SB 51: the California politics thread

This is an extremely well done piece illustrating bureaucracy https://t.co/Sqz5tg0fGX

— Eliot Brown (@eliotwb) October 3, 2020

We need to get our windows replaced, and we had to pay an “expediter” to get the permit pulled. Without her, we were looking at basically no estimate for when they could get it pulled. With her it happened in one day. Such BS.
(I’m in SF)

Who's paying for that Prop? California's $502,000,000+ ballot measure election donor list is topped by DaVita and Uber. Realtors, unions, landlords, and business associations are also big on the list.

Data is from the @CA_FPPC's Top Contributor list at https://t.co/wWsMaT35Hi pic.twitter.com/JcltL56hmE

— Alfred Twu (@alfred_twu) October 3, 2020

We need to get our windows replaced, and we had to pay an “expediter” to get the permit pulled. Without her, we were looking at basically no estimate for when they could get it pulled. With her it happened in one day. Such BS.
(I’m in SF)

I learned a hilarious thing about San Francisco and permits the other day (via a Zoning Admin hearing for a project my org is helping legalize -- my job actually involves permit expediting)-- that even if you are going to rent a commercial building (or portion), you have to get a building permit, even if you aren't going to do any construction. There isn't a separate zoning permit (clearance) process like there is in other cities (e.g. Oakland).

given what I know about San Francisco's requirements for grid-tied solar permits, that does not surprise me. don't even get me started on Daly City!

Also, my org had a similar experience with SF DBI where we submitted plans and everything for the building permit online, as per their instructions, and then later got an email saying, essentially, "we lost your stuff" that had been submitted online ...

xp sleeve -- my fave Bay Area small city story was ilxor akm's about Berkeley and the bathroom light switches.

Though back in the pre-covid era, when you would go to SF DBI in person (which I have done), I was actually impressed because they had a system where they would actually text you when your number was about to come up! Like, you weren't stuck waiting in the designated waiting area until your number was called. You could actually do other things! ... In case you had any doubt, Oakland does not have this feature. In Oakland, you sit and wait. And wait. And wait.

But even once those are resolved, the plans will still need approval from a mechanical plan checker at the Department of Building Inspection, the Fire Department, Public Works and the Department of Public Health.

This part is normal. because:
He hired an architect to draw up plans for upgraded electrical and plumbing systems, a front counter and some kitchen equipment. No structural changes were planned, and the outside of the building wouldn’t be touched.

upgrades to electrical and plumbing are basically -- you need a mechanical permit and plan check. Fire can be super simple. Health Dept -- duh -- you are serving food. Idk what Public Works has to do here that's kinda odd, but ...

sometimes i do wonder if i suffer from some sort of stockholm "this is fine" syndrome about these things tho lol

I'm still dealing with the light switch btw, almost a year later and my permit is about to expire. The ordinance mandates that the switch have an auto off and no auto on. So I failed last inspection because it had an auto on.

omg !!!!

Who's paying for that Prop? California's $502,000,000+ ballot measure election donor list is topped by DaVita and Uber. Realtors, unions, landlords, and business associations are also big on the list.

Data is from the @CA_FPPC's Top Contributor list at https://t.co/wWsMaT35Hi pic.twitter.com/JcltL56hmE

— Alfred Twu (@alfred_twu) October 3, 2020

Thread:

It is my burden and my tragedy that I do indeed understand what Trump is trying to say here. Behold, the unholy mishmash of California water policy, salmon, agriculture, and of course the unfortunate delta smelt. A THREAD: https://t.co/S6ParBisp8

— Miriam Goldstein (@MiriamGoldste) October 9, 2020

ooh good thread! i kinda wondered if that was what he was driving at, though my understanding was vvvvvv limited lol

Miriam is awesome -- her husband and I were housemates in college!

wow!

she was the person who informed me at a dinner party (a little over 20 years ago) that my sociopathic ex from college was engaged to married.

Also: I discovered a strong enclave of anti Prop 15 people among my fb friends

When the New York Times is endorsing the no side of your California ballot measure you’ve fucked up

"It seems that these companies would sooner destroy their own businesses than grant workers the dignity of comprehensive benefits, guaranteed wages or unemployment insurance." https://t.co/WLm43Q32dl

— Matt Pearce 🦅 (@mattdpearce) October 13, 2020

aiui these companies do not have businesses, in the sense of profit-making enterprises

spent a fair amount of time this weekend discussing/debating prop 15 with anti-15 folks -- partly around the issue of "does live/work housing qualify as residential" ... does it qualify in its entirety or only in part ...

Does their live/work housing draw in >$3M per year? Do they own or rent? Prop 15 does not apply to residential or agricultural properties. Should your homies or their landlords be making more than $3M/Y, shouldn’t they just pay their fair share of property tax? Statewide median income is closer to $59k (last I checked)

*sigh* yeah, some of these dudes are definitely libertarian bros and the fact that the tax money will benefit poor people in their cities are totally absent from their considerations.

The point they keep raising is the fact that, due to the nature of many commercial leases, the landlords will pass the increases down to the tenants who will then be unable to afford the rents on their shops and studios.

The big question for me (outside of how live/work is categorized and whether "use as residence" requires the building be thoroughly up to code with all the permits) is how the buildings are assessed -- how is this current value determined.

The point they keep raising is the fact that, due to the nature of many commercial leases, the landlords will pass the increases down to the tenants who will then be unable to afford the rents on their shops and studios.

this is not how rates the markets sets rents. rents are set by supply and demand. you'd think a libertarian would know this. proof of this: commercial rates did not go down after the passage of prop 13.

we should not mess up live/work/own if we can help it, but tbh i'm fine with quite a lot of collateral damage in service of the goal of dismantling prop 13 (i.e. stopping wealth transfer from young poor people to old rich people), and how many people actually own and live in commercial space right now? it can't be that many. a few thousand statewide?

first sentence there should be "this is not how the markets sets rents."

(also i don't actually believe that claim myself, but it's intellectually incoherent to be a market libertarian, to know that rents did not go down after prop 13 passed, and to claim that rents will go up when part of it is repealed.)

It seems like Prop 13 is a classic American scheme to transform potential tax revenue into bank profits. Lower property tax means people can afford more expensive houses so housing costs go up and banks make more interest income. Am I missing something?

in the sense that prop 13 is part of the reason housing is so expensive (and therefore mortgage writing for a percentage of that is so profitable). but prop 13 actually hurts lenders too, because it makes it harder to move once you have a house (hence prop 19, which they support).

the real problem with prop 13 is not that it drives housing prices up (but it does). it's that it's grossly unfair, and that it sacrifices a huge amount of revenue that we need to fund services like schools at the level they do in texas or new york or new jersey.

the real reason housing is expensive is not prop 13. it's that we simply don't build enough of it near jobs.

I’m hollerin https://t.co/VIBdTnhfff pic.twitter.com/smEBAObBKj

— Ask Me About Prop. 15 (@TribTowerViews) October 14, 2020

idgi

what do the different colors mean?

And also the Prop 15 supporters should keep it quiet about private property taxes since the whole idea is that 15 is a tax only on commercial properties, right?

how many people actually own and live in commercial space right now? it can't be that many. a few thousand statewide?

that is the "niche" that I work with, as well as people who rent commercial spaces as residential, so even if the numbers are small, they are significant to me (and to those few thousand). I'm not arguing that this should be the crux of everyone's decision in voting for this, but it does affect mine.

Of course. Sorry.

I guess prop 15 plus ab5 has made for an exhausting couple of years

my feeling about prop 15 is that it sets important precedent and is way better than nothing, and it could be later amended to provide more protections for low-income people, etc. the way that AB5 was fixed recently in terms of adding in exemptions for musicians, photographers, etc.

if the low-income people you're concerned about are renters of commercial property then i don't see a great way of amending commercial property taxes to address that (rent control perhaps, but that's a separate issue).

if the low-income people you're concerned about are the *owners* of commercial property then those people are rich: "The ballot initiative would make an exception for properties whose business owners have $3 million or less in holdings in California; these properties would continue to be taxed based on their purchase price. The ballot initiative would exempt a small business’s tangible personal property from taxes and $500,000 in value for a non-small business’s tangible personal property."

My main concern are the tenants -- and to a lesser extent the owners, inasmuch as they are likely to retain the tenants and not price them out of their spaces. Some of the tenants are live/work and others are just artists and craftspeople who have cheap studio/shop space. And it's a tricky situation -- yes, a lot of the problem has to do with the nature of the leases and the lack of rent control. But, the reality is, these people are more at risk of eviction, because most owners are going to past the tax increase onto the tenants if they can, because they are in it to make money.

One ray of hope in that regard, is the precedent of the Covid eviction moratoriums that put in protections for non-profits and small businesses (at least the Oakland one did). Prop 15 already exempts agriculture from the increase. (I am guessing part of that is political, as it would be way less likely to pass if agricultural buildings weren't exempted. There would be so many ads about how it will result in an increase in food prices with pictures of sad children and moms standing in front of ziggurats of fruit.) One could amend it to also exempt artists, manufacturing businesses with income below a certain threshold ... whatever other special interests they want to help out.

Again, I am in favor of Prop 15. I am just bringing up issues that people I know, who are against it have raised, outside of the classic property owner complaint, "we pay too much in taxes for too little services and they don't even fix the potholes on my street!!"

if the low-income people you're concerned about are the *owners* of commercial property then those people are rich:

However, rich is relative -- you can have $3 million in holdings and mortgage debt of that much or more ... that is one of the issues that is coming up with my discussions with the Anti Prop 15 people. If an owner had $3 million or more of commercial real estate totally unencumbered (or maybe a nominal amount of debt) then yeah -- definitely rich. I shed no tears. But, the legislation isn't looking at equity, only the value of the assets.

And one of the big issues here, in Oakland, is that the market value of a lot of industrial property is "inflated" because of the cannabis industry. At least one of these property owners has a building that is "worth" $3 million merely because cannabis growers would pay that much for it, in theory. The thing with these new assessments is that they are hypothetical. I doubt the state or the counties are going to do comprehensive Property Condition Reports on all of these commercial buildings. I know I am talking about one city in a large state where a lot of commercial real estate is pretty homogenous. However, there are so many variances (sorry) in commercial buildings that it really is a bigger guessing game than with single family homes.

i'm skeptical these increases will get passed on to tenants. the savings didn't get passed on when prop 13 passed. the price of rent is set by supply and demand. landlords are in it to make money, and if they could make more they would raise the rent. they don't need the pretext of a tax increase to do so.

of course there's a difference between owning a $3m building and having a mortgage for some fraction of $3m, but i don't agree that someone who got access to a line of credit 20 years ago and no has equity (presumably quite a lot!) in a building worth over $3m should receive a tax break on the basis that they are not rich.

off topic (kinda) but have you seen commercial rents falling yet? i understand the rental market (commercial and residental) has cratered in SF proper, e.g. https://www.msn.com/en-us/money/realestate/rent-for-a-studio-in-san-francisco-plummeted-over-30-from-this-time-last-year-as-remote-workers-now-seek-to-flee-the-city/ar-BB1a1otT and my employer cannot sublet their SF (or south bay for that matter) office space for any price.

*and now has equity

i'm skeptical these increases will get passed on to tenants.

uh, I would be shocked if they weren't. We're gonna have to disagree there.

but have you seen commercial rents falling yet? i understand the rental market (commercial and residental) has cratered in SF proper,

I think it really depends on the property type and location. Office space is probably super depressed right now because of people working from home. Probably a lot of retail and restaurant type space, especially in areas where office buildings are, ... also down. Industrial warehouse space? I don't know if that is really going down in cost.

It's just super tricky because these valuations are really hypothetical -- like how do you determine the equity of a commercial building that has been held for 20 years or more? The concept is, it is worth what someone would pay for it. This is easier in the case of single family homes (or even duplexes) because there are a lot of them, they are more homogenous, and they more frequently change hands between unrelated parties. In the case of the commercial building -- there are potential huge problems that would significantly lower the price. Also, you have the issue of change of use rules -- like, a house is a house, it is and will be single family residential, so a lot of things aren't issues w/r/t change of use.

Commercial buildings, on the other hand, have a variety of different use classifications, and if you were to change from one to another, a lot of expensive upgrades come into play. And some of these, a buyer wouldn't know unless the property has been inspected and a lot of money has been paid for various reports and tests, etc. So, you can have a building that a county assessor says is worth 3 million based on recent sales ... but, because of the specifics of the building's construction and historical use, and all sorts of other things ... the actual sales price could be way less.

Though, maybe I'm mis-reading the text and it refers to holdings currently valued at $3 million as reported on their taxes or ... prior to reassessment?

the assessed value isn't plucked out of thin air. commercial property is harder to assess than residential, sure, but other states manage it, and so do other countries. it's a solved problem. california isn't special.

also the assessed valuations don't need to be correct predictions of the sales price in an absolute sense. that's not the goal. they just need to be roughly correct relative to each other so we don't end up with this:

Category coloring really did not do any justice to this injustice. In this neighborhood substantially all of the property taxes are being paid by 7 new apartment buildings, at MacArthur, 51st at Telegraph, and 51st at Broadway, collective assessed for over $650 million. pic.twitter.com/NJeDLnYMJA

— Your Obed. Servant, J. B. (@Jeffinatorator) October 14, 2020

those apartment buildings should be paying the lion's share of the taxes -- those are the gentrifying tower blocks that "everyone" hates.

sorry -- you chose a bad example to make your point.

a lot of the procedural/logistical arguments against prop 15 (and for prop 13) neglect the existence of the entire rest of the world, where those problems have been solved and they do things the fair way, which is a little bit harder administratively, and it works out well.

nah, the lion's share should be paid by people who own the most valuable buildings.

but other states manage it, and so do other countries. it's a solved problem. california isn't special.

maybe the solution is a bad one? Idk. I'm sure there isn't just one solution. I am merely saying that in this context, where many of these buildings haven't been assessed properly in a very long time, there are a lot of big question marks that other places that might be better at regularly collecting data on buildings don't have, because they have better practices in terms of data collection.

i know you're skeptical that government can get anything right, but i promise you, when revenue is on the line, they will manage this fine.

nah, the lion's share should be paid by people who own the most valuable buildings.

― 𝔠𝔞𝔢𝔨 (caek), Wednesday, October 14, 2020 12:20 PM (two minutes ago)

see the thing with that area is, the majority of the buildings are much smaller, and thus less valuable. Those apartment buildings were probably initially proposed to be much larger but had to be reduced in order to "fit with the neighborhood." There's another one in the pre-dev stage just north of 51st on Broadway on the former CCAC campus that is going to "meet that fate"

In that neighborhood from your tweet, there are a lot of single family homes and duplexes (a few triplexes), there are some smaller apartment buildings (less than 15 units), and there are a number of single story/2 story commercial buildings on the main streets -- ground floor retail, top floor either office or residential. The only buildings that are as large as those apartment buildings are the Kaiser medical buildings. There are a lot of Kaiser medical buildings. Oh, and there are some one story warehouse buildings that have been auto garages for a very very long time. Seriously, this is just not a good example for the point you are making -- there are plenty of other areas where there are new apartment buildings that are fairly comparable in size to older ones -- and there you would definitely see the striking difference that supports your argument.

i know you're skeptical that government can get anything right,

that's not my position -- just that it would take a fair amount of work, and maybe some tough compromises. I'm not saying it isn't impossible, I'm saying it's a challenge.