Austin: https://www.redfin.com/zipcode/78725/housing-market
Fremont: https://www.redfin.com/zipcode/94538/housing-market
I know Fremont is suburban, but it's a well incorporated suburb to both SF, Oakland and San Jose. 78725 is on the opposite side of Austin from most of the fancy neighborhoods.
The big difference is that in Austin you have the option to commute a bit for much cheaper housing. But in the bay area you could be commuting over an hour each way and the houses will still be over $1 million.
And there is absolutely no transit alternative comparable to BART. There is a morning and evening train, but it's really only effective if you live and work exactly on the stops.
I-35 is bad, that’s about it. The freeways around the rest of Austin are still moving even around rush hour. None of those hold a candle to the Bay Bridge on a Friday afternoon, not even remotely close to as bad.
Yet, so many do, don't they?
:)
Where I live, roads, ramps, exits are more integrated into surroundings.
According to this, Austin Texas is #10 on this chart.
#1, LA
#2, NYC
#3, San Fran
#4, San Jose (near San Fran)
#5, Seattle
#6, Miami
#7, DC
#8, Chicago
#9, Honolulu
#10, Austin
Not because I know anything about Texas or California, or about traffic as a field, but because any data set - especially a list - can be used to present an argument and then be refuted due to "this detail". I see this on HN a lot and I believe that it has made me much less likely to be misled by someone toting data.
Austin has essentially nothing, the train they built is legitimately the dumbest, cheapest option that was offered at the time, though they are building dense housing along it now. People often choose which side of the river to live on because of traffic. You're simply not going to convince me that Austin isn't one of the worst cities to commute in, because unless you want to bike in 100ºF heat, you literally have no choice but to engage in it, especially if you have to cross the river.
East-West commuting is much easier. The wise strategy is to live East/West of town, not North/South.
If you dare go Eastside; or, worse, need to go from like Renton to Totem Lake; or Redmond to somewhere that isn't the the center of Bellevue, you're just never going to get there in a reasonable amount of time.
Renton to Totem Lake in particular is planned for 2024-25. https://www.soundtransit.org/system-expansion/i-405-brt
Also, Renton to Totem Lake should only be one connection given a weird sound transit airport route (590?) from West Seattle to Bellevue that goes through Renton.
I don't know about the Bay Area, maybe they are better because of reliable transit, but Austin is nowhere near the So. Cal area when it comes to traffic.
Source: while working as a transport planning consultant, I had a private client in Austin. He flew our team around the city in a helicopter, saying "see all this traffic? It's insane!". I'd just flown in from New Delhi. By the standards I was accustomed to, I didn't see any traffic at all.
Certainly Austin does have a need for much better public transit -- and if being upset about traffic is a catalyst for making that investment, then that's great! -- but in that respect it's no different to most other major metropolitan centers in the US.
If you visit Amsterdam or Copenhagen, you know what I mean. The happiness of the people, clear streets and less noice is something you can't explain, but it's better what you can imagine.
Employees at corporate HQ's tend to want to have houses in the burbs. They tend to be in there 30s and up as well. There is no shortage of suburban real estate in the vicinity of the gigafactory. A minority of employees will live in downtown Austin and hate their life due to the horrific commute out of there.
It's a weird mix of nascar and bumper cars, but also rolling parking lot.
Edit: It's the main way you'll go North/South here. Often times I'll double the commute taking side streets just to avoid 35 - depends on the day/time/personal interest in sport driving.
This is genuinely hilarious. Perhaps this is true at midnight, or during the early days of the pandemic. 17 miles in Austin is well over an hour at peak commuting times.
> Thanks for visiting, but Austin is full. Yankee go home, please.
This NIMBY mentality is why Austin is rapidly catching up to California in housing prices. The advantage is not going to last long at this rate.
(And before you start, I'm like 4th generation native Texan.)
FWIW I haven't been in Austin, just Dallas
But geographically speaking, Austin is pretty awful. I35 is basically the in/out for all of the commuters from the north and south. There are some tollroads but Austin has had trouble getting people to use them because they were so expensive. They even raised the speed limit to 85 as an incentive and still enough folks wouldn't pay the astronomical rates! Now, for people making software engineer salaries, they could afford it, but they likely won't be enough to continue investment in the needed timeframe.
Apple, Tesla, etc, so many huge names are moving to Austin and the city just wasn't built for it. They have enough room to make stuff happen, but construction takes money and political will. Austin is a blue city, but we all know money leans red, especially when it comes to increased taxes to pay for city projects. Can you imagine the amount of money that would need to be spent to imminent domain a subdivision for a new freeway? I can see the speculative investment purchases already! Hold them up in lawsuits for a few years while the housing prices get pumped to kingdom come.
Now, I live up the road in quaint little ole Dallas, so what do I know? I've watched the price of housing increase by 30% in a couple years. It's absolutely insane. Lucky for DFW, it has had more of a focus on transportation development across the entire metroplex a lot longer than Austin, so even during rush hour you can get all the way into downtown from the far suburbs in an hour. Granted, this is also made possible by an insane amount of investment in toll roads, but they've been strategically built through the wealthiest neighborhoods, forcing residents to take them just to leave home. (Obviously not required, but the city knew they had money to burn.)
DFW also has the second(?) largest airport in the US, processing an insane amount of cargo and thus we have highways to match. DFW boasts 4 professional sports teams, a major backbone of financial services, a thriving entertainment scene, and still plenty of room to expand.
DFW still lacks around public transportation, but if you are willing to pony up the cash for a place in the city, it's certainly possible to commute in a reasonable amount of time. You will absolutely need a car still for weekend activities unless you want to ride a bus for 3 hours one way.
Californian's, if you're going to move to Texas, go fill up Austin first before I buy a house next year, but then when you realize it's too crowded down there, you can come visit the state fair (going on now)!
;)
Is Austin cheaper than San Francisco? Yes.
Would I classify Austin as "affordable"?
I would have two years ago, when my wife and I were first looking to move here. That was the whole reason we began the process.
But, it's gotten insane.
We were going to wait a year, after renting, before we bought. Prices here were rising, we bought within six months so we wouldn't get priced out of our neighborhood.
On my street, I have neighbors who bought literally a year before me, who live in basically the same home (1970s subdivision so all the houses are basically templates) that paid 40% less than we did.
My neighbors could not afford to buy their current homes at the prices they're currently selling for. They cannot afford to buy similar homes in similar neighborhoods.
This is only going to get worse.
Look at prices in Portland, Seattle, Vancouver, or out east. They all easily top Austin.
I think it's a good thing. Austin has a budding tech scene. Hopefully the political shitstorm there blows over so people actually want to live there.
Literally Dell Computers is from Austin.
Not trying to belittle Austin - I know they have a tech scene - and I know every city is trying to capitalize on marketing their city as the next silicon valley (which is such a ridiculous thing to do for an incredibly long list of reasons).
Amazon is here, and again they have a number of buildings in the Domain area. I think it might be their second or third largest site, behind HQ and possibly HQ2.
Of course Dell is here. Google doesn’t have much of a presence, yet.
There are lots of other companies that have massive presence here in Austin. Tesla is highly unlikely to be the biggest.
Amazon largeset office presence outside of seattle (and bellevue which come consider seperate) is SouthBay cali, followed then by HQ2
And yes, hopefully these changes will turn Texas purple unless they continue to gerrymander the ish out of the whole state.
How is the sprawl in Austin compared to the Bay Area?
A lot of times land/housing is cheap/er, but you 'pay' for that will long/er commutes in bad traffic. And often with few/no options for public transit.
I just looked on Redfin - I could buy a 3300 square foot house in Austin for under $900k with a huge pool and that was a 5 second search.
No offense all you Austin folk, but you literally have no clue.
[1] https://taxfoundation.org/high-state-property-taxes-2021/
The two are directly linked, so this makes sense. A higher property tax means that the future annual rent (real rent if you're a landlord, imputed rent if you're a owner-occupier) you get from property will be reduced, so the capitalized present value will decrease correspondingly.
My mom has a million dollar home in California and pays around 1.5k/year in property taxes because she's owned it since the 70s.
EDIT: and we’ve owned this house since 2008.
The idea that property tax is passed down to renters 1:1 is just something you made up.
The concept you need to look into is called tax incidence: https://www.maxwell.syr.edu/uploadedFiles/cpr/efap/Notes%20o...
1. Property owners make a lot of money and own a lot of property.
2. When you increase property taxes, people who own a lot of property pay a majority of that increase.
3. Rent prices don't immediately increase 1:1 when property taxes rise, based on one data set.
Basically, property taxes are mostly paid by people who own property. Most property is lived in by the owner. So property taxes aren't regressive, since rich people end up paying the majority share.
People have been trying to create a model for the impact of rent shifting since the 60s. No one has a good model yet. It's hard to model.
If I sign a lease for 2000/mo, and the state increases property tax on the owner, the owner can't immediately increase my rent. Rents increases are generally governed by local laws. But over time, they can raise it, and it can be reset when the current occupants leave.
So an owner's profit margin takes a hit when property taxes rise, and renters bare a smaller percent of the burden of the new tax than the absolute amount raised in the short term. Long term, renter's are still covering the owner's total cost of that property, otherwise the owner would be losing money on the property – which, if that were prevalent business practice, we wouldn't have that many landlords.
So yes, renter's pay property tax.
But, definitionally your rent must cover the mortgage and property tax of the property you occupy, plus profit. If you rent is less than property tax and mortgage, the land lord is underwater and will soon sell to someone else who will charge more or evict you for remodeling.
In the current situation, when the realty appreciates at >10% per year (in Austin, at least) it's not a very smart decision to sell or renovate the house if you cannot find a tenant willing to cover all your expenses.
For example: Zillow shows my house appreciating 10K per month, my mortgage+tax+insurance is 3K, assuming Zillow is in the right ballpark, it makes sense for me to keep the house even if I can't find tenants for 3K (similar houses in the area used to rent for 2K-3K last time I've checked).
Under less insane circumstances, a land lord who is charging less for rent than the house costs to own is going broke. As a general rule most land lords rent to make a profit, and therefore won’t charge rent below the cost of ownership.
0 - A poorly capitalized land lord will still go broke in this circumstance, since they’ll eventually fail to pay their mortgage without refinancing.
It's not relevant to the current discussion though. Right now rents are lower than mortgages in general so the assertion that the tenant pays all landlord's expenses is demonstrably false.
If you have evidence that it’s the norm for landlords to rent below their operating costs, by all means provide it. But from what you’ve provided so far, I am unconvinced.
Seeing how in general rents had been lower than mortgage for quite a while it's sane to assume that I am not an owner of a unique house with a selected group of friends who are in this completely extreme situation.
> Note that I am not making a statement about every house, to rebut your assertion that all renters pay no less than the landlord's taxes + mortgage + insurance it's enough to show some (even one) counter example and not to prove that all or, even, typical renter does not do so.
Don’t be a pedant, we were clearly talking about the typical renter.
Are you talking about paying property taxes via an escrow account that your mortgage lender takes care of for you? That's not your "mortgage payment", which is a function of your loan size, interest rate, and term, and nothing more. The monthly mortgage payment (assuming same term and interest rate) is the same in CA and TX for the same amount of loan.
(I guess we could also talk about things like PMI, but that won't raise your payment by all that much.)
Property taxes might be quite a bit higher in TX, but I'm not convinced a $900k home in TX is the equivalent to a $1.2-1.3M home in CA. I would expect that's closer to $1.7-2M, and then the property tax amounts end up being not that different.
From there tax basis more or less tracks market value, but it’s possible to protest the assessor to keep it below market value (though it’s time intensive and requires in-person hearings).
To get ahead of any artificial attempts at deflating tax basis, Dallas also maintains a comprehensive public lot value database that assigns a land value for tax purposes based on census tract (initially likely a product of redlining, but now based on average census tract market value) — so, similar to a pure land value tax, even if you’re sitting on an unimproved piece of land, you’ll still be taxed similar to the average home in the neighborhood, which has the effect of setting a tax floor.
Austin is similar, I believe. Most cities have to, as aside from sales tax property tax is their only source of revenue, because any sort of income tax is constitutionally banned.
No income tax, but property taxes are at least 2% of the assessed value, and sometimes 3. You'll see that on the Zillow listing.
But ultimately it seems like they get you one way or another, through sales, Income, and or property tax.
My utilities are 50% cheaper and more reliable, crime is lower, the air quality is better, and I bought a new construction with 10G Fiber Internet (You will never get this in California due to failing infrastructure). I miss is the arts, culture, and nightlife, but that was wiped out by government-enacted COVID restrictions so there are few redeeming reasons to stay. Tesla should be a good lesson that when you put political idealism above the basic needs of your residents (Safety, infrastructure, housing), people leave.
Otherwise, you get what little you can get and you just have to be happy with DSL because it’s still better than what you can effectively get with Spectrum, since you’re sharing that with all your 500 closest neighbors and you still have to put up with outages and throttling and being treated like trash from the “cable guy” installers who wouldn’t understand concepts like bend radius if you broke their arm at the right distances and showed them how the glass fiber also breaks when it is bent too tightly.
Yes, this is an old pet peeve.
That's depressing, especially for a US "tech hub". I'm in an irrelevant-but-dense urban area of Japan and have 1G fiber @ <$40 / month.
Isn't that the case pretty much everywhere, though? These things will come back in CA just as they will everywhere else, barring catastrophic economic collapse.
Just clueless people on the internet that don't know what they're talking about. Probably because there is nothing else to do in texas besides be mad about things lol.
Then you think about it again and comment on a public forum about it. Yeah that's totally not caring at all.
I've had 10g fiber in three places in San Francisco and almost moved to a house in Cupertino that had 10g fiber. Not sure about the rest of California honestly.
Also I’m not sure the utilities are better in Texas. Cheaper, sure, but is that gas infrastructure winterized yet?
Nothing happened then, and I don’t expect anything to happen this time.
There’s no new inventory being built, and there won’t be a significant amount of new inventory built any time soon, because Texas is the most terrified state in the country of all the Mexicans coming across the border to take all the jobs.
They’ll spend billions of dollars to protect that border, but nothing to build new housing for people moving to the state.
https://www.trulia.com/TX/Austin/
https://www.trulia.com/CA/Palo_Alto/
Texas also doesnt have prop 13 so it is unlikely to ever reach the levels of a California city
I think that's fair but the nonetheless the only houses on here in San Mateo for under 600k are about 600sq ft. Even 1200sqft homes are 1M+ Where do you think married mid-level engineers are going to live?
For 500k in Austin you can choose between brand new 1300 sqft homes or older 2500 sqft homes.
By comparison, Austin permitted 8600 multi-family units in 2018 alone. That doesn't include single family detached, which averages another 2800 a year.
They’re right proper nutcase looney tunes in San Francisco, when it comes to new building. Almost as bad as they are here.
Well, that is unless you’re building high rises on the river for the millionaires and billionaires. Then you can build as many of those as you want.
Then, they can rinse and repeat at a new location.
Or is Tesla going to give each of them 25kw solar arrays plus three Powerwalls, and a backup natural gas generator for when the sun doesn’t come out in January or February and ERCOT decides they’re going to just go into rolling blackout mode because they are unable to sniff their own butts?
The only thing to remember is that Californians can afford the new area's current housing prices and a decade's worth of price increases.
The number of people moving from San Francisco to Austin in a year is something like 240 households. https://www.sfchronicle.com/bayarea/article/People-are-leavi...
Zero growth isn't the right baseline. The fact that the population hasn't boomed means something is definitely wrong.
Nothing to fault them for if they want to be wealthy and exclusive.
“The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right.” -Jeff Bezos
Being data driven is not necessarily a bad thing, but the design of the study, the kinds of data collected, and all the other factors that go into how the data is measured need to be considered too.
This article about there being no “Californian Exodus” just doesn’t seem true, much in the same way I discount all those reports that say something along the line of “No, crime is actually down in the Bay Area”. Despite people living there saying it’s gotten way worse. The answer probably lies in changing what gets counted as “a crime”, coupled with police not responding to things they used to report, and citizens feeling like it is futile to call the police. But the data would paint the picture that crime is objectively down. But when you apply some other analysis you can see the conclusion is flawed.
Many people moved their nexus to their parents house while physically going elsewhere with the uncertainty. USPS data has no way of accounting for that if the physical human being did not tell USPS to forward mail to where they physically were.
Anecdotes are a signal to say “look over there and see where the hypothesis goes”, if people havent done that and simply invalidate anecdotes because meme, then the answer is not known
And for many questions the data doesn’t exist, just because someone elevated USPS change of address filings as a signal doesn’t mean it is the strongest
get California moving and those emigrants could turn every single state blue starting with every swing county, worth mentioning as the opposite is not true for the opposition party, from a math and distinctly unpartisan perspective.
By the time Tesla reaches critical mass in Austin, Project Connect may very well be on its way to construction of the Orange and Blue lines. This establishes a light rail train from North Austin to the Airport. Given Round Rock is north of Austin, and the Airport is nearly adjacent to the Tesla complex, this could be a suitable option for commuters. Or easily extended with additional investment.
Though, for white collar jobs, I would expect multiple Tesla offices in Austin to work around this problem. They already have office space leased on opposite ends of the city.
Tech Ridge is a great location that is accessible from Round Rock and Cedar Park. Apple, GE, 3M, Home Depot, and Blue Apron all have offices in this area.
I think all metro traffic situations are relative, because no one likes any amount of traffic.
I wouldn't trust this. Speaking as a resident of Austin, there's several OG Austinites that are mad about all the change. Sounds like FUD to me. Point to a source please!
This two are the same problem: http://www.austintexas.gov/news/sanitary-sewer-overflow-repo... https://www.kxan.com/news/local/austin/sewer-overflow-sends-...
https://www.kxan.com/investigations/93-of-austins-stormwater...
I mean, look at this: https://www.redfin.com/CA/Palo-Alto/3785-Park-Blvd-94306/hom...
I think Austin is better about building too, meanwhile in the Bay Area they just rejected units desperately needed in the tenderloin because they might become a "tech dorm".
Wow. That is unreal.
Yeah, no region in almost any region of America comes close to Bay Area prices.
What you get for that in Austin is in a different league.
A suburban area with single family houses + high paying jobs = exclusionary house prices
In addition, a large part of Texas is privately owned and counties are much more relaxed about land use. This means high land availability for new housing. This will reduce the price increases from demand increases.
Not only that, CA has Prop 13: for better or worse, your property tax is essentially frozen in the year you buy your home in CA. In TX it increases with the market value every year. And the assessors are ruthless – market value of your home went up by 20%, as they have the past few years? Expect your tax bill to too (granted, I believe legislators have restricted this to a maximum increase of 8% a year as of this session, but I believe localities are still allowed to exceed that in some cases).
Source: I'm from Dallas, and a homeowner in Los Angeles. Though rates are publically available:
https://smartasset.com/taxes/california-property-tax-calcula...
There is very good evidence that property taxes are capitalized into property values. Land taxes in specific are fully capitalized (which is to say, they lower the price of the land, and the landlord can't pass on the tax to tenants), right in line with long-standing theory:
https://web.archive.org/web/20201108135554/https://dors.dk/f...
Paying property tax might sting, but those ruthless assessors and high rates are one of the few things keeping housing affordable in Texas.
Assuming you made exactly 100k as a nice lowball you'd have owed $6947.92 in 2011 California income taxes. Harder to quickly find 2011 Austin property taxes but using todays rates without the homestead exemption you would have paid $4653 presuming you lived in Austin proper with Austin ISD taxes.
This is obvious a simplified calculation assuming basic W2 income and may very well not have applied to you, but for others reading it's nice to see some actual numbers.
California taxes were affected by CA deduction, CA personal exemption, and 401k (which I didn't max out, and even without it I think the original claim still stands although just barely)
Unaffordable housing prices are as much a policy choice as a function of the market.
And TX has a sales tax of 6.25%, while SF is 9.25%.
And no state income tax in TX.
It’s not even close.
Cities have their own sales tax. And so can school districts (and they can have their own property taxes, too).
And sure, you're right, there's not much housing under $1M in the Bay Area. That doesn't change the fact that a $1M home in TX still pays about the same in property taxes as a $2M home in SF. Or the fact that in SF your property taxes are essentially frozen at purchase price, and in TX they will increase every year.
And sure, property taxes for a $1M home in TX is the same as a $2M house in SF, but that's a mansion in TX and a 2 bedroom apartment in SF. You get way more for your money.
And google tells me that TX does cap property tax increases. Not like Prop 13, but we all agree Prop 13 is terrible, right?
And everyone is ignoring the state income tax which is 9.3% in the $60 to $300k bracket (and goes up to 13.3%). So if you’re making $250k, that’s saving of $20k alone, which is about the property tax in TX.
It’s not even a close comparison in terms of the tax burden between the two.
The maximum cumulative rate by law is 8.25%.
Austin/Dallas/Houston/San Antonio are not classified as "High Cost of Living" areas, as SF/LA/NYC are. This means that a conventional mortgage as of 2021 in Texas is capped at $548k, while in LA/SF it's $822k. The practical effect of that is any mortgage higher than $548k in TX is classified as a "Jumbo"/non-conventional loan, which usually comes with a higher interest rate and/or higher percent down required.
You want a $1M house in TX rather than CA? Be prepared to put $400k+ down or accept a higher rate + PMI, rather than the normal 20% down in CA. All on top of the fact that you're paying the equivalent in taxes to a $2M+ home in CA.
When I bought my home this year, it got re-assessed at my purchase price, yes. But for as long as Prop 13 is the law of the land, no matter how much home prices in CA inflate, my property tax is more or less capped at the price I paid for the house.
Exactly. And this is important for potential homeowners to understand. It is one of the things that makes California real estate so attractive. One has to view their house as an investment, not just a place to live.
In November 2020, California scaled back on some of the benefits of Prop 13 for families. Prior to Prop 19, properties could pass from parents to children and the property tax basis would not increase. Now, the benefit is limited to the parents' primary residence, the inheriting child or children need to reside in the property for one year as their primary residence, and the amount excluded from reassessment is limited to $1m.
The main proponents of Prop 19 were realtors who expected the change to result in more sales of properties after parents die. I haven't seen data on it, but they were probably right. There will probably be more sales as children who inherit their parents' properties can't afford to keep them after reassessment.
Prop 19 was titled the "The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act" because it allowed seniors and victims of wildfires to sell a home and buy a new one anywhere in the state and carry over their current property tax assessment, regardless of the sale price. However, it totally undermined one of the best ways for families to pass wealth on to their children, the acquisition of properties for investment. Corporations, of course, were unaffected.
I'm a would-be beneficiary of Prop 13 Pre-19 and a homeowner in Los Angeles, and even I voted for this reform. I would vote to repeal Prop 13 in whole if I could. Prop 13 was originally meant to protect middle-class Californians from losing their primary home (for which other alternatives exist: see TX. Your primary home cannot be taken from you for tax reasons or in bankruptcy) – not a tax loophole for generational wealth.
Not true. Only $1m of assessed value is excluded for heirs moving into an inherited property as a primary residence. Inheriting property worth more than $1m is not a bad problem to have, but in places like Los Angeles it means that a lot of people not be able to afford to live in the property and will be faced with either fixing it up for use as a rental or selling the home they grew up in.
It doesn't really change my point though – I still don't see why a $2M+ property deserves to get transferred tax free. A $2M property would still only pay a little over $10,000/year in property taxes after the $1M exemption (which you can deduct against federal taxes, even with the SALT cap, which itself will likely repealed!). A pretty nice discount for an heir compared to someone who just went through actually buying a $2M home and pays twice the tax.
Honestly, if you're inheriting up to a $5M home for free in CA, and are still reliant on a job to make ends meet, the payment probably comes out to more or less what you would pay in a mortgage+taxes for a ~$1M home. A pretty good deal! If you're inheriting anything more than a $5M home, then I don't really think Prop 13 was intended for you in the first place – people with $10, $50, $100 million+ properties, well, it's my belief that we shouldn't be basing our entire housing policy on what's best for them. They can likely afford the taxes.
Not to mention that you can only shield a house from re-assessment for 1 generation, so even if there was a multi-million dollar family home that this family simply couldn't afford to pay taxes on otherwise, the heir of the heir would have to pay taxes regardless. So what's so privileged about the situation that tax reassessment gets to skip a generation? The law as is is designed to benefit a shrinking sliver of the CA population while debatably actively hurting the rest.
I think a decent compromise that won't actively pull the rug out from anyone while also leveling the playing field is just ending Prop 13-related inheritance exemptions altogether. It wasn't even part of the original law. Then get rid of the exemption for all commercial and secondary/investment properties going forward. Let people live in their primary homes with a frozen tax basis, sure, just don't let them transfer it (and for the edge case, to encourage downsizing after becoming "empty nesters", allow people to transfer their assessed tax basis to a property of lesser or equal market value).
What's your basis for this belief? My understanding around Biden's tax plans was that the SALT deduction cap would likely remain at $10k.
Just did a quick search for recent news, and nearly all of what I'm reading is doom-and-gloom around the possibility that the SALT deduction cap will be repealed. Which makes sense, since that would lower tax revenue, and that's not something politically palatable with the Dems trying to push through multi-trillion dollar infrastructure spending.
Previously: https://www.google.com/amp/s/www.cnbc.com/amp/2021/09/08/mod...
There is, however, a large group of ordinary middle-class people, particularly in cities like Los Angeles or San Francisco, who own what were once modest homes that are now worth more than $1m.[0] Their heirs will be burdened when the property tax bills double (or more) in one year, even if the heirs use the property as their primary residence. More heirs will sell inherited properties, which is exactly what the real estate brokers who promoted Prop 19 intended. $1m+ is also a sweet spot for broker profitability.
The intent of Prop 13 was to stabilize property taxes after the double-digit hyperinflation of the 1970s by capping annual increases in assessed value at 2%. That created stability for individuals and businesses that led to massive investment in and migration to California.
Prop 19 undoes that stability, but only for a narrow group of people: heirs to $1m+ properties from parents who did not have sophisticated estate planners. From Wikipedia:
The Case–Shiller housing index shows prices in Los Angeles, San Diego, and San Francisco appreciated 170% from 1987 (the start of available data) to 2012 while the 2% cap only allowed a 67% increase in taxes on homes that were not sold during this 26-year period.
Personally, I think it would be fair to increase the annual cap from 2% to 4%. In a decade or so, that would undo much of the tax discrepancies caused by Prop 13. And the effects would be spread out, so people could plan for it. Increasing the cap, however, would never pass because it is clearly a tax increase on everyone and doesn't benefit a special interest like real estate brokers.
[0] The median home price in Los Angeles is now over $900k. https://www.zillow.com/los-angeles-ca/home-values/
[1] https://en.wikipedia.org/wiki/1978_California_Proposition_13...
[2] https://web.archive.org/web/20191011004252/https://us.spindi...
The largest share of property taxes is actually school districts which run roughly 50% of the property tax in austin. The city is 25% and the other 25% is the county, health district, and community college.
Tax rates float. If the valuations double, but the taxing entity budgets stay the same, then the tax rate will drop in half.
Rising valuations dont have much to do with the increase in taxes over time.
Financially speaking, either place may turn out advantageous depending on your house's price and income. CA (Bay Area) has a lot of other positives that are almost impossible to get in TX - tech scene (quality and quantity), nearby sea, desert AND mountains, good weather are just some of them.
Many years ago, I chose to move to TX as opposed to CA. But most recently, after living abroad for some years, I picked Bay Area to move back to mainly because most of my friends have converged to Bay Area over the years - almost all are in tech. However, if you aren't involved in tech and don't care about some of the other positives of the Bay Area, Austin is almost a no-brainer.
I live in Dallas. We're growing massively, but honestly, I haven't really noticed too many changes in my day to day. It takes just as long to get somewhere as it did 5 years ago.
Because they were large, spread out cities already, the highway infrastructure, suburban development, and local planning have all been optimized to support that reality. Austin tried to keep that smaller college-town feel, which was hip and trendy and cool for visitors like SXSW, but is now leading to the awful growing pains they face today.
I think Austin has the potential to be a really great city, but it's gonna take decades to get anywhere near that reality.
In the meantime, Houston is building another loop, Dallas is extending the DNT practically to Oklahoma, and Ft Worth has a shiny new tollroad on the west side of the city. They'll keep absorbing growth while Austin struggles to get organized. Unfortunately, many of the people flocking to Texas don't know any better so they go to Austin first.
My 2¢.
I do wonder how much this affects salaries, though. Do employers in states with lower or no income taxes tend to pay worse for the same job than employers in states with higher income taxes?
One thing to consider though, is that the companies available to work for outside Austin, probably aren't supplementing salaries with generous stock compensation packages. If more startups move to Texas, that could change too.
With two working adults in the house, 120k/ea is a very comfortable living.
A lower income tax may cause more people to live somewhere and/or more people to be willing to work for less, but it still comes down to whether or not the supply of labor willing to work at a lower price exists.
Arguably taxes are higher for newcomers. Yes rates are lower but purchase price is insane. But Native Sons of the Golden West pay pennies on the dollar in property tax. Old businesses to. It's a $30B per year tax cut to successful real estate investors. That's 3x the size of the NSF and several billion more than NASA.
This is the root of all California's problems. Underfunded schools, endless sprawl, state parks closing, crumbling infrastructure and rampant housing speculation. It's all because of Prop 13.
No, the root of all California’s problems are Californians. …/s?
Compare Austin to somewhere near Freemont or compare TX to CA. Comparing Austin to all of CA is more than a little dishonest since there's a lot of rural nowheres in CA to drag down the average price but the comparison exludes all of Texas's rural nowheres.
https://www.city-data.com/city/Austin-Texas.html
https://www.city-data.com/city/San-Francisco-California.html
Austin typically has a far lower murder rate than SF (usually 1/2 to 1/3 the rate of SF looking over the prior decade). Austin is usually well below the US national murder rate, which is rare for a major US city. Austin has a dramatically lower robbery rate vs SF. They're similar on assaults. Austin is higher by 50% on rapes. SF is a lot higher on thefts. They're similar on burglaries.
I'll simply state that I would never consider working for Tesla before, but now I would be open to it.
Travis County is pricey but it isn't too long of a drive to get to pretty cheap real estate.
That's slowly changing, but I suspect that's temporary.
There are incredibly expensive parts of Austin. There are cheaper places in Austin.
The areas where upper-middle class Bay Area tech workers would want to love are not in the cheaper areas.