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Friday, October 27, 2006

Measure H: Voo Doo Economics For L.A.

Measure H, as you may know, is a proposal to impose a tax for 30 years on L.A.'s property owners so that the City can borrow $1 billion, repay it with interest, and give the proceeds to developers, ostensibly for "affordable housing." ("Affordable housing," by the way, is a term of art that means housing which costs no more than 30% of the occupant's income, whether that income is $50,000 per year, $100,000 per year, or $1 million per year.)

The proponents of Measure H blithely claim that it "will cost the average homeowner less than $50 a year, only about $4 a month."

However, when you ask them how they arrived at that number, you know what they say?

Nothing. They have no idea how that figure was concocted. Nor can one find the math on their "yes on H" website, or anywhere else, for that matter.

Is there any provision in Measure H itself limiting homeowners' liability to $50 per year? Of course not. Is there any provision in Measure H putting a cap on the amount, or even the rate, of interest on the bonds that will be issued during the next 10 years if it passes? Nope.

You should therefore give no weight whatsoever to the "$50 per year per homeowner" claim.

You should, moreover, ask the proponents how much government expenditures will have to rise to accomodate the new occupants of the construction Measure H would fund. For example, how many children do they expect to move into the new units, and how much per year will we taxpayers have to spend to educate them? How many of the new, supposedly low-income occupants will be using local emergency rooms as their "free" health plan? How many, statistically speaking, are likely to fill up our jails and courtrooms?

Nor do the proponents of Measure H ever mention how much the owners of real estate other than houses would have to pay to carry the billion-dollars-plus-interest debt -- or from whom those property owners would get the money. Landlords will presumably "pass along" the cost to tenants, thereby driving up the price of housing. Retailers will try to pass along the price to customers, who will either bear the burden or shop in neighboring cities whose merchants will not have to fund the billion-dollar bond. Query how much the City's sales tax revenues will drop as smart shoppers go to, say, Culver City, to avoid the higher prices.

Increased density has a price. There's no reason to believe that price will be just $50 per year.

6 Comments:

Anonymous westchesterkids.org said:

Homeowners should ask.. what's in it for us??

Answer: Nothing except 100 to 200 new neighbors (higher density) next door for every surrounding acre of property. That and your wallet or purse is $50 lighter.

October 27, 2006 11:21 PM  

Anonymous Anonymous said:

Walter, stop making so much sense!

This measure is atrocious, preposterous, hideous, specious, ridiculous, etc. ...you're an English teacher, you get the picture. Furthermore, all these "$4 a month" or $50 a year tax and fee hikes add up. And I'm not getting a 13% raise like the clowncil.

VOTE NO MEASURE H !!

October 27, 2006 11:47 PM  

Anonymous Anonymous said:

The fact that Measure H is going to do something about homelessness is important to me and I'm voting for it.

I wihs that you had another opinion represented on this blog. It seems really biased and negative

October 28, 2006 10:19 AM  

Blogger Walter Moore said:

To 10:19:
You are living proof of the value of making an argumentum ad miseracordiam.

There are people, like you, who, as soon as they hear that something is "for the needy," "for the homeless," "for the children," or "for the crippled," simply stop thinking and support whoever claims to be helping some sympathetic group.

I urge you to read the actual measure itself -- not the preamble, not the arguments for or against. Just read the measure and make up your own mind about whether this measure is actually a good way to help the poor. And be sure to look up every term with which you are unfamiliar, e.g., "AMI," "affordable housing," etc.

By the way, I don't mean to pick on you. Your heart's in the right place. The problem is that crooks -- in this case rich developers -- take advantage of your good intentions, and money that could help the poor instead goes to the wealthy.

October 28, 2006 12:09 PM  

Anonymous Anonymous said:

If the state is mandating low-cost housing, then the city should comply, but not by building affordable, saleable housing.

Instead, the city should be modifying city laws so that developers would be more inclined to build apartments and to be less inclined to tear down rentals to build condos.

If the state is not satisfied by this, then the city should take whatever means available to challenge the state.

People who need low-cost housing can not afford to buy. It is only by finding affordable rentals that we can house our poor.

October 30, 2006 12:14 AM  

Anonymous Anonymous said:

Eli Broad and the other connected land developers must be salivating. What exactly is the improved cash flow to the taxpayers from the increased RE taxes from all the wonderful (downtown)redevelopment? I'll be it all goes to the CRA.

To the barracades!

October 30, 2006 5:19 PM  

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