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Comment by ThrustVectoring | Hacker News Reader

Honestly, the end of the article gets into what's actually necessary to change to fix the housing situation. There's a ton of locally-optimal but globally-detrimental decisions to not build places - so what's necessary is a regional zoning czar for the Bay Area that can tell people to shut the hell up and allow people to build.

Nobody really has the power to do this, and the voters are demanding NIMBY policies, so I'm not holding my breath. The next best strategy is coming up with an acceptable measure of how many people a certain plot of land "should" house and taxing/subsidizing landowners based on how much housing they actually provide on the land. That's technically not an ad-valorem tax, so would dodge Prop 13, while still pricing out people who really should make room for better use of the land.

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How about attaching a direct cost to NIMBYism?

Sure, you can vote against zoning or building high density housing, but it's going to cost you. The price will be your prorated cost share of moving the project somewhere else. Don't want that tower block next to your house? Fine, pay $1M to have it moved.

You could combine this with a reverse auction of subsidies. As in, yes, I'll take that tower block for $500k.

Eventually the market clears and the problems get solved.

That's an amazingly good idea imo.

It's generally called a 'land value tax'. Most of the value of land derives from the amenities provided around it. By taxing the land you encourage development and discourage speculation: excess land value will be extracted through taxation.

Land-value is a better measure of how much housing "should" be built in an area. Ideally, it'd be a land-value tax with a housing capacity subsidy, making the entire thing revenue-neutral.

Unfortunately, Prop 13 makes a LVT infeasible to implement. Maybe a national LVT program would work, but that's replacing a smaller problem with a more difficult one.

Instead of a subsidy you could just allow the write-off of the structure's depreciation. Structures, unlike land, lose value over time since they have to be maintained and suffer wear and tear.

The bigger the structure, the bigger the tax write-off.

LVTs make perfect sense and won't ever be implemented because we just started off on the wrong path. We're stuck with Prop 13.

The devil's in the details. It's hard to come up with measures and targets that are both fair and easily communicable.

If you go with number of people, well, that's the wrong measure (and hard to enforce // easy to fake). Number of bedrooms is also incorrect, as is square footage. Number of rentable units is also weird, since it encourages studio apartments and the like at the expense of splitting bigger units and sharing areas.

Another option is using a baseline of "however many people currently live there", but that favors parking lot owners and the like. "Average density of the local region" is unfair in that it suddenly imposes a new cost on the density hold-outs.

You can calculate a target based on something like distance-to-transit and local zones, but that gets complicated and political in a hurry. Land-value would be a good choice, since the price conveys really useful information - but that is likely illegal due to proposition 13.

My next-best idea is collective punishment: charge zoning districts based on the difference between how their residential and commercial/industrial construction. Mountain View is much less likely to vote to let Google expand their campus while blocking commensurate housing construction if it means they have to start subsidizing the places those workers start commuting from.

You could tie minimum wage to median home value. It'd push places out of business, lowering labor demand. Sort of an indirect way of making people leave the city. And let those that can stay afford whatever ridiculous amount of money they have to pay for a 300sq ft studio.

The goal isn't to push poor people out of the area and replace them with rich people. The goal is to price out landowners who fail to develop housing.

To that end, it's probably better to somehow align the tax consequences with the people who can successfully NIMBY up development projects. That is, subsidizing living next to a high-density apartment complex, rather than subsidizing building a high-density apartment complex. Or in addition.

Like, if building a tall apartment complex in the Mission meant that all the neighbors got $50/month in density subsidies, I'd imagine that a lot of opposition would dissolve.

"Once it reaches a certain threshold, the process of institutionalization becomes counter-productive." - Ivan Illich

This is an example of why planning doesn't work. And the unforeseen side-effect of any policy is an example of why central control is not just inefficient but often counter-productive -- why hiring processes to identify high-capacity creative individuals select for the opposite; why the school system produces not learning but limits it so as to produce ignorance; why housing policies aim to improve cities and lower inequality makes cities like San Francisco and Stockholm some of the most unequal in the world.

http://p2pfoundation.net/Counterproductivity

> This is an example of why planning doesn't work.

Surely this is merely an example of planning not working, not proof that it can never work. Many cities do not have these problems.

This is an example of why planning doesn't work.

You misunderstand.

Any system taken to its logical extreme then becomes its opposite.

Ivan Illich advises pragmatism over dogma.

You're right. My comment went a bit far.

"Nobody really has the power to do this"

The State of California has the power to fix this and, presumably, the motivation to lift this albatross from the neck of the economy.

The government is not a monolith - it's made up of people who follow incentives. Proposition 13 is basically the third rail of California politics, and there's very strong NIMBY tendencies in voters.

Fixing the housing issues in the Bay Area would be worth billions to the larger economy, but the people who make and influence the decisions are largely concerned with other matters (specifically, house prices and doing things that voters approve of).

The end will come when people cease to reap the benefits-- Prop 13 delivered a lot of value to homeowners from 1978 on, but home prices now incorporate the "savings" one gets from the absence of Prop 13-- the only people who benefit are those who are locked in.

The amount of California residents that are forced to be renters makes the continued existence of Prop 13 less and less tenable every year.

Only once the renters start actually voting.

I don't understand why you think that what you're describing (essentially a land-value tax) isn't an ad-valorem tax.

Thanks, fixed.

It's not an ad-valorem tax because it isn't based off of the price of the property. A $1M house next to a $1.5M house would have the same tax bill, so long as they have the same housing capacity and land area. If the price of a house doubles, their tax obligation would remain unchanged.

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