Squeezed

I got this via email from a friend in Minneapolis:

Cam Winton posted about this on Facebook. The current city overseers do not want single family dwellings. They have said as much. We are not in their vision for the future. Our little happy lives living in single family homes is destroying their view of the world.

I rode the bus this morning with a neighbor today who shared his story of increased taxes, I shared mine, he told me of neighbors with huge jumps. At work I talked to another county employee who is ready to sell her house which is located about 4 blocks from mine. Reason…unbelievable hikes in taxes.

This is nuts. We are about to get rolled big time.

We certainly are.

Minneapolis and Saint Paul are indulging in several parallel liberal conceits:

  1. “Progressives” do, in fact, believe that there’s always a few more bucks they can wring out of any population.  The correspondent wrote that, suddenly, home valuations are skyrocketing in parts of South Minneapolis.  The idea is “pay up, or move away and let us get at all that choice property!”
  2. The idea that they know better than the free market how people want to live.  The essence of the free market is that if people don’t like, or want, a product, service or idea, they just say “no”.   As long as we have a free market for homes, people will choose what they want, and say “no” to what they don’t.  As Minneapolis is not New York or San Francisco (whatever its pretensions) – it’s built in an place with lots of land – most people eventually will look for some kind of breathing room.

Joel Kotkin predicts that at some point, “cities” as we know them today will become playgrounds for the very wealthy, and warehouses for the very poor, surrounded by…not so much “suburbs”, but exurbs and smaller communities where actual people will hold actual jobs.  I think Minneapolis is well on the way.

21 thoughts on “Squeezed

  1. So if these people do move out, will we see a city to suburb version of what happened when the left moved out of Mass and California after they trashed those states. They moved to more Republican states like Vermont, Washington and Colorado, then preceeded to do the exact same thing there.

    So lefties will move out of St Paul and Minneapolis, into well run, lower taxed suburbs, then push to elect liberals there who will do the same thing they did in Mpls.

  2. With in six years, the bond market will back up majorly and everyone’s mind is going to get concentrated on what is real, productive, and fair.

    In the mean time we get this theft and graft bubblenomics system. It’s insane.

  3. Americans live in the suburbs to cluster with people who want to live like they do. In particular, they want their kids to go to schools with the kids of parents who think like they do. There are no standards in American schools. All students must be kept in class, no matter how disruptive or how unwilling to learn, and they will be promoted with their age group no matter how few skills they attain. Living in a community made up of families who take education seriously is the only way to get your kids a good education in America. As long as this is true, the suburbs will remain as they are now. In a society that refuses to set limits and standards, self-segregation by migration is the only way for middle class families to live safe, productive lives. Singles and couples without kids can self-segregate by choosing who they associate with (unless your neighbor starts selling heroin). Families need community structure.

  4. This is just an extension of the contributions we’re seeing from the 47% who pay no fed income tax to national politics. The “have not’s” vote their priorities which is always “more from you for me”. Someone leasing an apartment could give a rip if property taxes are untenable; y’all have a lot of nerve owning property in the first place!

    In fact, given the avaricious nature of the majority of urban dwellers, it’s highly likely the spectacle of comfortable, middle class families getting priced out of their homes is seen as good entertainment.

    Let us not forget that for a leftist, a thing isn’t done, and done well until someone (other than themselves) gets hurt.

  5. TFS:
    Ditch the regular income tax, keep the alternative minimum tax (which has very little complexity), and add a VAT. In the process we would lose the home mortgage interest deduction and the health care expense deduction which are the most unfair and distorting parts of the current tax code. The Fair tax people suggest that you deal with poverty by giving everyone a rebate every month based on what they would pay in VAT if they earned at the poverty line. Sounds good to me. We can keep the AMT as a wealth tax for the truly rich.

  6. “Americans live in the suburbs to cluster with people who want to live like they do. ”

    Yeah, but they used to live in the city for the same reason. Northeast used to be Polish, Ukrainian and Baltic. Swede Hollow was Swedish, then Italian. Highland used to be Jewish.

    We have suburbs partly because, yes, as you say, birds of a feather flock together. But also because a generation of GIs came back from the war sick of being corralled around in “public transport” – stacked five deep on troop ships, jammed onto trains – and jammed into “public housing”, like barracks and berthing spaces. They wanted elbow room, and a community that mixed just the right amount of community cohesion with more individual freedom than the cities allowed.

    It was a model that worked then, works now and, according to the likes of Joel Kotkin, will likely overtake major cities as the primary focus of American life sooner or later.

  7. You won’t get VAT in place in place of federal income tax, you’ll get both. A VAT discourages consumption of consumer goods, anyhow.
    Better would be a repeal of the 16th amendment, and a government financed only by tariffs.

  8. You won’t get VAT in place in place of federal income tax, you’ll get both. A VAT discourages consumption of consumer goods, anyhow.

    Yes and yes. No VAT — the idea is to make taxes as transparent as possible and the VAT is designed to hide the taxing.

  9. The taxation system needs to favor investment over consumption. A national retail tax can be progressive-ized.

    The other thing is, why should taxes be progressive anyway? Nothing else is. Government especially in excess is a poor value, too, obviously.

  10. Your friend should read the Minneapolis zoning code. Far from being hostile to single family residences, the city practically makes it illegal to build denser units. Between height limits, parking requirements, and lot ratios in most of the city you can’t build much of anything beyond 2 1/2 to five stories.

    Property values are going up, not because of progressive values, but because of free market demand. More people want to live in the city, so the value of homes increases, which means owners of all properties pay more taxes.

    At least in the core cities, government regulators protect SFRs and a free market would unless a tidal wave of taller denser units.

  11. Your friend should read the Minneapolis zoning code. Far from being hostile to single family residences, the city practically makes it illegal to build denser units.

    Filed in there with “they’re not taking guns right now, are they?”

    We know the Met Council wants to dense up the metro. This is a step in that direction.

  12. Actually filed right here in the open:
    http://www.minneapolismn.gov/cped/planning/rezoning/lrt/lrtrezoning_tod-haiwatha-07
    “Building height is an important reflection of neighborhood or district character. The Zoning Code places height restrictions in each zoning district. Outside of downtown, ordinary height restrictions range from 2.5 to 6 stories.” I was off by a story.
    What the Met Council wants is fairly unimportant. Cities get to set the rules.

    And if by “this”, you mean what Cam Winton is protesting, “this” is not density. He is objecting to the tear down moratorium in parts of Minneapolis. This moratorium is backed by those who don’t want more density, including bigger houses and ( to quote from the CW linked website) – “several multi family buildings planned in this area that would be held up by a moratorium.”

  13. Rep. Dave Camp has a good first start at tax reform and his proposal offends both sides equally. Rep. Camp’s proposal essentially lower tax rates and broadens the tax base by removing tax expenditures which cost $1 trillion in revenue a year and also attempts to deal with compliance issues

  14. Better would be a repeal of the 16th amendment, and a government financed only by tariffs.

    The total value of imported goods is less than what the Federal government spends, so even a 100% marginal tax rate wouldn’t be enough — we’re not doing static tax analysis, we’re saner than Democrats.

  15. RickDFL said, “Property values are going up, not because of progressive values, but because of free market demand. More people want to live in the city, so the value of homes increases, which means owners of all properties pay more taxes.”

    He obviously doesn’t know how property taxes work in MN. In other states with a mill rate system when values go up so do the taxes. But in MN the system calculates your tax individual tax capacity and compares it against the total ax capacity of the taxing jurisdiction. If your percentage of the total tax capacity goes up then your taxes go up.

    This proportional system explained how your taxes can go up even when your property value is going down. Even if your (city, county, school district, etc) keeps the same tax levy your taxes may go up. For instance, if your property value drops by 5% but every other property goes down by 10%, then your share of the pie becomes proportionally larger and your taxes are going up.

    The only way to get large tax increases out of the scenario laid out is for the value of these specific homes to have gone up much more (or conversely – down much less) than other Minneapolis properties in general. That happens when the homes are in a ‘hot’ neighborhood or they have been remodeled with a corresponding increase in value.

  16. All shelter is overpriced due to 100 years of bad government and Fed policy intervention. Basically, housing became a forced savings / speculation-hedge vs. bad Fed policy. Forcing people to live like rats isn’t going to resolve the problem. Undoing via intelligent government action it would cause a political riot and collapse the banks.

    One’s only hope is is a very large stock of silver rounds, ammo, and dehydrated food.

    I have shelled out for a service for years from a hedge fund guy who’s favorite saying is “all of the conspiracies are right out in the open.” It’s totally true: http://bit.ly/1hvrxQG

  17. In other words, you can’t fix statism with more statism, but you can’t undo it either. It will collapse naturally, which is the price of not having as natural of an economy as possible.

  18. Think of all of the various statist apparatchik’s we have, including some on this forum. This is is a very good survival / prosperity strategy prior to the collapse.

    Everyone should watch “The Lives of Others.” It’s the same thing here; same path, it’s just early days. http://bit.ly/1gBXed6

  19. Noting the _current_ Minneapolis building codes is proof of what exactly? Minneapolis likes a tight leash on it’s residents? Minneapolis can’t issue variances to its own building codes or change them at will?

    The fact that Minneapolis can do what it wants is true, but I would not assume it wants something different than the Met Council, and I certainly wouldn’t take current Minneapolis building codes as evidence of a difference in opinion.

  20. MtkaMoose: Thanks for the info on MN Property Taxes, I know they are complicated. I think the point still stands that if X lives in Mpls and X has had a property tax increase this year, it may not be because politicians changed the levy or rates were increased, but b/c their market value of the property went up. Of course not every value increase leads to a tax increase, but some do.

    Troy: The Mpls zoning code shows that Minneapolis politicians use the power of government to prevent the level of density that the free market would produce. Mitch and his correspondent assume that b/c liberals live in denser cities and because (they think) liberals favor regulation over the market, then urban density must be produced by regulation not market forces. This causes them to completely misread the No Moratorium issue. Far from being hostile to low density single family residences, Minneapolis politicians use zoning to block the market from replacing them with multi-unit buildings.

    Whether Minneapolis or the Met Council prefer different levels of density is not the issue. Only Minneapolis has the power to enforce it’s preferences through zoning regulations.

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