California is gripped by economic problems, with no easy fix

Original Article ↗ Hacker News Discussion ↗

Prop 13, Tax Structure, and Zoning

  • Major focus on Prop 13 as a core structural issue: it keeps property taxes low relative to market values, shifts revenue burden to income taxes, and makes state finances volatile.
  • Several participants stress Prop 13 is a constitutional amendment: changing it requires a 2/3 legislative vote plus voter approval; it cannot be “just repealed” by the legislature.
  • Suggested reforms:
    • Phase-out or “soft landing” by raising the max annual assessment increase rather than full repeal.
    • Split-roll (treat commercial property differently) was tried via a recent ballot initiative and narrowly failed.
  • Zoning: many argue the state could preempt local zoning via statute, but see it as politically difficult.

Homelessness, Crime, and Prop 47

  • One camp blames Prop 47 and permissive enforcement for a large rise in theft, open drug use, and visible homelessness, especially in SF and LA.
  • Others push back, citing data (linked article) that most homeless are from California, and attributing the crisis primarily to high housing costs and a “homeless industrial complex.”
  • Strong disagreement over whether out-of-state homeless migration is a major factor; anecdotes vs. skepticism about ideologically motivated studies.

Housing Affordability and Supply

  • Broad agreement housing is extremely expensive and construction has lagged population growth.
  • Debate over whether “there is far more housing than before” implies no problem vs. counter-claims that building rates have fallen for decades, with zoning and permitting seen as deliberate supply constraints.
  • Some argue Prop 13 and transaction-driven reassessments discourage moving, reducing turnover and distorting the market.

Migration, Who Benefits, and Quality of Life

  • Data cited showing net domestic out-migration from California, especially among lower-income, less-educated, younger people; foreign immigration and demand still keep housing tight.
  • Split views:
    • California portrayed as prosperous and desirable, especially for tech workers and homeowners.
    • Others emphasize median residents, renters, and non-tech workers facing deteriorating quality of life.

Macroeconomy, Unemployment, and “Crisis” Framing

  • Dispute over whether slightly higher and recently rising unemployment in CA (vs. US average) is meaningful or just noise.
  • Job-openings-per-unemployed-person is lower than other states, but some argue the trend is long-standing and not evidence of a unique crisis.
  • Several see the article as overstating distress; others think multiple “self-inflicted,” policy-driven problems are real but solvable.