patrick.net

The homeless encampments of today are in some ways like the Hoovervilles of the Great Depression. But back then people were evicted or lost their homes due to the stock market and banking crash. Today it’s due to the purposeful Globalist strategy of making housing unaffordable and everyone’s life miserable. “You will own nothing.”

GNL says

The homeless encampments of today are in some ways like the Hoovervilles of the Great Depression. But back then people were evicted or lost their homes due to the stock market and banking crash. Today it’s due to the purposeful Globalist strategy of making housing unaffordable and everyone’s life miserable. “You will own nothing.”

They're also using the stock market with bizarre price distortions where money losing tech trannies get pumped to 1000 x revs in market cap while outstanding companies turning profitable get shorted to 1-2 x rev mkt cap. If course eventually value will be discovered and bid up while crap will drop, but they do this long enough to get retail to buy/sell to maximize their losses. There is now an anti-woke etf which probably will be worthwhile but you can bet the ppt will do everything to keep woke cos up

Reality says

It would be quite unfair to force all people incapable of saving enough money for a roof leak or hot water tank leak to be permanently homeless; or for that matter students and people early in their career in a phase of high relocation probability.

First, my proposal wouldn't apply to apartments, only single family homes. So, students and families, etc. could always rent an apartment. Second, rental homes would still exist but it would just be less prevalent and more expensive to operate. This is how it used to be...renting more expensive than owning. But because of financialization of housing, that paradigm is gone.

porkchopXpress says

This is how it used to be...renting more expensive than owning.

This is one of the craziest things about what's going on...renting costs less than buying.

Rental supply would shrink to less than 10% of its current size if none of the businesses expenses can be subtracted from revenue to arrive at profit. Removing all businesses expense deductions (e.g. interest expense, property tax, maintenance, etc.) would be like a 33% sales tax on rent payment if corporation, 40+% sales tax if the landlord is a high income family. I don't think Costco would be able to sell its $5 chicken if hit with a 33% sales tax or 40+% sales tax. Most landlords have very low margins. REITS usually have a cap rate between 5-10% after business expenses; a 33% tax on revenue would necessitate raising rent by 23-28% just to break even and still drop REITS' return to 0%.

If the rule only applies to single family houses instead of apartments, then Wall Street banks would make builders turn entire multi-block development into a condo / "apartment" that spreads out horizontally on small allocated plots but under one joint title.

Through most of an economic cycle, renting cost in most markets is slightly higher than ownership cost (the difference between buying small retail packages vs. Costco-sized large packages, in time domain); the owner/landlord covers vacancy for banks and municipal tax authorities. Currently in most markets, and in the past decade or two in markets like SFBA, renting cost less than buying is due to two factors: landlords passing on savings thanks to their own lower cost basis (either lower purchase price or lower interest rate, not due to generosity but due to competitive pressure); for many years landlords in one-way-up markets like SFBA and NYC also passed on some of their expected capital gain profits to tenants (once again due to competitive pressure). It shows that despite what most people caricature landlords as greedy, the competitive pressure from a plethora of landlords in any given area works well in delivering housing at cost much lower than a bureaucratic monopoly would have (which is what the banking system is, especially if the small and medium sized banks offering most lower interest loans are squeezed out by big banks). The real danger in the near-future is giant corporate concentrated ownership of homes forcing up rent price. That's why I think there needs to have policies that curb concentrated ownership and fostering competitive/discrete ownership for both owner-occupied homes and rental properties. Pottsville was a nightmare because the old man Potts owned the entire town (nearly all the rental properties in town).

mell says

They're also using the stock market with bizarre price distortions where money losing tech trannies get pumped to 1000 x revs in market cap while outstanding companies turning profitable get shorted to 1-2 x rev mkt cap.

Which Woke companies are getting pumped up ?

Which non Woke profit making companies are getting shorted or beaten down ?

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https://rudy.substack.com/p/it-was-the-zero-percent-era-that

Big_Johnson says

The day a renter buys his first house in CA is the day he/she will love prop 13.

Same day he/she becomes a parasite on the rest of the state - how is this a good thing for others!
https://www.taxfairnessproject.org/

Patrick says

https://rudy.substack.com/p/it-was-the-zero-percent-era-that

Yeah Patrick, I noticed rents are staying flat here in the Florida panhandle. And wages seem to be still increasing at least 5% annually here.

I see a lot of apartment complexes offering 1 month free for a 13 month lease.

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Patrick says

https://rudy.substack.com/p/it-was-the-zero-percent-era-that

This is good news. Its should be temporary. But I heard on radio that NY Fed not ready for next rate hike (as we are approaching elections ;) Unfortunately inflation will not bring down much of home prices, rents, stocks!

Around 1999 rent inflation started to increase at a faster pace than CPI. I wonder why this is as perhaps illegal immigration was not factored in the Census data enough to cause an increase in housing units. Granted a lot of illegal immigrants likely live in crowded living conditions like 3 people to a room.

Notice how rent did not increase from around 2008 to 2012 during the housing bust.

Blue says

Big_Johnson says

The day a renter buys his first house in CA is the day he/she will love prop 13.

Same day he/she becomes a parasite on the rest of the state - how is this a good thing for others!
https://www.taxfairnessproject.org/

Great site!

How it works everywhere else: Your home is reassessed every so often -- usually 1-4 years. If it has gone up in value, congrats! You are now wealthier. But your taxes go up too to compensate.

How it works in California: Your home's assessed value is frozen at the moment of purchase. Even if it skyrockets in value, it will not get reassessed as long as you own it.

The upshot: The houses that have grown in value the most - making their owners millionaires just by the virtue of happening to buy a home in the right neighborhood - also get the largest subsidies. People trying to buy their first homes, laden with large mortgages, get no subsidy.

‍

PAID FOR BY YOUR KID'S EDUCATION
Why does this matter? Property tax pays for one very important thing: K-12 education. In most jurisdictions a minimum of 40% goes toward education.

In other words: This subsidy, primarily benefiting wealthy homeowners, is paid for with lower teacher salaries, larger classroom sizes, and deteriorating facilities.

(Read more on Prop 13's impact on education)

‍

REFORM IS ON ITS WAY
The good news is that after 4 decades momentum is building to overturn Proposition 13.

Prop 15 is an important first step to reforming property taxation in California. It essentially unravels the subsidies for large commercial properties. You should vote "Yes" on Prop 15.

CONSERVATIVES FOR MOAR TAXES!!!

The only more ironic thing is PEOPLE OF IRISH/POLISH ORIGIN FOR THE SUCCESS OF IMPERIAL LANDGRAB WITH SOME GENOCIDE ON THE SIDE.

🤡

https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494

See above. Its about tax burden as far as state and county or city. New York is ranked 1 and California is 12. Florida is 46.

California ranked at 12 should have enough money for the public schools (K-12). Where is the money going ? To the pensions of retired state workers ?

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Just ask yourself: do you know anyone who hates the idea of owning?
Not in America, but in Scandinavian countres.....is not what society expect. "Own nothing be happy" is the way to go. Let's have a beer!

Patrick says

man palo alto is a bad example. it’s where all ultra rich self centered techies live with too much easy money for their own good. all they do there is make too much, spend it on drugs, and expensive housing.

Patrick says

REFORM IS ON ITS WAY
The good news is that after 4 decades momentum is building to overturn Proposition 13.

Prop 15 is an important first step to reforming property taxation in California. It essentially unravels the subsidies for large commercial properties. You should vote "Yes" on Prop 15.

It sure would be a bitch of a thing if grandfathering included in the bill.

GNL says

Patrick says

REFORM IS ON ITS WAY
The good news is that after 4 decades momentum is building to overturn Proposition 13.

Prop 15 is an important first step to reforming property taxation in California. It essentially unravels the subsidies for large commercial properties. You should vote "Yes" on Prop 15.

It sure would be a bitch of a thing if grandfathering included in the bill.

california is always ready for more taxes, all in the name of fairness and equity. today it’s businesses, tomorrow it’ll be home owners.

My wife and I took a stroll in the bluff above Capitola around the jewel box. You can pretty easily see the renovated sugar shacks (Post WWII vet bungalows 800 to 1200 sq ft) with added stories, and the houses that are intergenerational hand me downs (negligible prop. 13 taxes, just held onto because why not, only visited once in a while.)

They silicon valley oligarch houses are new multistory add ons with fresh paint and all the cutsey California appurtenances. The inter generational inheritors right next door have unkempt yards, dirty windows, crappy drapes, old roofs etc. The inter generational inheritors are a lot more common away from the beach.

The winter salt and sand blasting makes them deteriorate pretty quickly if on an exposed bluff or right on the water. There are always several that are being renovated at any particular moment. A couple we knew in Aptos painted their house every three or four years when they were in it.

The house down the street listed for $1.2 million. 3,300 sq. ft. Maryland DC bedroom community.

It went pending immediately after the first open house viewing.

The DMV isn't hurting at all. Transactions are low but the economic activity seems high. I live less than a mile from the CIA. Nobody hurts around here...it seems.

FortwayeAsFuckJoeBiden says

GNL says

Patrick says

REFORM IS ON ITS WAY
The good news is that after 4 decades momentum is building to overturn Proposition 13.

Prop 15 is an important first step to reforming property taxation in California. It essentially unravels the subsidies for large commercial properties. You should vote "Yes" on Prop 15.

It sure would be a bitch of a thing if grandfathering included in the bill.

california is always ready for more taxes, all in the name of fairness and equity. today it’s businesses, tomorrow it’ll be home owners.

Exactly, this modification to Prop 13 is not something we should support. At no time should we encourage a measure that is going to increase the tax revenue to the State / local governments without first placing limitations on what they can do with our tax dollars. Blank checks for OPM is giving drunks drinks at this point.

ForcedTQ says

At no time should we encourage a measure that is going to increase the tax revenue to the State / local governments

I haven't heard anyone say they want taxes to go up by eliminating prop 13. They want to be taxed evenly and fairly compared to others. That doesn't have to mean more total taxes to the California government.

GNL says

ForcedTQ says

At no time should we encourage a measure that is going to increase the tax revenue to the State / local governments

I haven't heard anyone say they want taxes to go up but eliminating prop 13. They want to be taxed evenly and fairly compared to others. That doesn't mean more total taxes to the California government.

I should say thank you for your understanding. Yes. It really is that simple. LOL you were able to understand is because, I suspect you live outside of CA.

But Prop 13 parasites come up and add all sorts of confusion and keeping all slaves in line to pay high and uneven taxes rates and far less tax rates for for the rich. Poor and middle class end up paying much higher tax rates of 10x, 100x rates compare to rich!

The more I look at it, the newly proposed propositions to partial 'repeal' of prop 13 are suspicious. Like Prop 15 (failed in 2020) etc. they do not send a message to even it out but instead send a indirect message "Tax Hike" by saying, how to spend that 'extra money' on some BS programs!!
So folks behind "repeal" must be supporters of Prop 13!! what a scam.
Btw, Prop 13 became like a cancer to CA for a long time, now it has so many derivative propositions over the decades.

The one thing that can truly be believed is that dishonesty is running rampant in America.

People only care about what's good for them. Fairness and truth are redheaded step children.

Blue says

LOL you were able to understand is because, I suspect you live outside of CA.

Correct. I do understand wanting to allow the older set to grow old in their homes. I am sensitive to that in California the same as the rest of the country. I think Patrick has posted some great solutions.

How the F is it fair that someone can inherit a tax subsidy? That's fucking insane.

GNL says

Blue says

LOL you were able to understand is because, I suspect you live outside of CA.

Correct. I do understand wanting to allow the older set to grow old in their homes. I am sensitive to that in California the same as the rest of the country. I think Patrick has posted some great solutions.

How the F is it fair that someone can inherit a tax subsidy? That's fucking insane.

Life isn't fair. Prop 13 like any other law, has unintended consequences that have yet to be fully seen.

The best part of "conservatives" braying about some people not paying "enough" taxes is the argument that it is "starving public schools". The same "conservatives" who recently argued that children should be taken OUT of public schools and homeschooled (or at least sent to private schools).

Ah, the consistency, the principles!

1337irr says

Life isn't fair. Prop 13 like any other law, has unintended consequences that have yet to be fully seen.

And that's news? People are trying right a wrong. You're against righting wrongs? Or am I reading you incorrectly?

GNL says

1337irr says

Life isn't fair. Prop 13 like any other law, has unintended consequences that have yet to be fully seen.

And that's news? People are trying right a wrong. You're against righting wrongs? Or am I reading you incorrectly?

There isn't much I can do about it. I don't live in or own property in California.

1337irr says

Life isn't fair. Prop 13 like any other law, has unintended consequences that have yet to be fully seen.

Yep.

"It would be like a death tax"

No, it's not a death tax to restore a property tax rate for the heirs. They didn't buy the house with their money decades ago and lock in the tax rate. They just got the house transferred to them as a new owner, and are not entitled to the rate locked in by the former owner.

This is really silly. In Florida we have the homestead exemption which is a better method. If you get the house via inheritance, but don't live there, you can't claim the exemption, duh.

Because most of the people inheriting places are living somewhere else and planning to rent them out. But want to keep the rate as if it's their one and only residence they brought with their own money decades ago.

GNL says

How the F is it fair that someone can inherit a tax subsidy? That's fucking insane.

This is Prop 58, not Prop 13. Patrick’s rent has been subsidized by Prop 13 b/c the current owner has a low property tax basis and doesn’t feel the need to raise his rent close to market.

There are more, but I won’t get into it. People will believe whatever they want to believe.

AmericanKulak says

If you get the house via inheritance, but don't live there, you can't claim the exemption

This is how Prop 13 works now.
On November 3, 2020, California voters approved Proposition 19, the Home Protection for Seniors, Severely Disabled, Families and Victims of Wildfire or Natural Disasters Act. Proposition 19 is a constitutional amendment that limits people who inherit family properties from keeping the low property tax base unless they use the home as their own primary residence.

EBGuy says

On November 3, 2020, California voters approved Proposition 19, the Home Protection for Seniors, Severely Disabled, Families and Victims of Wildfire or Natural Disasters Act. Proposition 19

What would happen if the tax benefits of this and Prop 13 were stopped ?

It would cause a lot of owners to sell their homes and it would cause a housing price crash ?

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ad says

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https://finance.yahoo.com/news/pimco-kiesel-called-housing-top-160339396.html?source=patrick.net

Bond manager Mark Kiesel sold his California home in 2006, when he presciently predicted the housing bubble would pop. He bought again in 2012, after U.S. prices fell more than 30% and found a floor.

Now, after a record surge in prices, Kiesel says the time to sell is once again at hand.

I bought at 2.5% and my home appreciated 350k so my plan is to save as much cash for the next bubble when houses are down 30%. When do you think they will drop again?

Broadway_Sam says

I bought at 2.5% and my home appreciated 350k so my plan is to save as much cash for the next bubble when houses are down 30%. When do you think they will drop again?

You're looking for market timing gains. No one here can tell you. Housing even with high interest rates is still on solid ground. If you're in LA, or an inflated market like Austin, TX I'd be somewhat reluctant to buy. 2008 or whatever official year is not in the cards in my opinion. 30% is a lot and there's no inventory. Prices during the bust were increasing with 7-9 months worth of inventory. We're not remotely near that in most markets.

And yes, YOY sales are going to decrease this fall. It doesn't matter if no new inventory hits the market. Sales numbers are a god awful metric. If there aren't houses for sale, it's hard for prices to drop. And the only drops will because people testing the market with shit homes that weren't gonna sell anyway. Banks aren't going to foreclose if people hit a rough patch. No excuse for that right now really. You might have to wait a while for 30%.