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How does prop 13 make housing more expensive for people not currently covered by prop 13? If the owner of the apartment pays fewer taxes, won't that keep prices

How does prop 13 make housing more expensive for people not currently covered by prop 13? If the owner of the apartment pays fewer taxes, won't that keep prices down for the renter?

Kalium 10y ago
https://en.wikipedia.org/wiki/California_Proposition_13_(1978)#Sales_Disincentives.2C_Less_Individual_Mobility.2C_Higher_Housing_Costs https://en.wikipedia.org/wiki/California_Proposition_13_(197... Your analysis would be correct in a context where both supply and demand for housing are constant... and also assuming that maintenance costs never, ever change. However, prop 13 helps to discourage land sales and new construction, resulting in a supply that grows much more slowly than demand. This drives prices up, especially in areas like the Bay that have been under-building housing for decades. Higher prices results in landlords incentivized to find ways to throw out rent-controlled tenants and outright prices out many working-class families. Also the costs of things like building upgrades and plumbers can sometimes go up year-to-year. In short, keeping property taxes fixed to 1970s-era for grandma with multi-million dollar property results in people getting pushed out of their homes. This is perhaps just a bit less than ideal.
- ktRolster 10y ago
  I see what you are saying, that people staying in their houses is preventing people from moving out and the houses being destroyed and apartments built in their place.
  - Kalium 10y ago
    Basically, the market is a good deal less liquid than it should be. This has a surprising number of nasty side-effects.
    - ktRolster 10y ago
      I would be surprised if that were the real blocker in SF, though. If you look at this graphic, the yellow areas are all zoned to build no taller than 40 feet: http://static6.businessinsider.com/image/5342ef126da811ef6aba14fa-917-687/sf-building-height-zoning-1.jpg http://static6.businessinsider.com/image/5342ef126da811ef6ab...
      - Kalium 10y ago
        The two things are not independent. One of the reasons things are zoned so agressively and changes to zoning fought so hard is prop 13's effects.

How does prop 13 make housing more expensive for people not currently covered by prop 13? If the owner of the apartment pays fewer taxes, won't that keep prices down for the renter?

Kalium 10y ago

https://en.wikipedia.org/wiki/California_Proposition_13_(1978)#Sales_Disincentives.2C_Less_Individual_Mobility.2C_Higher_Housing_Costs https://en.wikipedia.org/wiki/California_Proposition_13_(197... Your analysis would be correct in a context where both supply and demand for housing are constant... and also assuming that maintenance costs never, ever change. However, prop 13 helps to discourage land sales and new construction, resulting in a supply that grows much more slowly than demand. This drives prices up, especially in areas like the Bay that have been under-building housing for decades. Higher prices results in landlords incentivized to find ways to throw out rent-controlled tenants and outright prices out many working-class families. Also the costs of things like building upgrades and plumbers can sometimes go up year-to-year. In short, keeping property taxes fixed to 1970s-era for grandma with multi-million dollar property results in people getting pushed out of their homes. This is perhaps just a bit less than ideal.

ktRolster 10y ago
I see what you are saying, that people staying in their houses is preventing people from moving out and the houses being destroyed and apartments built in their place.
- Kalium 10y ago
  Basically, the market is a good deal less liquid than it should be. This has a surprising number of nasty side-effects.
  - ktRolster 10y ago
    I would be surprised if that were the real blocker in SF, though. If you look at this graphic, the yellow areas are all zoned to build no taller than 40 feet: http://static6.businessinsider.com/image/5342ef126da811ef6aba14fa-917-687/sf-building-height-zoning-1.jpg http://static6.businessinsider.com/image/5342ef126da811ef6ab...
    - Kalium 10y ago
      The two things are not independent. One of the reasons things are zoned so agressively and changes to zoning fought so hard is prop 13's effects.