patrick.net

I come here for bubble news, not communism, man.

my boyfriend found the protagonist completely unsympathetic

Well, I find Capt. Malcolm Reynolds not exactly law-abiding.

"Well, I find Capt. Malcolm Reynolds not exactly law-abiding."

When law rests with bellboys and killer ninja dudes, I feel the writers are telling me to cheer for the non-law-abiding.

Exactly my point for a P13 thread, keep it from hijacking every other thread. But I can see it touches a nerve with everyone, best not discuss it ever again.

When law rests with bellboys and killer ninja dudes, I feel the writers are telling me to cheer for the non-law-abiding.

Well, I did have a few parking tickets...

Anyway, I do love the "Mal" character.

I hate Reality TV!

Prop 13 has been discussed to death and disinterred. Yet it is still alive and kicking.

See, it is pointless.

Nigel says: On the other hand, during this same real estate run up, we’ve seen the difference between the haves and the have nots increase to an equally unsustainable level.

You'll need to cite a lot of evidence to back up that claim. Have the rich really gotten richer, and the poor gotten poorer, in the last 5-10 years?

Even if that has happened, I would challenge that if it's due to paper gains from the real estate bubble, the wealth isn't realized. Some of it is bound to be given back over time, either to inflation or true declines in market price.

You’ll need to cite a lot of evidence to back up that claim. Have the rich really gotten richer, and the poor gotten poorer, in the last 5-10 years?

I'm pretty sure they have. Real wages have declined since the 70s on average. I guess George Bush's tax cuts returned more to the upper echelons, executive salaries have skyrocketed, and there are lots of reports of 'hollowing out the middle class diamond'. These, I assume, are substantiated by analysis, you'll have to google for harder evidence. Anyhow, newsfreak said so...

W.C. Varones Says:
I come here for bubble news, not communism, man.

You can go to the bubble news area, man. Georgism isn't communism particularly. Anyhow, you've got nothing to lose but your chains...

Someone Said:

> Holy cow! Abolish property rights?

Then Different Sean Says:

> Not quite, not abolishing property rights in terms of
> ownership, use and quiet enjoyment, only in setting a
> price on it.

The right to use is not a lot different than the right to own and the value of a 99 year flat “Lease” for a piece of land is very close to the “Cost” to buy a similar piece of land.

Brent Says:

> Didn’t know you could inherit a properties tax base,
> that sorta undermines the “kicking old ladies out of
> their home” theory for upholding it.

Prop. 13 get’s even better (for the kids of parent’s who own a lot of Real Estate) and worse (for the taxpayers as a whole).

Kids can take over the tax basis on up to $1mm of real estate when their parents die.

You may be thinking that$1mm is not a big deal but typical $5-10mm mansion in Woodside, Atherton or Ross that was bought in 1970 has a “tax basis” of under $300K today. When you combine the family home with the weekend place in Carmel and the family cabin on the West Shore most kids will still be way under the $1mm “tax basis” cap…

A while back a friend was complaining that it costs him $300 a month to rent a garage on Russian Hill and my Dad mentioned that $300 a month was more than his property taxes.

P.S. In my search for the person that lost the $500K of wine in Atherton I noticed that Chuck Schwab owns a 6,900 sf home on the street where the wine was stolen that he bought in 1976 (a couple years after he started making big money when the discount brokerage thing caught on) for $230K. My guess is that the home would sell for at least $10mm today and I have a feeling that I may have found the guy that lost the wine (since $500K of wine is a lot even in Atherton on a street with $10mm homes)…

Turner and Boswell are free to grab as much of our country as they can. Is that right?

Is it right that most people have to eat cakes when a few can enjoy caviar?

Or is it preferable that cakes are universally unavailable but everyone gets bread?

GDM Says:
But what about this: Does anyone else have a fundamental problem with the fact that Ted Turner own 1.7 million acres of the United States? Should any one person be able to own that much? Turner and Boswell are free to grab as much of our country as they can. Is that right?

It seems that it is. I often wonder how much wealth of this sort, in a few people's hands, has gone into purchasing swathes of investment properties also as the business cycle turns through the property phase... Is it possible that people have Ted Turner or Bill Gates as their landlord without realising it?

OT. More good news from the world of offshoring, just breaking:

Blow for Tasmania as boots set off overseas

THE company claims to be "Australian for boot", but its boots are about to be made in Asia.

Blundstone, based near Hobart, is shifting most of its production overseas, at the cost of about 360 jobs - 80 per cent of its workforce.

The company said costs had forced the move. "You've just got a situation where [Australia] can no longer sustain this type of company," said Blundstone's chief executive, Steve Gunn. He ruled out government aid to enable the private company to keep making its boots in Australia and New Zealand, and plans to split production between India and Thailand. The cost of labour there was 5 to 7 per cent of what was paid locally, he said.

Blundstone has been a family-owned company since 1870. It has survived in recent years by trading on its local origins to make competitively priced "grunge" footwear that found favour with film stars and models. Cindy Crawford and Brooke Shields were said to own Blundstones, and the dancing troupe Tap Dogs wore the boots on worldwide tours.

Tens of thousands of construction workers across Australia could take part in a boycott of Blundstone boots following the iconic boot company's decision to shift most of its production to Asia.

The construction arm of the Construction, Forestry, Mining and Energy Union is urging its 100,000 members to only buy Australian-made safety boots.

John Doe Says:
You might find this interesting:
http://en.wikipedia.org/wiki/Allodial_title

In ancient Israel one could not own land since God owned it all. The tribes were allocated portions of the land which were subdivided and held by clans. One could lease the land out for up to 49 years but in the fiftieth year it had to revert back to the original clan.

This is a good point, and is the sort of more lateral thinking I was hoping to see. You can be sure the Hittites down the road probably didn't have RE/Max offices either, and had a different system of land use again.

Personally I have a problem with taxation of one’s personal residential property. I think it is regressive particularly for those too old to work. I’m very much a believer in personal property rights and the biggest offender in this area is the government.

I'm not proposing a Georgist tax on property for life, for that sort of reason. There are very many possible and imaginable systems which may be 'fairer' while avoiding land speculation (which are not Prop 13). And remember that the New World had no European 'owners' at all for a long while, as per the thread introduction, and in fact it was the early colonial government which made land grants or land sales to settlers. (And that eminent domain can be exercised at any time, and 'freehold title' is more an illusion of ownership.)

DS said:
Not quite, not abolishing property rights in terms of
ownership, use and quiet enjoyment, only in setting a
price on it.

FAB Replied:
The right to use is not a lot different than the right to own and the value of a 99 year flat “Lease” for a piece of land is very close to the “Cost” to buy a similar piece of land.

Then DS posited some other points, none of which address this very fundamental question, which FAB pointed out:

What *exactly* is the logical difference between owning your land and merely having the right to "use" your land? If I own land that I am prohibited from using, doesn't that reduce its real value to zero? Conversely, if I have an indefinite lease on land that I am free to use at my discretion, doesn't it acquire the same value as land I might instead own?

Peter P, bread is only available after a 15hr shift at your McJob. If there is no bread the "associate" is shown a picture of cake as an incentive to outsource their job so they can have come rice. Short grained, without flavor.

-come
+some

or maybe not.

Curbed SF reports that a condo in SF Woman’s neighborhood (1740 Franklin Street #3) is on the market for $1,095,000. Curbed says that the “Beautiful building on a too-busy street, overlooks the landmark Victorians and the Christian Science church on the corners of Franklin and California.”

I’m wondering if this condo was actually on the market this summer when it “sold” (per tax records) for $810K, or if it was some kind of family transfer. The previous transfer per the tax records recorded the value at $55K (yes less than a new Buick) in the summer of 2005 (not 1975, but 2005).

P.S. With a condo you don't really own any "land" and often just "own" airspace in your unit (with an oblication to pay HOA fees to maintain the building)...

Foreclosure rate data for the US for December continue to be much, much higher than last year:

http://money.cnn.com/2007/01/16/real_estate/December_foreclosures_up_from_2005/index.htm?postversion=2007011711

FYI - someone here has claimed the remainder of my Economist subscription.

Does anyone other than the government actually ‘own’ land anyway?

God. This is His green earth anyway.

But humans have a 9999 year lease, with mineral, fishing, and hunting rights. ;)

Skibum :

Thanks for the link. I wanted to check how CA fared on a % basis, and it is 14th in the nation. Kind of expected. Very surprising was Colorado. There 1 in 375 houses is in foreclosure ! That is scary.

Does anyone know what CO is that bad ?

Off topic, but I know how much everyone loves food here......

My son is in Beijing, on his way home for a visit, and shared with me the government has begun a restaurant license program geared to insure sanitary conditions and food safety. So.....great news for anyone who's going there in '08.

The truth is they passed an edict that all restaurants will have to obtain a license.....just like they did for parking permits in the city.....which you can buy from any street vendor.

Ymmm....let's do lunch!

Now, with that problem solved, they can focus on toilets, transportation, communication, and pollution.

http://www.dqnews.com/RRBay0107.shtm

DQ numbers are out for the Bay Area.

What *exactly* is the logical difference between owning your land and merely having the right to “use” your land? If I own land that I am prohibited from using, doesn’t that reduce its real value to zero? Conversely, if I have an indefinite lease on land that I am free to use at my discretion, doesn’t it acquire the same value as land I might instead own?

We explored this concept to some degree last year in The Psychology of “Ownership”

DQ says in January: Indicators of market distress are still in the normal range.

DQ says in December: Indicators of market distress are still at a moderate level.

?

Oh, and for those of you interested in Prop. 13, here's one that hearkens all the way back to July, 2005 --one of my earliest threads: NIMBY Laws and California Housing Prices.

lunapark :

DQ also says something very important.
Last month's sales count was the lowest for any December since 1996 when 7,180 homes were sold.

Just on the face of it, this is bad for REIC. I am pretty sure there are more homes in BA now that were in 1996. So it definitely means less % of houses being sold to overall stock of units (not inventory).

Secondly, the price per sqft has remained relatively constant throughout the year. For resale, when median was 705K in last Dec, the rate was 480. Then the median went to 772K in Aug - 10% increase, the rate went up only to 507. Now the median is back to where it was last Dec, the rate is still hovering at 490.

That means, the market has been FLAT for over a year now. They started admitting that only recently. Well, YOY median drops are just around the corner. We will see what DQ says then.

Robert Coté Says:

Why do you hate me?

*Sigh*.... Robert, Robert, we've been over this so many times. If people in my generation (and future generations) could "lock in" the same 1979 (+2%/yr) tax basis as yours, then no problem.

However, I *do* have a problem with state-sponsored Birth Lotteries that richly subsidize preceding generations at my expense. I *do* have a problem with someone my age being forced to pay ~$16,000/yr in property taxes on an identical make/model house right next door to yours, while you pay $2,600/yr., merely because the Gen-X'er made an unfortunate choice of parents and birth-year.

My general feeling is, if we can't provide the same tax subsidy equally to every generation, we should abolish it --or just abolish property tax altogether.

RC,

Property tax is essentially an ineffient form of a "use tax", as in use of public services and infrastructure --public schools, roads, bridges, etc. Now whether or not most of the tax money really goes towards those things is very debatable.

However, unless you and your family are really using a *lot* less of those things than I am, I fail to see how your 83.75% tax subsidy at my expense is equitable, "fair", socially optimal, economically efficient, morally unhazardous, or whatever term you would prefer to use.

Especially taxes that are entered into volluntarially.

Hmm... don't recall anyone in my generation or later being given the opportunity to give an up or down vote on Prop. 13. As more and more young people recognize how it screws us, this may eventually change though.

It would be the most amazing of accidents were taxes ever fair for any one person or asset.

I don't expect life to be fair, but taxes are an entirely artificial human construct. They should be designed to be as equitable ("fair" if you prefer moral terminology) and generation/asset class neutral as possible. Prop. 13 fails this test miserably.

What we have is the best we can expect; rules applied consistently and transparently.

What we have is transparently and consistently applied generational rape. The fact that I can readily identify my attacker (Tax board & Boomer voters) does not ease nor remedy my suffering.

@pa renter,

Yes, Prop. 13 even harms long-time owners from Boom & Silent Gens that might otherwise choose to move. The "Golden handcuffs" syndrome. It cripples market efficiency and artifically contrains supply. Even a hard-core supply-sider could agree with this reasoning.

Prop 13 is bad only because of incentivization issues. I doubt it has made life any more unfair.

A smart government will let the market resolve fairness issues by itself.

What is fairness anyway?

Oh HARM,

I think we have a better chance just moving out of California. We're never going to change Prop 13 or any other part of California's ridiculous proposition/license to misgovern system.

Doug H,

As someone from south of the Yangtze River, I'm compelled to say, who cares? Beijing food is expensive and not all that great tasting. Peking duck is overpriced and not particularly tasty.

Beijing food is expensive and not all that great tasting. Peking duck is overpriced and not particularly tasty.

I have had better peking duck in Hong Kong and Canada than in Beijing.

I am not hopeful that they can bring their toilets to international standard by 2008.

RC:

I'm quite familiar with ROI, ROE, even ROIC, not to mention the time value of money, and all its variants.

Nonetheless, your arguments vis-a-vis Prop13 are self-serving and question your credibility in what is otherwise well informed debate.

Property Taxes are *not* an example of discretionary, avoidable taxation. I suspect you already know that, and are just trying to create a non-analogous substitute to further your position. The logical extension of your line of reasoning is that eventually there will be exactly 1 person paying all property taxes and n-1 people renting from that 1 person.

And what about how Prop 13 introduces frictions that work to retard your own theory of exburbinization? Seems to me you should be all in favor of gentrification sans government intervention.

offo,

Surfer X reminds us that another odd aspect is that many long time owners have refinanced several times during their occupancy at the same residence. Well, when we "refinance" we have an appraisal done and in essence are in fact "re-purchasing" our home. Hmm? Take out equity based on the increased value yet retain your previous value for tax purposes? So you CAN have your cake and eat it too!

Any time I've confronted people about this I get the "Why do you hate America look" like I'm there to confiscate their guns.

offo / DinOR,

The fact that refinancing and inheritance have no/minimal effect on property tax is the most obvious flaw in Prop 13. I guess one can argue for Prop 13 based on purchase price, but this "I will have my cake and eat it too" is beyond unfair. This is a BIG flaw.

On the related note, if you take a cash out refinancing and put the money in tax-free Govt bonds, IRS does not like it. You cannot have it both ways. Either take a deduction on the mortgage interest OR pay taxes on the interest you earn from the cash out. Not both.