Property taxes are what keeps housing affordable. Look at California for an example of what happens when they go away. To be precise, property tax increases th

Property taxes are what keeps housing affordable. Look at California for an example of what happens when they go away. To be precise, property tax increases the liability of holding a house as an investment relative to other investments, so higher property taxes make capital that was invested in real estate move to other sectors. That means that fewer properties are owned by speculators, so more are owner-occupied. This is why California has one of the lowest homeownership rates in the country (alongside New York and Nevada, which are much more urbanized than Cali): http://www.census.gov/housing/hvs/data/rates.html http://www.census.gov/housing/hvs/data/rates.html (Homeowners don't like to believe this, because the economic reality is basically that investors can buy whatever they want and the middle class picks up the scraps; that's sort of undignified, but true, so people should get used to it)