“Now is not the time…” to be conservative…more thoughts on SB827 and Prop 13

So predictably, the entire BoyInternet thinks I’m sooooooooo stupid for thinking that value capture could everrrrrrrr happen in California because Prop 13 and doesn’t this stupid woman realize her proposal modifies Prop 13 and JEEEZ WOMAN YOU CAN’T USE SB827 TO CREATE A COMMUNIST STATE YA KNOW. (Because that’s totally an accurate account of what I suggested.)

The only reason y’all got your unders in a bunch is that I’m a woman who has the nerve to suggest that she might have policy ideas that might work better than what THE MENZ have derived. I said over and over again that I support 827, it’s better than nothing, etc. I didn’t go into Prop 13 problems because my value capture post was already long, and it was “wish list” post anyway.

OHHHHHH and then one of my very, very junior co-authors, a dude, tried to lecture me about my “tone.” You are lucky, friend, that I am a nice lady.

Usually.

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Perhaps the most interesting, but frustrating, comments came from the bros who lectured me that “Now is NOT the time to pursue Prop 13 reform…”

Um…..why exactly NOT? And if not now, when, exactly? Who died and left you arbiter of what now is the time for?

I get why Senator Weiner is going for what he thinks is a possible legislative win. I’ve been told he “supports Prop 13 reform.” But apparently not enough to stick his neck out. I get his approach here; he’s a junior legislator who is discovering the lay of the land in Sacramento, and he doesn’t want to overreach.

But I don’t understand why the rest of us are being such conservative little ninnies about it. The Democrats have the assembly, the California Republicans still seem to be in disarray, and THIS HERE GUY IS a “GIVES ZERO FIGS ABOUT RE-ELECTION” GOVERNOR:

JB

When exactly will political conditions be “right” if not right about now? Californians elect themselves a Republican governor with unfortunate regularity, and we could have one quite soon. At some point, California Republicans are going to get themselves organized again. At least two of our likeliest D candidates for guv’nor are going to be running for President from the California governor’s mansion (do we have one? I’ve never checked) if elected, and the last thing they want to be associated with is a tax change.

Proposition 13 is a policy that undermines every single gain we make in environmental policy and land use reform, and this includes SB827.

Imagine you have a bucket of good policy results…and as you pass more good policies…that bucket starts to fill up. But alas, there’s a pretty big hole in that bucket that diminishes the ability of each and every good policy change, like SB827, to deliver what we need it to.

That big hole is Prop 13. We’d be better off phasing it out even if we chose a really long timeline, like 30 years, to soften the blow to individual homeowners.

As long as Californians expect to get rich from their housing, our infill strategies are going to be both a) a struggle and b) less impactful than they could be.

And perhaps most of all in transit value capture: y’all infill advocates TAKE TRANSIT FOR GRANTED IN WAYS YOU SHOULD NOT. Transit agencies across the United States are in, for all practical purposes, worse financial shape then they have been in for quite some time. For all our Measures M and R, all we do when we expand these systems is put Metro on the hook for operating service that loses money with every vehicle they put on the road.

And yes, while our new investments are supposed to yield us new patrons, even New York does not have enough passengers to clear their costs. If they can’t with their passenger loads, it’s good evidence that the rest of us US systems aren’t going to, either.

Y’all just assume that T in your TOD is going to be there, operating, for when all the new families come to move into your infill. Well, ok, but the T in the TOD right now is not providing service that is good enough to really change the game, and it won’t get there if we can’t increase frequencies across the board. That takes money, and we don’t have it. And we don’t have a lot of choices for getting it.

All of the major metros where we want TOD already have relatively high sale tax burdens, so that way may be closed off to us. We can’t keep pouring money into capital improvements and getting tiny margins back unless something changes about how we fund transit.

So yeah, part of my rationale behind a land value tax reform via value capture is that it’s way more just, and it gets rid of a dumb policy that hamstrings everything in California from our schools to our climate policies.

But the other reason for value capture is that as a transit policy person, I WANT THE MONEEEEEEEEEEEEEEEEEY FOR TRANSIT. The rest of y’all should, too.

We’ve kicked the can down the road far too long on both transit finance and reforming Prop 13. We should do as much as we can to dismantle the latter whenever we have political opportunities to try it. IF IT’S JUST IMPOSSIBLE to recoup value from land around stations, then help me figure something else out that isn’t a sales tax.

Should Weiner be the one taking the political risk? That’s his lookout; he seems to know the score.

But SOMEBODY has to, and we should be thinking about exactly when Prop 13 reform happens, and that has to be a better answer than “after the apocalypse when we’ve devolved to cannibalistic tribes grilling our peers over bonfires on the centerline of the 405”–also known as “not now” and “later.”

4 thoughts on ““Now is not the time…” to be conservative…more thoughts on SB827 and Prop 13

  1. Dear Prof. Schweitzer,
    Loved your post on land value recapture and the reminder about Henry George. It is possible to do somewhat of an end run around Prop. 13 by increasing the business license tax on rental property, since it is considered a tax on operating rentals as a business rather than on rentals as real estate. In Nov. 2016 Berkeley and East Palo Alto both increased their business license tax on residential rental property (Berkeley to 2.88% and EPA to 1.5%) for the purpose of raising money for permanently affordable housing and homelessness prevention. http://www.fundaffordablehousing.org has the background studies and campaign materials. These taxes are low compared to the windfall increases from rising rents, which are of course based almost entirely on rising demand for the location rather than anything necessary to profitably operate rental property, but most cities charge minimal amounts like 0.1% and they help make the point.
    Thanks for these posts.
    Steve Barton

  2. I greatly admire how you’re standing up to the mansplainers out there, but I’m quite confused by your “it’s better than nothing” stance toward SB 827. Will you continue to support the bill even though dozens of social justice organizations have come out against it?

  3. Large parts of Prop 13 do need to be reformed. But the argument for the “famous” part is that in some places in other parts of the country, not very wealthy people own homes in gentrifying areas, and are put under pressure by rising property taxes to sell out. Eminent domain by other means. So think of Prop 13 as “rent control applied to the government.”

    What exactly would be the impact of a Henry George single tax (which I gather is land value only, not improvements) on this? Poor folks don’t want to move. They’d prefer to find a way to improve the community that benefits them. And old people, who have the most political power, are increasingly intending to “die in place.”

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