A Way To Make Housing More Affordable

Rent-or-BuyAbout eight years ago I was unemployed for almost two years. A friend of mine told me that I wasn’t unemployed, but that I made $40,000 per year. I looked at him and shook my head. That made no sense, but he pointed out that because I had been lucky and inherited my parents home I didn’t have to pay rent which [at the time] would have worked out to about $40k/year.

While that number has increased nowadays, it hit me hard. There are some things that many people don’t understand about owning a house that is different than renting and I feel that should change. While it’s a change that should happen nation wide, it’s something that makes a lot more sense in San Francisco.

If you own a house you must pay property tax. The thing that some of you might not know is that property tax is tax deductible. I met a woman who recently bought a house and is paying over $11k/year just in property tax. All of that is deductible from her tax return every year as a living expense. With rental rates at an all time high in San Francisco this is a bit of a drop in the bucket, but getting to cut $11k+ off your yearly income is still nothing to sneeze at. She can also claim her mortgage payments as a living expense and deduct them from her income.

This is why I believe that rent should be tax deductible as a living expense. I recently saw an article where an elderly couple in the Sunset District who were paying $2100/month in rent had their new landlord remove an in-law apartment from their house thereby making the home a single family dwelling. The landlord was then able to increase their rent because the home was no longer under rent control to $8900/month.

San Francisco is one of the few places in the United States where something like this could happen, but there are places where it is happening more often. Most of the Bay Area is quickly approaching the rental prices of San Francisco because when you leave San Francisco the homes are bigger thus demanding a higher price. Even the apartments are larger outside of San Francisco.

So why isn’t this happening? I can only make a guess, but let’s use San Francisco as an example. If residents were to be able to deduct their rent from their income as a living expense San Francisco would look like a very poor city. Yes that new techie family that’s paying $10k/month for a house in the Mission would suddenly have a $120k deduction from their income each year which would probably qualify them for financial aid unless they were pulling in closer to $200k/year in salary. This also probably wouldn’t help reduce rent because hey, it’s a tax deduction.

Overall, San Francisco has for a long time been difficult to live in due to the increasing rental prices and that also increases expenses in the Bay Area. To make this change so that rent was tax deductible would probably make a large number of people in the U.S. look much poorer than we realize, in California where Proposition 13 is in effect so that property tax can only increase by 1.1%/year, home ownership even with these high purchase prices currently has advantages over other parts of the country. Perhaps this is more of a state wide thing, but I believe it’s something a lot of our politicians should start talking about.


OK, I have to admit that when I started this blog it was supposed to be about San Francisco, not San Francisco politics. Somewhere down the line I posted a couple of articles relating to San Francisco politics and was nominated as the Best Political Blog in San Francisco by SF Weekly. I came close to winning, but didn’t. Now that the election is over I’m going to write my last political article on politics in San Francisco and give it a rest for awhile, so what better topic to write about than, #OccupySF.

People of #OccupySF I feel for you, because I was there 20 years ago and I was also there 40 years ago. Now let me explain. 40 years ago I was just a little kid and the 60’s hippies were protesting everything except love and getting high. In an interview from way back when a girl said, We’re giving up our homes and jobs so that other people can have them so they should take care of us. This was almost always followed by, Get a job you f*cking hippie!

Fast forward 20 years and you have me just out of college. I went to college because I was told, if you don’t go to college you’ll be flipping burgers for the rest of your life. Well, seeing as when I graduated from college most of people flipping burgers where younger than me or not U.S. citizens, I probably wouldn’t have been hired at most fast food restaurants anyway. I stayed at home and didn’t have to pay rent, but I kept looking for work. I worked through high school part time and through college part time. When I graduated college [1987 and the total cost back then was under $5k by going City College and SFSU] I had no debt and very few expenses. I finally moved out at 28 [which left my mother in tears for a week] and moved in with a friend to a two bedroom home in the Mission where we paid a total of $800 per month.

I found work through temp agencies in fields that had nothing to do with my degree in broadcasting. I kept looking and I think I was finally hired as a full time employee around the time I turned 30 working for a printer. 19 years later to today I’ve worked at many printers and graphic design firms and taught myself html, css, php, etc. None of these things were available to learn when I was in college, but have kept me going.

How does this relate to the #OccupySF movement? Most of you are in debt and don’t like government and/or corporations. You’re the 99%. So am I, but while I agree that we should tax the 1% just like the rest of us, I see corporations as a good thing. Let me list a few reasons why:

  1. Steady work: Most corporations have enough money that they can keep going when the economy takes a down turn. Sure there may be some lay offs, but in general you’ve got a better chance of keeping your job with a large corporation
  2. Health Benefits: There was a time at one job I had where the boss said, well, paying for health benefits are a crap shoot maybe you’ll need it, maybe you won’t. Not true. I had a stroke at 37 and most people I know once they hit their 30’s suddenly have high blood pressure or high cholesterol and need to take medications on a regular basis and need to see a doctor regularly. Small companies don’t have to give you that and if the company is under 20 employees they don’t need to pay into the Healthy San Francisco thing we’ve got going here.
  3. 401k: It’s nice to have some money when you get old enough to retire and large corporations are more likely to take care of their employees with a 401k. You pull a little money out before taxes and put it away to earn money so that when you retire you’ve got something to supplement you Social Security [you know that ponzi scheme that Rick Perry likes to talk about]
  4. Perks: Large corporations don’t like having their employees turn against them so they placate them by having refrigerators stocked with food and drink for them. The company I’m with regularly stocks a few refrigerators with sodas, mineral water, juices, yogurt, cheese, gummies and energy bars. You practically don’t need to bring your lunch to work at a place like this.
Now today you have protesters who are camping out decrying government and corporations. They have no internet access or electricity and since they’ve been doing this for several weeks they most likely don’t have jobs. I don’t have time to do this. I supplement my income by using online resources such as task rabbit. I’m able to add a couple of hundred bucks more a week from that and another couple of hundred a week through freelance work.
Yes, I always hated the rich guys at the top of the food chain in business because they got to sit on their asses all day and rake in millions, but that was because I wanted that job. I always wanted to be able to provide for my family without any worries just like they did. The problem is that to get to that place you have to work for it, not sit and demand it. Even though I’m a contractor, I look for work ever day and I know that the jobs are out there because I send out at least 10 resumes a day. So do thousands of others which is why I don’t get calls as often as I used to, but I’m out there every day trying to make more money than I did yesterday. This is why I don’t have time to camp out and protest because I have a family to feed.
Many of you may not know this, but San Francisco has a JobsNow! program still in effect that if you can find someone to hire you San Francisco will give them a $5000 stimulus bonus for hiring you. They just have to keep you for five months. There are ways to make ends meet out there you just have to get out there and find them. Enough of the rant, just think about this. Oh and by the way, I’m a progressive, not a republican.



An Answer to Prop 13

Many people [including #SFMayor candidates] who haven’t owned a home for more than 10 years are against Proposition 13 that capped property taxes for home owners in California and took money from the schools. There are lots of people who want it repealed either because either they don’t like the the fact that people who have owned homes for a long time don’t have to pay as much taxes as new homeowners or because they’re parents with kids that see them suffering in the school system. I think I’ve come up with an answer and I hope at least one person besides myself will forward this on the our Governor Jerry Brown.

I have a friend who lives in New York and his mother recently died leaving him with a house in upstate New York. It’s not a big house, two bedrooms I believe, but it’s on 12 acres of property. He pays $8000 per year in property taxes and he asked me when we were talking recently how much I paid in school taxes. School taxes? I don’t pay school taxes. He pays $4000 per year in taxes used solely to benefit their schools. This started my mind thinking and as I usually do I started to run the numbers. Here’s the formula if California started collecting taxes for schools and I’m going easy on y’all. I’m rounding down numbers.

California has a population of 38,000,000 people [rounded down]. The median income adjusted for cost of living is $44,000 per year [rounded down]. If California charged every person  a 1/2% tax off the top before everything else was taken out of their paychecks that would give the State of California 7,357,000,00 per year just for the schools [amount adjusted for 12% unemployment]. For those who have trouble reading numbers that is 7.357 billion dollars per year. There are 9324 public schools within California. I’ll let the private schools fend for themselves since they charge parents to send their kids there. If you divide the income by the number of public schools each school would receive $789,000 per year [rounded down]. Think about what the schools could do with that money.

Say I’m Joe SixPack who wants to be able to make $250,000 per year without getting taxed too much. If you were making that much per year how bad would it hurt to lose $24 per week when you’re bringing in $4800 per week [rounded down]? California is the 8th largest economy in the world. Don’t you think we could put into effect a tiny tax that would help our schools immensely? I know I am simplifying the allocation of funds incorrectly as say Los Angeles County has more students than say Bell County, but still, it would better serve our students educational needs.

If you pull Prop 13 it won’t drop prices on homes in California. We’re called the Golden State for a reason. Everyone wants to come here. If anything it might actually raise the property taxes for new home buyers and that new income isn’t guaranteed to go to the schools. It would probably go into more pork barrel politics where the politicians are trying to get the biggest piece of pork out of the barrel [yes that is where the term comes from for you young whippersnappers]. If we had what I call a polite tax to benefit our schools, no one would go hungry for it. Schools wouldn’t have to keep asking parents to purchase supplies and our own state and local governments wouldn’t have to worry about why our great state has schools that are in such need and cannot supply a decent education to our children.

PLEASE! I urge you to think about this and pass this article along to your friends, neighbors and especially politicians. I know I am going to. We might just change the quality of education in our state and step forward to show other states how to do it right. We are the most populous state in the Union so we should be able to convince everyone regardless of part that a polite tax like this would help give California the leading edge in education it needs. Besides, it will also mean that everyone you interact with at the businesses you interact with will be better educated.


San Francisco: Fear the e-Check!

This story starts back in 2010 when I received my bill for the property taxes I owe on my home. Now I could write a check to pay for the taxes [which I should of], but decided to pay online. I wrote maybe 3 checks in the last year as it’s more convenient for me and the companies I deal with to pay electronically and I have never once had a problem. I noticed that all of the online payment choices had a “convenience fee” associated with them.

I’m always hated the idea of a “convenience fee” where by using it makes it a convenience for you and the company you’re paying. There was a convenience fee free option of using an e-check so naturally I chose that. I entered my account info and routing number and got a receipt that my taxes were now paid. I did notice after awhile that in checking my account that it seemed like they hadn’t taken the money out yet, but hey it’s the government, they tend to run like molasses on a cold day.

Last week I receive a letter from the SF tax collector’s office saying that my e-Check had been reject by my financial institution because the account didn’t exist AND I was being charged a $50 fee for the rejected e-Check and an additional $57 for being late with the payment even though I originally had paid it on time.. Funny, no other utility company had sent me a letter like this. So I make a phone call and the woman I talked to immediately told me to talk to my bank and get them to send her and her superior an email stating that it was a mistake and they’d remove the penalty fees.

Here’s where it gets interesting. Apparently at some point my routing number had changed and I didn’t know that. The bank informed me that was why it was probably rejected, but because the letter said it was rejected by my financial institution and didn’t name the bank that was the problem and they couldn’t write the email. So I send an email to the tax lady and she tells me that she can’t say what bank because they only process the e-Check by the numbers that I gave them and sent me a gif file of what they received. As it turns out I had made one mistake in the account number also. The SF Tax Collectors office apparently doesn’t have any way of verifying whether or not the information you gave them was correct.

So I go back to my bank and show them the printed out email that has my account number with the one number wrong and the old routing number which you would think would be enough proof to show them that I tried to pay with the account, but once again, unless the SF Tax Collector’s office could mention the name of my bank even though I could show them the account and routing information they can’t send an email. So now I’m in a bit of a catch-22 situation and while all the other employees at my local bank are being very helpful to me the assistant manager has been blocking me from the branch manager who if I could find him would recognize me and help me. While I could get nasty and name names, I’m not going to do that.

I just wanted to let everyone know that when it comes to the SF Tax Collectors office be very careful as they don’t have a system of checks and balances in place to verify what they’re doing and if anything goes wrong it’s your fault and they make you be the middle man with your bank.