my clients have already located their businesses outside CA, as have scores of my friends. If this madness continues, I shall be following them.

Dec 3, 2006, 9:47:00 AM  
Anonymous Anonymous said...

work might be outsourced to places like India, the big ideas are being made here in CA. That drives up the cost of living for everyone. I've lived and"...

(buzzer sound) wroooong.. Let's do some fact-finding, shall we? First of all, most of the biggest businesses aren't in California. Here it goes...

Houston TX:
Clear Channel: The largest media advertising agency in the world.

Houston, TX: Sysco Foods: Largest food and restaurant supplier in the world, profits in the billions.Houston Is 2nd only to NYC in terms of having the most fortune 500 companies within it's confines.

Other TX industries: Aerospace, Tech, research, Texas Instruments, Dell computer ( largest computer producer in the world), and numerous advertising agencies including films, 3D, and radio.

Knoxville,TN: Scripps Networks: Producer of the Food Network, HGTV, DIY, Fine Living, as well as the largest newspaper and magazine publishing agency in the country.

Nashville: Comprised of the biggest collection of healthcare companies in the nation. last time I checked, healthcare was ranked no.3 out of the top 5 money producing industries.Home to CMT and ranking a close 2nd to NY as the biggest music producing city in the country.

Raleigh/Durahm,NC: Home of Red Hat and countless other independent tech firms. The area also claims the highest per capita population of citizens with PHDs.

Atlanta: Home of Verizon Wireless and Cingular, the largest wireless networks in the country, a multi-billion dollar business. Also home to Coca-Cola, Delta, Bellsouth, UPS, Rubbermaid ( relocated there), Home Depot, CNN, TNT,Turner Networks, Cartoon Network,and The Weather Channel . Atlanta ranks only 3rd behind NY in terms of the number of fortune 500 companies located there.

So.. California has a lot of companies. So do other states and cities. What's your point?

I could go on and on and on, but the simple fact of the matter is that you can take your pick of any one of the cities I picked at random and even others that I didn't and find a fairly diverse cross section of business. What's different is that the average person who lives there and works at one of the myriads of companies I listed will likely do very well, if not signifigantly better than the equivelant citizen in CA, even if the CA citizen makes more.
Putting Google up on a pedestal and claiming that it is the golden lamb of which all CA citizens adhere to and could aspire to is ridiculous. Only a handfull of their employees make truly astounding salaries, for as the cost of living goes up in CA, even people making 6 figure incomes are now having difficulties. How much do you need to make here? 200k? 300k? 500k? I don't care what people are Google are doing. I only care about myself and my family... not thinking about some crazy-ass idea.

There will come a point where California will lose it's competitive edge. Sure- the companies might still be here, being run by a pared down strictly management level team of US workers with the rest being shuffled off to another state or country, but this doesn't mean anything to a school teacher, engineer, or truck driver.

Dec 7, 2006, 8:56:00 AM  
Anonymous Anonymous said...

Holy S*it.. Out of curiosity, I looked at how much homes are in the Atlanta area. Some 20 minutes out of town are like 60k! That baffles the mind.

Dec 7, 2006, 9:03:00 AM  

Post a Comment

Links to this post:

Create a Link

<< Home

Terms of Use: The purpose of the Marin Real Estate Bubble weblog (located at URL http://marinrealestatebubble.blogspot.com/ and henceforth referred to as “MREB” or “this site”) is to present and discuss information relating to real estate and the real estate industry in general (locally, state-wide, nationally, and internationally) as it pertains to the thesis that recent real estate related activity is properly characterized as a “speculative mania” or a “bubble”. MREB is a non-profit, community site that depends on community participation and feedback. While MREB administrators do strive to confirm all information presented here and qualify all doubtful items, the information presented at MREB is neither definitive nor should it be construed as professional advice. All information published on MREB is provided “as is” without warranty of any kind and the administrators of this site shall not be liable for any direct or indirect damages arising out of use of this site. This site is moderated by MREB administrators and the MREB administrators reserve the right to edit, remove, or refuse postings that are off-topic, defamatory, libelous, offensive, or otherwise deemed inappropriate by MREB administrators. You should consult a finance professional before making any decisions based on information found on this site.

The contributors to this site may, from time to time, hold short (or long) positions in mentioned and related companies.