Article "How making $300,000 in San Francisco can still mean you're living paycheck-to-paycheck"

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A lot of people are homeless because they are addicts and these people are giving them pot? Sheesh, way to keep people down.
 
Looking at the budget, it is hard to call that living paycheck to paycheck.

Over $45,000 per year in savings, over $13,000 per year in entertainment and vacations, and some lavish spending on a car, which is of marginal utility in SF.

With some modest re-budgeting, they could be easily be putting away $60k per year. After 12 years they are likely to have accrued $1 million from those assets, and another $300k in home equity. Building up a million in net worth over decade is hardly living paycheck to paycheck.
 
I grew up in southern California but left some years ago. Still have relatives and know other people from San Diego to the coastal redwoods. So I hear a lot.

Having once owned a home in California, allow me to explain property taxes there: the modern history of property taxes in California begins with the approval of Proposition 13 in 1978. This was a homeowner-oriented rebellion that had been building for years with people on fixed incomes slowly but steadily being forced from their homes by a system that still exists in most states of arbitrary and often capricious assessments and increasing tax rates. Not to mention there was a good deal of corruption in the various assessors’ offices around the state.

Proposition 13 limited the tax rate to 1% of the valuation plus voted indebtedness (usually bonds approved by voters) and limited assessment increases to 2% per year. Further the assessed value could only be reset to current market level when the property changed hands in a purchase transaction. This had the effect of forcing property taxes to be based on a real transaction rather than an assessor’s overactive imagination and it also had the effect of making the carrying costs of a home predictable.

People who hate this system have often complained that this favored people who stayed in their homes for years as the markets ran past the assessed values; my reply has always been, do you think they could stay there that long or stay there in retirement if their property tax wasn’t so predictable from year to year? People on low or fixed income levels have to have some predictability to their carrying costs, they can’t afford the whim of tax hunting assessors. Further, this promotes stable neighborhoods as well as people usually have an incentive to stick around.

With this predictability of property taxes and these limits on them, that was how the real estate market in California really took off. I do not feel the least bit sorry for the government either. At the time Proposition 13 passed, the state budget that year was $15bn. For the 2019-20 fiscal year, Governor Newsom proposed a budget at $144.2bn. In other words, the budget is up nearly 10 times while the state population has only doubled and the rate of inflation doesn’t support that much increase. So they’re not hurting yet they are still looking to undermine Proposition 13. Better be careful what they ask for, if they actually do override, you can bet the real estate markets there will crash.

By comparison, the average property tax rate in Texas is about 1.9%, nearly double that of California so that nearly doubles the tax per $1000 of valuation. This has had the effect of keeping TX property values relatively low despite all the migration into the state.
 
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There are people who live paycheck to paycheck on 300,000 and people who save 1/2 their takehome on a salary of 40,000 just about anywhere in the country. It depends on what your priorities are.
 
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