The Bell Rings for San Francisco

The kids are jumping ship and they’re not coming back.

By Brendan Connellan, San Francisco, former commodities trader on Wall Street, current playwright working on his first novel. Originally published on Medium:

It’s been coming. For the five years I have lived here, people have shaken their heads and wondered how long San Francisco could keep getting away with it. We’ve all stepped in human feces and kicked syringes to the curb. It bonds us. We’ve all had to step to the side as a crazy meth head lurched towards us with intent. But, hey, stock prices kept going up and the sun continued to set over the Pacific Ocean and it’s been beautiful enough to somehow make the deal worthwhile. It’s a trade-off, we told ourselves. But then the glass shattered. It’s over.

San Francisco is a city built upon lies, mostly told by the dwellers to themselves. It presents itself to the world as a progressive city, whatever that means at that particular moment to that particular person. The notion of “values” is tossed about like a feather in the wind, even though everybody means something different by it. It’s certainly comforting. It tells itself that it’s nothing like those cities in Texas and Florida and the whole wild world is the better for it. “I’m special, so special,” just as the Pretenders used to sing.

To be clear, there is much that is fantastic about living in San Francisco — I like strong winds and I don’t like high temperatures — but it’s a slippery concoction, a three-card monte trick that flips your eye to the wrong hand. It worked until it didn’t work.

Which is where we are right now. It’s suddenly no longer quite so easy to fool the dupes. We have the virus with us and it’s showing no sign of upping and leaving. It has changed everything. There has been a sudden but seemingly permanent change to the way that working is viewed. The concept of an office building has been thrown out the window. I hesitate to use the word “disrupted” but, for once, it might actually apply.

Now that Facebook has given its imprimatur to its staff to work from anywhere, albeit at a cut rate, the gates have been flung open. The golden handcuffs have been snapped. This was the tape that San Francisco had long been using to glue its finances together but it’s been ripped away and the wound beneath is red and raw.

The charms of Menlo Park and even of SOMA only go so far. Remove the necessity to live in an insanely overpriced box amidst a towering pile of take-out cartons and stained sweat pants and everybody turns into Wile E Coyote. Cloud of dust. I’m out. See ya.

Once somebody clears the fence, they don’t come back. Ever. How many young tech workers have vaulted to the freedom? Pick a number. 20k? 40k? But no city can afford to give up its supply of 30-year-olds. Yes, they can be annoying. Yes the backwards baseball cap and bro this and bro that isn’t all that endearing. But they pay a lot of taxes and they eat from food trucks and go to gyms and they’re too young to suck up much in the way of health services.

So there’s that. Call them useful idiots, call them whatever you like, you’re going to start missing them when they’re no longer clogging up your fields and hills, chugging Millers Lite from a solo cup.

Then there’s the homeless thing. I use the word “thing” because nobody seems to have made any headway in addressing the issue in the past decade despite billions being spent and everybody agreeing that it’s a “problem.” There are many ways in which this particular word can be said. If uttered lightly and quickly, perhaps with regard to the lack of topping on your pizza, it’s not the end of the world and you know it. If said slowly and with a meaningful stare, it’s a deal breaker.

Now that a sizeable chunk of your revenue has strapped itself to a rocket to fly back home to the corn fields and the Great Lakes, the question needs to be posed. Are they leaving just because it’s so much cheaper anywhere else? Because they’re no longer content to be confined to a room with somebody they found on Craigslist who farts in his sleep? Or might there be a bit of “I can’t take any more of the filthy streets and the crazy guys coming up to me, trying to steal my phone?” If so, it has become a very real consideration and one with giant dollar signs affixed.

Then there’s Prop 13, one of the many “third rails.” San Francisco delights in these. This one applies to all of California and the ten second version is that, back in June 1978, a couple of tax vigilantes jammed through an arrangement whereby property tax would forever more be based on the value of the property in 1976 and only thereafter permitted to be raised by a a maximum of either 2% or the inflation rate, whichever was lower.

It was such an obvious fiscal wrecking ball that Mayor Moscone, Governor Brown and Supervisor Harvey Milk only needs five seconds to vote against it. But it passed. Warren Buffett pays more tax on his Omaha home than on his house in Laguna Beach. It isn’t unusual to have a $4m property in San Francisco where the owner pays as little as $2k rather than a more appropriate $50–60k.

Of course, since Peter only ever robs Paul, this means that a multitude of community services need to be slashed to make up the budget shortfall. Today, classroom sizes are bigger, parks more unkempt, streets dirtier and libraries more curtailed in their hours than they would be otherwise. Should Prop 13 be ripped up? Yes. Will it be? No. The moneyed elite benefit most from the arrangement (regressive, San Francisco, not progressive) and they fund the lobbyists and back the more pliant political candidates. Forget it.

Likewise, for rent control. I know many a person paying $2k for a 1500 square foot space in a nice area when the recent arrival next door is forced to pay $6–7k. Again, it’s a system that relies on a fresh influx of ambitious 30 year olds whose life purpose is to code for Google. They pay more just so the protected guy can get away with paying less. Once again, it’s not fair but will it change? No. Those that benefit would turn out in droves to vote against it.

Finally, my favorite one, public pensions. 20m are registered to vote in California elections but only 10% of that number gets any benefit from the ridiculously generous pensions being paid out in full. Not only have the funds been horribly mismanaged, the state and local governments mask the fact that they are making up the shortfall by including it in the number allotted to, say, education and hoping that nobody notices. In consequence, it’s no surprise that California ranks even lower than even maligned Florida and Texas in its 4th and 8th grade math and reading attainment levels.

To conclude, San Francisco’s bluff has been called. It could get away with looking the other way as fentanyl dealers took the BART downtown and sold their merch. It could hope that nobody cared that much if the streets were both dirty and smelly because, hey, it’s San Francisco. Tourists didn’t matter since you could scalp them hard and who cares if they never came back, even if it was a mildly upsetting that the one common denominator in things said by visitors post hurried exit was that they were stunned by what a dump the place was and they couldn’t match that up with all the talk of it being the wealthiest place on Earth. Cognitive dissonance, etc.

Do I think that City Hall will see the light and start pulling levers? No. Not yet. I call it the Thelma and Louise Moment. They could have turned back. They had some options. Harvey Keitel could have helped them out. But they kept driving and that’s what San Francisco is going to do, right until it has three wheels dangling over the edge of the cliff. It will only be at this moment that we hear the words over the PA system “guys, I think we have a problem.”  By Brendan Connellan, San Francisco.

“I’ve stopped defining worst-case scenarios because they keep getting worse every week”: San Francisco’s controller. Read… San Francisco, Epitome of the “Everything Bubble,” Faces Fiscal Chaos. Boom-and-Bust, Always. Now is the Bust

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  366 comments for “The Bell Rings for San Francisco

  1. Endeavor says:

    Cities are about socializing young people and all the spending that goes with it. That is precisely what the new Covidians are forbidden to do. SF will not be the only major city to have a financial and demographic problem.

    • leanFIRE_Queen says:

      Kids socialize very differently nowadays. My son and his friends prefer to do it online with 200 carefully picked friends he takes along with him wherever he is. This new generation is truly different, what do you want to be when you grow up? YOUTUBER, of course!

      Geography truly doesn’t really matter for them and for good reason, all they need is fast and reliable internet. If the parent is able to work remotely, that’s a family that saved itself from inflated housing costs (let’s face it, those inflated costs permeate every single other cost at the local/state level).

      We all needed a solution to inflated housing costs, remote work and kids socializing online is a marriage made in heaven. What’s not to like?

      • Shawn says:

        COVID-19, the best thing to happen to my family. We both WFH, kid schools from home. Instacart, doordash, postmate, amazon, walmart, target delivery for everything. Cars, buses, bart, ride-share, who needs them. Family spends more time together, much happier. Welcome to the future.

        • WS says:

          I’m truly surprised at how well families seem to be getting along. If all this had happened when I was a teenager, I probably would have wound up chopping my folks up with an axe.

        • CRV says:

          My boy’s (14) school results are even better, because there are less distractions. He misses the personal contact though. But since the beginning of june he’s going to school one afternoon in the week and is happy about it. It’s just enough, for now.

        • STEPHEN says:

          Sadlly, this is true for us as well. My quality of life has increased immensely since the lockdowns started. I say sadly because I take no pleasure in the sufferings of others.

          We’ve saved immense time and money by eliminating both my commute and the temptation of frivolous consumption. I’ve been able to direct my time towards productive pursuits that yield long term benefits – ie rebuildig a junked truck, renovating a dilapidated shed, etc.

          Its weird having such a counter-narrative impulse. I feel subconscious relief when I read about increased covid incident rates. I kinda feel bad about that. Many people are not so lucky as to maintain employment working from home. But my family life has benefitted. How to think about it?

      • John says:

        If the job can be done remotely in say kansas, why wouldn’t the job be done in India, Philippines or Bangladesh.
        Be careful what you wish for, since it is far more likely remote working will be done in a third world crap hole than in kansas, texas or some other state

        • yossarian says:

          “Be careful what you wish for, since it is far more likely remote working will be done in a third world crap hole than in kansas, texas or some other state.”

          my thoughts exactly. i’m an “essential” broadcast worker in nyc and while many of my co-workers scrambled to work from home, i volunteered to stay in the office and got them to pay for my commute via uber. i changed my hours to make me more essential. my goal has been to be the last guy they can afford to outsource.

    • Frederick says:

      San Francisco has bigger problems than just Covid 19 and they’re surely not alone in that department

      • VintageVNvet says:

        10-4 Frd,,, a friend who (used to) travel all over USA says EVERY large city has the same problems, with some just greater than others.
        She a dem, so will not admit that ”one party rule” is part of the problem in every one of the cities.
        She doesn’t go out of her hotel at all at night anymore.
        Really a shame, as I used to walk all over SF anytime of the day or night, ride the buses similarly, etc. Though in all fairness, I could also run really fast in those days.

      • yossarian says:

        i’m in nyc and the article describes our situation, too. i have the low rent apartment and my kid is in the public magnet school, so we’re staying for now. anyone who has been here as long as i have will tell you it can get really bad. you used to have walk past a hundred sleeping crack heads to get to work and broken glass was everywhere. these kids have no idea what has been unleashed.

      • Rubicon says:

        As VintageVNvnet observes:

        What San Francisco used to look like and does no more is typical of most all large cities.
        The FATAL FLAW for the US occurred when corporations/hedgefunds/Big Banks/manufacturing titans off-shored millions of US jobs to Asia. It’s been downhill all the way.
        America is finished and its Empire won’t last much longer, either.
        All because of Greed & Power by the 10% wealthy.

  2. c1ue says:

    Cheers – you hit most of the salient points.
    I’d only add: the COVID-19 restrictions on restaurants, bars and nightclubs is probably the biggest reason to leave SF, if you’re a 30-year old.
    Why even bother with high rent, tiny living space and poopy streets when you don’t have the entertainment?
    Living without all of those in SF is no different in Antioch, Billings or Fresno, just a lot cheaper.

    • LeClerc says:

      @c1ue,

      When were you last in Antioch?

      Rent is cheaper there for a reason.

      • c1ue says:

        i drive through Fresno and Antioch all the time.
        The simple point is: with lockdowns – there is virtually no difference between living in SF vs. living in Fresno or Antioch.
        And the simple extension from there: Manila or Mumbai.

    • Jason says:

      Interesting comment. It is amazing how great it is to watch a well filmed live concert on a large HD TV with a good sound system. I wonder if our young peoples cultural lives will now be more digital and so less need to get to and pay for expensive concerts and shows.

  3. DeerInHeadlights says:

    Pretty good summary of San Francisco and much of the Bay Area tbh. Commodities trader turned playwright….interesting! Where do you find these guys Wolf? Do you have like an ad on Craigslist or somewhere? “Having a mid-life crisis? Tired of the same old? Burned out by the corporate machine? Good at writing? Look no further…”

    • Wolf Richter says:

      DeerInHeadlights,

      There are many people like that out there who switch to something they have a passion for. I did too — and I love it. If you can make money doing something you have a passion for, even better! Try it! It’s good for your soul.

      • DeerInHeadlights says:

        Couldn’t agree more Wolf. It was a rhetorical question as I’m sure you understand. And I wouldn’t have said what I did if I didn’t feel very much like someone who’d apply for this hypothetical ad! The corporate machine and especially in Silicon Valley sucks the life out of you. I’ve been contemplating a switch for years…just haven’t been able to make up my mind or muster up the courage. Would have done it already if I had very cushy finances. The bulk of those I see doing it are on solid financial footing. Not saying it’s a requirement but I’m sure it helps greatly.

        • Lisa_Hooker says:

          My two cents. Try it. Try it young. You sound young enough that if it doesn’t work out you will have time to recover. The older you get while seeking cushy finances, which may or may not come, the more difficult it becomes to take a leap. Usually the cushy-ness isn’t quite enough and you go for more cushy, and what you want is put off.

      • Tim says:

        My personal dream is to build small Thorium salt reactors that sh*t precious metals…

        …but having no physics or engineering education or aptitude, that dream is a little distant…

        .. suppose I could just go into the woods and experiment..

        (only gently teasing)

        • Tim says:

          That’s it, going to get barred now…

        • Dave D'Rave says:

          If you really want to do that, I recommend Forestville, or maybe Occidental.

        • Thomas Roberts says:

          Tim,

          The future is in fusion reactors. Particle accelerators do exist, which, can produce a variety of elements. However, it’s probable it will always be more expensive to do this, than produce renewable materials. Also, as soon as gold can be cheaply mass produced, it’s value will fall through the floor.

          The fun, easy, no talent way to make money is to be an actor. As they frequently demonstrate, it’s a requirement to have no skills, intelligence, or aptitude. Sometimes they can trick you for awhile, but, eventually they expose themselves as dum dums.
          ;)

      • craig resnik says:

        enjoy reading your commentary. feel like we passed in the night. we moved from russian hill to southwestern france 20 years ago. from the world of trading and video production to growing walnuts on our farm and running a boot camp out of a castle built into the ramparts of a medieval village. I salute your ability to make a living doing something you love.

      • polecat says:

        Ah, but Wolf .. do you have low overhead,costs already sunk into that marine clay & shale?

        The reason that I ask , is that any kind of small, or modest manufactury, say .. where the startup cost might take a good chunk of capital just to get off the ground, would be next to impossible under current real estate values × often onerous rules, regs, and their conditional building codes, would it not ?? I’m talking about someone, hypothetically speaking, who might have a dream, and a pretty solid product line.. but none of the vast vulture-cap wealth or ‘See Eye Ay’ ‘startup’ drug money fueled bengies. And taking ‘bidness’ bankster-loaned digidolars could be problematic too, at least until the virus subsides, if ever ..
        So if you small, lean, and mobile, then yeah the possibilities are perhaps wider .. but I my mind, a city, a Good city, needs a multitude of disparate small productive concerns, not just coffee huts, city service workers, and ‘cloud-monolith’ billionaires!

    • RepubAnon says:

      Actually, it’s more of a rant than a summary of SF Bay Area life. In order:

      * Prop 13 fixed the property tax rates, and made them very hard to raise. However, the property tax owed is based on the building’s assessed value at the time of sale, with fixed annual increase per year (if one remodels, that can trigger a reassessment as well). (This means retired folks don’t get priced out of their homes just because property values skyrocketed.) Every sale means updating the building’s assessed value to the sale price. So, folks buying a multi-zillion dollar condo don’t pay taxes based on that condo’s 1976 value.

      * Same thing with SF Rent Control – one rents at the then-market rate, which can only go up a fixed percentage per year. Again, this protects long-term residents against getting kicked out of their apartments because a bunch of coders moved in.

      *Homelessness is a real problem – the temperate climate has much to do with this, as does then-Governor Ronald Reagan’s decision to close the state mental hospitals rather than rise taxes to pay for community-based housing. This is where the rather bizarre anti-tax fixations have hurt us – I’d much rather pay more in property tax on my home than deal with the homeless people who, due to a lack of public restrooms, have nowhere else to “go.”

      The SF Bay Area remains a nice place to live – but you get what you pay for. Refuse to pay taxes, and you can’t complain about potholes…

      • Tom Stone says:

        Prop 13 applies to Commercial as well as residential properties, it wasn’t sold that way…
        One nice thing about commercial properties is that you can hold them in an LLC and sell the LLC…there’s no change of ownership.

        • Wisdom Seeker says:

          This. Prop 13 is a boon to anyone who can jigger the ownership game so that one legal entity “owns” the property forever, regardless of who owns that legal entity. Commercial RE is now totally skewed as a result. Residential RE is only partly screwed.

          It’s a complete farce and should have been fixed decades ago.

          (Residential is still screwed because now there are many neighbors who bought within ~5 years of each other paying 2x more/less in taxes on identical cookie-cutter HOA properties(Residential is still screwed because you have neighbors who bought within ~5 years of each other paying 2x more/less in taxes, on identical cookie-cutter HOA properties, for as long as they’ll be owners, just because of the bubble pricing changes. There is no “equal treatment under the law” in such a system – and the fact that no one lifts a finger to fix even that sort of discrimination is a horrendous indictment of the entire “progressive” state.)

        • polecat says:

          Prop 13 + HOAs are a marriage made in Hell’$ pit.. created by the imps. of the dark realestate angle himself. He threw all those Hotel Cally Grannies .. in fear of the unknown, a few charred bones.. oh, and lostsa trees .. for extra penance
          And so, here we are!

        • Happy1 says:

          This is a big part of the problem. That and prop 13 being extended to grandkids.

        • Mr Wake Up says:

          Tom Stone:

          Correct but then theres also no gain in depreciation. If you purchase the LLC instead of transferring the deed then hypothetically you purchased a business and hence you can no longer depreciate the asset minus land value according to IRS code.

          In addition you also assume all and any liability that can and may arise against the LLC or corporation you purchased.

        • Jeremy says:

          You hit the nail on the head Tom S.

          Prop. 13 was a scheme promoted by Chevron in Richmond (E Bay) in order to keep the taxes on the refinery land holdings down. It was that simple but the history is lost to the newbies.

          I moved to SF in 1993 – rented a 2 bedroom apartment for $750 pm. before moving to Sonoma County. Ended up riding the property wave in Soco and bailed out in ’08. Great times.

          A few more years renting and then moved to Devon UK where life is much kinder and far gentler.

          So glad I left.

      • CZ says:

        Can confirm, and would add;

        Prop 13 is basically rent control, tends to lock people into properties, reduces turnover/inventory, therefore raises prices.

        Is quality of life in SF really worse than, say, NYC? All things equal I’ll take SF — NYC more dense, dirty, violent, crummy weather…

        • Happy1 says:

          I’d take SF over NYC every day, better weather, fresh fruits and veggies, beautiful coast and mountains a short drive away.

        • Jackflash says:

          I’m bailing on San Francisco in two weeks (after 8 1/2 years). Great weather? It’s chilly 90% of the time and the other 10% it’s hot and there’s a forest fire 50 miles away destroying your lungs. Getting to the coast and mountains is a hassle as you’re competing with everyone else doing the same thing. I gave up on going to Tahoe years ago and marvel at friends who have the energy to sit in traffic for six hours each way after a draining work week with 30 hours of commuting already built in. Who knows, maybe I’ll be back, but this is my second stint here with 10 years in NYC in between. New York was way better. No, I’m not moving back there either. San Francisco would be an insanely great place to live if you got into the property market at rock bottom in 2012 and you don’t have much of a commute. For the rest of us it’s kinda hell.

      • Happy1 says:

        Mental hospitals everywhere lost the ability to confine people against their will for more than 72 hours based on Supreme Court legal decisions. This has nothing to do with Reagan or any other governor.

        • CZ says:

          If I recall “deinstitutionalization” dates back to the 50’s, with calls to get people out of mental hospitals on humanitarian grounds.

          -Patients in public mental hospitals peaked in 1955 at 560,000.

          -CA mental hospitals peaked in 1959 at 37,000.

          -1965 Medicare/Medicaid established: patients in mental hospitals not eligible, but are eligible if living in community; led to discharges.

          Here’s a good summary:

          https://www.kqed.org/news/11209729/did-the-emptying-of-mental-hospitals-contribute-to-homelessness-here

        • Paul says:

          Correct!

        • yossarian says:

          happy1 is right. i don’t know the legislative history but it wasn’t until the late 70s or early 80s that they stopped forcibly removing the mentally ill from the streets of new york. there were several high profile judicial decisions that made it extremely difficult to remove someone against their will for more than a few days. we had a sick guy who lived with his mom in our building who was charming and used to hang out on the streets smoking pot and chatting up young women. occasionally, you would see him raging but most of the time he was very friendly. turns out he was beating up his mom but she wouldn’t press charges. he was also arrested several times and taken to bellevue for observation for attacking people. it was so bad that nobody would get on the elevator with him. it took about five years and multiple charges to get him evicted and institutionalized.

    • RD Blakeslee says:

      Ex patent examiner builds prize Angus herd, 3 out of 5 Choice steer carcasses in the American Angus Association Carcass Quality contest (evaluated by USDA graders on the rail) against some of the finest “scientific” breeders in the world. He used old-timey Scottish phenotypical evaluation, vs. modern genotypical.

      When he bailed out of the Washington, DC. rat race and headed for the hills, a friend asked what he would do.

      “Build a cattle herd”

      “What ?! You’ve never farmed!”

      “Nope. Never built a harpsichord, either, before that one you see standing over there.”

  4. Jamie says:

    Three very valid points, but two of the three are not unique to San Francisco (Prop 13 and Pensions)….it’s a California problem. Very well written piece and much of it can be transferred to the state as a whole. If you’re a boomer in California, you have got it made. Low property taxes, high property value, and a big fat pension….all robbing your grand-kids educations. Way to go California.

    • leanFIRE_Queen says:

      > all robbing your grand-kids educations

      Those grandkids shouldn’t be living in California. Problem solved.

      Gerontocracies can only hurt the young if the young stay put. Voting with your feet and your money has always been the most effective type of vote there is.

      • JBird4049 says:

        As a native born Californian, I still like my home state despite its increasing problems; I do not like the idea of leaving because a bunch of narcissistic greedheads thought it was a wonderful thing to create paradise and then wreck the place for everyone else including the other natives.

        And leave to where? The same narcissistic greed enabled by the current neoliberal regime is everywhere in this country. What’s to prevent what might be the next paradise, wherever it might be, from being taken over and destroyed. No, it is better to stay and fight although I might still get flooded or burned out.

    • Javert Chip says:

      Jamie

      Maybe if CA wasn’t spending $100B on a train to nowhere, or $80k/per person (total employment cost) to human pooper scoopers for San Fran sidewalks…

      In other words, your biggest problem isn’t Prop 13

  5. Patrick says:

    Brilliant synopsis of a previously beautiful city I loved so well.

  6. Tony says:

    Just wanted to say that the city workers in San Fran who pick up the human feces make almost $100k a year. Pretty impressive pay for picking up crap.

    • Wolf Richter says:

      Tony,

      You just sent my BS-o-meter red-lining. Since when do we have city workers who that? It’s up to residents/owners to keep the sidewalks clean.

      • MonkeyBusiness says:

        Wolf, I live in the Bay Area too, and back in 2018, the city did form the “Poop Patrol”. Compensation back then was 70K in salary and around 110K in benefits?

        Not sure if the Patrol has been disbanded.

        • Cas127 says:

          Yeah, the poop patrol is a thing but…

          1) Did it operate with typical gvt worker efficiency and cost-effectiveness?

          2) Where are the metrics? Where is poop patrols’ Poop Mountain?

          3) If actually working hard, did the PP just get drowned in a neverending ocean of Number 2? Where is the increased, er, supply coming from?

          Do SF food programs only hand out bran muffins and coffee?

        • BuySome says:

          Did they get any official city uniforms with a “Super Duper Pooper Scooper” logo patch?

        • El Katz says:

          It’s not just the pooper scoopers… it’s the crews that subsequently pressure wash the streets to keep down the cases of Hep C. Then the merchants that must clean the entrances to their establishments on a daily basis after someone fouls it during the night.

          Sad.

        • polecat says:

          Is it being utilized into producing sustenance .. like food gardens, as in the days of old ??
          You’all might snicker and laugh, but I could see things ‘reverting back’ to that point, once again. Might be a better use for all those unsold, empty condo towers ..

          ..ya know, supply-chain disfunction and all that goes with it, like survival ..

        • polecat says:

          And remember. Rome once had splendor too.

        • two beers says:

          You can always rely on the professional-managerial class to get outraged when some gets paid a living wage for a distasteful job that doesn’t require a graduate degree.

          If you want your damn streets clean, pay people a living wage to shovel the stuff that offends you out of the way of your precious Ferragamos.

          Street cleaners are far more socially necessary than disrupting vulture capitalists and the “creative” pizza-delivery app coders they support with ZIRP and QE infinity.

        • Cheap seats says:

          You’d have to pay me a lot more than 70k to pick up shit for a living. Seems pretty reasonable given how expensive it is to live in SF.

      • Javert Chip says:

        Wolf

        I’m loath to argue with our host, but one of the reasons so many in the US think San Francisco has city employee pooper scoopers for human feces is so many reporting outlets have/are reporting it.

        https://nypost.com/2018/08/23/its-a-crap-job-but-it-comes-with-a-big-paycheck/

        Jobs come with employee salary of $71,760/year ($184,000 including benefits: pension, health care, trans-gender surgery, god knows what else).

        Yea, I understand San Francisco law my require the owner to remove the stuff, but I think we all understand (wink, wink) following the law in San Francisco is, shall we say, “optional”

    • sierra7 says:

      Tony:
      If true, not much difference between them and traders for Goldman Sachs admittedly selling “crap”!
      At least one is doing something usefull!

    • Willy Winky says:

      Reference please.

  7. Petunia says:

    I remember when a liberal education included math, economics, civics, and tolerance for the belief of others. Now a liberal education includes none of these things in any meaningful way. Look at your liberal bastions of the left and they are all s**tholes. The list is long enough not to be an anomaly.

    Guess what, unlimited immigration is expensive, unlimited education in dozens of foreign languages is expensive, unlimited investment in properties by foreigners is expensive, unlimited pension growth is expensive, not dealing with reality is expensive.

    • RagnarD says:

      Nice

    • polecat says:

      If I may add one to your list, Petunia :

      Unlimited, god-like (un)communicative powers derived from the rise of the ‘Giants’ of digitech .. and to some extent their spinoffs, in addition to their subservience to the craycray ‘security/media state’, have made rational discourse and policy in this world impossible! .. and will this cost society gravely as long as they are not reigned in !! The same goes for Big Finance and Big Medical. These ‘entities’ are the making of sh!tholes everywhere.

      • polecat says:

        Unfortunately though, we have a Congress that works for them, and them only! It’s fitting the the acidhigh-House members wore cloths derived from Ghiana, a country that sold their neighbors into slavery to the europeans, way back when. They Are, in many respects, The 21st Century Plantation.

    • Paul says:

      Please excuse me for asking, but how old are you?

      I am 65 and do not remember a liberal arts education including such things in my time.

      Maybe it did and I didn’t see it, as I was at MIT, not exactly a liberal bastion.

      • Mike G says:

        It’s the Fox News fantasy version of liberal arts education by people whose hatred of the concept is rivaled only by their ignorance of the actual coursework.

      • ImplicitI says:

        The metaphor used of “tolerance for others” would include the humanities, philosophy, psychology , art and music.

    • Lisa_Hooker says:

      Petunia – and don’t forget Art. I was an engineering major and was forced to take two semesters of Art History. Thought it was a PIA at the time. After around 15 years I began to realize how important it was and it only becomes more appreciated with time.

  8. Dos Tacos Mas says:

    See if you can spot the problem … from a very recent Forbes article:

    Corruption In San Francisco

    San Francisco’s self-titled “Mr. Clean,” Mohammed Nuru, Public Works Director, is best known for failed efforts to keep feces and hypodermic needles out of the public way. Cases of human waste on city streets spiked to 31,000 in 2019 – an all-time high.

    Nuru earned a $269,500 annual salary in 2018 (up $55,000 over a seven-year period). Allegedly, that wasn’t enough. In February, Nuru was arrested for charges that included bribery.

    Only in San Francisco can team members on the “poop patrol” cost taxpayers up to $184,000 each.

    • “Hey dude, if I give you a fiver will you just look the other way for a minute? It’s an emergency.”

    • AlamedaRenter says:

      Most Facebook managers make 350k and manage about 10-25 people. I know one at that level.

      Many managers at the city of SF manage 100s or 1000s of employees and make between 200-300k.

      Seems reasonable to me.

      • Cas127 says:

        Ala,

        Judging results by inputs (“number employees managed”) rather than outputs (agency goals fulfilled) is how governments end up murdering their economies.

        There is nothing “reasonable” about it…it is *all* political.

        All those “employees” are bought votes for the political status quo…their primary function is to support increased gvt spending, not increased gvt effectiveness/efficiency.

        That is why FB managers oversee 10.

        And why SF city managers “oversee” 1000.

        Randomly check the 10 largest employers in any metro in the US.

        7 or 8 of them will be government entities or quasi private entities enormously subsidized by gvt (hospitals).

        That is political power in the raw.

        • polecat says:

          Facebook ain’t exactly a shining example of virtue, you know. And talk about political. They, Google, etc. ARE the neo-status quo, and have been put near the last 20 year! They are the bigger fist of propaganda ‘media’. The Cable/TV broadcasts are the evermore diminished and atrophied one. All are a curse where the plebs are concerned.
          And yes, many public admins. have their owner questionable ‘issues’ ..
          And we get to be on this ride, locked in without little recourse but to watch it all play out!

      • Happy1 says:

        Facebook produces a product people actually use and it’s workers have skills that actually could be used in other jobs. City level managers in SF are an order of magnitude in skill and competence lower than tech workers with the same salary.

  9. Jdog says:

    Cities are an unnatural environment that force people to give up a large part of their personal sovereignty and to accept tribal rule. It is a dehumanizing environment which separates people from nature and from their relationship with it.

    • Javert Chip says:

      Well the good news is most places in the US (…not all…) have actually replaced “tribal rule” with state & federal constitutions and statutes.

      However, still pretty much means you can’t eat your neighbor’s dog (again, there are geographic exceptions).

    • Dan Romig says:

      Jdog,

      I agree with you that for those that live in a high-rise type condo or apartment complex. It does not seem natural to me.

      My good friend who lives a few blocks away from me in south Minneapolis joined me for a 40 km bicycle ride up and back along the river today – COVID-19 precautions taken to a degree as we rode.

      We both have nice small homes on slightly over 6,000 sq ft lots. In a few minutes, I’ll head over to his back yard with a few items from my garden, sit around with friends and grill up a nice dinner.

      My new neighbor who bought the home to the south had the day off today. He was outside reading a book with his dog at his feet. “After the divorce, I lived in an apartment. Getting a house so I could have a dog was what I wanted the most.” he said as we greeted each other and Poncho wagged his tail to get a scratch from me.

      Long winded, but that’s why many of choose to live in the city. We have personal sovereignty and enough privacy to stay sane, but as neighbors where I live, we have each others’ backs too.

      Thank you Brendan for that compelling read!

  10. Seneca's cliff says:

    Whats ironic is that if you look at Zillow listings in the hip parts of San Fran, or Portland, or Seattle they always list the reason to buy an overpriced property is proximity to cool restaurants, bars, night clubs and shops. In Portland many of these adds list establishments that have already given notice that they are closing for good. But the RE pumpers can’t seem to let go of trying to pump this “cool neighborhood” canard , long past its sell date.

    • Anthony A. says:

      Well, the RE folks have to tell them SOMETHING!

    • Blue Star Donuts saw the writing on the wall. Bailing on downtown PDX. On the bright side, downtown was way more fun when it was dirty, sketchy and cheap. Gastronomy is the only thing that’s gotten better. Let it burn.

    • Happy1 says:

      Walkable urban neighborhoods with good food or the height of civilization and the best thing about SF and similar places in the US and Europe and Asia.

  11. MiTurn says:

    Well written and very insightful. Thanks!

    Sounds like other “left coast” cities (Seattle?).

    Just hope the exodus does not terminate near me — NIMBY.

    • Anthony A. says:

      Agreed, us too. Our streets are clean and we want them to stay that way.

    • Paulo says:

      Hah hah good NIMBY comment.

      Article reinforced how smart my Dad was to sell out his home and business in Walnut Creek back in ’68. We moved to my mom’s country, Canada, and haven’t looked back. I used to remember wistfully the rolling brown hills dotted with oak in 110 degree sunshine, ranches we would sneak on to and ride the horses bareback all the while ready to flee the shotgun toting rancher, catching blue belly lizards and snakes etc etc etc. I looked up my old home address on G Earth and saw all the orchards, fields, ranches, and creeks now covered with golf courses and sub divisions. I’ve never been back and can truthfully say will never visit, ever. In the fifties my parents thought it was the promised land compared to Minnesota. In just 15 years it turned into a violent treadmill. Remember Patty Hearst, aka Tanya? Haight Ashbury? Same story, different time. Money for a few, lots of deadbeats, drugs, and scams. Same old.

      • AlamedaRenter says:

        Sounds like he wasn’t smart at all and left millions or even 10s millions on the table.

        • Larry Finch says:

          Alameda

          We left the place in 95 and moved to Utah and haven’t looked back…what we left in potential equity we gained in quality of life and immense tax savings.

          We go back to visit a couple of times a year and it always helps us reinforce our decision. Nice place, but I wouldn’t want to liver there. Oh and we did ok on the equity front also.

        • Paulo says:

          Alameda.

          I didn’t mention the waterfront we bought on Vancouver Island, which ended up financing Dad’s retirement by age 60. Or, my waterfront which I have been living on for the last 16 years… and retired doing so at 57. Or my carpenter brother’s 5 acres of waterfront on Quadra Island.

          Do you actually think that would have been possible for CA working class folks? I didn’t think so. We would have been lucky to buy a tract home up in Vallejo by the refineries.

      • Anon1970 says:

        Perhaps your parents were concerned about you being drafted when you turned 18 and being sent off to Vietnam. Most draft resisters arrived in Canada by themselves but in some cases, the whole family moved north (e.g. architechtural critic Jane Jacobs).

  12. jake_t says:

    Without prop 13 everyone but the rich would have to sell and move away at a much higher rate and what would those extra tax revenues be spent on? Government expenses do not increase because property values go up.

    • Jeff Jones says:

      Hahaha

    • Zantetsu says:

      Absolutely false. Prop 13 is one of the factors that increases housing prices by artificially increasing ‘stickiness’ of housing, people are reluctant to sell because they will lose tax benefits when they do, which means the supply is artificially dampened, which means that prices are artificially increased.

      Without prop 13 houses would cost less overall and the tax consequences would not be as significant as they are now for people buying new homes under prop 13.

    • seb says:

      Good point. The only part of the article that I didn’t agree with was his assesment of Prop 13. No one would ever be able to retire in California if your property taxes were changing each year with home values. San Fran also loves it when a property sells – because now they can collect more money on the same property.

      • CZ says:

        Supply and demand. If no one would be able to live in California, they would leave, and housing prices would fall to zero.

        At some point an equilibrium is reached between housing costs and disposable incomes.

  13. Lucais Sewell says:

    Loved the Joan Didion verve! Great piece!

  14. Anthony says:

    People always say how low the tax is in the USA because you don’t have free medicine but there is one tax you pay, that is so, so, so much bigger than here in sunny England, property tax…… I can’t believe how much you pay. I live in Manchester and the highest property tax for the dearest house is £3449. ( The property could be worth £5 million but you still pay £3449 a year)

    My own property tax on my small £150,000 house is £1149 a year (as I live alone its reduced to £850) I know you pay less tax than us but wow, your property tax is insane.

    • Anthony says:

      Oh in Tory controlled super rich areas in London, the amount payable can be much lower……Kensington top rate is £2,473.66 …lol

      • Tim says:

        Bah, humbug, all tax is theft…

      • Jeremy says:

        And that is why foreigners bought flats in those towers lining the river Thames. At night they are dark. Uninhabited. But they were a great place for the Chinese to park money outside their homeland – low taxes. They were sold offplan, sight unseen. Not so much these days!

      • Phil M says:

        Anthony, My company has an office in Manchester. Consider myself fortunate to visit twice a year. Really like it. Am struck by the # of street people i see. I’m told the City has beds for everyone but evidently many folks don’t want to go to these ” shelters”. Curious if that is really the case.

    • Zantetsu says:

      The value of what we get from our taxes are very low in the USA, much lower than elsewhere. We built lots of bombs that do no good for anyway rather than providing health care for all. I lived in NZ and the overall tax rate was I think pretty comparable to the USA, but the return on taxes paid in NZ was much higher, probably because I put no personal value in bombs and F-18 fighter jets sitting on an air force base somewhere. Not to mention the huge government bureaucracy we have to support here in Amerika.

      • BuySome says:

        Yup..when you have a nuclear arsenal there’s no need for a standing military waiting to leave your borders unless you are projecting the demands (aka dam ands) of true empire building. So, welcome to Imperial Rome 2020. It only goes downhill from there unless you can convince the emperor to relinquish power and re-establish the republic belonging to the whole citizenry. Got togas?

      • Happy1 says:

        Not a fan of our enormous military, but the facts are that social spending and other entitlements are the majority of federal spending.

        • timbers says:

          And, that the largest are self funded – like SS and Medicare.

          Military? Nope. 100% deficit contributor.

          Additionally, Social programs add value, military spending destroys things – like lives, bridges, hospitals.

          Spending 1 billion on medical care is not the same thing as spending 1 billion on blowing up bridges, roads, water treatment plants, apartments, hospitals, schools.

        • VintageVNvet says:

          Correct Timbers,,, and to be sure,,, SS has been ”raided” and our contributions stolen by the same MFrs that are now stealing our wages and personal savings…
          Wasn’t even going to take my SS until a friend in the insurance biz pointed out that if I had invested my 60+ years of contributions with him, I would have approx double the monthly income…

          When Oh Lord When will this stop???

        • Wolf Richter says:

          VintageVNvet,

          “SS has been ”raided” and our contributions stolen by…”

          No. The SS funds are invested in Treasury Securities, $2.8 trillion as of May.
          https://www.ssa.gov/cgi-bin/investseries.cgi

          Just like the Treasury securities I hold at TreasuryDirect.gov, but my holdings of Treasuries aren’t at the trillion-dollar level yet 🤣

          Yes, and insurance companies are the WORST when it comes to investments. Maybe your friend is trying to sell you an annuity where he’d make a HUGE Commission.

          The thing about SS is this: it’s a fantastic deal if you pay into for 35 years and then live to 100+ and draw on it for 35+ years. It’s a shitty deal if you die at age 65 and have no survivors. But dying at 65 is a shitty deal all around. If you have survivors (a spouse, kids), they get to draw benefits.

        • Happy1 says:

          @timbers:

          Medicare and Social Security are “self funded” in that they have dedicated taxes to fund them, whereas defense is funded generally, but it doesn’t matter what taxes pay for what, social spending on entitlements is the majority of federal spending, and overall taxes would be vastly lower if they were smaller. So just because there are taxes dedicated to these items doesn’t make them magically better.

          And defense spending largely isn’t spent on destroying things, it’s mostly spent buying overpriced equipment. Like I said, I am not a fan of excessive military spending either, but it is mostly propping up military contractors.

          Lots of Medicare spending is similarly wasteful. How is the country made better by CT scanning a 90 year old who falls in a nursing home like they are a 20 year old in a car accident, for one example. Zero societal benefit, profits to hospital chains.

        • Wolf Richter says:

          SS needs to be removed from the budget and be accounted for as a pension fund. Same with Medicare. “Entitlements” is a politically motivated misnomer for these pension funds and health insurance programs.

    • KGC says:

      California is not the worst for property taxes. Oregon is much worse.

      Prop 13 was intended for homeowners, not commercial property. As such it was an attempt to limit the rapidly increasing property taxes of the 1970’s, and was passed because the State gov’t would not self vote a limit on what they could raise taxes by nor would they enact a law to require such raises to be matter of public vote. This was at a time when properties were undergoing a major increase due to the job market growth and the State was raising taxes 10%+ annually with “assessments” based off such sales. Many long time residents were being forced to sell because their fixed incomes could not keep up with the tax increases.

      What most people forget is that the aftermath of Prop 13 passing was a time of huge increases in levies, fees, and any other way the State and local gov’ts could come up with to keep their income without having to put it to a public vote. CA is very good at “non-tax” gov’t revenue production.

      The State is also really good at NIMBY as a lifestyle. They are all for helping the homeless, low income shelters, etc, but prefer they be places somewhere outside the actual physical boundaries of the State. In fact, this may be the best practical solution long term, taking failed cities and funding them as giant places to “dump” those problems. (Although I expect the residents of such places probably wouldn’t like it much.) CA could easily afford to house 10,000 “homeless” anywhere in (for example) Kansas.

      • Javert Chip says:

        San Francisco reports it spends $40,000/year for each of its 8,011 homeless.

        Of course, that is not saying each homeless gets $40,000…there are LOTS of city bureaucrats, 31,000 to be exact, each averaging $71,000 salary (not including benefits).

        Who knows what benefit the homeless actually get from that $40,000…

        • JBird4049 says:

          The actual number of homeless is probably closer to 15,000 and $3,000 per a month or $36,000 per year could *rent* an efficiency or studio apartment for everyone. The problem is not that solving the problem is hard, if that’s what they want to do, but that’s not the goal. It is to profit from the misery.

          I’m sure that there are difficulties that I am not aware, but please don’t tell me that a city as wealthy as San Francisco with problems of both homelessness and public filth going back thirty or more years could not have dealt with them; some real goals, long term planning, and a solid, undiverted budget could have built both all the apartments and public toilets needed a decade ago at a lesser expense. But the Goddamned NIMBYism and corruption prevented. Heck, since many of the homeless work, they could have made some money eventually for the City.

      • Boomer says:

        $25k/yr Menlo Park bungalow, 4K/yr for the same bungalow in toney Ashland. Your rates are higher but all else being equal you pay much less. Plus you don’t have to give Gavin Newsom one red cent sales tax on your In N Out Cheeseburger or anything else. You also don’t have to give up your first born to buy a firearm or ammo.

  15. MCH says:

    San Francisco, I am still waiting for the Kurt Russell movie… we have had LA and NY, need to add SF.

    The SF one might be easier though, just drove down 101 or 280.

    I think it will be a wake up call if Wells Fargo moves. But then, the activists would just say good riddance. Now, all of Ed Lee’s work has gone down the toilet.

    • Haha! I’ve been fomenting “Escape From Portlandia” for a while now. Of course it would have to be a sequel, since this is where everyone escaping NYC, LA and SF seems to land. I think it’s stabilized our economy somewhat, but oh! the price we pay!

  16. timbers says:

    Brilliant article. And not having been to San Fran in several decades, have no idea if it’s accurate or not but it’s still brilliant.

    But…there’s a, uh…”Pra-Blem” (as in the way Katherine Hepburn said the word in Guess Who’s Coming to Dinner…S-L-O-W-L-Y).

    Did you have to post the article just before the release of Basic Instinct in 4K UHD? It might now ruin my watching the movie!

  17. Gian says:

    And precisely why should the government profit when property values go up, but those who purchased their property years earlier receive no windfall until and unless they sell, at which time the property will be reassessed at the new sold for value? Prop 13 is a godsend to fixed income people and others who surely would be taxed out of their homes without it. Why should the tax man benefit from a paper gain? All tax revenue in CA is being gobbled up by PERS, Calsters, bloated government and massive waste, financed by property owners. My advice to government is practice what you preach to taxpayers, “Do more with less”.

    • Because then owners never sell, and while they pull in 2020’s rent on 1930’s mortgages, the city’s income is also stuck in 1930. Off the top of my head. But maybe we should scream mortgage controls next time our aspiring millennial masters bring up rent controls?

  18. RD Blakeslee says:

    “But no city can afford to give up its supply of 30 year olds.”

    They didn’t. H-1B.

    • MCH says:

      H1-B should really offer a path to citizenship, it offers the country new talent and improves it overall.

      Instead it has been turned into a corporate slave machine where it gets used to import cheap labor to be abused at will then sent packing the second their terms done.

      • timbers says:

        So let’s send the H-1B’s back home where they can improve their OEN country, since USA is already so exceptional and awesomely awesome. We need to share that, right?

        • MCH says:

          what?

          What are you actually trying to say here?

        • timbers says:

          Let the awesome get jobs in their own awesome nations and keep their awesomeness there.

          Let Americans get jobs in America.

        • MCH says:

          @timbers

          And if there is a need for a particular hardware engineer that do not exist in the US, what do you do, just forget about that line of work?

          Seems a little silly.

        • Yossarian says:

          @MCH there are plenty of hardware engineers here. They just won’t work for the salary offered. The H1B is a prime example of corporate greed.

        • Ethan in NoVA says:

          There won’t be any hardware engineers here because no one will enter the field as they don’t wish to compete against H1Bs. You might find that at some companies the people making the hiring choices have a preference to their own people from India as well.

      • H-1B’s for Congress? Just a thought. 😁

        • MCH says:

          we could hardly do worse.

          I have to agree with Monkey Business’s comments. Back in the early 90s, I had an internship at a smaller company, and they were trying to bring someone in on an H-1B, and they had to put up ads around the country, and jump through a bunch of hoops to get a guy who had a specific specialty, he was studying in a US university at the time, and we got him. He was well paid, and was very good for the company.

          That’s how the system is supposed to work, to bring in exceptional talent. Now, it is used as another way to bring in cheap labor, and it’s a system that is much abused. I don’t agree with Trump temporarily closing the program down, what he needed to do was have the system fixed and adjusted for the way it was meant to be. Not to bring in some guy to replace an existing worker.

      • Jon says:

        Someone who came from India on F1 Visa then converted to H1B visa and have seen the use and abuse of H1Bs from inside out can safely say with conviction out of first hand knowledge that although the spirit of H1B visa law is good but in reality it is used by big corporations to replace US Workers with cheap and pliant foreign workers.

        Companies love Indian workers on H1Bs as it may take anywhere between 10-15 years at least for Indians on H1B to get their green card. Thus it is hi tech slavery in one form.

      • cb says:

        MCH says: “H1-B should really offer a path to citizenship, it offers the country new talent and improves it overall.”
        ____________________________________
        sounds like a corporatist talking point.
        from my vantage, it just provides competition to push down the value of labor, whether that labor is physical labor or mental labor, and it provides increased competition to rent or buy housing and other goods and services.

        Big Business loves immigration of any kind – it expands markets and pushes down labor costs.

        • MCH says:

          cb sys: “Big Business loves immigration of any kind – it expands markets and pushes down labor costs.”

          H-1B’s original intent was to bring in talent, there are talented people out in the world, they do NOT all reside in the US. The strength of a country comes from the fact that it is willing to bring in new people whose skills the country lacks. Check the original intent of H-1B as opposed to how it is used. It was not designed as a competitive tool, it has been corrupted into one.

          Look there are people who points to immigrants and say: “they wreck the country.” This is singularly false. Here are just a few people who are immigrants… Einstein, Musk, Strauss (Levi in case you’re confused), Brin. If you want to say their contribution is not worth it, well, you’re entitled to your opinion. But while big business may love immigration, the country as a whole has benefited because of these people, to deny their contribution may as well be a denial of the fact that the sun is the center of this solar system.

        • Happy1 says:

          My comment is not specific to this Visa category, but it is a fact that a large percentage of the companies in silicon valley are headed by immigrants, and the US is a nation of immigrants, talented people should be welcomed here to the benefit of everyone.

        • cb says:

          MCH said: “But while big business may love immigration, the country as a whole has benefited because of these people, to deny their contribution may as well be a denial of the fact that the sun is the center of this solar system.”
          ________________________________________

          If that is the case, just open the borders to unlimited immigaration, and the country should benefit even more.

          (the exception(s) do not make the rule.) but nice try.

          (really, as I read through your back posts, I’m not sure of how differents our positions are. You point out that the H-1B program is abused. My argument is that American Citizens should not be reduced or displaced because of immigrants, H-1B or otherwise, particularly when the transaction takes place primarily to benefit corporate entities.)

        • cb says:

          Happy1 said:
          My comment is not specific to this Visa category, but it is a fact that a large percentage of the companies in silicon valley are headed by immigrants, and the US is a nation of immigrants, talented people should be welcomed here to the benefit of everyone.
          ____________________________________-
          The US, is a nation of Citizens, and should be operated as such. The transactions taken by the US should be beneficial to the country and citizens at large, with no provisions for special interest groups that damages the country and citizens at large.
          Of course, talented people who benefit everyone, are welcome.

        • MCH says:

          @cb

          Finally, you’re getting the point, our positions are not that different. Unlimited immigration doesn’t make sense.

          However, pulling in people with talent when there is a need, and where there is a lack of such talent makes perfect sense. You just have to make sure that you don’t have a system that is abused. This is absolutely the case today.

          Nuanced arguments are what’s needed here against the rampant stupidity that comes from the dumbos and the jackasses. Unlimited immigration is idiotic, as is closing the borders to practically everyone. The original system was a good one, it just needs to be tweaked and put on track for the H-1B.

          There is also the question of unskilled labor. This is a different question, one that needs resolution. There are various ways of making that one work if one is sensible. One that we’ll never get as long as the dumbos and the jackasses keep having the opportunity to use this as a wedge issue to get votes.

      • timbers says:

        MCH, I’ve worked in very large corporations that use H1-B.

        Many – I believe most – of the H1-B’s are put into separate rooms and areas and process rote work formerly done by the “less special” American workers. I have seen these rooms and areas with my own eyes. For example, the and entire floor of Indian H1-B manned State Street’s “Help Desk.” But it had 1 American in the center of the room – the manager, a white male American. I’ve also seen entire room filled with H1-B’s, performing at desks the way non H1-B.

        The H1-B is used to drive down wages rates and increase corporate profits.

        • MCH says:

          Yep, I believe what you’re talking about, because as I’ve said more times than I care to repeat on this thread alone, the entire H-1B process has been corrupted by the Wall Street and Congressional jerkoffs.

          The jobs you described is one that they can easily find Americans for. It is an absolute travesty what the corporations have been allowed to get away with. They take a program meant for drawing talent from across the world to one set up to suppress wages. It is absolutely screwed up.

    • MonkeyBusiness says:

      The President is now thinking of banning new H1Bs from entering the country until the recovery takes shape, which I think is sensible.

      My opinion about H1B, they should have modeled it after Singapore:
      1. There’s a minimum salary requirement. This is usually set at the median level.
      2. Not tied to a particular company. This way even if people initially started with a “low” salary, the market will make sure that pretty soon these people will make the prevailing salary.
      3. People with high salary and/or can show unique skills will be provided with an expedited process to citizenship.

      In other words, do NOT blame the H1Bs, blame the companies instead. What’s the difference between H1Bs and sending work away to China. None. Companies want cheap labor.

      • Javert Chip says:

        Eeeehhhh…Singapore is DEFINITELY NOT the best model for guest workers.

        • MonkeyBusiness says:

          If you are talking about those low paid laborers, they use a different visa, no different from the United States. Seems you just don’t get the distinction.

          H1B is supposed to be highly skilled people.

      • Sea Creature says:

        That won’t work..

        In many (most?) major IT shops in the USA, Indian H1B’s make up the majority of the workforce (it may even be more, in my experience working or consulting in dozens of major companies stateside, Indian H1Bs typically made up north of 90% of the workforce).

        So the ‘prevailing’ rate, just becomes the minimum rate you can pay for an Indian to come and work in America, since their numbers flood out everyone else in the field..

        • MonkeyBusiness says:

          H1B is only given to 60K people a year. And not all of them will get the minimum wage.

          The minimum wage for H1Bs hasn’t budged in the last XXX years. That’s the problem. Move that to 110K (the median according to BLS), and their attractiveness will fade. 60K used to be BIG when H1B was first introduced. It’s just one of those laws that has not kept up with the times.

          CPI alone will ensure the rise of the median.

        • Apple says:

          180,440 new and initial H-1B visas were issued in 2017.

        • MonkeyBusiness says:

          @Apple, you are twisting facts. Every year, there’s only 60K NEW H1Bs issued. The rest are people moving to new companies.

      • cb says:

        MonkeyBusiness said: “In other words, do NOT blame the H1Bs, blame the companies instead. What’s the difference between H1Bs and sending work away to China. None. Companies want cheap labor.”
        __________________________________________________-
        correct. And a country that outsources it’s factory production, and imports competition to drive down labor costs might be doing the multi-national corporatists a favor, but is doing a dis-service to the people of the country at large.

      • Erle says:

        Stop thinking so sensibly. Perhaps we should import some guy or gal that can make an edit feature on this forum so that one can correct obvious misspellings.

    • Dave Chapman says:

      You have people in this country who want to bring back slavery.
      They are going to call it “A Guest Worker Program”.

      • VintageVNvet says:

        ”…bring back slavery.” NAH DC,,,
        it’s never been absent here or anywhere else in the world that I am aware of: it just changes format, slightly or greatly, as well as its name.
        Wage slave does appear a slightly/somewhat more digestible name, and likely the majority of actual working conditions are much better today, but it is still the same master to slave relationship it has always been…
        Someday we will have reached the point where each and every person gets to benefit from the fruits of their labor without paying the masters for the privilege, but there’s still a long way to go.
        While this latest theft by our owners has been sufficiently egregious to bring tons of attention to the process, most of the time the theft is quiet and pervasive and WE the PEEDONs do not even look up, just adjust once again to our diminished worth and well being.

      • cb says:

        the slavery is already here in the form of debt/wage/rent slavery. Cheaper, more compliant slaves are the wish of all good corporatists.

  19. Raymond Rogers says:

    The problem with homelessness is that these cities are building massive infrastructures of homeless services that offer little support to the homeless. Then you have zoning laws that restrict tiny homes.

    Mark Horvath has been doing great work documenting some of these problems. His YouTube channel Invisible People is very enlightening.

    So many of these people would be better off if we built the homeless 15×12 homes to rest their heads. It doesnt have to cost billions. Add a community kitchen and a bathroom and people would have a place to clean up for job interviews. The police, in addition to dealing with crime, are tasked with chasing the homeless from spot to spot. Sometimes these people lose their belonging in the process, along with vital medication.

    Many people who work live in their cars. But some cities say you cant sleep in a car or you get ticketed. So you have women sleeping in sleeping bags outside of their vehicles. The assbackary of the system and laws is mindblowing.

    Of course nothing will improve until we bring back heavy industry and manufacturing, and break up these monopolies.

    • Cas127 says:

      “It doesnt have to cost billions.”

      Costing billions is a feature, not a bug, for the political class that doles out the billions, receiving tens of millions in various forms of kickbacks.

      That is why these problems never get better and gvt budgets never go down.

      • Michael Fiorillo says:

        Well, it may not provide permanent, affordable housing, but it’s a pretty good jobs program for the meritocratic, professional/ managerial class.

        My suggestion? Raise the minimum wage, make it easy to unionize, and burn down the non-profits/NGOs.

        • cb says:

          Landlords always support minimum wage increases as a portion inevitably flow through to rents.

          How about we stop the low interest rate and asset support by eliminating the money creation machine, and let prices and rents fall?

          and quit subsidizing land lords and lenders by allowing interest expense writeoffs, depreciation and other foolishness. While we are at it, quit allowing non-citizens to purchase housing.
          And dont allow hedge funds and corporate entiities to purchase single family housing.

    • Robert says:

      Yes- what ever happened to boarding houses? They used to be common- complete with a full time cook and a communal dining room*
      Sounds like an idea that is waste past due reviving.
      * and one was good enough for Andrew Jackson when he was first elected to Congress. (a man who swore to balance the budget, and kept his promise unlike Trump who hung his portrait in the Oval Office to establish his “populist” street cred and then signed off on one $trillion budget deficit after another.” (and anyone who thinks there will be consequences to being $26 trillion in debt has got another think coming).

      • Stan Sexton says:

        The Fed and Wall Street are just playing the game with bigger numbers. They have learned that as long as the newly invented money goes to the rich, and not to Main Street, there is little consequence (Inflation). After all, the 2008-2012 bailout was 29 Trillion. As long as the money is invested and not spent, it literally disappears from consumption and monetary velocity. So inflation is not the problem. Inequality and concentrated asset ownership is the problem. The historical solution is Bastille Day

        • cb says:

          @ Stan Sexton –

          Not to doubt you, but I would love to see a breakdown of that 29 Trillion. Never heard such a number before.”

          and, Inflation is a problem. Rents, education, healthcare, and asset values hold the inflation.

          Agreed that concentrated wealth (asset ownership) and power is a problem. It is the bane of Capitalism and destroys free markets.

      • Erle says:

        Robert, your suggestion of boarding houses is perfect for a long gone era of civility. Imagine sitting for supper with others of your income. They may have wildly varying interests but can have a civil discussion that benefits most. Blowhards would be ostracized for the common good of conversation.
        Nah, TV must always be on with sports or some other nostrums from the controllers. It would not work any more.

    • Jdog says:

      Homelessness is just the same as anything else, if you subsidize it, you get more of it. The more money you throw at homelessness, the more homeless you get. There is a substantial portion of humanity who would prefer to stay stoned their entire life, and the easier you make it for them to do it, the more will take advantage of the opportunity.
      We have been through this all before, and the answers have already been discovered. All it takes to eliminate homelessness is a little common sense.
      If these people are proven to be unwilling or incapable of supporting themselves, then take them into custody and make them wards of the State. Put them in work camps where they must get up and work everyday in return for their keep and will have no access to drugs or alcohol. I guarantee in 6 mos. the homelessness problem will be solved.

      • Portia says:

        Very good comment, thank you. Any time there is a “War on…” anything, you have to know it has become big business, and will take off.

    • CZ says:

      The problems of most homeless will not solved by having “a shelter.” Next time someone asks you for money, offer them a couple dollars to tell you their story.

      My experiences: many are just plain mentally ill and unable to function. Many are addicted. Many lack the most basic common sense and instincts for survival. Many are just incorrigible screw-ups who have burned every bridge with every friend and relative and wind up on the street. And some, but not many, are are there b/c of circumstance and sheer bad luck.

      • Portia says:

        A shelter is a start, anyway. But it can’t be a place where the mentally ill, addicts, naive, fuckups and victimized can be further parasitised.
        Community used to be able to mitigate the instance and sheer volume of the homeless, by providing some kind of job or relief and at least compassion and an understanding that “there but for the grace of God…” but there is no community anymore, it’s the “professional class” bitching about how they just don’t want to see people like that after having to pay so much and having “worked so hard” to attain a level that should erase these realities from their world.

        • Portia says:

          Oh, and the PE, VC, HF and other RE vultures that create and feed their fantasies, in order to gorge themselves to gluttony.

    • Happy1 says:

      A great many of the homeless people in San Francisco and elsewhere want nothing to do with living indoors, they are mentally ill or addicted and prefer camping in the woods or on the street. I don’t see how that can be solved.

  20. Stephen says:

    Maybe a metaphor for all of America! You know, there are only so many myths that one can tell espouse before you circle back to reality, especially when the money runs out. I am not sure what America will look like in 20 years, but as Dorothy and Toto discovered, we will not be in Kansas anymore.

  21. DawnsEarlyLight says:

    California, the state of eyes wide shut, woke, but unspoken.

    • Zantetsu says:

      The story was about San Francisco. It’s a big state, much bigger than one city. 35 million people live here. What are you accomplishing by generalizing like you are doing?

  22. Leopold says:

    Lived all my life in the city until recently. Agree with most of your article. However, there are an infinitesimal number of homes that pay the 1976 plus inflation tax rate. Almost all homes have been sold since then, have remodeled and been reassessed or were built recently.

    Mayor Moscone, Supervisor Milk and Governor Brown were tax junkies whose entire political life depended on ever increasing taxes. Prior to Proposition 13, the property tax rate throughout California averaged a little less than 3% of market value. Additionally, there were no limits on increases for the tax rate or on individual ad valorem charges. (“Ad valorem” refers to taxes based on the assessed value of property.) Some properties were reassessed 50% to 100% in just one year and their owners’ property tax bills increased accordingly.

    Prop 13 passed by 2/3rds approval, in every county except San Francisco and two others agricultural districts. It’s the will of the people who got it on the ballot through the initiative process, instead of via politicians in the legislature.

    Proposition 13 requires taxes raised by local governments for a designated or special purpose to be approved by two-thirds of the voters. Government often imposes “fees” in-leu of this.

    The crime of Prop 13 is the commercial properties, like oil refineries, highrises office buildings or apartment house blocks, “never change hands”, only the controlling interest in them supposedly does, so they are rarely reassessed.

    30 somethings are about to have children who will attend school.
    The number one county in California for high quality public schools is Marin. The cheapest quasi-urban community we found in Marin is San Rafael. It has a nice downtown and is bikeable, little tolerance for homeless, which have ‘service centers’, a.k.a. magnets, off in an industrial area. We love it and don’t miss living in the city which we can easily visit for whatever reason.

    I believe the city will continue to deteriorate demographically, financially and safety wise. Smart people will go back home or will move out of the city to nearby areas. Eventually it will come back, but we’ve lost all interest in San Francisco, except for the things that will always be there, like views and geography, but those are just not worth living around the civic decay.

    • DawnsEarlyLight says:

      Escape from San Francisco, sounds like a new movie!

    • CZ says:

      Good intelligent post by Leopold.

      I wonder if there are actually any cities that are thriving instead of deteriorating? Inequity and growing underclass seem to be a malign influence on most urban areas.

    • Pedro says:

      That’s what the previous generations said about your generation. It’s a cycle. Stop thinking you’re so special and that somehow you got to experience the best years of SF.

      Some say SF went downhill after the 1906 earthquake. It’s a boom/bust town.

      Youth will always flock there and then flee when they realize life is easier elsewhere.

  23. Jeff Jones says:

    Every blog that mentions SF has at least one comment alluding that the City is built on hills of poop. They are usually light on analysis but easily point to rental prices. Here’s what happened and it’s the white middle class that destroyed America’s most beautiful city, not tweekers.

    1. The homeless were once not homeless people. Many lived in SROs in SOMA. Then the real estate developers got the idea that the area should really belong to people whose pants jingled when they walk. So, the Moscone Center plan was launched with all the hotels and restaurants that were needed to accommodate the conventioneers and their guests. Down went the SROs and up went the tents and cardboard boxes. Feinstein, backed by the special interest developers, let loose a building craze resulting in 30 million square feet of office space. She demolished the International Hotel, a home for elderly Filipino immigrants, at the behest of corporate developers. Thirty-five years later, it still sits vacant.

    2. Proposition 13, the Ed Jarvis death wish, dramatically reduced real estate taxes resulting in cutbacks in education and other essential programs and services. It also required a 2/3 majority in the legislature to raise taxes thereby creating crisis after crisis. We are still living with the end results today, a world where people of color have had sustained population decreases in SF because of housing unaffordability.

    Without fail, the critics of street people are from the very group that created and sustains the crisis because they personally want to benefit too. They have no plan, no insight, and no compassion, but they are the darlings of bloggers.

    • Zantetsu says:

      So how do you explain the homeless problem on every major and semi-major west coast city? You’re saying the Moscone Center caused all of it?

      I think you are in need of a wider perspective. It is a societal problem caused by lack of personal accountability that has allowed the problem to occur.

      • Or maybe… Corporate interests run the show and value near-term profits over social we’ll-being. Marketing (including politics) incentivizes self-gratification over character (see Century of the Self). Corporate interests (immortal) tirelessly work for corporate welfare. The same society that’s becoming increasingly oblivious to personal responsibility becomes increasingly aware of socioeconomic problems. Also, they don’t do economics. Bad ideas abound. My only question is where do GOOD solutions come from? Thomas Sowell says there are no solutions, only trade-offs, but SURELY we can do better than this!

      • Petunia says:

        I heard in LA county there are 4 vacant homes for every homeless person. The video sited an article which claims most of the vacant homes are owned by investors. The investors are pricing out the residents. It is happening up and down the west coast up to and including Canada.

        • Zantetsu says:

          There could be 100 homes sitting there, I would personally not become homeless, live in a tent, sh** on the street, use meth, or accost strangers.

          Even if I lost my home I wouldn’t do any of those things.

          Personal accountability.

        • David Hall says:

          I heard there are 66,000 homeless people in LA County.

      • MCH says:

        You explain it by looking at the governance of those cities, and you can toss in Honolulu with the west coast cities. They mostly or all suffer from the same problem, the consolidation of power under one group, essentially one party rule. Those in power became no longer responsive to the people, and then the people they lord over are taught that they need to depend on the largess of those in charge. It’s an insidious system, where accountability of the leaders has been completely removed. All they care about is their power base. That it happens to be under the jackass party is just happenstance, I’m almost sure that if it were under the party of dumbos, it would have fared just as badly.

        This is a problem with all those areas where one party rule dominates. You can certainly trace parts of the problem back down to the late 80s to mid 90s, where it became a good idea to divide people into camps based on politics. It was idiotic… if you take environmentalism for example, seriously, who doesn’t want clean air and water. But then this whole thing got politicized when one party sucked up and pandered to the cause, and now the environmentalists are pretty much marginalized, no one competes for their votes or attention any more because they belong to and are owned by one camp. The other has no way of securing their votes, so they don’t even try, instead they find groups that oppose those, get their votes instead, and then we have politicization of everything.

        It is everything wrong with our system.

        • Apple says:

          So the problem is Democracy?

        • Portia says:

          Apple, what Democracy?

        • Lisa_Hooker says:

          The system is based on divide and rule. Unification and teamwork are not part of the picture. This is the same system that has been used for millennia.

        • polecat says:

          Let’s call it what it has all really become – a giant finger-pointing ‘Mockrasy’.

          There seems to be little, if any, cohesional societal ‘glue’ remaining. So things go on falling apart, in ways large and small.

          Buckle up!

        • MCH says:

          @ Apple

          What we have is not a Democracy, it is a F***ing joke. Let’s pick SF for example, a snowball has a better chance in hell than a Republican getting any elected position in SF no matter how experience and how good his ideas are.

          The problem fundamentally is the lack of education, and the a**holes who benefits from it. Toss in some feel good words, and a lot of negativity of why opposing the powers in charge makes you a (insert your favorite epithet here), and then we have one party rule than wrecks the joint. In a lot of ways, many local governments has become like the Soviet/CCP counterparts, one party rule with a pretense of democracy. They may as well just install Palpatine and call it a day.

    • Leopold says:

      1. The people that lived in the SROs were evicted from the decaying, seismically unsafe old hotels originally built to house guests to the 1915 Panama Pacific Exposition. That was over 40 years ago, therefore, the youngest homeless caused by this would have been a 20 year old back then. Easy enough at that age to seek greener pastures.
      S.F.’s “homeless” are mostly younger drifters and failures from all over America. Average age 51, therefore, except for a few ancient homeless, they would have been 11 or younger to be kicked out of the senior hotels you mentioned, a demographic and arithmetic impossibility.

      Agree, Feinstein was, and still is, a business-oriented venal opportunist.

      “The International Hotel is not ‘still vacant’,” the site is a ten story low income highrise, reserved for old Filipinos and now houses 4x the number of original inhabitants, who are all dead of old age anyway. Along with that are other high rise housing projects reserved for them, like Clementina Towers,

      Prop 13s “crisis after crisis” for whom? Certainly not middle class black and white homeowners and elderly who could afford to remain in the communities they had built and where their children were raised. Not for renters whose landlords didn’t have to pass onerous property taxes along with higher rents.

      People of color, and lots of whites, mostly left S.F. to move to suburban houses in the Bush low interest real estate speculation years. Low interest rates cause high prices, speculation and flipping that raised rents.

    • Happy1 says:

      Sorry I lived in SF in the 90s, SOMA then was an unsafe dump, I don’t think gentrification there can be construed as a negative.

    • Stan Sexton says:

      White Middle-Class was the problem? They were being wiped out by the Post-Vietnam inflation that caused property values and property taxes to rise. My property taxes are $50 a month (San Diego). My neighbor just bought his house for 635k. So he’s paying probably $600 a month. But they are govt employees and I’m on mostly Social Security. Needless to say, a whole bunch of retired people would be homeless without Prop 13.

      • Apple says:

        Why not just freeze property taxes for those 65+ as they do in many states?

        • Lisa_Hooker says:

          Apple – most if not all states do not freeze property taxes, they freeze property assessments. This allows a retiree to feel that something is being done.

          Meanwhile the taxing authority simply raises the tax rate because the government needs more money. I have had an assessment freeze on a property I occupy for 8 years during which time the taxes I pay have more than doubled with no changes in the property.

        • Portia says:

          Lisa–where I live, the state gives a prebate to the town according to income so a person’s RE taxes never become more than they can afford. There are a preponderance of elders on fixed incomes in my state. And, across the river in New Hampshire there is an elderly property tax exemption over 65 for very low income.

    • cb says:

      Jeff Jones said – ” it’s the white middle class that destroyed America’s most beautiful city, not tweekers.”
      _______________________________________

      and the white middle class caused this How ???

      • Leopold says:

        Perhaps by leaving in disgust and for the self preservation of their family, the safety of their children and the ability to live in a place that’s not a gauntlet of feces, beggars and car break ins?

        So Jeff, how is it that Chinese, Hispanic and Black Middle Class people did not destroy the city? Or, are they non-existent, defective and unable to achieve anything, fortunately spoken for by you, or perhaps somehow magical and different?

        The Chinese, illegals, gays, wanna be rockers, revolutionaries, coders and cultural rejects of America, plus the bidness types can have San Francisco.

  24. VeryAmused says:

    My parents have owned a home for 40 years in southern California.

    Their property tax rate is .43%.

    However, over that time, they have paid a cubic @$$ load in income and consumption taxes.

    You can’t talk about California property tax without talking about the other ridiculous taxes that make up for it.

    So hell yes I will vote against repealing prop 13th. My family has already paid their share for this mistake.

    • Zantetsu says:

      Damn straight. And new families should pay through the nose so that your family can stay in the same place for 40 years. I mean we all owe it to you don’t we?

      We’ve all paid our share dude. Not sure why you think that your family is unique.

      • VeryAmused says:

        You do not owe it to me like I do not owe it to you.

        Explain what share you paid, over decades, in California to deserve a cheaper house?

        • Zantetsu says:

          A ton of income taxes. Also sales taxes, and other taxes. I didn’t get to pay an artificially reduced property tax though because I’ve never owned property in California.

          We all deserve cheaper houses, not houses made artificially more expensive by prop 13.

        • MCH says:

          Zantetsu,

          I like the wording you used… “deserve” It puts perspective around everything.

          You know, there is another world that sounds very close to it. “entitled”

          In this world, no one deserves anything. They have to earn it. Having lived in CA for 20 plus years, a little over half of it renting, I’d like to think we’ve earned what we got. Not “deserved” it.

          Now, if there are certain people who have lived here longer and not gotten there, there are people who have lived here for half that time and have gotten their own place. They did it under the current system, under their own will… or not.

          I’m pretty sure the ones that did it on their own didn’t get there by someone else thinking they deserved it, and gave it to them. This speaks more to the person involved than it does to the system.

          Every system is unfair to someone in some ways. The only question is how they try to overcome the problems, or let the problems define what they are.

        • Lisa_Hooker says:

          @MCH – I’m hearing “deserve” more and more lately. Last time I was personally involved it was a potential girlfriend that stated she deserved a Mercedes and was dropped like a hot potato.

          I figure we all “deserve” air and water and to be not hassled. Everything else requires work.

          Reminds me of a bit of a conversation with my father when I was quite young. I had asked about freedom in America. He said, “Well, you can walk down the street swinging your arms as far as you want. As long as you don’t swing them into someone else.”

      • TrojanMan says:

        You are not entitled to other peoples money. For those of us who have been in California forever, we have been taxed thorough the nose but there. Will always be people like you who believe we should be taxed more to benefit you. I am paying huge property taxes now but I know in 20 years it will be a bargain. Try to have some foresight. If you don’t like prop 13, there are 49 other states to can check out.

        • Also, it seems prop 13 at least theoretically reflects democracy. Don’t like it, fix democracy! After that we all need to learn that our choice is either occasional dissatisfaction or this binary tyranny that’s going SO amazingly well.

        • Zantetsu says:

          Straw man. I never said I was entitled to other people’s money. But I can tell from your starting position that my time is wasted in response to you so …

        • TrojanMan says:

          @Zantetsu, sure you did. Your entire argument assumes property taxes should be higher than they are, i.e. that you are entitled to even more of other people’s money in the most burdensome tax state as it stands even with Prop 13. If you want cheaper homes either convince your state representatives to approve more housing or move to another state. Pulling the rug out on a generation of California property owners is not going to happen, but complain until you are blue in the face.

    • DeerInHeadlights says:

      So they’ve been getting a nearly free ride in property taxes for a long time and you want it to continue for THEM but not for others? The others who moved in more recently pay the exact same taxes your parents do on stuff other than housing. What if they’re coming from other high tax states like NY?

      Sorry but you’ll need to do better than juvenile “finders keepers” logic. One way I see this can be made more fair is to continually lower property taxes for people based on how long they’ve lived and worked in the state. This at least incentivizes people to live and contribute to the growth, well-being and sense of ownership in their state.

      The way it is right now and how you described it, that sounds fundamentally unfair to me. It’s no different to a situation where a new migrant comes to the country and you make him pay a much higher rate of income tax for the same income bracket compared to older residents. This kind of protectionist and insular thinking destroys social mobility, which is one of the bedrocks of a modern, progressive and forward-looking society. For a nation of immigrants, that’s an awfully antithetical outlook.

      • Zantetsu says:

        It’s called “I’ve got mine, Jack” and VeryAmused and TrojanMan are happy to have got theirs, Jack.

      • TrojanMan says:

        Everybody has played by the same rule since 1976. If you reverse it now you are pulling the rug out on everyone who relied on it. You are also free to buy property here and enjoy the same benefit, like many from out of state have already done.

        If we were a low/no income/sales tax state then you might find some sympathy, but since we lead the country in those categories I really don’t care what works for you or not. Your argument is simply a ploy for more affordable housing based on what you and others like you deem to be fair. The people of California, however, have a different view of fairness, which we have embodied in Prop 13. Any attempt to repeal Prop 13 will go down in flames because it benefits all Californians by ensuring they will not be driven out of their homes if their salaries do not keep up with taxes on property inflation (especially since everyone wants to move here).

      • VeryAmused says:

        I was going to formulate a response but TrojanMan has said all that needs saying.

      • Stan Sexton says:

        Remember, newly bought houses are taxed at a 1% rate. If you destroy Prop 13, there will no limit to what a one-party State can tax real estate. We must put a lid on Sacramento or everyone besides Curtis Ishii will have a $418,000 CALPERS Pension.

    • Leopold says:

      Yup, add up forty two years of “low taxes” and consider the higher value of the pre-inflation dollars with which they paid those taxes and you can boast that your family have helped built and maintain the public services and infrastructure that the newcomers who have paid nothing live off of.

      Proposition 13 is hated by the real estate parasites who want to break up stable communities and earn their commissions. It’s loathed by the public employee unions who want property taxes to fund their high salaries and their pensions. It’s an evil thing that prevents much larger sums of money being available for recently arrived immigrants and drifters from other places who want to suck on a new better public benefits teat than where they came from, and who will vote their loyalty to the special interest panderers in Sacramento.

    • CZ says:

      So move to Texas, zero income tax. Tho you’ll be paying 3% on your house, adjusted upward yearly.

      • SimpleLife says:

        I remember the passage of prop 13 as a school aged child in southern CA. Summer school was cancelled the next year, but my homeowner parents were thrilled, especially as their house appreciated in value rapidly over the next few years. I do see the point of prop 13, but considering the budget issues faced by CA, maybe it’s time to tweak it just a bit, imo maybe revised for commercial properties. As an adult living in Texas, we pay about 2.7% property tax for assessed value in a nice neighborhood, which is reasonable considering no state income tax, plus a similar sales tax. Also, property taxes are Somewhat of a choice based on location and value of your home, and our mortgage payments are certainly lower than they would be in CA for a comp home. The money we save in income tax TX v. CA is a huge sum, and has allowed us fully fund two 401k’s, put two sons through college, and enjoy travel, even to CA 1-2 times a year to visit family and friends.

      • Bet says:

        I lived in TX for 20 years. Escaped 11 years ago back to Seattle ( which has now turned into some weird left fantasy zone) That zero income tax is made up for in many ways. My farm was taxed Twice . School tax. Property tax my car was taxed. Registration and I think school tax. My business was visited by the tax assessor counting my furniture , equipment , office supplies. Tax , tax , tax. But big bidness loved it. As long as they rented or leased they didn’t have to Pay. Taxes not paid are made up somewhere else

        • Happy1 says:

          Hate to break it to you, but taxes are obviously built into lease and rent rates, there is no free lunch

      • Ricardo says:

        we did and we do and I love it here everyday

  25. Harvey Mushman says:

    Interesting article. I don’t agree with your views on Prop 13 though. California is already taxed the most of all the states in the U.S.A.
    Abolish Prop 13 and many homeowners throughout the state would not be able to afford their homes. There are many ramifications to consider.

    • willem says:

      The Prop 13 issue is more complex than most commentators want to spare thought for.

      Prop 13 is one of the things that made such expensive property even MORE expensive in the first place. If the mil rate in California was as high as it is in many other states, today’s sky high California real estate prices would never have gotten quite so ridiculous, because (as you say) no one could afford them.

      Also, commonly overlooked, only a relatively small number of properties are actually tied to those late ’70s valuations. Anything sold since 1979 is appraised at its most recent selling price plus 2%/year max. That guy who owns the $4M mansion only gets off with a $2K/yr tax bill if he has owned it for a very, very long time. (Unfortunately, I have lived in CA for a number of years, off and on, and know all about this.)

      • Petunia says:

        I think homeowners should be protected from losing their homes to exorbitant taxes. It tax rates are not capped they will rise to the moon because local govts think a house is an ATM machine for them. At least new buyers can assess the amount of taxation risk they are assuming when they buy.

        • Zantetsu says:

          Tax rates only rise when property values rise. If you have more equity, you can extract some of it to pay taxes if you need to.

        • VeryAmused says:

          So an elderly couple that may have nothing but social security and their house, since California taxed them to death for everything else for decades, should just borrow against their house to pay higher property taxes.

          And hopefully they can’t afford it which will make them sell which will push prices lower so you can finally afford a house?

          Sounds like “Screw them because I need mine, Jack.”

          ffs

        • Zantetsu says:

          I get it VeryAmused. You think you should pay less in taxes than other people because you staked your claim first. You don’t have to use so many words to try to justify yourself, just say “I got mine, Jack”. It’s shorter and easier to type (also easier to read).

        • VeryAmused says:

          We get it Zantetsu. You are underpaid, overworked and bitter that people enjoy a luxury that you cannot afford. Life is hard. I hope your situation improves.

        • No1 says:

          @VeryAmused, I am an Australian with no connection to California. What I find striking is that there’s probably no kind of arbitrary privilege in history which cannot be justified by saying “Life is hard. I hope your situation improves.” You could be a member of the nobility and talk to a commoner thus and you wouldn’t need to change very much at all to justify your privileges over those born in a different caste.

        • VintageVNvet says:

          Petunia,
          You are correct. Having watched many of my parents generation lose their homes when a gazillionaire bought an old house nearby, tore it down and built a mega mansion and sent the appraised value of ALL the local houses to the moon.
          In one case, a friend of mine had to go back to work when he inherited his grandparents home; that event triggered a new tax basis for the home, and the taxes went from $2500 to $15,000 annually.
          But he knew that was going to happen when he held onto that house rather than selling it along with the rest of the estate settlement.
          So, some fairness is clearly needed with Prop 13, especially when I am reading about it now covering so much commercial, values holding through trusts, etc…
          However, it certainly seems to me that the overall value to society of at least somewhat supporting elderly being able to remain in their homes is much greater than forcing them into any kind of what we used to call ”rest homes.”

      • Stan Sexton says:

        What made real estate so expensive in California was supply and demand but even more was the Fed lowering interest rates to too low and for too long. Now everyone wants to buy your house -Flippers, Wall Street (Blackstone), the Top 10% and Mom and Pop investors. Low interest rates create artificial demand and great inequality.

        • Lisa_Hooker says:

          Nothing artificial about it. Money’s cheap, inflation looms, buy something. Your logic says if I inherit a big pile of cash I’m a walking artificial demand.

        • Happy1 says:

          In San Francisco, local zoning also plays a major role, you can’t build skyscrapers all over the city like they did in Manhattan. Also all the adjacent permanent open space contributes.

    • Lisa_Hooker says:

      So raise CA property taxes so retirees move and spend those giant CA pensions in another state? Gain 2% and lose 12%.

  26. Kessler says:

    As I understand Fed has created 2.7 trillion dollars out thin air. So, what prevents it from issuing more of it to cover any kind of budget shortfall for cities & states? I think some states are already getting low-interest fed loans, despite being in terrible financial situation.

    • Stan Sexton says:

      2.7 Trillion. That’s nothing. They created 29 Trillion in the last Recession. As long as it goes to those upstairs, who invest and not spend, you won’t feel it.

      • cb says:

        29 Trillion? Am I the only one who didn’t realize the bailout was that large? I would appreciate a breakdown, if you have it. What are the components of the 29 Trillion bailout?

      • NARmageddon says:

        Stan Sexton. The 29T is plain wrong. Cb, do not listen to him.

        The 29T is the cumulative sum of overnight loans and other short term loans. The loan BALANCES were never 29T at any time, but something much smaller, maybe 3.3T or so.

        What Stan qoted is a misleading measure. It is like saying if you have a $1000 credit card balance, then the back lent you 12months*1k/month = 12k. But we all now you simply borrowed 1k for a year.

        3.3T is already bad enough. Let’s not get people used to seeing eye-glazing numbers like 29T and then think that the current Fed 7T balance is “not so bad”. It is awful.

  27. willem says:

    “Or might there be a bit of “I can’t take any more of the filthy streets and the crazy guys coming up to me, trying to steal my phone?”

    Let’s not forget that soon, if “The Folks” have their way, you won’t be able to call the cops for help with those crazy guys any more….

  28. Cas127 says:

    Judging results by inputs (“number employees managed”) rather than outputs (agency goals fulfilled) is how governments end up murdering their economies.

    There is nothing “reasonable” about it…it is *all* political.

    All those “employees” are bought votes for the political status quo…their primary function is to support increased gvt spending, not increased gvt effectiveness/efficiency.

    That is why FB managers oversee 10.

    And why SF city managers “oversee” 1000.

    Randomly check the 10 largest employers in any metro in the US.

    7 or 8 of them will be government entities or quasi private entities enormously subsidized by gvt (hospitals).

    That is political power in the raw.

    • timbers says:

      If politicians actually bought votes instead of corporations buying politicians, our governance would’ve vastly improved. You keep getting this backwards…just like when you say the PO gets fiat money. It’s supposed to it’s in the constitution. Just like elected officials are supposed to buy votes. It’s part of their job.

      • Cas127 says:

        “If politicians actually bought votes”

        They buy the votes of the “political class” whose income is tax dollars and printed/debased fiat – that is about 20% of the workforce…or about 30 million people (60 million if spouses included).

        It takes about 60 to 70 million to win a Presidential election…scale down proportionately for metros.

        The bureaucrat class (in the form of the immensely politically powerful public sector unions) lobby endlessly for more compensation, work limit rules that inevitably result in more pay/hiring, and in general, less required work/results.

        That 20% of the employed is deriving benefits that 100% of the employed have to pay for…that isn’t democracy in action, it is a political oligarchy in operation…wearing the mask of selfless “public service”.

        That is why the problems gvt is responsible for, never improve but only get worse…”requiring” higher budgets/more taxes.

        • Lisa_Hooker says:

          Cas – we have passed the “tipping point” with well over a majority of citizens dependent upon income from the government. Include not only direct government employees/spouses but defense corporations/contractors.

  29. Larry Finch says:

    “because nobody seems to have made any headway in addressing the issue in the past decade…”

    Try 3 decades….back in the day I used to canvas a sales territory South of Market and there has always been people living on the street. For a while in the early 90’s there was a huge encampment in the park in front of City Hall.

    When we could no longer safely take our kids to the City like my dad used to we knew it was time to leave. Never mind the taxes, car registration fees, housing costs…..I could go on.

  30. c1ue says:

    Re: Proposition 13
    There is a ballot initiative coming up in November which proposes splitting the property tax rolls.
    At present, every – businesses, middle class or wealthy property owners are all covered by Proposition 13 rules. So a $50K property in Tehachapi is covered by the same rules as Apple’s campus in Cupertino.
    The ballot initiatives proposes allowing the state/city/counties to split out corporations and properties over $10M from the general property tax – thus enabling a different rate and/or rules.
    That’s a smart first step in resolving the problem.
    Another important step is ongoing: the destruction of travel demand forcing AirBNB pros to put their properties back on the local rental market.

    • Stan Sexton says:

      You will end up paying so much more for almost everything. To save money, you’ll have to go from Amazon to E-Bay and everything will be bought out of state. The end of Prop 13 on commercial will create even greater inequality. Govt employees and pensioners will get raises for cost of living. They live in socialism. But the rest of us live in Feudalism.

      • c1ue says:

        I disagree with your statement 100%.
        I lived in Texas – home of the 3% property taxes. Texas has enormously more affordable housing – both to purchase and to rent.
        There are exceptions to the property tax rule – which is that the lower the property tax, the less affordable the homes and the higher the rent: New Jersey. But that’s largely because of New Yorkers/Manhattan.
        By and large – there is a direct correlation between high percentage property taxes and lower costs of housing as a percentage of income.
        But thanks for cleaving to the rich/corporate sock puppet role.

  31. Old-School says:

    Met a guy this week that bought his weekend home 1 mile from the beach for $4000 about 9 years ago. Sure it’s a older mobile home and he is still improving it, but he is skilled and is doing a nice job.

    My friend bought a nearly new mobile home 1200 sq ft in same neighborhood but even closer to the beach. With the virus she is going to be working from home for a long time and thought she might as well work where she enjoys. Property taxes $600.

    We are still a young country with a lot of land unless you prefer an urban lifestyle.

    • Stan Sexton says:

      Must be in Norcal. No one in SoCal has a $4000 mobile home that close to the beach, even a fixer.

      • Zantetsu says:

        I think Old-School lives in North Carolina, if I recall correctly. There is no where in California with those prices, even 9 years ago.

  32. Phoenix_Ikki says:

    TROLL ALERT..TROLL ALERT…

    I will play along though, please give us your thoughtful counterpoint as to why Prop 13 is the best thing about California? I am curious

    • TrojanMan says:

      So not only should we pay the highest state and local income and sales tax, but you also want us to pay the highest property tax in the nation? Housing is sacred. Prop 13 had been around for almost 50 years and all of us born and raised in Cali who bought homes here relied on that law when we purchased to feel secure in our homes. Now we should all be taxed more so maybe you and other recent additions to the state can take advantage of the impact on prices? Puuulease….49 other states for you all to check out.

      • DeerInHeadlights says:

        So you see the growth of tech and the influx of tech works bringing NOTHING good to the state? It’s well known that the growth of tech has enriched the local economy greatly. For every high tech job, multiple jobs are created in the local economy, including for those who are not as educated. If Apple employs ‘x’ tech workers in the state, it creates jobs for 4x NON-TECH workers. That doesn’t help those who live here?

        Sure there are problems, big problems. Like rents getting out of hand and property prices as well. Those can be dealt with by building more subsidized housing for example and lowering income taxes for those in the bottom rung of the ladder.

        • TrojanMan says:

          Of course tech is a net positive for California. That doesn’t mean we should change one of the bedrock laws of this state to accommodate a bunch of out of staters who just moved here. They make enough money already, they do not need us to screw a generation of Californians so home prices are more to their liking. We know for sure the extra tax dollars will simply disappear into Sacramento’s black hole.

          I worked in and around tech for 13 years before I could afford a home in the Bay Area. It wasn’t an easy road, trust me. But in the Bay Area you are competing against the best and the brightest form the highest stakes. It’s not for the faint of heart but the opportunities are endless.

        • DeerInHeadlights says:

          They make a higher salary but they’re paying astronomical sums too to just get any piece of property. I still don’t see how this justifies the nearly free ride the supporters of prop 13 advocate.

          So if something is firmly established (bedrock), it shouldn’t be changed however unequal? Fine logic you’ve got going there. I guess we should all go back to owning slaves, asking those we don’t like or “out of staters” to sit in the back of the buses, etc. etc.

        • TrojanMan says:

          @DeerInHeadlights – That is called supply and demand. Like I said, it’s not an easy road but that is the nature of a meritocracy. I stuck with it for a long time, others can do the same or go check out the other 49 states.

          The problem with your argument is that you equate Prop 13 to inequality, when in fact Prop 13 is applied equally to all California residents. It is the rule we all play by, and it is not a “free ride” when we are already paying the highest state and local income and sales tax in the country, and I can assure you we pay plenty of property taxes in the first half of home ownership. California already wastes tons of tax revenue, and you are against Prop 13 because you think it will make a home more affordable, not because the state needs the money.

          I also find it repugnant that you try to equate Prop 13 to slavery and sitting at the back of the bus. Try to have some perspective. Prop 13 prevents the government from jacking up your property taxes and driving you out of your home, regardless of your socioeconomic status. There are plenty of minorities throughout California cities who would lose their homes of many years if Prop 13 were repealed, exacerbating the homeless problem and making housing more exclusively for the rich who can afford increasing property taxes. So in fact, you are the exacerbating inequality.

        • DeerInHeadlights says:

          I am not sure if you’re getting what I’m saying or if you’re deliberately misconstruing what I’m saying. It’s not the application of the law (equal or unequal) that I’m harping against. It’s that the law CREATES inequality. As an out of stater, I’m subsidizing your living in the state by paying a much higher portion of taxes, so you can continue to benefit from the services that we ALL consume in a more or less equal manner. As a landlord, you are benefiting from huge appreciation in your property value and saving a ton paying the negligible property taxes while NOT giving me a huge discount on my rent which you should be if you wanted there to be equality.

          It severely limits access to housing for new comers, plain and simple. Isn’t equal ACCESS a fair thing in society? Especially for something as important as housing?

          Prop 13 has not only prevented legitimate tax increases on residential properties but also on all kinds of non-residential commercial properties, depriving the state of much needed tax revenue.

          And how does wasting tax revenue justify unequal taxation? I fail to see your logic there.

          Now, stay with me here as I put something forward that might blow your mind. Why is housing so sacred that it needs such protection so as to depend on and perpetuate such unequal legislation? Don’t you think food is just as essential as housing, if not more so? Would you be in favor of old Californians paying less for food compared to newer residents? Clothing? Haven’t food prices gone up since 2000 and do you think you should be paying less for it than I do? If that sounds unfair to you….

          I’m not equating slavery with anything. It’s called making an analogy and an analogy is a way of getting a point across. If entrenched beliefs and legislation can never be subjected to introspection and review on a continual basis, then you continue to live in the dark ages.

        • TrojanMan says:

          It’s not that I don’t understand you, I just don’t buy your notion of fair play. Equality in application is all that matters. The progressive income tax system creates inequality by treating high earners differently. So what?

          As far as analogies, it’s just another device you tried to use to push your notion of fair play over the people of California. The fact that you tried it with slavery and Jim Crow is what I find repugnant. Prop 13 is nothing like slavery or Jim Crow and you bringing it up just trivializes the pain of our black brothers and sisters.

          Nothing you stated blows my mind because it’s bunch of false analogies and shows limited experience with tax codes and other government programs. Of course people in vulnerable groups deserve more help, that is why we have food stamps and welfare. Governments supports all different kinds of values through policy, including the notion that people should not be forced out of their homes with higher taxes. I guess you’ll just have to live with it, or not….

        • VeryAmused says:

          DeerInHeadlights

          So you are telling a long time California that has been paying in to California coffers for decades should not get a break on his property tax because some guy who has been here for a few years has made a comparatively mediocre contribution and deserves the same lower price entry point to desirable property?

          And what unequal taxation are you talking about? You get the same benefits or prop 13 as anyone else in the state and all other tax burdens are equivalent. I am sorry you came late to the game and have been priced out.

          There are many metrics in life that makes us unequal. Just because you are on the wrong side of this one inequality does not make the people benefiting from it any less deserving.

        • TrojanMan says:

          @DeerInHeadlights – one more point. How can you bring up Jim Crow and Slavery and then say you are not talking about the unequal application of the laws? Those laws were unequal in their application because they only applied to blacks on their face. That is now unconstitutional under the 5th and 14th amendments. Prop 13 does not have that problem. I find your arguments lacking basic coherence.

        • DeerInHeadlights says:

          Ok, here’s my response and it’ll be my last word on the topic.

          Prop 13 has many pieces to it but I’ve only tried to address the unequal taxation part of it and that’s what I’m going to focus on. I understand that those paying minuscule property taxes due to prop 13 are actually very small in number but that small disparity is exactly what I’m addressing here. Furthermore and to be specific, the way the assessment of the base value of properties is done is what I disagree with, not the cap on annual property tax increases, which is no different than rent control and something that makes perfect sense to me.

          It seems to me that the central argument you’re making is one that boils down to something like “I got it first and I will keep it” or as Zantetsu puts it, “I’ve got mine, Jack.”

          “Equality in application is all that matters”. That statement alone shows where you’re coming from and how wrong the position is. Again, time for an analogy. Why? Because your words are all I’ve got to go by. I can’t read your mind. If I go around punching everyone in the face and spare no one, is that right? I’m doing the same thing to everyone, i.e. applying this action to everyone equally. Does it make it right?

          Equality in application is NOT all that matters. The law being “fair” and “equal” in its essence, in its nature, in its makeup in the first place is what matters MORE. Its equal and fair application only comes AFTER that. That’s the bedrock of justice, fairness and equality. You know that and I know it.

          Yes, I came late to the game and I’m paying for that with higher property prices. I shouldn’t have to pay for it AGAIN by paying significantly higher property taxes because your property’s tax is assessed in a completely different way than mine, while you may be benefiting from the tech boom in the same way that I am, benefiting from tax-funded public services in the same way I am, YET paying a substantially lower prices on your property than me.

          It’s partly because of me coming in and growing the tech sector that you’re benefiting with YOUR high tech job or a job associated with the sector. This has caused property prices to appreciate and allows you to extract rent at TODAY’s prices, taking full advantage of the appreciation, while paying YESTERDAY’s tax rates. On what planet is that fair?

          It’s nothing but subsidizing rent-seeking landlords and perpetuating inequality and continuing to prevent upward mobility for the newcomers and those who didn’t “get there first”. Awfully un-American.

          If you can charge me a rent that’s consistent with the taxes you’re paying on that property, I’m all for this portion of prop 13. Are you willing to do that?

          As for prop 13 being democratic, well that’s just another flawed argument. I agree that the majority wanted it and the intentions may have been reasonable. Even today, a huge percentage support it. However, it has come to create fundamentally inequality overtime as it relates to the disparity in taxation.

          The majority of x supported y and therefore it is right. WRONG. Yes, there IS such a thing as the majority of people continuing to support something unjust and unfair. Majority or might doesn’t make right.

          You said: “The progressive income tax system creates inequality by treating high earners differently.”

          I say, it is only right that high earners pay a higher share. It’s the fair thing to do. Applying the same rate of tax to everyone regardless of their income level is wrong and doesn’t make any sense. How is that hard to understand?

          I certainly don’t want older folks who can’t afford it to be forced out of the state. I’m all for paying them and other low-income people who deserve it a UBI based on their INCOME so that higher taxes don’t force them out of their houses and the state. However, everyone should contribute to this assistance from their taxes based on their own level of income. THAT is fair. What is NOT fair is old timers continuing to pay a relatively tiny amount of taxes when they should be paying much more based on the fair market value of their properties. Properties which have appreciated BECAUSE of the influx of tech workers and largely in part due to it.

          The amount of money the state can raise due to taxation raise does matter. Those paying very little as a result of prop 13 also suffer because of poor public services. Doing away with the unequal tax rate and raising taxes to pay for better public services benefits all of us, especially the lower income households who can’t afford to send kids to private schools which the rich can, old residents or new.

          I don’t care if something’s enshrined in the constitution/legislation or not. I care if something is fundamentally just and fair, or not.

        • Lisa_Hooker says:

          Subsidized housing – great idea, you subsidize it, not me, it’s your idea. Might even work until you run out of other people’s money.

        • Lisa_Hooker says:

          @DeerInHeadlights – within all this discussion one thing is obvious – however you came to California you came with too little money. You feel about buying in CA the way I feel about buying in Switzerland.

        • cb says:

          @ DeerinHeadlights and Zantetsu –

          Don’t screw things up by being logical ………………..

      • c1ue says:

        Meh. Tax rates are not as important as absolute value of tax paid. In this respect, California is plenty expensive even with Proposition 13. The only difference between California and Texas is that the prices of houses are higher – not just in the big cities but everywhere.
        Are you feeling secure in your home when the roads are crap, the streets are filled with poop, and the schools are churning out the marginally educated?
        While the grandma being forced out of their home (with hundreds of thousands of dollars in cash, or millions) is the trope behind Proposition 13 – the reality is that it primarily benefits rich people and corporations.
        Note that rich people and corporations don’t care about roads, education, poop on the streets, etc. Presidio Heights in SF literally bought out their own street from SF and maintain it (and security as well).
        The other issue is that Proposition 13 screws over the younger generations. They can never afford to buy a house in CA – which results in 2 things:
        1) They move away
        2) The existing homes for the middle class grow ever larger. I’ve seen houses in OC/Huntington Beach which have grown to touch all 4 sides of the property line – because 3 or 4 generations are forced to live in the same house, which keeps expanding to compensate.
        But ultimately – Proposition 13 isn’t all or nothing. As I note elsewhere – a split roll would cut out the rich and corporations away from their “regular people” shield.

      • c1ue says:

        Your comments show just how economically naive you are.
        The cost of housing – both rent and purchase – is a function of cash flow.
        The lower the property tax rate, the higher the property prices. The higher the property prices, the higher the rent.
        The massive subsidy enjoyed by 1970s era property owners is paid by everyone else – including their own children.
        Now add in the increasing number of ways by which even individuals can pass the Prop. 13 lockdown to their heirs.
        It is unsustainable and will come down.
        The choice is whether it will be for everyone or just for those most egregiously benefiting: the corporations and the really wealthy.

  33. R2D2 says:

    San Fran has long been a mix of super-rich bumping up against the ultra-poor. I was there in the 1990s and the shiny bridge was always juxtaposed with “beggars” in the parks. Today, SF is no different to any other major Western city.

    Just go to Munich, the golden child of Germany, and you have to step over homeless and druggies to exit the central rail station. Ditto for Paris, where exiting the flagship Eurostar train station is to run a gauntlet of muggers. West London, the wealthiest metro area on Earth by GDP-per-head, has its fair share of homeless people living in tents or cardboard boxes.

    In other words, SF is not alone. Pretty much the whole Western world is like San Fran now.

    • wkevinw says:

      R2D2- Right about these cities now being a type of feudal arrangement: rich folks in rock/concrete/walled residences, and everybody else living in the filth and substance abuse. When I was there in the ’70’s – ’90’s.(and family many decades before that), there was a middle class and some family neighborhoods. I think the Sunset was fairly middle class back then. I haven’t been there in a long time.

      Please note that almost every city in the US has somewhat of this flavor of “feudal” rich and poor- to varying degrees depending on RE costs- even down to the top 50+ cities by size.

      • Happy1 says:

        Sunset is still pretty middle class, if you can call a neighborhood with home prices of 900K middle class…

        • Chazthree says:

          Sunset still retains a “middle class” feel, but you’ll need a time machine back to the early 2000s to find a home there for $900K. There’s literally three listings on Redfin right now for under 900K in the sunset – one is a BMR which practically no one can qualify for, one is an $800K 1br/1ba tucked at the very SW corner of the Sunset, the other two are 1ba/1br in Co-op buildings. None are homes.

          I live in the Sunset in a rent controlled apartment since 2011; before that I was in the Haight for 8 yrs. I’m one of a handful of people I’ve known in my 18 years of living in SF that hasn’t left. I’ve been lucky to go from one rent-controlled apartment to another, but I’ve never had the insanely cheap rents you hear about. Planning to buy in E Bay or N Bay when it makes the most sense to do so – but I’ll be damned if I haven’t been saying that since I first tried to get in the market after the 2008 financial crisis. I was in striking distance of the lower end condo market in Oakland, but consistently got boxed out by investors or just folks who had a larger down payment than me. The inventory in the below $600K range for the E Bay and N Bay looks like it oughta cost $150K. Very depressing.

          BTW, I think the mass exodus of tech from SF is likely overblown. Plenty of folks waking up to the lack of value, esp in a pandemic, but I don’t see prices dropping at all. Yes, rents supposedly have come down by 9% (I can’t believe how many people were quoting that figure .5 seconds after it was published), but a 9% discount on a $3500/month one bedroom in filthy SOMA is nothing to get excited about.

    • Paulo says:

      R2D2,

      Good comment. And, it isn’t just cities. Out in rural land many folks live in RVs and/or rent shacks. If you fall off the career track these days, I have absolutely no clue how one can get back on?

      It is much much harder these days for anyone to get a start in life. It takes connections, big student loans, or a family working together.

      Then along came Covid 19 so who knows how anything will shake out? As such, while this article is very very interesting, it might be meaningless as this continues to unfold.

  34. Short_Seller_Blake says:

    How do you put a short on a city? I would LOVE to short a city like SF because I’ve been there enough times to see the direction it’s headed. Don’t get me wrong now, the prestigious Tenderloin District is still one of the nicest places on earth, but everything else in SF is a STRONG SHORT. That city is has been Detroited and Baltimored. Nothing but a total filthy disgusting place that’s intolerable more than 2 days. S shame because it has one of the most beautiful natural landscapes in the world.
    Sanctuary cities…….. come and ruin my city please!!!!

    • Anon1970 says:

      San Francisco has not reached the depths of Detroit and Baltimore, both of which are on Wikipedia’s top 50 list of murder capitals of the world. If conditions in the area get really bad, companies will pull up stakes and move elsewhere. While Prop. 13 made staying in one’s house more affordable, changes in US capital gains taxes made selling and moving on a lot more expensive over time. Starting around 1997, senior homeowners could no longer escape capital gains taxes by moving into another house more suitable to their needs. For single seniors, the capital gains exemption is only $250,000, which is not a lot unless you are planning to move to Detroit or Baltimore.

      • RoseN says:

        I’m glad you made the point about the large capital gains tax owed when selling and repurchasing a different home.

        Another commentator pointed out that a change in one’s tax basis keeps people in homes that have become unsuitable for them. This problem can be somewhat avoided by the use of Prop 60 or Prop 90. (The retention of the low property tax basis can be maintained for those 55 who abide by the program’s rules.)

        But even with Prop 60 & 90, the seller still can face a large capital gains tax, especially if prices have increased a lot. I’m not feeling sorry for these folks, but there’s no question that it results in some people not selling where there would otherwise. So Grandma stays in her multi-bedroom house, and her descendents wait till she passes on so they can avoid the capital gains taxes entirely.

        • Anon1970 says:

          And they inherit her tax basis, although I think there is an upper limit (perhaps $1 million of basis).

      • Justme says:

        Oh, the poor darlings!! ONLY 250k tax avoidance per person. That must be such an IMPOSITION on their unearned wealth.

  35. breamrod says:

    San Fransisco coming to a city near you!

  36. Otto Maddox says:

    Gee, near as I can tell no one has mentioned the next massive earthquake. These things have a way of piling on.

  37. Endeavor says:

    Imagine Detroit’s plight. So called rebirth based on entertainment with casinos, major league sports teams and bars/restaurants. Same old same old decline everywhere else.
    Covid may sink it for sure.

    • Anon1970 says:

      The 1967 riots sunk Detroit and it has never really recovered since then in spite of a few showplace redevelopment projects. Since 1960, it has lost of 1 million residents.

      • The Rage says:

        Detroit was already going down before those riots. It peaked ironically in 1957’s pandemic fueled recession. The next wave of plants were already committed to the debt financed suburbs by 1959.

        Be honest now. Wall Street debt expansion is what caused much of the problem and has pampered a minority of whites.

        • Stan Sexton says:

          Debt expansion and debt buy back, all fueled by artificially low interest rates that did not benefit average Americans.

      • Anthony A. says:

        I worked in a manufacturing plant 5 miles from downtown Detroit as Production Superintendent between 1975 and 1979. This was just a few years after the riots. I lived in Lavonia, 25 miles north.

        My production workforce was 85% black and all mostly older workers who worked there for 30 years (solid citizens too). We had barbwire fences around the plant property but that didn’t stop the theft and vandalism. A 24 hour guard service was not effective. I left for bigger and better things in 1980 and today the old plant (and the immediate neighborhood) is a series of vacant parcels.

        We had homeless, drunks, drugs, murderers, hookers, etc all around the plant area. Cadillac had their sedan assembly plant next to us and Chrysler made US military vehicles nearby. Everything is gone now.

        Yeah, Detroit is coming back…..but to what?

        • RD Blakeslee says:

          I worked at the Cadillac plant on Clark Avenue from about 1951 , part time through 1957, when I graduated from college and left Detroit forever.

        • Zantetsu says:

          RD Blakeslee, you have the unique perspective of having worked in Detroit during what people would call its golden times. Please tell us what it was like then — were there still crime problems even then?

  38. timbers says:

    So now that the Fed is officially on record as not caring about creating asset bubbles…and all us here agree it has inflated cost of housing with it’s asset bubbles…it’s it not only fair to demand of Powell & Congress that they do a let’s say a $600 billion program to give free homes to those they have been priced out of the market by the Fed’s self admitted asset bubble blowing? I’m talking homes without poop on the sidewalk btw.

  39. Seneca's cliff says:

    The property tax situation in California could be fixed by enacting a Georgian Style Tax on the Gain in Property Value ( look up Henry George). With 100% tax on the gain in property value when it is sold prices will be dropped back to affordable levels. And the biggest benefit is that people won’t be able to sell their home in California and use the gains to bid up property in Oregon.

  40. The Rage says:

    Fine by me, those morons drove Bay area prices up the ying yang. That said, all cities are built by debt and always have been. Once the US become a financial power globally, is why debt expansion has run wild. Can’t pop it without massive damage to white middle class income and frankly, that is why blacks used to be so anti-capitalist. They knew it as well. Lately, they are just sell outs looking to get more hands into the pie(and it has been increasing if they don’t want to admit it or not).

  41. historicus says:

    An absolutely beautiful….. city too bad

    • Wolf Richter says:

      SF needs a good cleansing over the next few years, and it might just get that.

      • MCH says:

        At the end of the day, I think the problem is just one party rule. SF has had it for the city for about as long as Hawaii had it for the state. You can just see the wonders it has done for Hawaii.

        If SF is the leading indicator for CA, and CA is the leading indicator for the country, then I’m not sure if that leading indicator is actually a good thing. The Joker said, he wasn’t a monster, he was ahead of the curve… would we really want to be ahead of this particular curve?

        I am curious to see if there is data indicating the wealth disparities in each state, I wouldn’t be surprised if those occurred on the coasts, but it also wouldn’t surprise me if it happened in Nebraska or the middle of the country. I suppose to be fair, one could look at two data sets. One unadjusted, and another adjusted by knocking off the top 50 (or pick a number) highest income earner.

  42. Shawn says:

    A lot of people in San Francisco, the Peninsula and Silicon Valley have payed 1 to 2 million dollars for their 1 or 2 bedroom/bath shacks. If people can work for these tech companies from anywhere in the world, how will that affect home valuations as people leave. Also, the incentive for tech companies to hire from outside will be that much more, because they are cheap.

    • MiTurn says:

      You nailed an important point. Will folks ever get the $$$ back on these ‘investments?’ Who will they sell too? Take a hit?

      • Cas127 says:

        Eventually ZIRP fueled, debt Ponzi schemes run out of subsequent suckers.

      • Jon says:

        I work in Hi Tech and I do get lot of offer from SFO/BA. I have been there many times for business and personally I feel SFO/BA is like sh*t hole.
        There are many other beautiful places in USA and for a upper middle class SFO/BA is a complete no no.

        I may sound ignorant but I pity the middle class living in SFO/BA paying through their nose. I have lot of friends living their working for big tech companies and I don’t see them happy at all.

    • Wolf Richter says:

      Yes. And keep in mind, California is one of the 12 “non-recourse” states, meaning residential purchase mortgages are non-recourse. The lender cannot pursue the borrower other than foreclose on the home. So if home prices fall and people want to leave, and they have trouble selling their house for enough to pay off the mortgage, they can just mail in the keys and leave, without legal or financial consequences for them.

      • cas127 says:

        Yep,

        Ponzi-Weimar America is a two-sided scam…luring in sucker buyers to vastly overpay at “low affordable monthly payments” then almost immediately selling off that doomed income stream of loan payments to otherwise ZIRP’d/NIRP’d investor savers.

        The only people who come out ahead are the intermediaries (think bookies) and ancillary fee takers (think protection selling mobsters, or, the G).

        They get their money upfront, in cash, mandatorily.

        All the other players get “promises” and a handful of magic beans.

      • Stan Sexton says:

        But once you refi, it’s recourse but most lenders won’t follow through.

    • DawnsEarlyLight says:

      Virtual Outsourcing.

  43. Ross says:

    Something none of the Prop 13 haters have been able to answer for me: why should *my* property tax be based on *your* willingness to pay 10x for the same property as mine? If you won the stock option lottery and can afford $1M purchase, then you can afford the property tax that goes with it.

    Also, get over the notion that Prop 13 “slashed budgets.” Yes, there was a single reduction at passage back in 1979 (which BTW was 41 YEARS AGO), but since then, property tax revenues have gone nowhere but up.

    • Anon1970 says:

      It took effect for the 1978-79 property tax year and yes its constitutionality was challenged, by a woman by the name of Stephanie Nordlinger. It was called the “Welcome Stranger” case because the California Supreme Court ruled in favor of Prop. 13 and allowed the state to effectively impose higher taxes on newcomers.

      In 1974, St. Ronnie (Ronald Reagan) signed into law an income tax increase that doubled the maximum state income tax bracket to 11%. A disproportionate share of the burden fell on single tax payers because of the way the tax brackets are constructed. When Prop. 13 went into effect in the State was sitting on sizeable surpluses and was able to pick up a lot of the cost of public school education.

      I have given up on complaining about the fairness or unfairness of various taxes. My feeling is that you win some and you lose some.

      Wolf, just curious. Are you are property owner or a renter?

    • Zantetsu says:

      OK then Ross, why should *my* newly bought property be based on *my* willingness to pay 10x what you paid for it?

      There is no objective reason why any tax rate should be set the way it is. There is only fairness and unfairness. The same property taxed completely differently depending upon who owns it is unfair, plain and simple.

    • taxpayer says:

      Ross, when you sell, why should *you* benefit from *my* willingness to pay a high price for the property? What did you do to deserve that?

  44. Crush the Peasants! says:

    When I lived in the Inner Sunset, I always had the sneaking suspicion that the city was conspiring to separate me from any chance of developing savings. And so with competing job offers in hand, I took the one that got me out of the Bay Area and into a more affordable part of the country. And it was just as well, as PJ’s Oyster Bed had closed.

    Incredible scenery, colorful history, great food, but no place to live if you were trying to build wealth.

    Better to visit as a tourist.

    • VintageVNvet says:

      Not so fast Crush,
      Knowing quite a few young folks (early 40s) who have worked hard and are very prosperous as a result in several locations in CA.
      Key words here are ”worked hard,” at least as hard as I did in the 1970 era, or almost LOL,,,
      As is mentioned earlier in this thread, it seems to be a matter of individual choices for all generations: some seem intent on spending every cent of income on ”wants” as I did for a short while; OTOH, some are very clear about spending only on ”needs” until they have real extra savings and so forth.

      • Happy1 says:

        California was the best place in the world for educated upper middle-class people in the ’70s and ’80s. It still is for a certain class of person with programming ability and an entrepreneurial streak. For upper middle class wage earners in any other industry it is a terrible place to live and has been for some time. The cost of living is such that saving for retirement is difficult.

  45. ALWAYS TANKIE says:

    Your take on rent control is bad

  46. CZ says:

    Kind of a shrill piece written by someone who’s spent all of 5 years in SF, and seems to have lived the entire time in the Tenderloin.

    The idea of an exodus enabled by remote work applies to all cities. Hopefully that will happen — SF is overly congested, with random people renting sleeping space in every spare closet, hallway and garage.

    But young people like cities for the bars, social scene, sex, entertainment. I’ve never met anyone under 30 who cared about “filthy streets” — that’s part of the gritty urban allure.

    My feeling is the larger risk comes from COVID wiping out restaurants, bars, gyms, and the attendant jobs, and sending all those workers packing. Again, we could do with some thinning.

  47. ultra says:

    The change in San Francisco’s population:

    2020 3,314,000 -0.12%
    2019 3,318,000 -0.21%
    2018 3,325,000 0.15%

    This doesn’t look like anything to panic about. Many major cities have gentrified, which reduces population density, and their boundaries can’t expand because they are surrounded by bodies of water and/or suburbs.

  48. WES says:

    Cities in Canada and the US have been given a once in a generation opportunity by Covid-19, to do more with less.

    So far none are taking the opportunity to tighten their belts.

    They still want more!

    • Paulo says:

      Wes,

      It’s only been a few months since the virus hit. As you know, it is illegal for cities, municipalities, and school districts to run deficits in Canada. We just paid our property taxes for this coming year as well as Provincial and Federal income tax this past April. :-)

      From Governing.com

      In the U.S., tax competition rules. Neither the federal government nor states share tax bases with localities. In Canada, although provinces have freedom to choose their own tax bases and rates, in practice most provincial income taxes are collected by the federal government under tax collection agreements — with the condition that the same base is taxed as for the federal income tax. Moreover, the Canadian federal government collects corporation income taxes and personal income taxes for several provinces under such arrangements. Thus, instead of tax competition, the Canadian federal and provincial governments essentially tax the same bases. The federal government collects more from its taxes than its direct spending, so that, for many years, it has transferred much of the surplus through two large unconditional transfer programs to the provinces — even as direct income maintenance programs for the elderly, children and the unemployed are largely federal.

      Unlike the more difficult relationships between the three layers of government in this country, Germany and Canada appear to be models of shared dependency and fiscal responsibility. It’s hard to see how a Detroit could happen there.

  49. CZ says:

    People have been criticizing CA for decades: “too expensive, outrageous taxes, socialist/communist, anti-business…”

    It’s so awful it’s grown to the 5th largest economy in the world.

    But any day now everybody’s going to abandon this dump and move to a real paradise like Oklahoma or Mississippi.

    • 91B20 1stCav (AUS) says:

      CZ-gave me a smile, thanks. Again, reminds me of Mr.Berra’s gem: “…nobody goes there anymore, it’s too crowded…”.

      Wherever you may be, look more locally in rock-throwing, and, find a better day.

    • Yerfej says:

      Funny you say that as I have been to the SF area many times on business and my feeling is I would never want to live there. It has it’s plus’s but it is not even close to being one of the best areas to live in the US. People will put up with a lot to further a career and that is what has driven the area economically but I am pretty sure the WFH is going to stay after the Covid which means in reality WFA (Work From Anywhere).

    • VintageVNvet says:

      I sure hope you’re right CZ:
      Not to knock either MS or OK after driving through both 3 or 5 times in the last 5 years and being treated very friendly by folks of all ages, colours, etc., both guv mint and otherwise.
      However, as an ”elder” taking care of even more elderly in laws — in the same house they moved into when they married 70 years ago BTW — in FL, I can hardly wait to return to my beloved CA coast in SF bay area or somewhat north of there,,, and have a lot of hopium that i will be able to do so, someday.
      And, if everyone else moves to the greener pastures of those and so many other states, maybe I will be able to buy another home in CA!
      Not likely, but, ya never know, eh?

    • Happy1 says:

      The tax and governmental problems are of relatively recent vintage. As recently as the ’90s, the state had relatively balanced governance between the two parties and taxes were high but not ridiculous. CA has been a one party state for some time now and it has not been beneficial to governance.

      And who cares if it’s the fifth largest economy in the world? Like that matters to the average person who lives there. The shareholders of companies based in CA, most of whom don’t live there, give you their thanks. Isn’t China now the 2nd largest? Should we all be envious of the people who live there? What matters for most people is if a place is livable for a family with 1.5 kids and a dog. How is the commute? The public schools? Most of coastal CA hasn’t been livable for a person with median income for 30+ years. But it’s a great place for someone making 700K a year, or a tech entrepreneur. For everyone else, not so much.

      And there are other places that aren’t OK or MS that people can choose, WA and OR, UT, CO, other parts of the west, FL if you don’t like cold. CA is wonderful, I lived there for many years, and loved it, love it still, but it is not a place for the middle class.

  50. tex says:

    And then they leave San Fran and come to your town to ruin.
    People get this and don’t want it.

  51. kitten lopez says:

    i rode my bicycle, to trader joe’s first thing this morning and saw 3 moving vans packing up (not UNpacking).

    and two young cats working the register/bagging at tj’s had just gotten here within the past year and they’re actually excited about things breaking down and opening up for them.

    another woman who is about to be 60, who works at trader joe’s and offered to sew for me last year, she cornered me for 20 minutes while i stood by my bicycle and my ice cream was melting, to say she wants to take me up on my offer to help HER also start her own micro fashion business alongside mine (i want to get others to do it so it can be a THING and promote us for us). so she’s taking a leave of absence and she wants to meet with me in two weeks.

    then i get home and another neighbor, Janet, who had my back when the homeless guy and his girl attacked me with their dog, as I was handing Rudy his groceries and dealing with someone’s mis-delivered UPS package, Janet jumped up and down, yelling to me about her daughter being ready to model the scaled down football pants i made for her. that fit PERFECTLY, by the way. (i learned to grade patterns by hand from the library)

    so i said since Basul can’t photograph her with covid going on, let’s have her little BROTHERS get involved and take what THEY consider the shots we should post online, and i’ll work with whatever they come up with.
    Janet BEGGED me to sell at fairs and on the street and said she’d run the tables.

    this pandemic already made me reconsider making my labels in india (via etsy) and making them one at a time, by hand as part of my …look, my “thang.” / that’s what i did when i made masks for people at KPOO and Trader Joe’s. a couple of people refuse to use their masks because of it and want to keep them pristine because they think they’re special art.

    and my other neighbor who used to sell weed and can’t get money from his approved disability claim because he didn’t put enough in recent years, he also wants to be involved. somehow.

    i’m trying to figure a way.

    so that’s my dispatch from the mission and MY mission (smile).

    i loooove San Francisco. i owe it big / it gave me my calm wild life. i was the conservative one when i got here. well, i still kinda am.

    x

    • RD Blakeslee says:

      You’re plumb FULL of life, kitten! Good for you. Just keep enjoying it as best you can – try not to sweat the crap that comes along.

      “Daddy”

      • kitten lopez says:

        (huuuge smile)
        thanks, Daddy. it’s my JOB. i’m on it because if you ever remember me mentioning Lalita at “Fragrance Shop NY” in manhattan, i stumbled into her “shop” (TEMPLE) as my life was in flames back in 2011 and i was being stalked from within our own theatrical production and i found her shop and she said her perfume for me was complicated and would protect me out there, and my job was to keep people full of LIFE while we were were on lockdown. that’s what she said because i thought we were in bunkers under ground!

        funny because i said her name a few times a few places right before covid and i’m usually protective of her getting the wrong kind of customers (consumptive oblivious and on cell phones).

        before the above story, a week earlier on my way home from Tj’s, these two young artist women i know followed me home in their car so they could talk to me about how i feel about things and now they want to get together and talk about new business ideas after things open up, too.

        i’ve got a thanksgiving-size group of WOMEN growing! i’d given up on them as i’d harangued them for years to join me. i harangued the men in my life after that til now, so i ‘spect they’ll be popping soon anytime now, too.

        i’m sooo ON IT, if this wasn’t gonna take so long, this is the time where i’d say, “DADDY! WATCH THIS!”

        thanks for the magic quarter…. you keep showing the rest of ’em how to love and re-invest in their own world and not what they’re INCENTIVIZED TO INVEST IN at their own peril and everything’s demise.

        x

  52. Wolf Richter says:

    Jeff Relf in Seattle,

    Per your request, I will give you feedback: I deleted all the parts that crossed the commenting guidelines. You know which parts they are. Here are my guidelines:
    https://wolfstreet.com/2017/10/07/finally-my-guidelines-for-commenting/

    • Debt Wazoo says:

      Note to self: Wolf allows the word “rapey”, which sounds like fingernails on a chalkboard. Must use this word more.

    • Your guidelines make sense, Wolf Richter;
      I see where I went wrong.

      I was insulting the majority opinion in our
      beloved cities of San Francisco and Seattle.

      However, one – must – acknowledge that police do,
      in fact, save lives — including black lives.

      I get the sense that America is too quick to
      appropriate the less savory parts of black culture;
      and too slow to appropriate Asia’s work ethic.

      We’ve outsourced “racism, fascism and pollution”
      to Asia, so we don’t have to deal with it.

      Why do Asians earn more than whites ?

      Why do whites earn more than blacks ?

      Why do men earn more than women ?

      Culture, obviously, is the difference,
      not systemic racism/misogyny.

      Feel free to edit out any of the above,
      if you think it might offend our brethren.

  53. Cashboy says:

    When you talk about poop cleaners earning US$80,000 and with benefits US$120,000 in San Fransico.
    You can see that China will be able to get a lot more research and development of IT and AI projects for the same money.
    Looks like China will win the the technology market.

    • VintageVNvet says:

      NAH CB,
      They too far out, in general, on the uncertainty spectrum, with all the various and sundry disappearances, jailing, harsh penalty on protesters, etc., of anyone with a creative spark to do well when it comes to inventing.
      Very good at copying, etc., as is clearly proven, but now even the Japanese are finding them too difficult to deal with, and they are no slouches at copying, reverse engineering, etc.
      Maybe, eventually Vietnamese will be the go to creative nation; still too early to tell about them, but they are looking good these days.

    • Happy1 says:

      People in China aren’t free and don’t have a government or currency they can trust. Until they do, they will never be the world leader in tech.

  54. Winston says:

    Move to CHAZ. Everything’s free there! /sarc

  55. Island teal says:

    Wow….now that was a Sat morning read. Comments were all over the place and were getting a little testy. Personally have not been to SF since bout 2005. Doesn’t seem like a lot has improved. First visit was late 60’s. As a child was lucky to see the USA during the 50’s living and driving cross country multiple times 😊😊

  56. Bob says:

    My wife’s cousin couldn’t take the lockdown and stupidity anymore so came down to visit us in San Diego 3 1/2 weeks ago. The whole time they’ve been here they’ve talked of what it’s like up there and much of the conversation has revolved around where they would move should they permanently leave. I’ve found that when people start talking like that in a serious tone it’s bound to happen. San Francisco is in trouble and it’s a trouble of their own making. The scary part is that SF is a microcosm of what the state could and will become if these insane policies keep getting pushed through.
    Also, any of you who may say, no, no, no, it’s really not like some folks say it is, my cousin will tell you, yes, yes, yes, it’s definitely like this article portrays it to be. My wife and I wouldn’t even go there anymore except that she has family there.

    • chazthree says:

      I’ve lived in SF for 18 years and want out. Question is, where to? I lived in San Diego in 2015 for six months for work, loved it, but it is not that much cheaper if you are middle class. (My salary is 160K, which won’t get you anywhere in SF). Plus, if one’s work is centered in SF, it is hard to move away. The problems of SF (unfathomably high prices) are evident in Oakland and Berkeley. It’s nonsense, especially when one compares median salaries with median home prices. One might think that the old expression “the outgoing tide will reveal who’s been swimming naked” might present some opportunities for those who have been patient. But something tells me that won’t happen, even though it “should.” 2010-2012 did present such an opportunity if you were poised to pounce at the exact right moment, but you had to show up with the proverbial suitcase full of ready money at any open house, not a stack of papers and promises (like me). Waiting around for this market to become rational could take a lifetime…bad way to spend a life, waiting.

      • Happy1 says:

        SD is a good deal less expensive than SF. The median home price is 1/2 as much.

      • TCG says:

        I’m always surprised at the people with very decent salaries who think they can’t break into the the property market here. I’ve often felt that way myself, but if you really want to own here, there are plenty of people doing it with *two* salaries in the kind of range you state (so 250k to 300k together).

        Unfortunately,many places in the US need two salaries to buy a bigger or nicer place and it’s not only the bay area.

        There are still neighborhoods with houses in the $6k to $8k a month range for modest 2 or 3 bedroom single family homes (that includes mortgage pmt, property taxes, insurance, etc). That is about around $75k to $100k a year on housing, which is admittedly a ton. But it’s less than 1/3 of income for two earners in the $140k to $160k range each and there are a lot of people like that around in the tech industry.

        If you’re trying to afford it on just your single salary, then it will be much more difficult and you’d probably need to look at something smaller (one bedroom or small two bedroom) and likely a condo outside the city.

        Saving up for the down payment is the hard part.

        I just don’t really get the whining I hear from so many high earning DINKs (dual income, no kids) couples in the bay area making $300k+ a year and saying they can’t afford a place to live. Because, seriously, for those DINKs that can’t afford $100k a year housing on a total $300k a year DINK salary, then you need to reduce your other expenses like eating out every meal, weed and blow and buying new Teslas.

        I understand that not everyone wants to pay so much for housing, but it’s not like people from every other state are being forced to move here. Which you’d think they were forced to from the whining I hear from the transplants moving in.

        I get that lots of people (including high earners) are disheartened and fed up and I think it’ll be a quite positive thing socially for some of those people to find a better situation elsewhere than be in the bay area. I hope bring able to work elsewhere enables them to leave, but I don’t think there is going to be a really steep drop off in prices over a longer term because there will still be hordes of people who will want to come here and will be willing and able to pay the high prices. The bay area has been very expensive compared to many parts of the country for 50+ years and covid may be a small reversal the trend or remote work may take some pressure off, but it’s still a very desirable place that many people want to live in, so I wouldnt bet on a market collapse. The whining about prices has been going on for decades and transplants just keep showing up.

        Also, to all the remote workers, don’t expect to be paid a bay area salary while living in Omaha or some other cheaper part of the country. That is mostly not what bay areas companies are offering. A lot of people seem to want to game it by faking addresses and other things, but taxing authorities may not look on that kindly (in both states) and the workplace may also have issues with being lied to in addition to possible legal issues.

        • Ethan in NoVA says:

          Just think about how much money you are spending and what the good is really worth. $800K+ on a structure that might really be worth $100K? It’s madness.

          Take away the expectation for the house price to always go up and no one would pay that.

        • Canadian says:

          “don’t expect to be paid a bay area salary while living in Omaha or some other cheaper part of the country”

          Bay Area salaries are unsustainable, regardless of what address one has, but the value of the work should be paid based on the market rate and not a ZIP code.

          It will be entertaining to see the massive EEOC lawsuits that happen when the first emigres from the wealthy, white neighborhoods of Silicon Valley see their pay cut when they move to historically black or Hispanic cities with lower costs and higher quality of life.

          Hmmmm… I moved to a “black” or “Hispanic” place and now my pay has been cut… that’s salary redlining, and I assure you it will be made illegal.

      • Canadian says:

        COVID, high costs and the generally poor quality of life in SF will start the exodus.

        I suspect a major seismic event will accelerate it significantly.

      • Canadian says:

        When I left San Francisco for the second time in 2015, I moved to Atlanta.

        I purchased a house in a nice suburb of Atlanta right outside of the “perimeter,” near Buckhead (a diverse and affluent neighborhood on Atlanta’s north side).

        My 3 BR, 2 bath home with a half acre yard cost me $180,000. My property tax was $1,600 a year.

        My mortgage payment was less than $1,200 a month.

        The same home in a depressing South Bay town would have cost $4 million or more.

        My income was about 20% lower in Georgia than in California, but the delta in income tax (lower in Georgia) and lower tax bracket overall made my takehome pay about the same, while my living costs decreased about 40% and I paid less for a 20 year mortgage on a nice family home than I paid to rent a crappy studio in SoMa.

  57. JP says:

    Wait till bear mkt in tech stocks — it will be monumental. It will be much worse than dot com bubble. Then we will see the ego reset in SF, valuation reset with real estate prices, salary reset, VC funding reset, etc… Seattle will go through similar reset.

  58. RedRaider says:

    Just let me know when home prices reach 50% so I can buy a second home in SF ;-)

  59. ft says:

    Lifelong Bay Area resident.
    Silicon Valley has been good to me.
    Propositions 13, 60 and 90 have been good to me.
    I never had a six figure income; I am not rich.
    Quality of life here has gone down mainly due to congestion.
    I encourage anyone thinking of leaving to pack up and do so.
    Bye.

    • VintageVNvet says:

      ”Former Bay Area Resident” ft
      ditto, ditto, ditto, ditto, did have a couple of times, ( along with couple of divestitures/AKA divorces, ) and ditto…
      and most importantly, ”DITTO” on your penultimate sentence,,,
      at this point, I can only hope that happens and I can afford to move back to my favorite city in the world, ASAP,,, now that London is even more of ”all of the above”

      Thank you,,,

    • Canadian says:

      Wait until your taxes increase to pay for all the stuff those departed residents were paying for… and your home sits on the market and needs to be sold at a steep loss when you have to leave California to have a decent retirement.

  60. KFH says:

    What a great article… well worth the read! I am on the east coast, in mostly rural Southern New Jersey and urban flight has begun again, fueled by a pandemic this time. And of course we have the 30 year old generation too… they are now taking the reigns and shaping their world, just like I did 35 years ago. It is their world, but it is natural for the older generation to criticize and fault them, like the older ones did with me many years ago.
    Perhaps David Bowie said it best, “And these children that you spit on
    As they try to change their worlds
    Are immune to your consultations
    They’re quite aware of what they’re going through”.
    Good Luck, San Francisco… But it is time to adapt and change.

  61. Jerry says:

    Anyone decent left San Francisco decades ago. The city had become quite disgusting with rich, obnoxious young people driving up prices and driving out all human dignity. Anyone with a heart and soul had left San Francisco before the Clinton regime was thru.

    It is thus quite entertaining to hear those same rich, spoiled obnoxious people complain. The bad news is if they leave San Francisco. they’ll only ruin someplace else. Gotten send a note to the Governor to use the national guard to close the border.

  62. CreditGB says:

    The tourists come with a notion of finding a beautiful city, gained from the promotional materials. Their frame of reference is the reality of their home cities.

    With nothing other than the reality they actually experienced, their exit polling reflects what they found on their visit.

    You find this same disappointment in many formerly dynamic cities in the US. Many if not most have been ruined by politicians to the point that few willingly stays.

  63. Randall says:

    In the 1970s when Prop 13 was passed my parents were deeply concerned about the constant increase in property taxes, and whether they could afford to live in the home and community they had lived in for 40 years.

    My wife and I bought a fixer-upper in 1994, the property tax was $1,850 per year. Over the last 27 years, our property taxes have more than doubled, to over $4,000 per year, which an annual increase greater than 3%. That increase is largely due to voter passed parcel taxes – it seems the majority of voters are willing to approve almost any tax if the politicians and unions tell big enough lies with splashy enough commercials.

    One of the primary applications of property taxes is for public education. Having paid the cost of educating a generation of our peers children (we didn’t have any,) the new generation of parents should bear the weight of educating their own children. Is that asking too much?

    Residential apartments are subject to the same annual limit of 1% increase in property taxes and voter approved parcel taxes – so when renters approve tax increases the renter still has to shoulder some of the burden.

    Government is incapable of controlling spending. Corruption is systemic. As far as I can tell, campaign contributions by public unions is bribery, and should be cause to invalidate contracts that have been based on fraud. Due to constant tax increases, my wife and I are considering leaving the state, which would make the tax assessors happy.

    • Canadian says:

      When people complain about Prop 13, I enjoy pointing out that California’s problem isn’t “super low taxes.” The state has an income tax for middle class residents of almost 10%, double digit sales taxes, eye-watering gas taxes, enormous taxes on cars (both at point of sale/purchase as well as on a yearly basis), and so on.

      If California didn’t have Prop 13, it would likely have all the same problems, all the same high income/sales/gas/car/cell phone taxes, and property taxes resembling those of Illinois… where an average family in the Chicago area can expect to pay $1,000 to $1,500 for an average $300K middle class family home with three bedrooms and two bathrooms.

      That would simply hasten California’s inevitable fiscal demise.

      • Canadian says:

        Incidentally, that’s $1K to $1.5K a MONTH in Illinois, not per year.

        I considered purchasing a lovely house in the Chicagoland area a few years ago, but realized that when I finished paying off a 20 year mortgage on the place, I’d have paid for the home twice over when property taxes were included… a cool $300K in property tax payments for a $300K home.

  64. You have absolutely nailed it Wolf. If the elected folks were deliberately trying to destroy the city, they couldn’t have done a better job.

  65. Interest rates are too low,
    house prices are too high.

    It’s a pyramid scheme;
    – only – early investors win.

    When kids have no future,
    they take to the streets.

    Riots precede – every – stock market crash.

  66. Canadian says:

    I was unfortunate enough to live in Downtown San Francisco twice in the last two decades… the early 2000s and the 2010s.

    The 2000s were nasty enough, with horrific poverty, crime and drugs. But the 2010s made the 2000s look like nirvana. The homeless encampments, rampant drug use, disgusting smell of urine and excrement, extremist politics, sky-high prices for third world living conditions, etc. sent me fleeing.

    With telecommuting likely to be the new normal as fantasies of “returning to the office” run into upticking infection rates and a lack of long-term preventative care for COVID (like a vaccine), the insanely overpriced cesspool scam cities of the West like San Francisco, New York, London, etc. will empty out at an epic pace.

    The days of landlords getting $4K for a 1 bedroom flophouse with bedbugs, roaches and mice scrabbling in the walls and homeless people camping out in front of it are over.

    It will be a long and precipitously steep decline from here on out. When it’s finished, San Francisco will resemble today’s Detroit or 1980s Philadelphia.

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