I'll read the full article later (thx). I would start out with: What does a $500,000 home in Houston and California have in common? Nothing! For $500K in Houston, you likely get a pretty fabulous place (much like Speedy got in G'town recently). In California, it is likely a 1920's 1 bed, 1 bath fixer (a Tiny Trashy home).
Total tax burden is a better comparison between 2 States, as opposed to just property tax. California has a high overall tax burden. I suspect they have a tax on how much tax you pay ;-) Texas has historically had a high property tax rate, but low on other things (no income tax). Good news is that this past year, Texas lowered property taxes substantially, especially the school district tax. While I think there are other reforms to be had, my property taxes went down nicely. Though Texas has a cap on increase on property tax at 10% YoY, plus a freeze on increase once you hit 65 yrs old.
As mentioned previously, new homes are possible in Texas. In California? Not so much. There is a weird wrinkle in the "greater" G'town area ATM. For comparable size homes, the prices are pretty close for a 40 year old house, that needs some fixing between G'town and Austin. For the same base price, you can get a brand spanking new home (never lived in) between G'town and Cedar Park, with master planned new parks, schools, pools etc., etc. all with a 2 year warranty.
Obviously, loads of "other" dynamics at play. EX: G'town has been the fastest growing city for towns over 50K population for a few years. Remains to be seen the impacts after a few more years. However, when there is new construction going on, there is also new construction going on for roads and services. Think new stores and shopping etc. In other words, a lot of new investments ($$$) being poured in to the area.
Sos I axe ya: You want a fabulous new joint with new everything inside/outside and down the street or ya wanna Tiny Trashy joint?
WYID, I'm a babe in the woods compared to you and TC on the subject of real estate, but thought this might be of interest to you, about house prices in California. It's from this week's Economist and is relevant to both "How are we going to pay for all this shit," and "How are we going to pay for our houses."
As it stands, the overall tax burden on Californians is the fifth-highest in the country, according to the Tax Foundation, a think-tank. The one area where the state’s tax revenues are low—absurdly so—is on property because of a law, passed by popular vote in 1978, which has led to homes being assessed well below their market value. That in turn contributes to inflated housing prices in California, pushing yet more people away from the state.
The average property tax rate in Houston is 2.13% versus 0.75% in California. Say you pay $500,000 for a house and own it for 30 years, and there's no increase or decrease in property values. If it's in California, you'll pay $112,500 in property tax over the next 3 years, versus $319,500 in Houston. The total cost of acquisition plus taxes is $612,500 for California and $819,500 for Houston. So their argument is people in California can/will pay more for a house because the taxes are lower. If they're right, it goes a little of the way towards explaining your graph.
One fulcrum that could dramatically alter California’s fortunes is the property market. Housing has become more unaffordable throughout America over the past decade but California continues to claim the dubious crown as the least affordable big state. The price-to-income ratio for buying homes is 12 in San Jose and 11.3 in San Francisco, double the national median, according to researchers at Harvard University. The root cause is a lack of new housing. Mr Newsom is well aware of this and has sought to kick-start construction. Since 2017 lawmakers have passed more than 100 separate pieces of legislation to make it easier to build homes. But the results have been dismal so far. Construction permits have plateaued at about 110,000 housing units per year, far short of what California needs.
Instead, the property sector stands as an example of how California often ties itself in regulatory knots. The state has sped up its notoriously cumbersome environmental reviews for housing, especially for affordable projects. Yet to benefit from this provision, companies must demonstrate that they are using highly skilled workers at prevailing wages—a requirement that in practice compels them to hire union contractors. Alexis Gevorgian, a developer, calculates that this can increase costs by as much as 40%, turning affordable housing into a guaranteed loss-making venture. “The expedited reviews themselves are useless unless you get a subsidy from the government,” Mr Gevorgian says. One of the things on the chopping block as California looks to close its budget deficit? About $1bn of funding for affordable housing, including subsidies for developers. California is no failed state. But it certainly is a struggling one.
The rest of the article is interesting. Unemployment in California is above 5%. Unlike the rest of the country, there are more people looking for work than there are unfilled jobs. People, especially the wealthy who are fed up with the taxes, are leaving the state. Income tax collection was down 25% last year. The deficit is on track to hit $78 billion, far higher than the state's earlier $38 billion projection.
California's anti-free market policies seem to be catching up with it.
https://www.economist.com/united-sta...-easy-solution Originally Posted by Tiny
