4 ms·

That is not a fair assessment of the situation. There are a number of factors that have been put in place by the populace and government agencies to force this

by Agustus 11y ago

That is not a fair assessment of the situation. There are a number of factors that have been put in place by the populace and government agencies to force this situation in the bay area: 1. Rent Control: This forces an incentive not to move. If you are in the 4-bedroom house at $1,500 a month for the past 15 years, a comparable 4-bedroom house is now $6,000. There is no incentive to move and owner's have little incentive to bring up to standard something they are not going to get an ROI on. In this instance, Prop 13 actually makes the situation bearable for the landlords, think if the costs went up and your return stayed static. 2. Building Restrictions: Between the historical board, local populace anger to building, and zoning enforcement, the bay area's supply has been static while demand has increased. There are workarounds, but they border on illegal (i.e. the guy who turned a storage closet into a baby's room for additional space); essentially sub-dividing up existing property. Within the Bay area, the ability to move a demand curve down has not existed, so the prices have risen to meet the existing supply. Prop 13 has no direct effect on these two items except a positive effect for the landowners in reducing the tax burden that would have forced early bankruptcy for them because of the rent control.

klipt 11y ago
If you think of the government as the "ultimate landlord", then property tax is just another form of rent and Prop 13 is just another form of rent control. It has most of the same positives and negatives as rent control: > forces an incentive not to move Check, if you move your property tax will go up > and owner's have little incentive to bring up to standard something they are not going to get an ROI on Check, the "landlord" (government) spending on residential infrastructure won't result in increased property tax income. This is partly why the peninsula cities invest so much in office space but refuse to build housing. You're right that Prop 13 makes rent control possible, but overall I'm not sure that's a good thing.
- DrScump 11y ago
  <You're right that Prop 13 makes rent control possible> Completely false; the Jarvis-Gann Amendment ("Prop 13") has nothing to do with rent control. You may intend to instead argue that both JGA and rent control provide disincentives to move (and I would not disagree), but that's a different statement.
  - avdempsey 11y ago
    You're being down-voted because Klipt is agreeing with GP that by holding down the costs of property owners Prop 13 makes the holding down of property revenues by rent control more tolerable for the owner.
    - DrScump 11y ago
      No, I'm being downvoted as a protest proxy against Prop 13, which I didn't advocate or defend -- I just tried to clarify the history. (I wasn't even of voting age when it passed.) Rent control existed in many CA cities well before Prop 13 and is orthogonal. The impetus for Prop 13 was that frequent and growing property tax rate (as well as assessment) increases during Willie Brown's control of the Assembly, combined with high mortgage interest rates, were driving longtime residents (especially seniors and others on fixed incomes) out of their homes. Most rental property owners are not lifelong, continuous owners that benefit significantly from Prop 13, and I guarantee you that those who are aren't giving any rent "discounts" because of Prop 13 savings -- the market (and law) sets the rents.

by Agustus 11y ago

klipt 11y ago

If you think of the government as the "ultimate landlord", then property tax is just another form of rent and Prop 13 is just another form of rent control. It has most of the same positives and negatives as rent control: > forces an incentive not to move Check, if you move your property tax will go up > and owner's have little incentive to bring up to standard something they are not going to get an ROI on Check, the "landlord" (government) spending on residential infrastructure won't result in increased property tax income. This is partly why the peninsula cities invest so much in office space but refuse to build housing. You're right that Prop 13 makes rent control possible, but overall I'm not sure that's a good thing.

DrScump 11y ago
<You're right that Prop 13 makes rent control possible> Completely false; the Jarvis-Gann Amendment ("Prop 13") has nothing to do with rent control. You may intend to instead argue that both JGA and rent control provide disincentives to move (and I would not disagree), but that's a different statement.
- avdempsey 11y ago
  You're being down-voted because Klipt is agreeing with GP that by holding down the costs of property owners Prop 13 makes the holding down of property revenues by rent control more tolerable for the owner.
  - DrScump 11y ago
    No, I'm being downvoted as a protest proxy against Prop 13, which I didn't advocate or defend -- I just tried to clarify the history. (I wasn't even of voting age when it passed.) Rent control existed in many CA cities well before Prop 13 and is orthogonal. The impetus for Prop 13 was that frequent and growing property tax rate (as well as assessment) increases during Willie Brown's control of the Assembly, combined with high mortgage interest rates, were driving longtime residents (especially seniors and others on fixed incomes) out of their homes. Most rental property owners are not lifelong, continuous owners that benefit significantly from Prop 13, and I guarantee you that those who are aren't giving any rent "discounts" because of Prop 13 savings -- the market (and law) sets the rents.