> I don't know the exact details of her situation, but it seems like perhaps the correct decision would have been to sell the house and move to a smaller, more

> I don't know the exact details of her situation, but it seems like perhaps the correct decision would have been to sell the house and move to a smaller, more efficient house if the current house is too expensive to maintain given the number of occupants and their age/level of income. I'm 24 and currently rent half a large house in the suburbs from a single guy in his 60s who needs the extra income to maintain the house which he bought when he had a larger family. In California, this can be difficult to impossible due to Prop 13, a voter initiative from the 1970s that caps the rate at which property taxes rise. Doing some back-of-the-envelope math, given that Inglewood has a median house price of about $450,000 [1], if Ms White were to move to a median house in Inglewood (probably a much smaller house since she has a five bedroom right now), her new property tax bill would probably be about $5220 [2], compared to the $1215 she's currently paying. This isn't quite as high as her property tax bill post PACE loan, but it's pretty close. In other words, Ms White can't really move; it would wreck her cash flow nearly as bad as this PACE loan. The flip side of this story is that Inglewood's (and the rest of CA's) home values are probably inflated due to Prop 13 -- lots of people like Ms White become trapped in their homes due to the massive property tax increase they would realize by selling and moving, which reduces the supply of available homes, driving up the price of those that do sell. In a sane world without property tax caps, Ms White and other landowners wouldn't be insulated from rising property values and probably would have worked with their government to temper rising property values with new housing units. Inglewood (city of about 100,000) only added a meager 1000 units of new housing [3] in the 13 years to 2012. [1] http://www.zillow.com/inglewood-ca/home-values/ http://www.zillow.com/inglewood-ca/home-values/ [2] property tax rate of 1.16%, which is probably about right -- in CA there's typically a 1% county assessment baseline plus any bond assessments. [3] http://www.southbaycities.org/sites/default/files/city_profiles/Inglewood.pdf http://www.southbaycities.org/sites/default/files/city_profi...