The reason for the double standard is obvious though: no once cares about rich people's problems. I say that slightly tongue-in-cheek, but there's a legitimate social problem here. Rents in SF could not grow so out of control without the income disparities also growing. Of course a city is not a closed population, so a good portion of the problem comes from rich people disproportionately moving to San Francisco, but even with that it's clear that on a national level income inequality is increasing in a very de-stabilizing way and SF is a microcosm of those dynamics.
Unlike previous economic booms of the 19th and 20th centuries, there is no mediating factors such as a massive need for human labor or a common cultural belief among the mega-wealthy in a moral duty towards philanthropy, or even just simple taxation. Automation is getting so sophisticated that these days a lot of productivity gains come from deploying capital to automate things (software being a part of this), and not only do all the gains accrue to the capital holders, but the gains are taxed much less than regular income.
So the deck is stacked heavily in favor of people coming in and flipping SF property for massive profits simply by virtue of holding the capital to be able to do so. The fact that they get one unannounced tax curveball thrown their way is not someone that remotely compares to someone choosing a profession and working their whole life only to find that rents quadrupled in a 5-year period. The answer is not "sorry buddy, you should have been a banker or a computer programmer, but I hear Modesto is still pretty reasonable"; there aren't enough such jobs to maintain a middle class that way.
>> there is no mediating factors such as a massive need for human labor or a common cultural belief among the mega-wealthy in a moral duty towards philanthropy, or even just simple taxation
Are you saying earnings in SF aren't taxed at usual CA rates, being highest in the nation? How could I get on this wonderful deal?
Also, I recently been to some places featuring walls and booklets listing people donating tens and thousands of hundreds of dollars to construction and maintenance of said places. If what you're saying is true, either these people aren't rich (and I wonder what "rich" means in your book then) or they did it of of some sinister motive which I'd like to ask you to explain to me.
>> a lot of productivity gains come from deploying capital to automate things (software being a part of this)
Despite popular belief, software doesn't write itself automatically. There are still some meatbags around clicking on those keys. Of course, you can automate manufacturing - but there's no significant manufacturing in Bay Area to automate anyway, and automation of services is still largely a dream.
>> So the deck is stacked heavily in favor of people coming in and flipping SF property
Last time I remember people trying to come and make living exclusively by flipping property without doing anything else ended up in what is called now Great Recession. I'm not sure that event can be treated as "stacked heavily in favor" of most of those who participated in the flipping. Of course, on higher levels (national-level banks) there were other games, but those didn't do property flipping.
>>> only to find that rents quadrupled in a 5-year period
If you tolerated quadrupling rents for 5 years, you're part of the problem - you're the one allowing to charge quadruple rents by paying it. 5 years is enough time to find other options. In fact, in 5 years you can learn a new language and move to a new country, not just find a job in the next city.
>>> there aren't enough such jobs to maintain a middle class that way.
But from this article we see there's no such jobs in SF either, it's just in Modesto if you're out of a job, your savings last you 3 years of rent, in SF they last you 3 months.
> Last time I remember people trying to come and make living exclusively by flipping property without doing anything else ended up in what is called now Great Recession.
Which was bad for lots of people, but not principally the people actually doing the flipping (some of them may have gotten caught in a bad position with two much sunk in inventory at the wrong time when the market crashed, but, generally -- OTOH, lots of people interested in flipping picked up property at discount prices due to the crash, too.)
Unlike previous economic booms of the 19th and 20th centuries, there is no mediating factors such as a massive need for human labor or a common cultural belief among the mega-wealthy in a moral duty towards philanthropy, or even just simple taxation. Automation is getting so sophisticated that these days a lot of productivity gains come from deploying capital to automate things (software being a part of this), and not only do all the gains accrue to the capital holders, but the gains are taxed much less than regular income.
So the deck is stacked heavily in favor of people coming in and flipping SF property for massive profits simply by virtue of holding the capital to be able to do so. The fact that they get one unannounced tax curveball thrown their way is not someone that remotely compares to someone choosing a profession and working their whole life only to find that rents quadrupled in a 5-year period. The answer is not "sorry buddy, you should have been a banker or a computer programmer, but I hear Modesto is still pretty reasonable"; there aren't enough such jobs to maintain a middle class that way.