Prop 13 is one of the few reasons many could consider staying in California, vs having to pay property taxes on the bubble prices here. Property taxes do go up at what amounts to reasonable inflation numbers.
The most compelling argument I’ve heard in favor of continuing prop 13, from a good policy perspective is that it lets people stay in their homes. But couldn’t we achieve the same thing by means testing property taxes?
As it is now, the tax rate is set basically based on how long you’ve owned your property. I could be making $$$ and pay very very little. While my neighbor who bought more recently but earns less pays more. This seems deeply unfair to me.
Prop 13 also creates a very volatile tax base for local governments, contributing to the frequent budget issues we see in CA.
Means testing property taxes might make them more volatile than in states that don’t do that, but I can’t imagine it’s worse than the current situation.
Additional prop 13 sets up incentives so homeowners at all income levels are discouraged from selling and moving. And discouraged from allowing more housing supply because they only benefit from increasing housing costs. Taxes that go up with home value tend to blunt some of the benefit of that increasing value.
Most repeals of prop 13 would still include the widowed grandma clause that prop 13 was sold on. It would just get rid of some profits for the landlord class.
No, it allows transfer of property to certain relatives without full-value reassessment. Rates aren't any different than anyone else in the same jurisdiction pays, it's the assessment that is the issue.
You are right. I don't know why I wrote rate; what I meant is that the lower assessment can be inherited. That, I suspect, is the selfish reason many in this thread are asking "why do you want my parents out of their house"?
prop13 growth is capped below inflation. It also has the effect of causing funding shortfalls which have had the direct result of things like California's public schools being ranked 37/50, deteriorating public works, etc.
The single best thing California could do for Californians would be to sunset prop13 protections.
No, Prop 13 was in response to people being "taxed out of their homes" . Inflation, low interest rates, and turning homes into an "investment" did more to make the bubble.
Prop. 13 allowed people to advocate for exclusionary development policies, capture all of the land value increment of those policies, while at the same time being totally shielded from the taxes on their windfalls. The timeline of California land use abuse was that first came zoning, downzoning, historical preservation, and all the other anti-housing controls. Then came rent control and Prop 13, both of which act to shield incumbents from the consequences of their own actions.
What do you think happens in most other states with normal property taxes? Do you think people just continuously get pushed out of their homes because of local taxes?
It's pretty rare even in extremely high property tax counties like Cook and DuPage here in Illinois.
I am (not American) trying to see how framing this as getting pushed out of your house is better than saying 'being able to sell your house for a huge gain' is better.
Yes this means folks will have to move, but again as cities grow and shape themselves, is it even the same place people have in mind that they started in?
May be my attitude is colored by my immigrant status though - I was willing to pack up and move, so trying to understand what makes people sticky.
I have known it to happen to friend’s parents that live in New Jersey, as their pension didn’t keep up with the property tax increases. But New Jersey is notorious for their property tax.
I mean, Prop 13 passed specifically because seniors were losing their homes. But in this case the cure was worse than the disease.
