SB 51: the California politics thread

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.

yeah i understand. i was mostly trolling there.

haha lol!

I dunno if 15 is going to raise rents or not but I voted for it because I think state funding for schools is at crisis levels and something needs to be done. I honestly don't understand how commercial rentals work at all. Often I'd think that landlords would rather have someone in there than not, but they also seem to have no issue jacking up leases and rates for shops and small restaurants and forcing them to close only to leave them sitting vacant for years and they seem to think this is an ok thing to do, so what the fuck do I know.

What do people suggest for 23? I voted no. I suppose I could change that vote if I felt like it were important enough (didn't turn in ballot yet) but my take was that it would be burdensome to dialysis centers. I only know one person on dialysis out here but I would hate to do anything that made it more difficult for him or anyone else to get this procedure done, which I'm fairly confident does not require a doctor present.

I would abstain on 23 if I could vote. Indictment of the ballot measure system.

why should we have to the legislators on this stuff. I voted no on 23

I voted for 15 too, but honestly I'm not comfortable with any of these propositions, or any of the ones in the past in CA

they are putting complicated proposals into the hands of voters who are really not all that interested. don't see how that is good

I sealed and signed my ballot and am ready to deliver it

I'm going to remain positive

correct opinion, the proposition system is bad

how did people vote on cash bail vs probably racist algorithms?

yes yes to end money bail

I agree with this guy (vice mayor of culver city and a good poster actually?!)

I’m voting YES on #Prop25 because Californians aren’t going to get another shot at removing bail bond industry money from politics for a generation. I’m aware of the problems with SB 10, but we won’t see anything better for years without eliminating the industry’s power.

— Alex “Yes on Measure RE, No on B” Fisch (@AlexFischCC) October 16, 2020

A yes on Prop 25 means we will almost certainly see frequent reform to bail as we stumble toward a better tomorrow. A no outcome probably means at least a generation of the status quo.

— Alex “Yes on Measure RE, No on B” Fisch (@AlexFischCC) October 16, 2020

not sure where to post this:

Just took an Uber for the first time in forever. The app said my driver was yes on prop 22. I asked him and he explained; NO, but the msg comes up with every ride and he decided to just click yes to make it go away.
Thats infuriating, misleading and probably illegal.#NoOnProp22

— Tonje Ettesvoll (@Unicorn__Voice) October 17, 2020

He made an independent contract with the devil, no big deal.

https://www.taxfairnessproject.org/map

congratulations to palo alto, menlo park, marin, berkeley, etc.

What in the world is going on with the dialysis proposition? Y’all have to do so much research to vote.

California state ballot initiatives are worded like “Vote no if don’t not want thing to do not happen, or will” and if you fuck it up you legalize babies working for Instacart

— Mark Agee (@MarkAgee) October 15, 2020

lol otm

I decided to vote in DC one last time because I didn’t feel like I could deal with figuring out CA props whilst in the midst of moving. Next time, CA, next time.

dialysis is one of those weird things where it's like, every election there is some proposition related to it on the ballot, and the majority of voters are like "idk and/or idgaf" ... it just seems a potentially bad thing to let the general population decide.

My guess is that a bunch of shady unlicensed dialysis centers popped up due to some new insurance code and have been getting away with shoddy practices (see: drug treatment centers in Florida). This bill adds a little regulation to them (requires having a doctor on-site, which doesn't seem wildly overbearing), so of course they hate it. I voted yes.

the fact that you have to guess is an indictment of the system

iow, sarahell otm

Everything decided by ballot measure is a bad thing to let the population decide, and it’s particularly bad when you remember decisions made by ballot measure can only be overturned by another ballot measure. But yeah, triple negatives in wording and insanely technical issues very few people have direct experience of are the worse offenders.

the population shouldn't get to decide anything??? ... like that logic seems suspect and what lead to things like the electoral college and the fact that we have the same number of Senators as North Dakota.

Ballot measures are a nice idea in theory but the past 100 years have shown that they are an unbelievably bad way of running a government, and they are getting worse.

yeah I don't think the fact that the founders wanted to entrench a slave-owning minority discredits the whole idea of representative democracy

Yeah the US senate is not the alternative. Getting rid of ballot measures s the alternative.

Ballot measures are a nice idea in theory but the past 100 years have shown that they are an unbelievably bad way of running a government, and they are getting worse.

I could argue that our federal government, sans ballot measures, is also run quite badly, and has definitely gotten worse! ... Like "worse than what" is my question to you.

there are/have been ballot measures that have been effective in terms of pressuring legislators to actually respond to what people want ... idk ... remind me how long you've lived in California, caek?

Just get rid of ballot measures! Keep everything else the in the CA constitution same. It works all over the world.

(and stop forgetting the rest of the world exists and has things to teach us. why are the only options the status quo or the ... federal constitution?!?)

the rest of the world works so so so so well. geez ... you have this unrealistic view of "the rest of the world"

Apparently not long enough because my first thought isn’t “we can keep doing what we’re doing or we can ... South Dakota”

Looking by forward to tons of prop 22s, ie tech companies paying for laws that literally cannot be overturned.

I don't understand your problem with ballot measures. It appears that you want elected officials to have to decide everything through the legislative process, which you know, concentrates power more in the hands of the elected officials ... the direct democracy of ballot measures, if done well, is actually a nice form of checks & balances to that. But maybe, we both are coming from this place of idealism, where we are being a bit too hand-wavey about the fact the reality of the systems we are advocating for, is actually mediocre.