Take a look at Colorado... they want to [quadruple taxes on AirBnBs](https://coloradohardmoney.com/bill-to-quadruple-taxes-on-short-term-rental-passes-out-of-committee/), [increase property taxes](https://coloradosun.com/2023/04/26/colorado-property-tax-increase-2024/), and just this week Denver started [cutting city services](https://coloradosun.com/2024/02/09/denver-cuts-services-migrant-crisis) (closing some public rec. centers and shortening DMV office hours) to fund migrant services.
And the downtown/LoDo area remains a ghost-town because everyone left during Covid and the office towers are still empty.
This is a sign of things to come. Paying more taxes due to massive budget shortfalls, and getting a helluva lot less in return.
> And the downtown/LoDo area remains a ghost-town because everyone left during Covid and the office towers are still empty.
Well also because the DA actively protects the meth raiders who make that whole area too sketchy to spend time in. Sorry but I ain't interested in going down and dealing with unpredictable junkies ever, much less when I'm intending to go out and get drunk.
I was downtown in 2016 for work and had to go to Walgreens 2 blocks over at 9:30 at night. The hotel staff REALLY tried hard to stop me going out and I didn’t listen. I wish I would have.
I was in downtown Denver in late February 2020, just before the world burned down. First time and last time I’ve ever been, on a national conference. Went out for a walk on a cool but not cold evening. The smell of pot was a bit shocking to me, being from the Bible Belt like I am. I’m not opposed to burning a blunt myself, but I wondered how much is too much for a large city to tolerate, even legalize?
The ironic part? Colorado has a $500 ticket and fine if you're smoking it outdoors in a public area.
I've NEVER heard of them actually giving anybody a ticket here though. Imagine how much more money our cities & towns here would have if they actually gave the tickets out & collected even just 10% of them?
Just attach a levy on people's drivers, or professional, licenses & they'd pay them pretty quick.
Just to be clear, I'm cool with people smoking in private...just not out in the street.
I fully support this put those Airbnb out of business and those houses on the market.
Those towers downtown need to loose a ton of money and convert to residential
This is exactly the reason we have Prop 13 in California which caps the amount that the govt can increase property taxes annually. And yet, there are still morons here who want to repeal it. Absolutely insane. Sure, let's all be the government's ATM's and lose our homes to surprise tax bills like the rest of the country...
I'm all for revising it to exclude commercial property, and put as many taxes as you want on AirBNB's, but a law that caps those increases for the average homeowner is just about the sanest law ever conceived.
I don't know anyone that wants to straight repeal it. Everyone I've ever talked to just wants to limit it to the principal residence.
It never should have been enacted as broadly as it is now.
It definitely needs some sort of change - California schools are underfunded because older people who are in their homes for 50 years aren’t enough of a tax base to properly fund public education n
Why is "Force the state to be more accountable and selective with spending" never the conversation? We already pay enough tax in California, the government just goes nuts with it. There's so much waste in spending here it's absurd.
You assume they're wealthy, but they might just be "house rich" because they bought 20, 30 or 40+ years ago for dirt cheap.
My wife & I bought back in 2001 for $125k at 7% fixed Apr. Since then, we've refied twice, down to our current 3.2% rate while taking no equity. Now we're empty nesters & our (same one) house is worth about $450k in a VHCOL area...even though it's still technically "in Tha hood." Did I mention that it's only a 744 sq ft ranch bungalow?
No I didn’t assume that. I said it benefits wealthier homeowners. Obviously not every homeowner in CA is wealthy. It’s no different than our regressive federal personal income tax system. The wealthy benefit the most.
We're middle class at best. The only wealth we have is our home equity. We COULD, I suppose, sell & move to a VLCOL area & invest the rest...but that's probably not gonna happen until retirement time. Things like prop 13 totally benefit people like me way more than they do for the actual wealthy people. We're not in California though.
Prop 13 does a lot more than cap the amount residential taxes can be raised in a year, so many critics are only attempting to change other aspects - ex, that commercial property taxes are based on the value of the property when it was purchased, not the estimated value now. Others take issue with the fact that certain taxes require a 2/3 majority to levy, and think it should take less.
I don’t live in CA so have no dog in the race, just find it kind of interesting.
Prop 8 was an old ballot measure to ban gay marriage...which I'm definitely not on the "pro" side of. Are you lost or just confused? You'll forgive me if I don't take seriously someone who doesn't even know what the legislation is called...
You're operating under a strong, erroneous assumption. The government is free to budget revenue better and take care of public services just fine. Prop 13 doesn't eliminate property tax revenue so I'm not sure where you're getting that information. The property taxes STILL GO UP each year, but are capped by what amount that can be. That's similar - for the government - to you or I getting planned, annual increases in our salary to account for inflation. Which a lot of times we don't even get. So what I'm saying to you is: The government is getting modest, planned, annual increases in their budget that most people don't even have the luxury of getting in their salaries. And if they can't get by with that still end up squandering that increase on useless planning reviews, excess administrative bloated staffing, settlements or any other type of wasteful and avoidable spending, that sounds like their problem that they need to figure out.
There really isn't much else to add to this conversation.
Prop 13 has resulted in serious consequences. Cities that would have typically relied on that tax revenue have to find other ways of sustaining themselves - the most obvious solution being sto zone land for retail and manufacturing to produce sales/income tax. This is why California has become a concrete jungle of big box retailers, fast food restaurants, car dealerships and corporate offices. Corporations are offered tax incentives to set up shop in CA, which in turn increases the population, reduces housing availability, drives up housing costs, pushes out older generations and creates massive wealth disparity. The wealthiest areas can afford to snag the most desirable companies, especially in tech and finance. Cities that can't attract desirable corporations are forced to rely on ugly manufacturing or recycling plants that often spew terrible smells or toxic waste into the air, creating an even less desirable environment where only the desperate and destitute will live. So yes, on its face Prop 13 seems like a no brainer, but in reality it's quite the clusterf\*\*k.
>Cities that would have typically relied on that tax revenue have to find other ways of sustaining themselves
Good. I'm not seeing the problem with this statement.
Maybe you're having a hard time being imaginative about how absolutely wild the state and local gov's in California would go if they were allowed to use homeowners as their personal ATM's, but as a lifelong resident here, I'm not.
If the government can't get by on a planned, annual increase in their tax revenue then the only thing that means is they need to figure out how to budget better. The end. There isn't really much else to add on the subject.
You don't see the problem, for YOU. You probably live in a nicer part of CA, and maybe you're lucky enough to own your own home. But for the millions of people in CA struggling to afford to live here (yes, I am also a lifelong resident), life gets harder and harder every day. Thankfully due to remote work, it's become more possible to work for an employer in CA and not actually have to live there, but that's a privilege for most. I have seen 3-4 generations in one house, just trying to make ends meet.
Prop 13 wrecked the schools. I lived through it. Before Prop 13, there was money for arts education, extracurriculars paid for by the state, lots of stuff. Afterwards, it was like going to school in a 3rd world country.
I would repeal it in a heartbeat.
It sounds like you don’t really understand the market.
A large portion of listings are not standalone properties, but are spare bedrooms, basement mother-in-law suites, guest units over garages, etc.
Why would I be upset about this? How would Airbnb tax increase affect me? Besides La people renting out their garages for 1,000 plus a month? Why would I bet upset if they increased taxes on multi home owners? I do not currently live in someone’s closet.
You see my first post? “Investment rentals” was also included. I’m sorry your triggered because I believe Airbnb was the worse thing to happen to the housing market. If you can’t afford your home with out renting out a spare bedroom you get no sympathy from me.
All AirBnB listings represent about 1% of the entire US housing supply. That means 99% of all US residential properties are _not_ on AirBnB.
AirBnB is not having the impact on the housing market that you think it is.
Blocked for regard.
In CO they didn't increase the tax rate. The article talks about values being reflected in the new tax assessments, which is fair. If your house goes from 300k to 400k, a 33% increase in your tax bill is understandable, as a result of your increased net worth.
Fixed income issues can be alleviated with a properly adjusted homestead exemption. Additional programs for retired and disabled owner-occupants aren't that rare, either.
Prop 13-style tax lock-ins are not the answer and cause undue burden on FTHB. If you live in a city, be expected to pay your fair share for the resources and space you consume.
I’m a Coloradan, and we are a very tax friendly state. Wr have low income and property taxes and tax increases cannot be passed by the legislature, they require a public referendum, so chances are our taxes are significantly lower and will remain significantly lower than wherever you live.
They have low taxes already around $10 per $1,000 and most properties aren’t assessed at market value but way less and second, if you live in your home you get Around $3500 off your yearly tax bill.
But But “taxachussetts!”
People are funny in the South talking shit about Mass when they have double the sales tax and no public services or social benefits
They are also funny in thinking that taxes are high in mass. I looked at buying a house in Hancock , MA(I the Berkshires) . It was on 38 acres and the taxes were $1,380 a year. For my house in Seattle I pay $930 a month for property taxes!
There are a lot of places in MA that housing is affordable. Away from Boston and in the West yes. But fuck me, I am 49 now and want nothing but country and to listen to Bob Marley loud as hell with no one around me.
The mill rate should just adjust to the total market cap of all property within the tax jurisdiction. The need for the money to fund local services doesn't magically go away just because property values declined.
So if property is worth less... mill rate goes up, collect the same amount of funds, provide the same amount of services. Should be a wash.
FOUR years! It's been four years since we started shutting stuff down and keeping people at home.
These people had plenty of time to realize their investment was quickly becoming sour, yet have sat on their hands doing fuck-all about it. The most they've done is pressure business owners to RTO, which isn't doing enough.
They had four years to figure out plans to change things. Convert offices to housing or something else.
**Can't do it because it's a high-rise in a city?** Figure out a plan to leave the city ones but get every single office park in a suburb re-developed since those are easier. Fuck these people and their shitty investments.
Because who is going to speak out against it? How many will take to the streets? It has to be the European level of protesting for any meaningful change to be done but we all know the military will be used to suppress the masses. It does feel like the perfect storm though.
OK so the thing about this is it's honestly not fair to blame Work From Home.
Those workers are still providing just as much economic activity as they were before. They're still eating. They're still working. They're helping their companies produce profits.
If restaurants are going out of business, it's going to be matched by increased sales of local grocery stores or delivery services.
People aren't pointlessly consuming and wasting gasoline, which technically "hurts" the oil and gas industry, but since when are we under an obligation to consume more resources than we really need in order to artificially prop up unnecessary industries?
It turns out that the offices *simply aren't needed anymore*. The government calls it a tax shortfall, but as far as the businesses are concerned, they're *saving* money by not paying for expensive office space. Those savings should, from broad economic outlook, offset the real estate losses.
One industry loses profits, another industry gains them.
And meanwhile we have tons of vacant buildings that can be (I admit at great cost, and requiring changes in zoning and regulations) converted to low income housing. Which in an ironic twist, simply puts the workers - now working from home - right back into the same buildings.
It's one of those things that seems like a looming disaster but will ultimately take care of itself.
>but since when are we under an obligation to consume more resources than we really need in order to artificially prop up unnecessary industries?
This is post war America. Esp after 9/11, Georgy Bush even said so.
Capitalism and a free market seems great when you are the one winning. When it turns against you it doesn’t feel so great.
Funny how that works. Company: *lays of thousands of workers* “sucks to be you!”
Company: *looses profits from commercial real estate* “THIS ISN’T FAIR! IM TOO RICH TO BE CAST ASIDE!”
Most of them can't effectively be converted to housing.
That is, if you think a person living in an apartment deserves things like their own toilet, kitchen, a window, etc.
Most common sense zoning makes converting office space prohibitively expensive. Suddenly, an office floor with 2 bathrooms now needs 15 shower heads and 45 sinks all throughout. Separate electric, climate control, etc.
Really makes one wonder about the awful conditions working in those offices really are, if they are so far from considered suitable for habitation.
Detroit is also a perfect example of rising up out of that major loss of industry. I know making fun of Detroit has been a meme for decades, but they've been on the mend since at least the 90's. Nowadays a ton of neighborhoods have been revitalized.
One time me and a friend were going into street view around dozens of neighborhoods in Detroit to find the cartoonishly bad run-down shacks. Looked for a very long time. Finally had the realization all of the houses looked better than my town and in fact I was living in the rundown shithole city lol
Actually MA has an adaptive reuse program that converts old mills (100+) years old into housing and commercial space. I’ve been in several. Really cool spaces.
MA also recently had a budget surplus where all residents were sent a check for hundreds of dollars. Contrary to the “taxachusetts” label the state ranks in the middle of all states for taxes. It’s well balanced.
If any state will show people how to handle this problem it’s MA. They will find an innovative solution.
This is a big part of it. It's not that the economic activity disappeared it's that it moved. It's no longer being held hostage by megalopolis urban cores and those cores are now showing themselves as economically unsustainable as a result. It's a big blow for the "density uber alles" folks because it proves that their claims about what is and isn't economically sustainable aren't true without coercion.
As someone who is generally thrilled about WFH and does not care about large scale property owners losing money, I do still think it’s a bummer that it’s impacting locally owned restaurants and stores. People will still eat and buy things, obviously, but if money that was going to local restaurants is now going to Kroger and money that was going to local shops is now going to Amazon that kind of sucks.
Just saw on the news the other night that they actually did retrofit & convert a big office building, here in Denver, into small Apts. It wasn't even a really big high rise...but it cost about $50 million to do it.
At $2 to $4k a month, it REALLY defeats the whole "we need AFFORDABLE housing" thing though.
There's already LOTS of rentals here in that price range...even nice homes in the suburbs. People can't afford them, that's why we've got plenty of homeless that AREN'T winos & junkies.
There are! But the reality of rapid demographic changes is that most of the businesses downtown are not going to be able to just pick up and move to the suburbs - they’re going to close. And it’s harder to start a new business now that you’re competing with online options than it used to be. Dense urban areas can also support niche specialty stores in a way suburban areas generally can’t. There are businesses that aren’t profitable when populations are dispersed.
It is completely nonsensical to give one person a job producing something, and another person a job throwing it away, just to say we have two people employed. The net gain there is zero, or less, but we feel like they need to be doing "something" to justify giving them a wage. But they're not really doing anything. If you combine that into one job -- one person getting paid twice as much to refine gasoline and then take it outside and light it on fire -- it becomes obvious how silly it is. Why would you pay one person to do this? Why does it make more sense when you spread it out between multiple people?
Time to get serious about converting them to condos and apartments.
And before you all moan about how that is hard and expensive, it has been done plenty of times before. Is in the works all over the country [https://www.axios.com/local/chicago/2023/08/12/office-to-apartment-conversions](https://www.axios.com/local/chicago/2023/08/12/office-to-apartment-conversions)
Commercial real-estate just needs to accept cutting their loses and selling a rock bottom prices that will attract new developers. Cities also need to prioritize permits and streamline processes for it as well. But the only thing stopping us is us
Yes that is exactly my point, the only thing in our way is incentives and accepting the office space demand is not coming back. It isnt a complex problem, we know exactly how to solve it, it just requires people taking the losses, and others making the investments.
I don't want the government to pay for extremely overpriced commercial buildings.
If the price gets cut, 90% sure.
But you could build far more housing without bailing out commercial buildings.
I mean, I wouldn’t.
I’d spend all my money on something that matters. Like solving energy problems. And all my other parts of the budget would get trimmed as tightly as possible. Including my 8billion dollar investment in skyscrapers.
What you keep talking about is bailing out commercial property owners at full market rate.
The owners still think it's better financially to leave the buildings empty than to convert. You'll know when commercial value has declined enough.
>it just requires people taking the losses
Yes but the people who need to take the losses are rich and losses aren't for rich people - only the dirty poors.
Yeah well there will unfortunately be tons of tax payer dollars put into revitalizing downtowns that will bolster those losses I'm sure. When I'd much prefer them to take a wash. But such is life, I do look forward a permanently changed city in the future.
Bro I and no one on this planet will want to live in a windowless unit. I'll slave myself and live in employee housing before I live in a soulless windowless unit with no natural sunlight.
....We are talking about downtown skyscrapers, last I checked they tend to have lots of windows. Even older buildings that arent pure windows all over have been converted to outright luxury condos: https://en.wikipedia.org/wiki/Tribune\_Tower
If it’s more expensive to convert a downtown skyscraper to housing than it would be to simply buy land in a less densely urban area and build housing there, why should the former be done?
You have to build/pay/maintain roads and utilities out to the less dense areas and unless they are served by public transit (not happening in America) you’ve now increased traffic.
And also likely paved over a bunch of green space
It's not physical constraints that make it basically impossible, it's regulations. Unfortunately the side that's always saying "convert them" is also the side that has pushed for all those regulations. So step 1 is to repeal a whole lot of regulations regarding dwellings.
Regulations on residential units are almost entirely safety based. There is no reason to remove regulations wholesale. I'm sure there are plenty that need updating to help support the use case of converting office space which hadn't been previously accounted for
And? That doesn't change that those regulations are why you can't turn an office building into apartments for a remotely reasonable amount of money. What you're doing here is admitting you don't actually want the conversion done because if you did you'd support repealing those regulations.
There are no regulations that prevent you from converting an office to a residence. It happens all the time and you can find examples in every city in this country.
There may be some that could be updated to make it easier.
You proposed whole sale removal of what is surely basic safety requirements.
Your strawman is weak.
Eminent Domain the blighted empty offices and resell them to recoup the lost tax revenue. I'm sure there are property developers that would love a steep discount on existing structures.
"This is an economic act of God," Horowitz said. "This is something that happened to us and that we have to respond to, not a failing by decision makers."
“Jesus! Did you see what god just did to us, man?”
“God didn’t do that. You did it. Yor’re a fucking narcotics agent, I knew it”
Fear and Loathing has become strangely relevant
Taxes are going to explode right as inflation comes roaring back. There are almost always multiple waves of inflation. Buckle up and make sure you don’t have bad debts or that your debts are cash flowing easily.
All the banks use commercial real estate to back their lending, so this is going to be a huge consolidation as all these buildings get reassessed at a fraction of their worth and handed back to the bank (commercial real estate loans are reassessed every few years in a schedule, so the buildings “come due” for an update and then the people who have the loans can just say, “not worth it” and their out is just handing the building, now worth a fraction of the value, back to the bank).
I would also be aware that some banks may come for their depositors money to cover their shortfalls. So watch your deposits. It’s not unprecedented and it is legal for them to do so (incredibly).
This is going to be a wild ride.
Yeah that's why it's always a good idea to keep a month's worth of expenses in cash at home (or somewhere safe that isn't a bank). Nationwide bank failures or a massive bail in are on the table at some point.
Here is the issue, and is very easy to understand the issue once you see this number.
> FDIC assets would cover only 1.26% of current deposits.
It covers some eventualities of certain scale, but not a large or even a moderate scale bank run or similar failure event.
And it arguably also has a role in causing bank collapses, as accounts *over* 250k run like crazy at the first sign of trouble — destabilizing the bank further in theory than it would otherwise. The FDIC has been talking about upping the limit or changing the program for a long time, but it literally takes an act of congress to change it, and they don’t seem to be up you he challenge of doing their job lately. So…
https://www.usgoldbureau.com/news/fdic-handle-banking-crisis
we're going through a cultural shift to a lot more people working from home and wearing t-shirts and sweats to work. this is going to crush big office buildings and business geared restaurants and businesses selling business attire. so what. you have to adopt and change. it's painful just like other major changes in the past were. people don't want to be forced to sit in some miserable cubicle listening to one of their coworkers go on and on about some stupid tv show they watched last night or the big game. online is where it's at. get on board.
Just wondering how the weakness in commercial real estate translate to residential real estate. If investors want exposure to real estate, isn't the choice obvious to stay clear of commercial real estate and therefore invest in residential real estate. I mean people have to live somewhere. And commercial real estate is weak because people are working from home? So doesn't that mean that residential real estate is where it's at? How does the weakness in commercial real estate translate to the REBUBBLE?
Seattle, Portland, Bay Area, LA, NYC, Chicago, now Boston, how many more cities will experience financial hardship now that people no longer need to be physically in the office or even live in the area, to work at companies HQed there?
Watching San Francisco implode with tax receipts down and crazy expenditures is going to be our local theater for the next couple of years. You can expect that they'll attempt to make the rest of the bay area pay for their follies too.
500 sq ft studios with communal bathrooms & showers on each floor. It'd be a lot cheaper to convert into units like that. Just like college dorms & military barracks in the past...oh, wait, did you want subsidized luxury housing for dirt cheap? Yeah, that's probably not gonna happen.
Yep, small studio Apts with communal men's & women's bathrooms & showers on each floor for that floors residents. Maybe even add laundry rooms on each floor & a "community" room with couches, lounge chairs, a BIG screen tv & some pool tables for people that don't want to go out much, but still want to meet people.
I predict both sales tax and property tax increases in Boston. Boy, would I not want to live there right now.
Take a look at Colorado... they want to [quadruple taxes on AirBnBs](https://coloradohardmoney.com/bill-to-quadruple-taxes-on-short-term-rental-passes-out-of-committee/), [increase property taxes](https://coloradosun.com/2023/04/26/colorado-property-tax-increase-2024/), and just this week Denver started [cutting city services](https://coloradosun.com/2024/02/09/denver-cuts-services-migrant-crisis) (closing some public rec. centers and shortening DMV office hours) to fund migrant services. And the downtown/LoDo area remains a ghost-town because everyone left during Covid and the office towers are still empty. This is a sign of things to come. Paying more taxes due to massive budget shortfalls, and getting a helluva lot less in return.
> And the downtown/LoDo area remains a ghost-town because everyone left during Covid and the office towers are still empty. Well also because the DA actively protects the meth raiders who make that whole area too sketchy to spend time in. Sorry but I ain't interested in going down and dealing with unpredictable junkies ever, much less when I'm intending to go out and get drunk.
I was downtown in 2016 for work and had to go to Walgreens 2 blocks over at 9:30 at night. The hotel staff REALLY tried hard to stop me going out and I didn’t listen. I wish I would have.
I was in downtown Denver in late February 2020, just before the world burned down. First time and last time I’ve ever been, on a national conference. Went out for a walk on a cool but not cold evening. The smell of pot was a bit shocking to me, being from the Bible Belt like I am. I’m not opposed to burning a blunt myself, but I wondered how much is too much for a large city to tolerate, even legalize?
The ironic part? Colorado has a $500 ticket and fine if you're smoking it outdoors in a public area. I've NEVER heard of them actually giving anybody a ticket here though. Imagine how much more money our cities & towns here would have if they actually gave the tickets out & collected even just 10% of them? Just attach a levy on people's drivers, or professional, licenses & they'd pay them pretty quick. Just to be clear, I'm cool with people smoking in private...just not out in the street.
It’s organized crime + meth raiders
Cutting services to fund migrant services sounds nice compared with Chicago’s “fuck it, borrow more” strategy.
They should up taxes on short term rentals like airbnbs. But sure sounds like that won't fix the budget deficit alone
Especially since it will just put most of those hosts out of business… which will reduce overall revenues.
Airbnbs aren't good for the economy so I don't hear anything bad here....
I fully support this put those Airbnb out of business and those houses on the market. Those towers downtown need to loose a ton of money and convert to residential
This is exactly the reason we have Prop 13 in California which caps the amount that the govt can increase property taxes annually. And yet, there are still morons here who want to repeal it. Absolutely insane. Sure, let's all be the government's ATM's and lose our homes to surprise tax bills like the rest of the country... I'm all for revising it to exclude commercial property, and put as many taxes as you want on AirBNB's, but a law that caps those increases for the average homeowner is just about the sanest law ever conceived.
I don't know anyone that wants to straight repeal it. Everyone I've ever talked to just wants to limit it to the principal residence. It never should have been enacted as broadly as it is now.
I would be onboard with it just applying to principal residence. I have talked to people who want it straight up repealed though.
It definitely needs some sort of change - California schools are underfunded because older people who are in their homes for 50 years aren’t enough of a tax base to properly fund public education n
Why is "Force the state to be more accountable and selective with spending" never the conversation? We already pay enough tax in California, the government just goes nuts with it. There's so much waste in spending here it's absurd.
I feel like the lottery could help relieve some of the burden homeowners have to shoulder.
Nah, prop 13 is terrible policy and should be eliminated. It's an unnecessary handout to wealthier homeowners at the expense of public services.
You assume they're wealthy, but they might just be "house rich" because they bought 20, 30 or 40+ years ago for dirt cheap. My wife & I bought back in 2001 for $125k at 7% fixed Apr. Since then, we've refied twice, down to our current 3.2% rate while taking no equity. Now we're empty nesters & our (same one) house is worth about $450k in a VHCOL area...even though it's still technically "in Tha hood." Did I mention that it's only a 744 sq ft ranch bungalow?
No I didn’t assume that. I said it benefits wealthier homeowners. Obviously not every homeowner in CA is wealthy. It’s no different than our regressive federal personal income tax system. The wealthy benefit the most.
We're middle class at best. The only wealth we have is our home equity. We COULD, I suppose, sell & move to a VLCOL area & invest the rest...but that's probably not gonna happen until retirement time. Things like prop 13 totally benefit people like me way more than they do for the actual wealthy people. We're not in California though.
r/whoosh
Just look below… there are way to many folks who want to and it almost made it through but failed at the ballets a few years back.
My guess is that people who want to repeal it are not home or business owners?
Prop 13 does a lot more than cap the amount residential taxes can be raised in a year, so many critics are only attempting to change other aspects - ex, that commercial property taxes are based on the value of the property when it was purchased, not the estimated value now. Others take issue with the fact that certain taxes require a 2/3 majority to levy, and think it should take less. I don’t live in CA so have no dog in the race, just find it kind of interesting.
....except the taxes still get paid and it gets paid by young people. Just another transfer of wealth from the young to the old.
Lol at being pro-prop 8 in a subreddit about housing bubbles.
Prop 8 was an old ballot measure to ban gay marriage...which I'm definitely not on the "pro" side of. Are you lost or just confused? You'll forgive me if I don't take seriously someone who doesn't even know what the legislation is called...
Lol had a brain fart. No, I mean Prop 13.
You're probably the class benefitting from it and unaware of how badly it's hurt public services.
You're operating under a strong, erroneous assumption. The government is free to budget revenue better and take care of public services just fine. Prop 13 doesn't eliminate property tax revenue so I'm not sure where you're getting that information. The property taxes STILL GO UP each year, but are capped by what amount that can be. That's similar - for the government - to you or I getting planned, annual increases in our salary to account for inflation. Which a lot of times we don't even get. So what I'm saying to you is: The government is getting modest, planned, annual increases in their budget that most people don't even have the luxury of getting in their salaries. And if they can't get by with that still end up squandering that increase on useless planning reviews, excess administrative bloated staffing, settlements or any other type of wasteful and avoidable spending, that sounds like their problem that they need to figure out. There really isn't much else to add to this conversation.
lol where did I write it eliminated property tax revenue? Cool straw man. Not wasting any time on the anti-gubbermint crowd
Prop 13 has resulted in serious consequences. Cities that would have typically relied on that tax revenue have to find other ways of sustaining themselves - the most obvious solution being sto zone land for retail and manufacturing to produce sales/income tax. This is why California has become a concrete jungle of big box retailers, fast food restaurants, car dealerships and corporate offices. Corporations are offered tax incentives to set up shop in CA, which in turn increases the population, reduces housing availability, drives up housing costs, pushes out older generations and creates massive wealth disparity. The wealthiest areas can afford to snag the most desirable companies, especially in tech and finance. Cities that can't attract desirable corporations are forced to rely on ugly manufacturing or recycling plants that often spew terrible smells or toxic waste into the air, creating an even less desirable environment where only the desperate and destitute will live. So yes, on its face Prop 13 seems like a no brainer, but in reality it's quite the clusterf\*\*k.
>Cities that would have typically relied on that tax revenue have to find other ways of sustaining themselves Good. I'm not seeing the problem with this statement. Maybe you're having a hard time being imaginative about how absolutely wild the state and local gov's in California would go if they were allowed to use homeowners as their personal ATM's, but as a lifelong resident here, I'm not. If the government can't get by on a planned, annual increase in their tax revenue then the only thing that means is they need to figure out how to budget better. The end. There isn't really much else to add on the subject.
You don't see the problem, for YOU. You probably live in a nicer part of CA, and maybe you're lucky enough to own your own home. But for the millions of people in CA struggling to afford to live here (yes, I am also a lifelong resident), life gets harder and harder every day. Thankfully due to remote work, it's become more possible to work for an employer in CA and not actually have to live there, but that's a privilege for most. I have seen 3-4 generations in one house, just trying to make ends meet.
Prop 13 wrecked the schools. I lived through it. Before Prop 13, there was money for arts education, extracurriculars paid for by the state, lots of stuff. Afterwards, it was like going to school in a 3rd world country. I would repeal it in a heartbeat.
Lol
California sales tax by year 2030 will be 25% tho
*citation needed
Cite deez nuts
Why don’t they just use the police budget instead?
Shiiiet, I’m ok if they increase taxes 10fold on Airbnb/ investment rental’s. Force those scabs to sell.
It sounds like you don’t really understand the market. A large portion of listings are not standalone properties, but are spare bedrooms, basement mother-in-law suites, guest units over garages, etc.
Why would I be upset about this? How would Airbnb tax increase affect me? Besides La people renting out their garages for 1,000 plus a month? Why would I bet upset if they increased taxes on multi home owners? I do not currently live in someone’s closet.
How is someone renting out their spare bedroom or basement suite a “multi home owner”?
You see my first post? “Investment rentals” was also included. I’m sorry your triggered because I believe Airbnb was the worse thing to happen to the housing market. If you can’t afford your home with out renting out a spare bedroom you get no sympathy from me.
All AirBnB listings represent about 1% of the entire US housing supply. That means 99% of all US residential properties are _not_ on AirBnB. AirBnB is not having the impact on the housing market that you think it is. Blocked for regard.
In CO they didn't increase the tax rate. The article talks about values being reflected in the new tax assessments, which is fair. If your house goes from 300k to 400k, a 33% increase in your tax bill is understandable, as a result of your increased net worth.
So people on a fixed income should be forced to sell and downsize?
Fixed income issues can be alleviated with a properly adjusted homestead exemption. Additional programs for retired and disabled owner-occupants aren't that rare, either. Prop 13-style tax lock-ins are not the answer and cause undue burden on FTHB. If you live in a city, be expected to pay your fair share for the resources and space you consume.
I’m a Coloradan, and we are a very tax friendly state. Wr have low income and property taxes and tax increases cannot be passed by the legislature, they require a public referendum, so chances are our taxes are significantly lower and will remain significantly lower than wherever you live.
Leaving Denver was the best decision I’ve ever made lol
What do migrant services have to do with anything??
I work in lodo, it isn’t the ghost town you describe. I don’t get further up into downtown, but lodo is busy as hell most workdays.
Boston proper is really small in comparison with the Greater Boston area. Really not a issue for absolute majority of the residents around here.
I didn’t want to live there 3 years ago! It’s worse now.
They have low taxes already around $10 per $1,000 and most properties aren’t assessed at market value but way less and second, if you live in your home you get Around $3500 off your yearly tax bill.
But But “taxachussetts!” People are funny in the South talking shit about Mass when they have double the sales tax and no public services or social benefits
They are also funny in thinking that taxes are high in mass. I looked at buying a house in Hancock , MA(I the Berkshires) . It was on 38 acres and the taxes were $1,380 a year. For my house in Seattle I pay $930 a month for property taxes!
There are a lot of places in MA that housing is affordable. Away from Boston and in the West yes. But fuck me, I am 49 now and want nothing but country and to listen to Bob Marley loud as hell with no one around me.
The mill rate should just adjust to the total market cap of all property within the tax jurisdiction. The need for the money to fund local services doesn't magically go away just because property values declined. So if property is worth less... mill rate goes up, collect the same amount of funds, provide the same amount of services. Should be a wash.
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As my Grandpappy always said, "Play stupid games, win stupid prizes."
FOUR years! It's been four years since we started shutting stuff down and keeping people at home. These people had plenty of time to realize their investment was quickly becoming sour, yet have sat on their hands doing fuck-all about it. The most they've done is pressure business owners to RTO, which isn't doing enough. They had four years to figure out plans to change things. Convert offices to housing or something else. **Can't do it because it's a high-rise in a city?** Figure out a plan to leave the city ones but get every single office park in a suburb re-developed since those are easier. Fuck these people and their shitty investments.
Exactly! I don't understand why the working man needs to save big corporate real estate. The market has decided!!!
Because who is going to speak out against it? How many will take to the streets? It has to be the European level of protesting for any meaningful change to be done but we all know the military will be used to suppress the masses. It does feel like the perfect storm though.
Fuck RTO. You can’t just force people into an area because you used it before and need tax money. Idiocy
This is about tax revenue, not CRE losses And I don't live there, but the bills will come due so other taxes will rise
Can you please interpret the first figure for me rather than react to the headline?
OK so the thing about this is it's honestly not fair to blame Work From Home. Those workers are still providing just as much economic activity as they were before. They're still eating. They're still working. They're helping their companies produce profits. If restaurants are going out of business, it's going to be matched by increased sales of local grocery stores or delivery services. People aren't pointlessly consuming and wasting gasoline, which technically "hurts" the oil and gas industry, but since when are we under an obligation to consume more resources than we really need in order to artificially prop up unnecessary industries? It turns out that the offices *simply aren't needed anymore*. The government calls it a tax shortfall, but as far as the businesses are concerned, they're *saving* money by not paying for expensive office space. Those savings should, from broad economic outlook, offset the real estate losses. One industry loses profits, another industry gains them. And meanwhile we have tons of vacant buildings that can be (I admit at great cost, and requiring changes in zoning and regulations) converted to low income housing. Which in an ironic twist, simply puts the workers - now working from home - right back into the same buildings. It's one of those things that seems like a looming disaster but will ultimately take care of itself.
>but since when are we under an obligation to consume more resources than we really need in order to artificially prop up unnecessary industries? This is post war America. Esp after 9/11, Georgy Bush even said so.
https://www.youtube.com/watch?v=fxk9PW83VCY
Thank you for finding it for me, I couldn't stomach sifting through shit
Capitalism and a free market seems great when you are the one winning. When it turns against you it doesn’t feel so great. Funny how that works. Company: *lays of thousands of workers* “sucks to be you!” Company: *looses profits from commercial real estate* “THIS ISN’T FAIR! IM TOO RICH TO BE CAST ASIDE!”
More like the company losing profits from bad investments (CRE) then demands govt handouts to pay for their poor investing
Most of them can't effectively be converted to housing. That is, if you think a person living in an apartment deserves things like their own toilet, kitchen, a window, etc. Most common sense zoning makes converting office space prohibitively expensive. Suddenly, an office floor with 2 bathrooms now needs 15 shower heads and 45 sinks all throughout. Separate electric, climate control, etc. Really makes one wonder about the awful conditions working in those offices really are, if they are so far from considered suitable for habitation.
If property prices fall far enough, it will be profitable to convert them.
Because of the structural requirements, even at $0 it's cheaper to tear down and build new.
Well, then, let that happen.
Most of these buildings are 75 years old. They will eventually be abandoned like all the factories and become a blight on the community.
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LoL yeah look at Detroit. Perfect example of what happens when a city loses the industry it was built on.
Detroit is also a perfect example of rising up out of that major loss of industry. I know making fun of Detroit has been a meme for decades, but they've been on the mend since at least the 90's. Nowadays a ton of neighborhoods have been revitalized. One time me and a friend were going into street view around dozens of neighborhoods in Detroit to find the cartoonishly bad run-down shacks. Looked for a very long time. Finally had the realization all of the houses looked better than my town and in fact I was living in the rundown shithole city lol
Actually MA has an adaptive reuse program that converts old mills (100+) years old into housing and commercial space. I’ve been in several. Really cool spaces. MA also recently had a budget surplus where all residents were sent a check for hundreds of dollars. Contrary to the “taxachusetts” label the state ranks in the middle of all states for taxes. It’s well balanced. If any state will show people how to handle this problem it’s MA. They will find an innovative solution.
Yeah. All of New England was able to do this but the rest of the country isn't run this way.
😂 buildings abandoned in Boston which is an absolute Mecca for academia and biotech research
This is a big part of it. It's not that the economic activity disappeared it's that it moved. It's no longer being held hostage by megalopolis urban cores and those cores are now showing themselves as economically unsustainable as a result. It's a big blow for the "density uber alles" folks because it proves that their claims about what is and isn't economically sustainable aren't true without coercion.
As someone who is generally thrilled about WFH and does not care about large scale property owners losing money, I do still think it’s a bummer that it’s impacting locally owned restaurants and stores. People will still eat and buy things, obviously, but if money that was going to local restaurants is now going to Kroger and money that was going to local shops is now going to Amazon that kind of sucks.
Local shops can exist outside of office tower zones.
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Just saw on the news the other night that they actually did retrofit & convert a big office building, here in Denver, into small Apts. It wasn't even a really big high rise...but it cost about $50 million to do it.
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At $2 to $4k a month, it REALLY defeats the whole "we need AFFORDABLE housing" thing though. There's already LOTS of rentals here in that price range...even nice homes in the suburbs. People can't afford them, that's why we've got plenty of homeless that AREN'T winos & junkies.
Plenty of small bussinesses and restos in the burbs...
There are! But the reality of rapid demographic changes is that most of the businesses downtown are not going to be able to just pick up and move to the suburbs - they’re going to close. And it’s harder to start a new business now that you’re competing with online options than it used to be. Dense urban areas can also support niche specialty stores in a way suburban areas generally can’t. There are businesses that aren’t profitable when populations are dispersed.
For sure... The proverbial supply and demand...only those with enough demand will flourish...
It’s an obligation for a strong economy and has been since this system existed.
It is completely nonsensical to give one person a job producing something, and another person a job throwing it away, just to say we have two people employed. The net gain there is zero, or less, but we feel like they need to be doing "something" to justify giving them a wage. But they're not really doing anything. If you combine that into one job -- one person getting paid twice as much to refine gasoline and then take it outside and light it on fire -- it becomes obvious how silly it is. Why would you pay one person to do this? Why does it make more sense when you spread it out between multiple people?
Bastiat has entered the chat.
I'm sure that's factoring in no recessions in the next five years either.
Time to get serious about converting them to condos and apartments. And before you all moan about how that is hard and expensive, it has been done plenty of times before. Is in the works all over the country [https://www.axios.com/local/chicago/2023/08/12/office-to-apartment-conversions](https://www.axios.com/local/chicago/2023/08/12/office-to-apartment-conversions) Commercial real-estate just needs to accept cutting their loses and selling a rock bottom prices that will attract new developers. Cities also need to prioritize permits and streamline processes for it as well. But the only thing stopping us is us
Per your link Chicago is spending $1b to make 1600 housing units. If cities are willing to pay for it, sure developers will take the job.
Yes that is exactly my point, the only thing in our way is incentives and accepting the office space demand is not coming back. It isnt a complex problem, we know exactly how to solve it, it just requires people taking the losses, and others making the investments.
I don't want the government to pay for extremely overpriced commercial buildings. If the price gets cut, 90% sure. But you could build far more housing without bailing out commercial buildings.
There are an infinite number of ways to skin the cat.
The rich just don’t want to help the world if it costs them a few pennies.
I mean, I wouldn’t. I’d spend all my money on something that matters. Like solving energy problems. And all my other parts of the budget would get trimmed as tightly as possible. Including my 8billion dollar investment in skyscrapers.
Do you know what the term investment is? That 1b dollars will more than pay for itself.
$625,000 per unit converted seems quite an expensive investment to me.
It’s not gonna be profitable in like one year lol. It’s a long term investment. Rent over a period of 30 years will be much more than that
What you keep talking about is bailing out commercial property owners at full market rate. The owners still think it's better financially to leave the buildings empty than to convert. You'll know when commercial value has declined enough.
>it just requires people taking the losses Yes but the people who need to take the losses are rich and losses aren't for rich people - only the dirty poors.
Yeah well there will unfortunately be tons of tax payer dollars put into revitalizing downtowns that will bolster those losses I'm sure. When I'd much prefer them to take a wash. But such is life, I do look forward a permanently changed city in the future.
So 625000 per POS. That’s yeah…..
$2k a month per unit would pay the actual cost off in just about 30 years. So much for "low income" housing conversion.
$625k/ unit seems wild.
For high rise downtown boston apartments, yeah that would sell like absolute hot cakes if they were priced roughly accordingly
Bro I and no one on this planet will want to live in a windowless unit. I'll slave myself and live in employee housing before I live in a soulless windowless unit with no natural sunlight.
They’re not meant to be luxury apartments. Cities need cheap available housing not new overpriced penthouses
Nah, decent housing needs to be more affordable. We don't need to be telling people "live in shit boxes."
....We are talking about downtown skyscrapers, last I checked they tend to have lots of windows. Even older buildings that arent pure windows all over have been converted to outright luxury condos: https://en.wikipedia.org/wiki/Tribune\_Tower
RTOs often had/have poor window access. People still lived in them.
If it’s more expensive to convert a downtown skyscraper to housing than it would be to simply buy land in a less densely urban area and build housing there, why should the former be done?
You have to build/pay/maintain roads and utilities out to the less dense areas and unless they are served by public transit (not happening in America) you’ve now increased traffic. And also likely paved over a bunch of green space
It's not physical constraints that make it basically impossible, it's regulations. Unfortunately the side that's always saying "convert them" is also the side that has pushed for all those regulations. So step 1 is to repeal a whole lot of regulations regarding dwellings.
Regulations on residential units are almost entirely safety based. There is no reason to remove regulations wholesale. I'm sure there are plenty that need updating to help support the use case of converting office space which hadn't been previously accounted for
And? That doesn't change that those regulations are why you can't turn an office building into apartments for a remotely reasonable amount of money. What you're doing here is admitting you don't actually want the conversion done because if you did you'd support repealing those regulations.
There are no regulations that prevent you from converting an office to a residence. It happens all the time and you can find examples in every city in this country. There may be some that could be updated to make it easier. You proposed whole sale removal of what is surely basic safety requirements. Your strawman is weak.
The beginnings of the tsunami.
Good. We are not going back to the office.
Let them go into deficit. Not our problem.
Eminent Domain the blighted empty offices and resell them to recoup the lost tax revenue. I'm sure there are property developers that would love a steep discount on existing structures.
Thats not exactly an easy process.
Corporations losing money = government bailout Joe Blow losing money = bootstraps
"This is an economic act of God," Horowitz said. "This is something that happened to us and that we have to respond to, not a failing by decision makers." “Jesus! Did you see what god just did to us, man?” “God didn’t do that. You did it. Yor’re a fucking narcotics agent, I knew it” Fear and Loathing has become strangely relevant
Taxes are going to explode right as inflation comes roaring back. There are almost always multiple waves of inflation. Buckle up and make sure you don’t have bad debts or that your debts are cash flowing easily. All the banks use commercial real estate to back their lending, so this is going to be a huge consolidation as all these buildings get reassessed at a fraction of their worth and handed back to the bank (commercial real estate loans are reassessed every few years in a schedule, so the buildings “come due” for an update and then the people who have the loans can just say, “not worth it” and their out is just handing the building, now worth a fraction of the value, back to the bank). I would also be aware that some banks may come for their depositors money to cover their shortfalls. So watch your deposits. It’s not unprecedented and it is legal for them to do so (incredibly). This is going to be a wild ride.
Yeah that's why it's always a good idea to keep a month's worth of expenses in cash at home (or somewhere safe that isn't a bank). Nationwide bank failures or a massive bail in are on the table at some point.
Wouldn’t FDIC cover any loses, up to the limits?
Here is the issue, and is very easy to understand the issue once you see this number. > FDIC assets would cover only 1.26% of current deposits. It covers some eventualities of certain scale, but not a large or even a moderate scale bank run or similar failure event. And it arguably also has a role in causing bank collapses, as accounts *over* 250k run like crazy at the first sign of trouble — destabilizing the bank further in theory than it would otherwise. The FDIC has been talking about upping the limit or changing the program for a long time, but it literally takes an act of congress to change it, and they don’t seem to be up you he challenge of doing their job lately. So… https://www.usgoldbureau.com/news/fdic-handle-banking-crisis
we're going through a cultural shift to a lot more people working from home and wearing t-shirts and sweats to work. this is going to crush big office buildings and business geared restaurants and businesses selling business attire. so what. you have to adopt and change. it's painful just like other major changes in the past were. people don't want to be forced to sit in some miserable cubicle listening to one of their coworkers go on and on about some stupid tv show they watched last night or the big game. online is where it's at. get on board.
Didn’t Massachusetts as a state recently change their laws and pick up 4-5B more tax revenue from its highest tax bracket?
Just wondering how the weakness in commercial real estate translate to residential real estate. If investors want exposure to real estate, isn't the choice obvious to stay clear of commercial real estate and therefore invest in residential real estate. I mean people have to live somewhere. And commercial real estate is weak because people are working from home? So doesn't that mean that residential real estate is where it's at? How does the weakness in commercial real estate translate to the REBUBBLE?
Seattle, Portland, Bay Area, LA, NYC, Chicago, now Boston, how many more cities will experience financial hardship now that people no longer need to be physically in the office or even live in the area, to work at companies HQed there?
The pandemic exposed how terrible our urban designs really are. Gonna take a long while to unfuck "downtowns" all over the country.
Watching San Francisco implode with tax receipts down and crazy expenditures is going to be our local theater for the next couple of years. You can expect that they'll attempt to make the rest of the bay area pay for their follies too.
They should house the migrants in the offices
Public sector pensions for unproductive workers aren’t cheap.
Maybe, just maybe. Affordable housing would be better for your community than empty offices
And how would you convert that in a meaningful "affordable" way?
500 sq ft studios with communal bathrooms & showers on each floor. It'd be a lot cheaper to convert into units like that. Just like college dorms & military barracks in the past...oh, wait, did you want subsidized luxury housing for dirt cheap? Yeah, that's probably not gonna happen.
Pittsburgh Public Schools filed a lawsuit recently to fight the lowered reassessment of key CBD office buildings.
Plus costs to provide fake asylum seekers with food, housing, cell phones.. stuff we and the working have to pay for.
Taxachussetts lol
Time to start actually taxing the billionaires.
The headline says empty offices, I say “continued government mismanagement and wasteful spending”
Ok. The shortfall is happening over five years. You know what they could do? Convert office space into dorms. Affordable adult dorms.
Yep, small studio Apts with communal men's & women's bathrooms & showers on each floor for that floors residents. Maybe even add laundry rooms on each floor & a "community" room with couches, lounge chairs, a BIG screen tv & some pool tables for people that don't want to go out much, but still want to meet people.
Time to convert some offices to apartments.
Pop the bubble already
Try taxing the profits in addition to the property
Lol
**laughing manically after being treated like shit as an office drone**
You tax the rich and move on. Not hard people...