Wednesday, October 21, 2009

California Air Raid

Just like the transit folks, the CRA is not going to take it from the state anymore. Or at least they are not going to let it be taken. Recently the state supreme court ruled that transit money couldn't be just thrown into the general fund and now the redevelopment agencies are trying to block to keep California from stealing their money as well. Who is the plaintiff? Why Union City who has been trying to redevelop around their BART station.
In Union City, the State raid threatens to delay the 100-acre BART Station District redevelopment project. The project, a collaboration between the Union City Redevelopment Agency, other local transit agencies and the state and federal governments, includes remodeling the BART station to create a two-sided station with additional parking; nearby new housing; new offices; and retail space. This transit-oriented development has been in the works for 10 years.
Here's a solution. Fix prop 13! Fix the budget process and hold a constitutional convention. Cut out the shell games because everyone is tired of you not bringing enough lunch money and bumming off of them.


arcady said...

California is going to have to deal with Prop 13 sooner or later, because it's just fundamentally unsustainable. The only reason they've been getting away with it for so long is that California has been growing for so long. But now that the growth has stopped, they're going to have to face up to the fact that the state budget process has been rather Ponzi-like in its financing of the present with now-unfulfillable promises for the future.

kenf said...

If I understand Prop 13 correctly it does prevent seniors and other low and moderate income people from being taxed out of their homes when their neighborhood gentrifies. Perhaps a better solution would be to shift away from property taxes to a much higher progressive tax on income.

arcady said...

kenf: Prop 13 has many parts, all of them contributing to the mess that California finds itself in in various ways. The first, most obvious one is the requirement for a supermajority to pass a budget, which leads to deadlock when the legislature inevitably can't get that much agreement on one, and it's not obviously the fault of either the majority or the minority party, and both sides can use it as an excuse to dodge the blame. Then there's the cap to 1% for property tax, which means that money has to be collected through other taxes, mostly sales and income, which are among the highest in the country. It also means that cities have a strong incentive to get as much commercial development as they can, rather than residential development. The cap on tax rate increases certainly protects seniors and so on, but it also has other very bad effects on the housing market. It's basically an incentive to hold on to your house, rather than sell it, which cuts housing supply, increases prices, and encourages greenfield construction and land speculation rather than re-use and redevelopment.

All together what it amounts to is a massive transfer of benefits to EXISTING homeowners at the expense of FUTURE homeowners: people like me who will have to pay high income tax, high property tax, and will only be able to buy a house for an obscene price. But that worked okay as long as California was still more or less a land of opportunity and people were still moving here in large numbers. But people are starting to realize that the cost of California might not be worth it, and there's a net domestic emigration now. And I know that if I ever want to buy a house, I'm going to move somewhere else. Sure, Prop 13 might let me keep my house when I'm 65, but right now when I'm 25, it's preventing me from buying a house in the first place.