Wednesday, June 03, 2015

Are High Housing Costs Forcing Talent to Flee Silicon Valley?

The pull of opportunity, not the push of expensive real estate, drives migration from California.

Theme: Housing prices and migration

Subject Article: "Soaring housing costs forces talent to flee Silicon Valley."

Other Links: 1. "Find a New City."
2. "If the 1% stifles New York's creative talent, I'm out of here."
3. "The Ruse of the Creative Class."
4. "Not So Much 'New York Poor' as 'Pittsburgh Rich'."
5. "Innovation Geography: The Beginning of the End for Silicon Valley."
6. "The Lock-in Effect of California's Proposition 13."
7. "Domestic migration: Dreams of Californication."
8. "Proposition 13 Then, Now and Forever."

Postscript: Given all the bloviating about how market urbanism can fix California's housing affordability woes, this ditty from the Cato Institute now looks amusingly ironic:

Political analysts often argue about when the modern-day conservative movement in America began. Some say that it began with Barry Goldwater’s campaign in 1964. Others say it began with the election of Ronald Reagan in 1980. I believe that the conservative, anti-big-government tide in America began 20 years ago with the passage of taxpayer advocate Howard Jarvis’s Proposition 13 in California.

Proposition 13 was a political earthquake whose jolt was felt not just in Sacramento but all across the nation, including Washington, D.C. Jarvis’s initiative to cut California’s notoriously high property taxes by 30 percent and then cap the rate of increase in the future was the prelude to the Reagan income tax cuts in 1981. It also incited a nationwide tax revolt at the state and local levels. Within five years of Proposition 13’s passage, nearly half the states strapped a similar straitjacket on politicians’ tax-raising capabilities. Almost all of those tax limitation measures remain the law of the land today.

Jarvis's tax revolt horribly distorts the real estate market, pushing up prices in California and in states receiving the equity rich migrants looking to cash in on the subsidy that Cato celebrates. As per usual, political ideologies make for awful policy.

1 comment:

Anonymous said...

Could be, prop 13 really helped my parents but was worst for the schools since property tax is a big factor. I think Ca just has a high population in urban areas like New York and of course in places like Orange County and San Diego there is a lot of opposition to apartment building since upper middle class folks don't want section 8 housing. In fact allowing pre-fab housing again in California could dropped the price of housing but there are no new mobile home parks or a pushed toward pre-fab housing. In 5 to 10 years 3-d print housing could come in effect lowering housing rates in places like the Inland empire. So, houses in the exburbs could be under 200,000 causing some folks to moved and places like the Inland empire are growing faster in jobs. 3-printing is now being applied to cars to reduce pricing. See local motors and divergrant microfacory. The different between prop 13 and today's Republicans is most Republicans want to copy Texas which has a high property tax and no state income tax.