From Michael Kriozere in response to the Chronicle’s “he ain’t planning to pay” piece:
While it is unfortunate that my discussion with the San Francisco Chronicle was taken out of context and thus reflected inaccuracies, it does provide me with an opportunity to share what has been and continues to be our commitment to both the project and the City. As such, I share the following.
Not only is One Rincon Hill more than 70% sold*, but sales once again are brisk; in fact, sales traffic has been above the pre-crash level (60-100 tours) every week in 2009. We are pleased to report that we have almost fully paid our construction lender and contractors, have no liens against the building and appreciate the unwavering support of our partners. We have not received any funds from the City in any aspect of the development of this project.
We have every intention to complete Tower II, but, as I said publicly months ago, we are waiting for the economy, and the residential real estate market in particular, to turn on the upswing. There is no rush to proceed at this time.
In specific response to the reporting in the San Francisco Chronicle that “he does not plan to pay the $5 million in fees that were central to obtaining city approval to build the high-rise,” this is not my plan. In fact, to date we have paid more than $16.6 million in fees:
Affordable housing in lieu fee (offsite) $11,026,146 (Dec. 2005)
S.F. public school fee $858,448 (Feb. 2006)
Rincon Hill Community Improvement fee $3,162,889 (Sept. 2006)
SOMA Stabilization Fund fee $1,268,306 (Dec. 2005 and Sept. 2006)
Total: $16,615,789
The sole remaining fee to be paid is the balance of the SOMA Stabilization Fee of $13.75 x 393,884 square feet or $5,415,905. This payment is not yet due. The payment becomes due when we obtain a final Certificate of Occupancy (which has not yet occurred); or, alternatively, we can post a letter of credit at that time to delay the payment by 6 months. In other words, we are not in default nor do we intend to be. Furthermore, the developer will not receive any distributions from the project before the SOMA Stabilization Fund fee is paid.
In my typical candor, I shared with the Chronicle the realities of today’s economy on our project – no different from what most every project is the country is experiencing. As we are in the most egregiously difficult financial environment of our times, I am realistically concerned with the burden of this fee. This was the intent of my discussion with the Chronicle, and I am disappointed it was not more clear. That said, we plan to pay the fees when due and proceed onto Tower II of this project which will provide a very singular living experience in a world class city.
Thank you for this opportunity to update our project and our vision.
Michael Kriozere
*Officially 72% of the 376 tower one condos are now either closed or in contract, but just under 70% if you include the 14 townhomes. And while this really doesn’t change our accounting with respect to net-new contracts since October, we will publish a more complete sales breakdown tomorrow.
∙ One Rincon Hill Still 70% Sold (And Reneging On Development Fees?) [SocketSite]
∙ One Rincon Hill’s Townhome Collection “Officially” Released [SocketSite]
Wow, $22 million in total fees once he pays the final $5.4M to the SOMA stabilization fund. I hope that SOMA feels well stabilized after getting this money. With 327 units, that’s about $67K per unit. That would pay for 1/2 a condo in many places.
^^^Correct me if I’m wrong, but I believe 22 million is the total in fees for BOTH towers, which would be more than 700 units. Still a lot, no doubt, but about half your 67k figure.
Wow is right. I read on SF gate that the fees were going to be $39.5M total, which sort of makes sense as some of the numbers seem to be based on square footage and there’s no T2.
The sad thing is those fees just fall down a rathole, and to the extent that any of them make their way to worthwhile programs, all they do is foster more dependency that then allows further extortion.
It’s unrelated, but it sort of fits with the theme of extortionate spending, please everyone vote “NO” on all the CA tax provisions coming up in the special election (Props 1A through 1E). The polling is shifting towards “no” and the mobsters in government shouldn’t be allowed to wet their beaks even more.
http://globaleconomicanalysis.blogspot.com/2009/04/california-please-send-message.html
Yep, nice slush fund Daly got for his buddies.
I bet I don’t agree with LMRiM on too much in the area of tax policy (I’m a total lefty — near socialist), but I’m with him on these May 19 propositions. Those are a good way to bury this state during rough times when raising taxes is the absolute worst thing to do.
All the fees the developer paid on the project come directly out of the buyers’ pockets. That said, why are we still dealing with a wrecked Harrison Street that needs to be repaved? Where are the solid plans and timelines for neighborhood parks that we were promised? Why do I have to put up with homeless campers and human feces on the street on my daily walk to the office?
Lazy city employees extorted business (and i-directly residents) and provide no services in return. Typical SF.
This is the kind of happening we at Rincon Hill Neighborhood Association are trying to shed light on.
First off – thanks to Socketsite and Mr. Kriozere for clearing up this misunderstanding. And secondly, yes, the city fees are going to be in the millions when you are developing a property of this size and scope. Just taking the affordable housing fee – if the in-lieu fee was not paid, then 12% (now 15%) of the units would be required to be below market rate where you essentially cannot make a profit on them. When you do the math on how many units that would be and multiply the cost to construct them at a minimum of $500 to $600 per square foot in hard costs, well $11 million in in-lieu fees actually looks like a deal. And you can argue all day and night if these fees are a form of socialism (they kinda are in my opinion), the fact of the matter is that every new development has to pay these and they are now the part of the building cost structure here like it or not. Good luck on the remainder of the sellout – I think the downtown high rise urban condos are a nice addition to the overall mix of residential options in the city.
Hmm. That’s a long statement, but it’s worded in such a way as not to clarify anything, really. By the time he actually gets around to discussing the particular $$ the Chronicle article said he was going to renege on (read: quoted him as saying he might renege on), his language is so hedged that I don’t see it amounting to any kind of denial at all. He never directly denies having said what he was quoted as saying. To the contrary, he reemphasizes that he’s “realistically concerned” about the burden of paying that fee.
So he doesn’t “intend” to renege — but he also “intends” to sell out the building (which should be easy with those “brisk” better-than-bubble sales (meaning tours?)). Still totally consistent with his previous threat not to pay if the project doesn’t turn a profit. Similar analysis re what he “plan[s]” to do.
In my typical candor . . . .
The schools get less than $1M and Chris Daly gets $11M WTF?
Hand over 10 of the unsold units to be BMR units and even at a realistic price that’s $5M.
The schools get less than $1M and Chris Daly gets $11M WTF?
Hey, it’s not cheap keeping the beggars working…
I don’t understand why there are any fees involved. As another poster stated: the buyer ends up paying. It’s just an extra tax that adds to the selling price that is used to calculate even more taxes. And we don’t even get decent services, oh yeah, there’s muni and we get the BS including Daly.
$60/sf fees sound rather outrageous and I think the city should wave the remaining fee. Sure, they were willing to pay when times were good, but it’s different now. It would be no different than buyers demanding the developer to cut the contract price when the price tanks 20%.
I don’t understand why there are any fees involved. As another poster stated: the buyer ends up paying. It’s just an extra tax that adds to the selling price that is used to calculate even more taxes. And we don’t even get decent services
Of course the buyer ends up paying. That was priced in to whatever the 70% of the building’s-worth of buyers happily paid. If it wasn’t “worth it,” these folks shouldn’t have bought.
^^^^^^
Wow. What a bunch of whiners. You guys make it sound like our city government is inefficient or something.
“And we don’t even get decent services”
You get a planning department that won’t let you build anything. Not even on your own land. 10 years of review to put up a doghouse. Your dog will die before then, but at least the architectural heritage got preserved.
You get an aging fleet of dirty buses that are either bunched up and jammed, or come 25 minutes apart. And you get to pay their drivers $200K/year because they switched shifts and technically worked overtime. All the time.
You get anti-commerce agendas that keep small business owners from redeveloping dilapidated, vacant structures. Especially theaters. Because if there’s anything San Francisco needs more of, its old theaters. We don’t want our world class city to fall behind the curve when this internet thing dies and vaudeville makes a comeback!
Just think – a couple mil from this extortion fee can be used to send a rotting trolley car back east, where it can be rebuilt and put back in to service carrying tourists to the wharf to buy “Alcatraz Outpatient” t-shirts.
It could also subsidize a failing jazz club for another few years. You know – for when the upcoming vaudeville craze fizzles, and jazz becomes hot again.
And you guys think this money gets wasted…shame on you!
“the buyer ends up paying”
All you economist-types (Robert, diemos, polip, Red Pill, LMRiM, tipster, ex SF-er), who is actually “paying”? Never mind the valueless use to which these fees are put, ultimately, whose pocket do they come out of? My uninformed gut thinks the developer. He charged the buyer whatever the market would bear — i.e. whatever the buyers would pay — regardless of the development costs. So these fees might have prompted him not to build at all (but they didn’t) but once he signs on and builds notwithstanding the fees, don’t they simply reduce his bottom line — perhaps below zero?
THANK YOU Trip! It is absolutely f—ing preposterous to suggest that the buyer pays a higher purchase price due to typical development impact fees or that condo prices are higher in Rincon Hill due to impact fees. It’s absolutely untrue, in fact it’s economically impossible. Real estate sells for whatever the market will bear, it can’t sell for higher simply because the developer wants to raise the price due to additional costs. Impact fees certainly affect developer profit and project feasibility, but they certainly don’t add to sales prices. If you think the opposite, I have a nice piece of waterfront property in Kansas to sell you — and I’ll give you a bargain rate (less than market price) because there’s no impact fees. ha ha.
“the cost to construct them at a minimum of $500 to $600 per square foot in hard costs”
anyone know if that’s accurate? cause i think that’s what they’re worth when they’re done.
$300m/394000sf = $761/sf
… in fact it’s economically impossible. Real estate sells for whatever the market will bear…
Not so quick, intheknow. Fees and various costs over time become incorporated into the equilibrium pricing structure of an area. Sure, a place only sells for what the market will bear, but it is important to note that the price that a market will bear is an endogenously given variable – it is not independent of the cost inputs.
Additionally, there are substitution and competition effects – if everyone has to pay these extortionate fees, then competition can only drive the price of the marginal unit down to [cost ex-fees] + [fees] + [‘economic’ profit – on average and over long periods assumed to be $0]. The buyer in this case pays the fee in effect because no provider can come in and drive the price down (on an equilibrium basis) to [costs] + [$0 economic profit].
It’s not exactly analogous, but one of the big questions in my mind lately, for instance, is the level of rents of SFRs, which are of course not subject to rent controls. But they do get the distortion of prop 13, in which long term owners face lower costs because their tax base is low. Some people use this as a partial explanation as to why rents on SFRs around here are low, and on the surface that seems plausible.
The “rent” that the market will bear is obviously lower than owning, but it’s important to note that it is still an objectively high $ figure (relative to income). Prop 13, among other things, raises equilibrium pricing for housing generally, because it is a useful insurance policy that buyers are willing to pay for. Even though at the margins it lowers rent prices (by increasing supply – long term owners can generate positive economic profit (not $0) because new entrants cannot get the benefit of the old tax basis), the high price structure of housing generally has been influenced by the prop 13 scheme. Over time and cumulatively, it has conditioned the population to devote larger shares of income to housing assets than it would have absent the distortion, and through substitution effects raises equilibrium rent pricing.
You could engage in similar musings regarding the mortage interest deduction (who really “pays” for it – who really “benefits”?). Or go further afield and ask whether the 401(k) tax deduction scheme ultimately caused large losses for many (perhaps most?) equity investors. Who benefitted from that? (hint – take a look at the share of profits of financial companies as a percent of GDP over the last 30 years or so)
These are all the econ 101 questions that make these markets fascinating. About ORH and SF condo pricing generally, I think a host of foolish governmental distortions have contributed to the absurd situation in which SF now finds itself: massively underutilized existing housing stock, massive distortions abd subsidization among ownership “cohorts” over time, a pricing structure that is completely out of whack for the productive capacity and income of the city (hence all these foolish schemes like BMR, companies “lending” downpayments, etc.) and the illusion that SF suffers from a housng “shortage” while at the same time development is too “expensive” and horribly misallocated.
“Impact fees certainly… don’t add to sales prices”
although parks (ie grass patches under the highway) and other improvement were used as selling tools. plus a fee to keep out BMR’s – certainly a “pitchable” plus.
add it all up and sales people get excited, rubs off on buyers, and the inflated prices make more sense.
i for one had/have no interest in most areas/buildings down there because of what it looks like today. but people bought the promise of tomorrow – had to, otherwise premiums to every other part of the city would not have been realized as they were
intheknow – if high fees and BMR costs require higher sale values to be viable, how is it that the high fees are not embedded in the price? If it costs every bit of $700/sf to build in SF and a developer needs to get out somewhere around $900/sf to meet their hurdle, projects will have to wait until the market gets to $900, right? If the market is below $900 nothing new gets built. If supply is constrained, prices go up. It is not just the buyer that pays for the ridiculous city fees and BMR costs in SF it is every market participant.
“It could also subsidize a failing jazz club for another few years”
Crying laughing. Very well said Dude.
I agree that all these fees and the San Francisco development process are too much. Much of this is common to long term high growth areas and has a mix of results in the market place. BMR units are mandated in various communities and primarily result in an increased mix of unit types. Corporate downpayment schemes happen wherever housing markets are out of reach of desirable recruits and arguably represent the market functioning by shifting capital to match assessments of value.
all they do is foster more dependency that then allows further extortion.
Yeah, those school children shouldn’t have any parks or schools, they should be forced to work in sweat shops starting at the age of six.
And pretty rich, complaining about parasites, coming from a guy who is proud of the fact that he doesn’t contribute to his public school district and is a free rider.
You gotta love this guy. “In my typical candor” means what?? If his statement is an example of his candor, he was born without a gene for shame. But he got what he wanted: one (and eventually two) oversized mediocre towers that should never have allowed to that heighth. Dude
NVJ, how dare you call a hedge fund guy like LMRiM a parasite! When the US government gives trillions of dollars to bail out Wall Street, that is saving the world. When San Francisco spends some developer’s money to “foster more dependency” with after-school programs and soup kitchens, *that* is feeding parasites.
Corporate downpayment schemes happen wherever housing markets are out of reach of desirable recruits and arguably represent the market functioning by shifting capital to match assessments of value.
Why don’t they just raise salaries to reflect the cost? That would be a real market solution. (Of course, the reasons they don’t just do that are related to the myriad distortions in earnings – including taxation, while “lending” carries very limited tax implications – as well as the fact that even corporations would like their employees to be “locked in” to an area through a mortgage debt anchor, which again works to lower required (cash) salary levels.)
I am just glad to see Chris Daly do the right thing with these fees and redeploy them in the Rincon Hill area, what with all the funds he has put into schools and parks and public space buildout in this area, it really does show how strong of a Supervisor he is. I am really glad to see that he has not ripped the area off nor has he engaged in false promises. He is the George Bush of city supes.
Aren’t these, what seem to be, rather large fees part of the unintended consequences of Prop 13?
LMRiM wrote:
> The sad thing is those fees just fall down a rathole, and
> to the extent that any of them make their way to worthwhile
> programs, all they do is foster more dependency that then
> allows further extortion.
The fees don’t fall down a rathole, they are used to pay back the people that have been giving bribes (also known as perfectly legal campaign contributions) and also toss some cash to the people that actually went out and knocked on doors for the candidate. Almost 30 years ago as an undergrad when working for a wealthy conservative real estate developer I was shocked when I found out he was giving tons of money to crazy left wing nut ball East Bay politicians. He then showed me a spreadsheet (in Visicalc on his Apple IIe) where he calculated the ROI on his bribes/campaign contributions to the politicians. In the past 30 years I have learned that most major donors do the same thing (my wife has relatives in heavy construction and the amount of cash they pay out in bribes/campaign contributions every year is probably more than the GNP of some African countries)…
> It’s unrelated, but it sort of fits with the theme of extortionate spending,
> please everyone vote “NO” on all the CA tax provisions coming up in
> the special election (Props 1A through 1E). The polling is shifting towards
> “no” and the mobsters in government shouldn’t be allowed to wet their
> beaks even more.
I just heard an ad on the radio that said “Props 1A through 1E is supported by cops, fireman, teachers, bus drivers, state workers, welfare mom’s, etc. etc.” and I was thinking that the ad would have been a lot shorter if it just said “The Props are supported by the people that take your money”. If anyone knows a wealthy conservative I was thinking that an ad buy before the election set to the song “I just wana take your money” from Slumdog Millionaire would have big results…
“Infintiy is hot, hot, hot! 20 Reservations last week. I’m putting another one up tomorrow.”
Off topic and shameless self promotion. Editor, why aren’t these posts deleted? (Or at least redirected elsewhere.)
[Editor’s Note: We’re working on it. And now back to One Rincon Hill or at least development fees in general…]
I guess realtors jumped off the One Rincon Hill Bandwagon.
“So Paul, how about adding some qualifiers to your comment. I’m not asking about specific contracts or clients, just general trendline. In the 2+ years you’ve done deals at the Infinity, what has been the general trend of prices? Up? Down? If down, then by how much, on a % or $/psf basis?”
LD – This is a very fair question. Paul – If one is going to engage in self promotion, one should also be willing to answer some fairly basic questions like these. Right now the sound of silence is almost deafening. Without clarification to the contrary we can only assume that what you are promoting as “hot, hot, hot” has been “down, down, down” over the past 2+ years.
The self promotion would be more palatable if he at least added some value to the conversation, provided some numbers/context, etc. For someone who does so much chest beating about being #1 in Soma, knowing every building, and so forth, you’d think Paul could at least answer a simple question about the rough level of prices, or their general direction.
Well, if the real estate mogul thing doesn’t work out for him, at least he can pursue a career in politics; seems to have a proclivity for speaking well while saying nothing.
I hate to break it to you, all you Chris Daly obssessives out there, but you don’t know jack s–t about the history of the fees about which you speak. You have equally to blame the illustrious mayor Newsom and his sidekick Michael Cohen for the deal. They all were in on it together. And you know what else you all fail to recognize about the actual money — Chris Daly actually doesn’t control it AT ALL. In fact, the money is overseen by (guess who?) — the Mayor’s office! The Board of Supes approves expenditures from the funds as proposed by the Mayor’s Office, and by the time there will be any significant funds available to spend, Daly will be long out of office. The level of uninformed ideological blathering and conspiracy-mongering on the site is amazing.
I posted responses, but they were deleted by the Editor because they were off topic. I gave specifics about 20 deals going into reservation at Infinity last week.
If the editor is going to delete my responses, please delete the queries to, so it doesn’t look like I am not responding. I am, they are just getting deleted.
[Editor’s Note: At the risk of further derailing the discussion rather than getting it back on track, other than an initial off-topic Infinity comment that noted twenty reservations last week (quoted by Willow above), we couldn’t find any removed comments that offered “specifics” other than the following:
And once again, back to the topic at hand…]
“If the editor is going to delete my responses, please delete the queries to, so it doesn’t look like I am not responding.”
Paul – perhaps your responses were deleted because details of the 20 ‘hot’ deals does not answer the question posed by Legacy Dude. My guess is that if you answer to the question he asked, as below, it won’t be deleted –
“In the 2+ years you’ve done deals at the Infinity, what has been the general trend of prices? Up? Down? If down, then by how much, on a % or $/psf basis?”
I think I said 20 units went into reservation last week. I did not put all 20 into reservation so I do not know the details of all the reservations. By “Hot”, I meant 20 units into reservation is a lot. I think there were a couple of posts that corobarated this sentiment, but were deleted.
I did not represent everybody that bought at Infinity, and do not have the price for every single unit that has sold.
It’s a mystery to me why Socketsite would want to delete a post of real time breaking news from someone who is in the thick of the action, but would prefer to regurgetate yesterdays newspaper article. I understand that it is off topic, but I figured people would want to know.
As far as self promotion, I am promoting the fight against Breast Cancer:
http://info.avonfoundation.org/site/TR/Walk2009/SanFrancisco?px=4557447&pg=personal&fr_id=1820&et=HQm-iX3iyttsY512YJlMcA..&s_tafId=348009
[Editor’s Note: We whole heartedly support the fight against breast cancer! But we’ll also note that all your removed comments linked to a brokerage site rather than the Avon Foundation noted above.]
Useless.
I hate to break it to you, all you Chris Daly obssessives out there, but you don’t know jack s–t about the history of the fees about which you speak. You have equally to blame the illustrious mayor Newsom and his sidekick Michael Cohen for the deal….and you know what else you all fail to recognize about the actual money — Chris Daly actually doesn’t control it AT ALL. In fact, the money is overseen by (guess who?) — the Mayor’s office!”
Intheknow, it’s a lost cause. These guys are completely comfortable with their uninformed hatred and have no incentive to change their minds, regardless of what the actual facts may be. Been there, done that.
“I just heard an ad on the radio that said “Props 1A through 1E is supported by cops, fireman, teachers, bus drivers, state workers, welfare mom’s, etc. etc.” and I was thinking that the ad would have been a lot shorter if it just said “The Props are supported by the people that take your money””
FormerAptBroker,
Cops, Firemen and teachers “take” our money? Isn’t it really “earn” our money? Education makes our populace smarter, safer, and more competitive. Anybody know any overpaid teachers? Didn’t think so.
Anybody with even a shred of long range vision knows that a stitch in time saves nine, and public education is one of those stitches that literally holds our society together. Want to play a not so fun game? Eliminate public education and come back in ten years.
As for cops and firefighters, you can’t be serious, can you?
I had an apartment badly burned in a fire once (started by the downstairs neighbor leaving a box on a gas heater). If that ever happened to you I don’t think you would be so snotty about firefighters “taking” our money. I saw a lot of quick action that probably saved three houses, and perhaps the whole block from complete destruction.
These guys usually can’t even afford to live here to protect spoiled little brats like you, and you think they are “taking” your money.
I usually agree with you about most things, missionite (and I have no view on Daly – probably just another smooth talking fraudster like most lib politicians, but like I said, I don’t have a strong view ;)).
But I disagree about public education. I think we’d be much better off without it. Return the money to the people, and schools will spring up no problem. And they’ll be much better than they are today (for the most part).
Perhaps for some very impoverished areas, that wouldn’t be the case. I sort of doubt it, as I witnessed growing up in a fairly poor area of the Bronx how the Catholic (and Lutheran) churches stepped in to fill the void – very well, I’d add. But if that’s the case that certain areas require large scale public education, then let’s limit it to only those depressed areas, and not wind up with the hydra of CA K-12 education that spends AT LEAST $12K per pupil (don;t believe the nonsense they promote that only $6-7K is spent – they’re only counting general fund revenue, are excluding prop 13 revenue, special funds and all Federal payments to schools – see here http://www.lao.ca.gov/2008/spend_plan/spending_plan_08-09.aspx#k12). Household income in CA is no more than $55-60K; how in the world can we support $12-13K per kid spending?
Public school didn’t work very well in the Bronx in the 1970s. I strongly suspect that it’s not working too well there now, or in most of Oakland or Richmond. Works great in Tiburon, though. Does anyone seriously think that Tiburon couldn’t do without public schools?? Like most public programs, the already advantaged getthe largest benefit.
For ideological reasons I hew to Disraeli’s famous observation almost 150 years ago:
“Wherever is found what is called a paternal
government, there is found state education.
It has been discovered that the best way to insure
implicit obedience is to commence tyranny in the nursery.”
About police, firefighters, etc. I have a number of those in my family (including a brother and cousin on the police force, three cousins who are firefighters, etc.). Necessary functions to be sure, and they have to deal with an insane amount of nonsense due to foolish political interference. But they’re paid WAY too much. You have no idea if you think they’re not 😉
I guess just saying that 20 units are being reserved is supposed to give the impression that things are HOT because that’s alot of reservations. So what? If you can’t provide general information other than things are being reserved, its quite useless and just comes across as a pep rally mentality for self-serving real estate agents.
You also state that you are in the thick of it, yet you won’t tell us anything about it by claiming that you did not represent every contract. What a cop out.
Read through your posts and it’s clear to see that you are just sidestepping the meat of the matter here, and playing victim that your posts are being deleted. Well, they really are useless if you can’t give us a market trends given your knowledge.
Other than self-promotion, your posts seem to be empty. Sorry, you are a nice guy, but we want information and apparently the only way to get it from you is by having you “reserve” a unit for us. No thanks buddy.
Yeah, yeah. Everyone always uses beat cops, teachers, and firefighters as examples to try to defend government waste. Notably, these are three rare classes of government workers that actually provide a real service. What about the scads of bureaucrats in each of these areas of governments and just about all others who do pretty close to nothing? What about the expensive and inefficient overtime this city blows money on? What about the duplicative and unnecessary agencies and commissions that provide little other than headaches?
Nobody is complaining about government workers we actually need. People are complaining about the ridiculous government expenditures for employees and “services” that we don’t need. Government will become as powerful and wasteful as people let it become.
Government will become as powerful and wasteful as people let it become.
A government big enough to give you everything you want is strong enough to take everything you’ve got.
LMRiM I recall you mentioning the pension for your in family gov workers was pretty high no? I feel paying police, fire fighters a decent wage is worth the money but given most jobs these days have reduced benefits, no pension etc. maybe we save money by reducing just the bennies; put them in line with mainstream jobs? If the idea in gov these days is to socialize everything, make all equal than it needs to happen across the board.
So you’re saying public education works (but is unnecessary) in Tiburon, but did not work in the 1970s Bronx. What about for the majority of people who live between those two extremes? Though you like to champion policies that would eliminate it, there does still exist a middle class in this country. I got a pretty good K-12 education from public schools, and I didn’t have to pretend to pray. Talk about indoctrination.
How did a hard luck kid like yourself get the K-12 education necessary to get into Yale or wherever you ended up going?
LOL, this thread has degenerated quickly. Vallejo police chief gets paid $500k, an East Bay fireman gets paid $250k, a teacher get paid $50k, all thanks to their unions. CA spending on edu is $7900/pupil. Now, shall we get back to gangs and rapists?
Some loop holes are being closed but these guys all go out on disability whether they need it or not (which confers tax benis) plus something like 90% of their pay for life
Firefighters in SF live elsewhere not because they can’t afford it but because they are socially conservative. (this will be a scandal after the big one)
And with the point about development fees it is beyond me how people cannot see these are paid for by home owners.
The most obvious way is in less development on the supply side. I think everyone see that.
The more subtle way, and this applies to things like payroll taxes are based on demand elasticities. If I recall from Econ 101 if housing demand in SF was totally elastic then it is bore by the developer, totally ineleastic bore by the buyer. Surely it is somewhere inbetween.
Maybe this is to simplistic but seems correct to me.
GWTF – the pension benefits are crazy, at least for the people I know in my family. 50% of final compensation for life for police officers after 20 years, which works out to approximately $90K/year (because compensation gets “goosed” during the two year measurement period prior to retirement), indexed to an inflation measure + a large lump sum payout (approximately $150-200K for most officers retiring after 20 years) at retirement. That’s in the NYC suburbs. NYC cops do not make nearly as much, but there are many other ways to enhance the payouts.
If the pay wasn’t “too much” you wouldn’t have thousands of applications for only a few spots these days (it’s been like that for most of the 2000s, and even the late 1990s).
Firefighters get very large “disability” payouts – sometimes deserved. My cousin was an on the scene responder at 9/11 (so was my brother), and the cousin is now out on disability at 75% pay tax free + very large cash payout (he does have serious lung issues now, though, but it’s hard to square paying millions – literally – in present value when families of soldiers who die in combat get maybe $50-100K).
@location – about education, for me it was a combination of luck, hard work and smarts. It was pretty tough getting into the top Ivies for a poor white kid – most of the slots were reserved for “disadvantaged” minorities. The slots that didn’t go to legacies and kids who had “all the advantages” that is 😉 No complaints, though. You play the cards you’re dealt and work as hard as you need or desire.
About public education between the extreme of Tburon and the Bronx, sure it “works” I guess. I just think it would work better if the money were returned to the people and families/social institutions were allowed to flourish. It’s hard to compete when the service is given away for ‘free”. The middle class seem to have no trouble getting access to food, transportation, comfortable shelter or any number of other things that have proven so difficult throughout human history.
As for “indoctrination”, remember, all non-state institutions are voluntary. When the state comes in and bifurcates the market by giving away the product, everyone else is at a disadvantage. That’s where the real “indoctrination” then begins. I wouldn’t want public schools “forcing” kids to pray. Then again, I wouldn’t want public schools to “force” recognition of “alternative families” as being equivalent to others. I’d rather leave morality and similar issues to the voluntary institutions of society (which is why I am against formal recognition of marriage by the state – whether heterosexual or gay marriage).
@jj – That $7900 spending figure is not true that you cite. Take a look at the link to the LAO data I provided. The actual (fully costed) figure is of course higher than $12k per pupil per year (see Figure 5 under “K-12 Education” in that link I provided) because: (1) the state borrows at below market and tax advantaged rates; (2) rent is not calculated and costed for public schools “owned” by the state; and (3) there is a systematic bias to distort upwards the number of students actually attending on any given day b/c Fed $$ are kicked in based on the number of “FTE” (“full time equivalent”) students. I bet fully-costed and adjusted SF spends $20K per student per year. Too much. Way too much.
Editor,
I post from different computers and definitely in breast cancer awareness mode. Some of the other posts to which u refer I did not update the url. Will do in the future.
I think I did provide some real time specific information that is useful:
1) I was told 20 units went into reservation last week.
2).4 A floorplans (2 br + sky terrace) on high floors were reserved on friday
I think that’s pretty good info and indication of the general state of the market.
Getting way OT here . . . but on the pension issue, I would not be surprised if a lot of the “promises” regarding public pensions get broken as a result of our market crash and other developments (i.e. failures to fund). Mish had an article about others’ exploring Vallejo’s successes on this front through the bankruptcy courts.
http://globaleconomicanalysis.blogspot.com/2009/04/pacific-grove-california-explores.html
Trip,
I totally agree that these pension promises are not going to survive indefinitely. That’s why I’ve advised my brother (and everyone in a similar situation) to grab that termination payment as quickly as legally possible (ie, retire as soon as possible) and convert those vague promises to a fixed state obligation. My guess is that it will be much tougher politically for a court (or legislature) to reduce pensions already being paid, then to impose conditions on currently working state employees (“Did we say 20 years? How about you work 40 years before getting full benefits?”). (Can you imagine the wails of the people on “fixed incomes” if they tried to monkey with existing payouts for people who are no longer working, lol?)
Then, as soon as you retire, start your own business. Preferably something that results in low reportable income and good cash flow 😉 Since many police officers are eligible for retirement by their early- to mid-40s, there’s a whole new career waiting for the most enterprising of them, and the nice annuity provided by the taxpayer is a good base from which to take some risks.
@LMRiM,
I am sure that you must have worked very hard. I guess what I was wondering is did you do that work in a public school or a private school?
If there were no more public education I think it would be a boom time for churches and religious schools. It’s not a road I’d like to see us go down.
As for “forcing recognition of ‘alternative families’ as being equivalent to others”, that is just forcing someone to open their eyes, it is not a moral issue. 😉
Yeah, like Paul’s going to give you the down low on the types of deals he has been getting at the Infinity. Right… No broker or homeowner in their right mind would leak this kind of information.
If you guys want to know if the asking prices have dropped (I don’t think so), visit the sales center. Better yet, put in an offer and see what kind of counter offers you get. No one has a crystal ball and can predict where prices will head in the future and where the bottom is/will be.
Sounds like you guys are desperate penny pinchers trying to save every last dollar. If so, Infinity is probably not the condo for you. May I suggest Oakland.
Sorry if this post is off-topic, but it really pisses me off when people expect that brokers have some sort of “duty” to give this information out. Brokers are salespeople. What else is new?
[Editor’s Note: While we agree with respect to predicting the bottom, we disagree with respect to where the market is currently headed.
In terms of providing buy-side insight instead of sales spin, that’s the whole point of plugging in: Infinity Sales Update: New Contracts Up But Driven By Discounts.
Oh, and we do know of at least one Infinity two-bedroom in Tower One having gone into contract at roughly 30% off. Now seriously, back to One Rincon Hill.]
My memory served me right – wow the pay and benefits of the discussed public service positions are mind blowing. I do value the services and those putting life on the line for me etc. so I agree salary should be high. I have a feeling however that in today’s world of overbudget, bk’s, and move to a socialist framework that pension plan pay, etc. may come into question.
@null: most of us that are interested in the Infinity and ORH have already been to their sales centers, and are keenly aware that prices there have indeed fallen. I speak from experience, having been there myself a few times over the last 2 years, seen many units, etc. If I had to estimate, I’d say they’re down roughly 15 to 20% on a $ psf basis, from opening day to today. Just an average across some similar floorplans I’ve seen.
Your Oakland comment was out of place, akin to saying, “If you don’t want to pay $75K for a Honda Accord, go get a moped.” Why can’t I just wait to pay a fair value for the Accord?
The beef with Paul is that he consistently posts vapid endorsements peppered with positive spin, yet fails to provide any details to support his insinuations. Imagine if your broker called you and said, “Great news, Mr. Null, I put all your money in ABC Company stock, which is hot hot HOT! Trading volume today is double what it was last month!” Too bad he left out the part about how the value had fallen 20% since you bought. Whoops.
Legacy Dude,
I post what I know, and what I am allowed to post.
I think it’s a mistake to compare a home to a stock. The main purpose of a stock is to make money. That is not the main purpose of a condo in downtown San Francisco. If that is your view, you need to get a new financial advisor.
I merely stated Infinity put an abnormal amount of units into reservation last week. Which I presumed would be of interest to people. Perhaps I was wrong.
Paul
You’re not allowed to tell us if prices at ORH and Infinity have come down since they opened?
Paul, you’re smart. You know perfectly well that the news of an abnormal amount of units being put into reservation last week (we’ll accept your representation) means nothing in and of itself. What matters is why this has occurred. Has the Infinity drastically slashed prices? Offered other incentives (free HOAs)? Something else (Google options exercised, short sellers cashed in)? We’re just asking you to provide some context — which you possess knowledge of — otherwise you are right, and this isolated snippet probably is not of interest to anyone.
If you are not willing to provide more, then we can only conclude that you’re offering nothing but spin.
Acoms Razor my friend.
That’s Occam’s razor Paul. Might work against you:
“When multiple competing hypotheses are equal in other respects, the principle recommends selecting the hypothesis that introduces the fewest assumptions and postulates the fewest entities. It is in this sense that Occam’s razor is usually understood.”
Ok Friar Ockham,
It’s been well established I am not a good speller. Google doesn’t make things fun anymore.
Paul
“It’s been well established I am not a good speller.”
Even worse… you are a shameless self promoter and poster of self serving inanties like “Many experts have predicted a flat to slightly downward trend for prices in 2009” and “Infinity is hot, hot, hot!”
chuckie,
You are right, I am going to start promoting the fight against Breast Cancer:
http://info.avonfoundation.org/site/TR/Walk2009/SanFrancisco?px=4557447&pg=personal&fr_id=1820&et=HQm-iX3iyttsY512YJlMcA..&s_tafId=348009
I apologize to you if you have taken offense to my past self promotions and “self serving inanties like ‘Many experts have predicted a flat to slightly downward trend for prices in 2009” and “Infinity is hot, hot, hot!'”
The hilarious part is that anyone who believed any of this same spin in the last 5 years has lost his shirt. Yet there it is, more of the exact same spin that caused a lot of people to lose everything, and he gives it at every opportunity.
If I had recommended a course of action that caused every one of my clients to lose money for the last 5 years, I’d hang my head in shame. Instead, the realtors just keep plugging away using the same tired techniques that are obvious to everyone but the realtors.
1/3 of the way through the dot com bust, the stock analysts who had pumped up the bubble all disappeared. I don’t remember a single one coming back to say “Pets.com volume (at half yesterday’s price) is twice what it’s been: that stock is hot hot hot” or “some analysts have predicted companies with no profits will be flat to slightly down.”
This industry has no shame: every one of his clients in the last 5 years has lost their shirts. But you gotta hand it to him, he doesn’t give up: just keeps plugging away hoping for one more greater fool.
^^^Or he sees himself selling more than just investments. You know? Places for people to live? Or have we all forgotten that that is what the primary purpose of real estate used to be?
ughhhh – firefighters and police make too much money??? How many hedge fund execs died in 9/11 because they raced to the scene to save firefighters?
The liars and fraudsters on wall street who manipulate money – and create NOTHING – except the bubble we are in (for which borrowers and brokers get blamed) and you say firefighters are overpaid????
Seriously, how does LMRiM get away with such insults – apparently to his own family – and to mine bro – without a word from anyone?
OH MY GOD, THEY MAKE LIKE $90k A YEAR – TOO MUCH MONEY.
And you are from NYC? You know how much is costs to live in NYC? Yeah – MORE THAN SF.
LMRiM you ought to be a CNBC commentator – completely out of touch rich people who can’t see beyond their own kingdoms.
My memory served me right – wow the pay and benefits of the discussed public service positions are mind blowing
Remember, LMRiM has a tendency to “exaggerate” to make his points. Remember when he told us his brother the beat cop made $150k/yr in base pay and when I dug up the actual pay rates in the county he told us his brother worked in and showed that they were under $100k, he claimed that it was all a Democratpublicanillumananti conspiracy to trick people? 50% of a beat cops base pay is not $90k/yr, not even in New York.
Here is an actual pay rate for a Deputy Probation Officer in California:
http://www.probation.co.riverside.ca.us/employment.html
You can see that pay starts at $19.80 and goes all the way to $31.20 at the peak. And these jobs require college degrees. How am I so familiar? My dad retired as a Deputy Probation Officer and makes $2700/mo on his pension. Which is nice enough, but nothing like the wild claims LMRiM makes. And I have actually seen my father’s retirement stubs, while he probably has only heard his brother’s boasting around the family Thanksgiving dinner table.
The $20k/student is more wild speculation. Schools of course have to pay for the cost of the facilities they use, it is not given to them for “free” or any such nonsense. No doubt middle class people would find a way to pay for school for their children, but many of the poor would not. Which is just fine with some people, obviously. Hard to imagine where all those poor uneducated people would end up as adults. No doubt there would be more prisons. You can look at Brazil for where this leads. In the long run, it is cheaper to educate people, as every industrial society on earth does.
This is not to say that some of the ideas discussed don’t have any merit. Sweden uses a voucher program to allow students to pick their school and has great luck with it. Of course, they don’t allow voucher money to be spend on religious schools and all schools must pass regular testing, but there is no reason we couldn’t do something like that here. It would probably be an improvement over what we have now. And some public pension plans are no doubt out of hand. It has always been easier for politicians to give generous incentives that the next set of elected officials have to figure out how to pay for, then do the responsible thing and negotiate a good agreement up front. The Vallejo bankruptcy case, which gave the city the right to redo the wages and benefits packages in court is really going to end up being a game changer here.
SF probably overpays its firefighters and underpays its cops, just notice the thousands who apply for every firefighter job and the hundreds of police jobs that lie empty.
tipster,
Your statements about me are false. The only person’s credibility you are tarnishing is your own.
Paul
“But I disagree about public education. I think we’d be much better off without it. Return the money to the people, and schools will spring up no problem. And they’ll be much better than they are today (for the most part).”
“The middle class seem to have no trouble getting access to food, transportation, comfortable shelter or any number of other things that have proven so difficult throughout human history.”
——
Hmmm Lmrim, have you never considered the impact that compulsory public education has had towards making this so for the middle class(es)?? For the middle classes here in the US as well as around the world??
To what would you attribute the progress you allude to (for the emerging middle class(es) specifically) when you state that they now “seem to have no trouble” getting access (to material stuff, when before) it was “proven so difficult throughout human history”?? Royal decree? Executive fiat? Strict adherence to libertarian social ideology?
What makes you think “the people” will do better with the returned money?? If “the people” could create better schools (universal schools as opposed to schools for the ruling elites), where were these schools in the many years of human history before the widespread adoption of compulsory public education??
For chrissakes, you’ve spent about a zillion hours at SS pointing out, with virtually unassailable detail, just how stupid “the people” are with their own money.
For someone so eminently pragmatic and intellectually thorough in matters financial, the blind spots in matters social and political that your ideological rigidity create are really quite curious.
@NVJ –
The $20k/student is more wild speculation.
I said it was a “bet” (identifying it as speculation) and only in reference to SF specifically, which is one of the most expensive areas in CA.
The average spending per pupil in all of CA is listed as over $12K per pupil, and I gave the source. Again, see Figure 5 under Chapter 3, “Expenditure Highlights” here:
http://www.lao.ca.gov/2008/spend_plan/spending_plan_08-09.aspx#k12)
I also gave the reasons why I suspect that the figures are understated. These are different numbers of course from the claptrap that is peddled in the Chomicle and by the teacher’s unions that CA only “spends” $6-7K per year, isn’t it?
I was guessing on the $20K per year in SF (and I identified it as just a guess) because I’ve seen that Washington, DC spends $25K per student per year for a system that is a disaster. I mentioned a fully-private school in SF once on SS, The Stratford School, and it costs less than $12K per year. Catholic schools in SF (albeit with help from private, voluntary contributions, not taxes that are collected under force by the sovereign) manage to educate children at generally $5-7K cost to the parents per student per year.
CA spends literally half its government expenditure (about $71 billion out of $144 billion total spending) on K-12 education, and it has one of the highest and most distortive tax structures in the United States. Too many resources are being spent on K-12. Way too many. (Those figures are also in the link I cited to – see Chapter 1 for the budget expenditure totals and Chapter 3 already mentioned for the education totals.)
@nnona – I really think that people are dopes with their money because the government has created a purposely unstable unit of accounting (inflating dollars) and has distorted credit markets to a huge extent, making normal decisionmaking with regard to personal finances an almost impossible task for the average person. Get the USG and Fed out of the way and I suspect that people would be a lot smarter 😉
I don’t see schools as having those same characteristics. In any event, if the states had to create standards for eductation (real standards, not the nonsense ones we have now) I could support that, the way for instance safety of automobiles are regulated. An accreditation or licensing scheme would work I guess, but I do think the private markets would be a better job of licensing/accrediting than government. (Consider for instance the miserable job that government-sponsored monopoly rating agencies have done with debt).
And, like I said, I am not totally against safety nets for the poor, and means-tested public schooling might fall into that category. Still, in my heart I think in the end these programs do more harm than good for society, and that if left alone nongovernmental solutions would spring up.
About the “rise” of the middle class, who knows? It’s always tough to tease out of history what were the factors of course. The average standard of living increased dramatically in the United States throughout the 19th century, well before the move to widespread “public” education which began in the early 20th in most parts of the US. Why would that rise have suddenly stopped?
Why would that rise have suddenly stopped?
We ran out of free land to give away. When land was the largest holder of wealth (through agriculture) and we had tons and tons and tons to give away (because we seized the land through ilitary actions from the natives), of course living standards are going to increase rapidly.
Wealth is no longer primarily tied to land AND the USG no longer has a lot of productive land to give away.
LMRiM,
I would assume public school costs are higher in the areas you mentioned because of the distribution of wealth in those areas. Areas with a huge income gap will inevitably spend more on public education, because inevitably more of the wealthy will pull their children from public schools. Since poverty is a good indicator of kids poorly prepared for school (as well as parents who really don’t care), costs will increase nine times out of ten when the percentage of kids in the school who live in poverty increases.
That’s why school districts without much of an income gap always do better – you can look here in the Bay Area at some areas like Marin and Palo Alto, but you don’t even have to look at “high income” areas. Go to smaller towns in other parts of the US with small income gaps yet lower overall incomes and you’ll find good public schools. Taking out a large percentage of the kids who have natural benefits towards doing well hurts every kid below them. This is a pretty documentable fact (not saying that I blame the parents who take kids out, just saying that it’s a self-reinforcing circle).
It was pretty tough getting into the top Ivies for a poor white kid – most of the slots were reserved for “disadvantaged” minorities. The slots that didn’t go to legacies and kids who had “all the advantages” that is 😉 No complaints, though
interestng comment. There must not have been many of those minority slots, given the number of disadvantaged minorities I saw in the Ivy League. Ivy League=sea of white and asian and indian, at least in my experience. I am a disadvantaged minority who must have gotten that slot. Guess my near perfect ACT and SAT scores didn’t help me… just my color that reserved my slot.
I also find your anti-public school rants interesting given that you went there (and did just fine) and that the large majority of people who get into the Ivy League get there from Public schools.
lastly: it is difficult to compare costs of education of private vs public for a few reasons
1) public schools have a mandate to educate ALL students. Private schools do not.
thus, all the most expensive to educate students end up in public schools
Mentally retarded children
English as Second Language children
Severe emotinally disturbed children
Learning disorder children.
the above classes of children are JUST ONE reason why the cost structure will be different for public vs private. The private schools simply kick out all the poor performing children. when you only deal with the cream of the crop of course you have great looking outcomes and also can do so for lower cost.
2)
private schools often get donations which make evaluating their costs difficult. For example, it’s much cheaper to train kids if your building is donated
3)
costs/fees. Often times when people quote costs they neglect to roll the costs of materials/books into the private school equasion. My neigbors send their kids to private elementary school. It is about $6500/year. but they have to buy books and other supplies that can easily get into $500-1000 per year as well.
anyway, I’m surprised that you are so willing to compare apples to oranges neglecting the obvious differences.
what I’ve found:
the important factor is not which school the child goes to, but instead the focus that the family places on education in the home. which is why you have hordes of immigrant families who have top students in the Bay Area, even coming from the most mediocre of public schools.
involved parents at a crappy school will produce a better student than uninvolved parents at an expensive private school.
ex SF-er wrote:
> There must not have been many of those minority slots,
> given the number of disadvantaged minorities I saw in the
> Ivy League. Ivy League=sea of white and asian and indian,
At Cal (where I went in the early 80’s) there were quite a few blacks and Hispanics (thanks to affirmative action)…
> at least in my experience. I am a disadvantaged minority
> who must have gotten that slot. Guess my near perfect ACT
> and SAT scores didn’t help me… just my color that reserved my slot.
It is sad that the majority of affirmative action kids that got in to Cal with sub par grades and test scores floundered and later dropped out. It is also sad that many assume that ALL the minorities that graduate from top schools are not very smart.
> lastly: it is difficult to compare costs of education of private
> vs public for a few reasons
> 1) public schools have a mandate to educate ALL students.
> Private schools do not. thus, all the most expensive to
> educate students end up in public schools
> Mentally retarded children
> English as Second Language children
> Severe emotinally disturbed children
> Learning disorder children.
The main problem with public schools in America is that they try and educate ALL of the above groups TOGETHER. I went to public school K-8 on the Peninsula and got a great free education since we didn’t have any kids with problems). I have a cousin that is a teacher in SF and she actually has to deal with a kid with Tourette’s syndrome (who jumps up and yells at her calling her a f*cking c*unt on a regular basis). The stupid kids, retarded kids, and kids with problems should be in special classes, but in PC California that will never happen.
> the important factor is not which school the child goes to, but
> instead the focus that the family places on education in the
> home. which is why you have hordes of immigrant families
> who have top students in the Bay Area, even coming from the
> most mediocre of public schools.
I agree and most of the Asian kids from SF who go to Cal and Stanford would probably do even better if they just skipped SF public schools altogether.
involved parents at a crappy school will produce a better student than uninvolved parents at an expensive private school.
I totally agree, ex SF-er, about family background and support/involvement being one of the key determinants.
About minorities and such at “top Ivies” perhaps you are younger than I am? I went to college in the mid-80s, and I didn’t see the breakdown of race/class that you saw. I’m not one to reflexively bash admissions/quota systems, recognizing that there are important nonacademic considerations at work, but to refuse to recognize that there were “two tracks” (at least back then) is stretching it. Unrelated, but there were a series of prominent California (and Michigan) court cases that demonstrated it with respect to the Cal system and UofM law school.
I assume that it is not the same today. The standardized tests, as I’m sure you’re aware, were rebased in 1994 (I think) partly in response to the secret “Strivers” program run by the Educational Resting Service after 1980 that separately reported “high achieving” minorities to the Ivies. Following the rebasing, the number of “perfect scores” for instance went from something like 3 or 4 in the US to the low hundreds. If anyone has particular expertise in the area, I’d be interested in hearing it, because I’m not an expert in the field.
Sorry if my comment came out sounding elitist or dismissive (more than my comments usually do even ;)). Clearly, there are many superbly qualified minority students at the Ivies.
I also find your anti-public school rants interesting given that you went there (and did just fine) and that the large majority of people who get into the Ivy League get there from Public schools.
I didn’t. I went to a Catholic elementary school that cost $35 per month. That was often beyond our family means, and the school graciously waived them whenever things got too tight. 30 kids in a class, and there was never a discipline or control issue, and I feel like I got a pretty good education. I also felt that they were fairly flexible in their learning approach, separating out high achieving students (and having them help the ones who were struggling) and even allowing people to skip grades (which I did). Public school in the neighborhood I grew up in was not tenable. High school for me was a free ride scholarship from a Catholic high school.
I’m sure public schools work fine in many if not most parts of the country. These are places where if the tax dollars were simply returned, the population would have no problem creating a large enough market to ensure an even better education if the government got out of the way. Where low cost education is most needed – particularly in urban cores where it’s tougher to find the sort of family/social environment that fosters learning – is where the public system seems to fall down the hardest. Wealthy areas (like Tiburon or Greenwich, CT where I recently lived before moving to the SF Bay) have great public schools, and need there of course is the least. Again, I think the kids of the hard-working immigrants who do well in public school in, say, San Francisco, would have no problem setting up schools if the public option weren’t there. That’s what I’d expect anyway.
About “donations”, Tiburon public schools get about $1M in identifiable private donations (approximately $1K per student) and of course my friends in the Greewich public system get even more. Regarding somparisons of “cost”, it’s hard to get a full read on public education costs, but the ability to have in effect a state-guaranteed pension plan and the ability of districts to issue tax free bonds with implicit general taxpayer guarantees is certainly a benefit that is not enjoyed by private institutions and is not counted in the economic cost of public education.
About the “mandate” to educate everyone, the Catholic school I went to didn’t turn anyone away. I don’t see government as any more “beneficient” or any more willing to go out of its way than private organizations. When we were looking at private preschools in SF, a particularly expensive one (The Little School) went on and on about how “inclusive” they were, pointing to a “semi-autistic” child in the program that had made “great strides” and a minority child who received a “full scholarship”. We passed 😉
“Inclusive” of all incomes? I think not. Wow, they had one minority child and one autistic kid? Geez, they do need to teach the public schools a thing or two!
@LMRiM
I see your link, it looks like that is actually what we spend overall, at least overall cost divided by “Average Daily Attendance.” You could also divide by overall enrollment, which would differ by a few percentage points.
I haven’t seen the $6-7k figures you stated, but I will look for them when I have time. In any case, California does not spend a particularly large amount per pupil compared to other states. We are at best, average.
Consider for instance the miserable job that government-sponsored monopoly rating agencies have done with debt
Why do you call them “government-sponsored”? Moody’s, S&P and Fitch are all private entities.
NVJ,
About the rating agencies, they were all granted “monopoly status” by the SEC when the SEC dictated that only “Nationally Recognized Statistical Rating Organizations” (NRSROs) could determine the ratings that were key to all sorts of regulatory requirements.
Wikipedia has an ok article about it:
http://en.wikipedia.org/wiki/Nationally_Recognized_Statistical_Rating_Organization
Government has created 100% of this financial crisis. Dig into any aspect of it, and you will find a massive distortion created by the USG (and Fed).
And you will likewise find a private entity at every turn. Why is it only government distortions that created the problem? Why has no place in the world figured out the mighty Austrian ways if they’re so obviously better? It shouldn’t be that hard to at least start up an Austrian wonderland in some African country.
And you will likewise find a private entity at every turn.
That’s how fascism works. Corporates hand in glove with the government 😉
Why has no place in the world figured out the mighty Austrian ways if they’re so obviously better?
People are imperfect, and society tries as best it can I guess. Why do so many chumps still incline towards socialism/communism given the legacy of suffering in the 20th Century atthe hands of these “big government” schemes?
The best succinct formulation I’ve seen is this oft-quoted passage:
“Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage.”
And, about why “liberty” (freedom from micro-management of society by an elite), the best passage I’ve seen is Mencken’s:
“. . . [The common man] is not actually happy when free; he is uncomfortable, a bit alarmed, and intolerably lonely. He longs for the warm, reassuring smell of the herd, and is willing to take the herdsman with it.”
(See the google books link for the full context of the quote from “Notes on Democracy”.)
[Last post here from my end – way too OT for enen me 😉 Sorry about that.]
“The average standard of living increased dramatically in the United States throughout the 19th century, well before the move to widespread “public” education which began in the early 20th in most parts of the US. Why would that rise have suddenly stopped?”
——
Wow, where to start? More elaboration, please, about your standard of living contention? By what measure are you inferring? The move to widespread “public education” began in the early 20th century in most parts of the country? Really? Well, don’t let a few facts get in the way of rigid ideology…
http://www.infoplease.com/ipa/A0112617.html
The move to widespread education started in 1852 (that would be MID 19th century) in Massachusetts. A couple other start years for random states; California 1874, New York 1874. In fact, the move to widespread “public” education FINISHED in the early 20th century in ALL of the country. The Southern states were last in adopting this. Curiously, that correlates to their present education ranking within the US.
Are you factoring the economic impacts of slavery, and the abolition of, in your analysis?
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“I really think that people are dopes with their money because the government has created a purposely unstable unit of accounting (inflating dollars) and has distorted credit markets to a huge extent, making normal decisionmaking with regard to personal finances an almost impossible task for the average person. Get the USG and Fed out of the way and I suspect that people would be a lot smarter ;)”
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The idea that “the people” or “the market” make(s) inherently “rational” decisions is heavily flawed. Basing a social and political philosophy on this premise doesn’t allow for the contradictions and imperfections of the human being or any body politic of said humans. No doubt the USG and the Fed “helped” distort things, but most if not nearly all people are not like you, eminently rational when it comes to financial decision making. You are not the brilliant exception that proves the rule. People are dopes with their money all the time, and have been since time immemorial. Look at the assumed financial “sophistication” of the Madoff chumps. How are you going to blame their credulousness on the USG or the Fed?
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“Again, I think the kids of the hard-working immigrants who do well in public school in, say, San Francisco, would have no problem setting up schools if the public option weren’t there.”
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The problem here is that you ignore the fact that many of these parents lack the language skills and cultural knowledge to navigate mainstream American life period. How do you expect them to set up a school system geared towards integrating their children into US society? Where is the time coming from?
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You ignore the impact of compulsory public education worldwide. Illiterate peasants are not very valuable to a country’s economy, and hence that country’s measure of “standard of living”. I highly doubt the fact that literacy rates have soared worldwide in the last few centuries can be attributed to formerly illiterate villagers having set up their own schools.
Just a last note. YOU injected the “way too OT” topic and your ideologies into the discussion. So to complain about it being “way too OT” is a bit disingenuous, no?
People are imperfect, and society tries as best it can I guess. Why do so many chumps still incline towards socialism/communism given the legacy of suffering in the 20th Century atthe hands of these “big government” schemes?
Well, as I’m sure you know, true socialism/communism is equally as unlikely to ever happen as lassiez faire Austrian-style capitalism – neither have EVER existed and NEVER will. You’re a very smart person, and I’d rather see you advocate for something realistic over the typical Austrian-fairyland talk.
Clearly, there are many superbly qualified minority students at the Ivies.
no, there are not. That was my point above. As you well know, Cal is not an Ivy League school (although it is Ivy caliber). Yale Law is. Thus, I am not speaking about the Cal/Michigan experience (neither of which are Ivies). both of those schools had affirmative action programs and then later stopped them. I remember when it happened. the year afterwards (1997 I think) ZERO blacks got into UCSD medical school and very few blacks/latinos (maybe even no blacks, don’t remember) and no native americans at UCSF
when one walks around the various Ivies, you will most decidedly NOT see many supurbly qualified disadvantaged minorities. As I said above, you will see a sea of white, asian, and indian (from india) students, and a few blacks, latinos, and Native Americans.
(as example 80% of Harvard is white and 12% is asian. 7% is everybody else).
http://www.stateuniversity.com/universities/MA/Harvard_University.html
one can (and people often do) argue that there should be even less minorities in higher education, or that minorities are now over-represented based on their “performance”. as AA programs are dismantled we are seeing less “disadvantaged” minorities in post secondary education.
regardless, I am not arguing that AA is a good or bad thing. I’ll leave that to others. I am only dismissing your claims that it was so hard for you because a bunch of slots were pre-destined for minorities.
I assume that it is not the same today. The standardized tests, as I’m sure you’re aware, were rebased in 1994
indeed. and they continue to restandardize (such as SAT being out of 2400 now).
luckily for me, my near perfect ACT/SAT scores are from before that, so I guess that maybe perhaps I still get to claim I “deserved” my slot?
Or perhaps my magna cum laude performance?
I don’t begrudge your admittance to an Ivy. I begrudge you trying to make it seem like it was harder than it was due to all those slots taken away from poor you to give to minorities.
I know it’s popular to bash the Ivies these days, especially considering the damage the graduates have done in finance, but the level of student is remarkably good at the Ivies, regardless of how they were chosen. I will even go as far to say that the level of student at the Ivies and the top 10 lib arts schools is HIGHER in aggregate than most other places of higher learning.
that is not to say that there aren’t Ivy idiots (there are, and lots of them) and non-Ivy geniuses (there are, and lots of them).
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About the “mandate” to educate everyone, the Catholic school I went to didn’t turn anyone away. I don’t see government as any more “beneficient” or any more willing to go out of its way than private organizations
You obviosly don’t know much about Private education then. I do, since I work with kids every day and have done so in 5 states:
in general, it is exteremely uncommon for private schools to accept, or continue to enroll, students with significant mental handicap, behavioral disrubance, or chemical use disorder. the state is mandated by law to educate all of them.
as any educator knows, one Down’s syndrome person is SIGNIFICANTLY more expensive to teach than a ‘normal’ child. and one child with Attachment Disorder is also infinitely more expensive. those kids are always booted out of private school. I see it EVERY week of my life.
thus, when comparing public vs private education, you are comparing apples to oranges. that’s fine, so long as you know your bias.
I had near perfect ACT/SAT scores as well pre-rebasing of the standarized testing. I did this from a run of the mill public school system. I did not go to an Ivy League school, but it did make ex-sfers best schools list. Please consider this as I begin my Mayoral campaign.
Sparky for Mayor!
If I get the socketsite crowd behind me I think I can win.
Thanks, ex SF-er. Your posts are always excellent.
To hammer the point home, public schools have mandates that private schools don’t have. Private schools don’t have to administer the (numerous) state tests, accept any child that enrolls at any time during the school year, keep students who are habitually late or truant, provide an individual education plan for every student with a learning disability (severely disabled students sometimes have a personal aide who accompanies the student to all his/her classes, paid for by the school), and on and on. If the parents of a student with Down’s syndrome want their daughter “mainstreamed” (put in all regular classes), then the public school will probably do so.
I’m a product of public schools (except for college) and taught for 10 years at a public school. It’s both a wonderful and an incredibly frustrating job. I taught honors students––easy! They came to class every day, did their homework every day, and wanted to learn. I also taught less-than-honors students. A mixed bag, with students in gangs, students who had spent time in juvie, etc. but also lots of students doing their best to learn, attending tutoring, and overcoming obstacles to succeed. I have the utmost respect for the special education teachers I worked with, who provided incredible support for both their students and the teachers at my school.
I had near perfect ACT/SAT scores as well pre-rebasing of the standarized testing.
So did I. I always knew we had some smart people posting here, but had not realized quite how many. I went to a rural public high school, where only 20% or so of the kids went on to four year colleges.
I did not get into the one Ivy I applied to (Cornell) nor into Stanford, but I did get into Caltech and UC Berkeley.
Here is a good NYT article showing how expensive these special ed kids can be to educate:
http://www.nytimes.com/2009/04/19/education/19autism.html
What percentage of public school funds go to Special Ed, does anyone have that number handy?
LOL about all these “near perfect” scores pre-rebasing (in 94). I’m not questioning anyyone (I think I’m one of the few who hasn’t made the claim on SS, and yes, sparky, you’ve got my vote if you run and in the Obamanation I doubt anyone will check whether Im a resident of SF when I cast it).
But keep in mind, to my mind “near perfect” means 1580 or above. Googling around, before 1994 on average there were only 7 kids in the entire country who scored that well in any given year. (See note 12 and accompanying text here: http://en.wikipedia.org/wiki/SAT). I remember well newspaper articles in the early- to mid-1980s that would identify the “one” (sometime 3 or 4) kids who got perfect SAT scores. Today, of couse, you never see those sorts of articles because hundreds of kids get perfect scores.
We do have a lot of smart people on the board!
@ ex SF-er – sorry if I offended you (which it seems I have). Please read what I wrote more carefully – I think you’ve mischaracterized my arguments regarding “slots” for admission (my fault – sometimes I don’t write as learly as I should). You’re certainly off if you think I “begrudge” anyone anything! No one took my spot at any Ivy. Not a minority, not a legacy, not a super privileged wealthy private school Manhattanite (all of which groups I mentioned, or at least implied). I got in everywhere I applied. What would I begrudge? Like I said, you play the hand you’re dealt and you move on.
Heh, MIT Ph.D
I wonder if anonn would like to weigh in on this thread …
I agree…ex SF-er seems to have read too quick. I think this is the offending paragraph,
“@location – about education, for me it was a combination of luck, hard work and smarts. It was pretty tough getting into the top Ivies for a poor white kid – most of the slots were reserved for “disadvantaged” minorities. The slots that didn’t go to legacies and kids who had “all the advantages” that is 😉 No complaints, though. You play the cards you’re dealt and work as hard as you need or desire.”
Thanks, chuckie.
All I meant was that at that time, the “real” Ivies were particularly concerned with “diversity” across a number of measures. One of them was “regional” – ie, they did not want to take too many from the NYC metro area, in my case. They were also very concerned with racial “representation”. And, of course, all the legacies and wealthy students who had “all the advantages” – both in terms of the preparatory schools they attended as well as the freedom to develop “extracurricular interests and expertise”. I should have emphasized the regional aspect a bit more – it really was a “slot” system because so many spaces were “reserved” for Collegiate Prep, Horace Mann, Dalton School, etc. For their measures of “income” diversity, Bronx High School of Science and Stuyvesant were favored (these also upped the percentage of students “from public schools” in their stats).
The schools would never – and will never – admit all this. No big deal. I’m sure everyone on this board thinks that GWB (“Shrub”) got in to Yale and Harvard Business School on his “own merits”, lol.
Believe it or not – I don’t really care – but I started high school at 12 years old (just turning 13) and worked at a butcher shop serving customers and delivering order for the first three years of my high school career – 3.30pm to 6.30pm M-F, and 8am to 6pm Saturdays. Longer hours in summer. And I had a 30 minute commute by subway each way to Manhattan. There wasn’t a lot of time to develop “extracurricular” activities. But like I said, no complaints. I had to do it (we needed the money, which was great – $55/wk+tips = $130/wk on average, all “off the books”, which was more than enough to pay for the entire rent on a nice apartment in the Bronx at that time). It’s a good story to tell now, but I actually didn’t put any of that down on my college applications – I was sort of embarassed by it all. Boy, was I naive! Now, as I say, I think one should press every advantage or angle available.
When it came time to apply to schools, generally the Ivies seemed to want to “kill two birds with one stone” – a minority student satisfied the concern for racial diversity while often satisfying the “socioeconomic diversity” criteria. I have some inside knowledge of this from a work-study position in an admissions office to one of the professional schools I held in college for a time. Removal of the “two track” system following the CA court case I and ex SF-er referred to demonstrated pretty clearly that there was a two track system (as practically all the previously “tracked” minorities were denied admission following the decision and resulting change in admissions procedures).
Like I said, no complaints. I was lucky beyond the vast majority of people who ever walked the earth. I wasn’t smart enough to “pick the right parents” (the old economist joke about the predictors of success) but God gave me enough natural smarts to make up for it. Sorry, again, ex SF-er if it came out wrong. I know from your previous postings that you didn’t exactly have a cake walk either 😉
LMRiM – I think the problem is that you’re continuing to say near-perfect SAT/ACT scores. The ACT was always (and still is) much easier to attain a perfect or near-perfect score because of the way the test is set up. Many people are probably like me, in that they got a perfect 36, but could only squeeze out mid-1400’s on the SAT.
anon,
Did you cheat off me?
Thanks, anon, for that useful info aout the ACT. I didn’t know that. 20-25 years ago on the East Coast, the ACT was virtually unknown and not used. At least I didn’t know about it 😉 I sort of remember reading at the time that it was used more often in the West, but I don’t know anyone in the NYC schools from that time that took it or even thought about taking it.
Everyone mentioned the “rebasing” – which I think was exclusive to the SAT – so I sort of equated the two and assumed people were referring to “near perfect” SAT scores. Your post clears that up.
For people who are interested in part of the backdrop as to “why” why the SAT was rebased, you can google the disavowed “Strivers program” (1980-1994, reportedly) of the Educational Testing Service.
sparky – nope, don’t think so! 😉
LMRiM – even in 1993 (when I took the tests and was applying to schools) pretty much every school on the East Coast would only take the SAT. On the West Coast you typically had to supply both for more prestigious schools (not talking just Stanford and Caltech or something like that – the entire UC system and most of the top state schools in other states – UW, CSU, Colorado School of Mines, Utah, etc required both). Some state schools (for example I believe the CSU system) would take the ACT alone.
^^^Oops. That first CSU above refers to Colorado State University, the second refers to the California State University system.
Heh, MIT Ph.D
I wonder if anonn would like to weigh in on this thread …
Heh. Yeah, I really screwed up on my SATs. That’s why I was a National Merit Scholar who got a full ride to a top 25 liberal arts college with D1 sports where I played varsity soccer.
Really, Anon? I guess requirements changed a lot in 10 years. In the mid-80’s, I had to take the SAT’s and three Achievement subject tests (later called SAT II’s, I think) for the UC’s and for Stanford and various other east/west coast private schools. I never took the ACT, but it seemed to be a midwestern thing when I was in high school. When I was a teacher, some of my students took the ACT because it was thought to be easier than the SAT.
I can’t claim a near perfect score, but I did score in the low 1500’s on the SAT. However, I know lots of people smarter than me who didn’t score as well. I’m a fast reader and good at doing easy math problems accurately. That and two degrees from fine universities got me a salary in the mid-five figures as a public school teacher 🙂
ACT was taken everywhere, based on where the student was from. West Coast, East Coast, and the places in between.
RenterAgain – that’s basically what I was saying. SAT was required for those places you mentioned (in addition to the SAT IIs that you mention)
Right, SAT everywhere but you could have ACT instead of SAT II test. I took some of them bad boys as well.
LMRiM I get where you’re coming from about ivy admissions, since your school experience seems to mirror my own. And I think I’ve reverse engineered where you went to high school (Jesuit, upper east side, anonymous benefactor? If so, two of my older brothers went there, though they commuted from NJ, ~1 hour each way, not the Bronx.)
I have to correct a couple of your perceptions about the “slots” that were “reserved” for the prestigious schools, though. I went to high school at one of the well known boarding schools (starts w/ “Phillips”) in the late 80’s/early 90’s, unlike my brothers. And the reality for kids there is that admission to the real ivies from there is tough, and where you’re applying from can be a disadvantage: Princeton can’t accept 200 kids from Andover, else they’re perpetuating the elitism. For this reason, our high school only allowed us to apply to 2 (two) ivies, for fear of the top candidates crowding out their classmates. For legacies and scions of wealth, yes, they can (and were) cretins and still get in. But for the rest of us, it was earned.
And like you, I have no complaints about it all. It all got me into a big three ivy, and I’ve done very well as entrepreneur/engineer out here ever since. And you should hold no resentment to the prestigious high schools either: they gave a free ride to at least one working class Irish/Catholic kid, that probably didn’t make their demographics look that much more diverse or inclusive. Despite their faults, they try to reach everyone.
You’re probably right, gumby. No comments about your brothers, but I hope they enjoyed their time there 🙂
It’s a subtle sort of balance with all these admissions questions I guess. Like I wrote above (way above somewhere), I do recognize that there are some important diversity/class issues at play, and even the “slots” were not precisely delineated in stone. But they were definitely there, and it was something that we all were aware of (it seems you were too). No big deal – I hope I don’t sound bitter b/c I’m really not.
Maybe it’s different today.
(Definitely no resentment towards the prestigious high schools. Mine was no slouch, and besides, I literally didn’t even know that those others existed growing up – before attending high school, that is – except for far away references to the vaguely-imagined bucolic campus somewhere up north where you attended;))
I got a 1560 total, which was a perfect math score and two or maybe three wrong on the verbal. I know it was one of the top 1000 scores in the nation that year, since I was invited to apply for a Presidential Merit Scholarship, which I had never heard of before. This was in the early eighties.
Ten years later, I got the same math scores on the GRE but only a 700 on the verbal, so maybe my science degree and tour of duty in the Army brought down my verbal ability. More likely, I got a couple of guesses right on the SAT earlier.
The math score was completely typical at Caltech: probably 1/3 of the students there had perfect scores. The verbal was unusually high though. I was totally unprepared for the workload there since high school had been so easy and failed out after two years. I almost wish I had gone to Cal instead right off the bat, but the tour of duty in The Army was a good maturing experience.
I don’t think Caltech tried to diversify its student body at all, it was 75% male and probably 80% white in the mid-eighties. I have visited more recently and it is now about 1/3 Asian with the rest white and still predominantly male. They do try to attract all the women who qualify but it has a reputation as such a tough place to be a woman that they have a tough time attracting smart girls.
Don’t get me wrong, the slots definitely existed, and they seem to be allocated in a ham-handed way. My main point was that most everyone competes – being a legacy doubles one’s chance of admission, but that’s still well below 50% (stat from the early 90’s). I saw plenty of pedigreed kids get thin envelopes. But yes I concede that it’s a different world when you’re a legacy like GWB – have a pulse & you’re in.
My family never really knew about such schools either, until meeting the college classmates of my older brothers.
@NVJ – Lack of girls was my main complaint in math/engineering college & grad school 🙁 But perhaps it made me a more focused student.
My engineering department was not full o’ ladies, either. I’m pretty sure that is a constant at every school.
NVJ, you went to Caltech? Finest school in the world, IMO. I was in Stanford’s band in the mid-80s and we always stayed at Caltech when we came down to play USC or UCLA. Odd bunch of students there, but I adored them and was astounded by how smart everyone was (and at the volumes of heavy drugs they were willing to ingest).