But the Bay Area's high prices are driven by scarcity + demand, not intrinsic cost. So if everyone had a higher tax burden, I'd expect costs to come down.
Unless a huge earthquake hits it, the Bay area will always be worth more than central Kansas.
At a minimum, there is one simple reason for this - the amount of infrastructure investment over the years (power, sewer, roads, etc), of which there is basically none in central Kansas, but loads of in the bay area.
The value of the land at Burning Man is much lower than the Bay Area, even though it has many of the same people.
I think the infrastructure is pretty important. Disregarding it entirely seems a bit much. Even a bad neighborhood in Philly has more value per square foot than farmland in Kansas.
> The value of the land at Burning Man is much lower than the Bay Area, even though it has many of the same people.
You're proving GP's point. People from the Bay Area go to a desolate desert in the dead of summer because of the social aspects of Burning Man - the land is worthless because its a desert, owned by the Federal government, and they only stay a week out of the year. They bring the infrastructure with them, from stadium audio equipment to porta-poties to wireless equipment.
That's absurd. If everyone had a higher tax burden social mobility would be completely destroyed.
Californians will never vote away prop 13 so property taxes will never go up, even in this imaginary increased tax burden scenario. With incomes taxed higher, prices would not come down at all.
No one would want to sell their houses, as they could never afford a new one after taxes. Prices would continue to be propped up by real estate investment wealth that is largely unaffected by this increased tax burden. No one could afford to buy a first home as their income is taxed to a degree that saving up for a 20% down payment would require being in the 1% of CA income or saving up frugally for >10 years.
