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While I understand the sentiment, how many people are estimated to be displaced? It's possible the local governments could work with very small amounts instead

While I understand the sentiment, how many people are estimated to be displaced? It's possible the local governments could work with very small amounts instead of coding another loophole into another law. Nuke Proposition 13, one-time grandfather some uses, and drop the remaining pain all at once.

deleted 9y ago
[deleted]
dv_dt 9y ago
In general principle, I want to favor owners living in their property. That creates social stability, instead of upheavals of neighborhood on every bubble. Without prop 13, the stronger the bubble, the more people with deep pockets are favored because they can hold out longer on property taxes. You'll just end up kicking people out of their homes sorted from poorest to richest as the bubble intensifies. Without prop 13, you may end up exacerbating bubbles - the system ends up favoring risky behavior: the uptake of buyers willing to take out the larger loans, or people taking out taking out loans to pay their taxes and try and ride out real estate bubbles. When the bubble bursts, there will be more people with more highly leveraged loans. Cities working on random rules to help subsets of property owners is, by definition, coding loopholes. By comparison, a primary residence of a homeowner isn't a loophole, that's a basic tax status used by the IRS.
- aianus 9y ago
  > You'll just end up kicking people out of their homes sorted from poorest to richest as the bubble intensifies. No, it's the richest people with the smallest cash flow that get kicked out first. Property tax for a salaried worker with a $1m mortgaged house is totally manageable, property tax for a retiree with a $2m paid-off house could be unaffordable. The latter person (who's much richer) has to move, the former doesn't.
  - dv_dt 9y ago
    I think you're splitting silly hairs - technically its anyone with bad cash flow. If someone has no liquid assets and their "wealth" is only tied in the property they're living in, it's monopoly bubble money, and you're kicking them out because they're fixed income doesn't match the real estate market values (which may be unrealistic in a bubble). If you're truly wealthy, and want to preserve the property, then you'll have many options to transition even fairly illiquid assets to keep a property.
    - aianus 9y ago
      I don't agree it's hair-splitting. You can't get kicked out by surprise by repealing Prop 13 unless you've enjoyed huge capital gains and are therefore likely rich. It would make no difference for poor people who don't own property that was acquired at low cost many years ago. It's really the opposite situation of what you said.
      - tehlike 9y ago
        At the rates real estate prices are rising in bay area, you would be kicking people out of where they called home for years. Whether they sit on huge gains or not is irrelevant, they wouldnt be able to afford it.
      - dv_dt 9y ago
        That capital gain isn't accessible unless there is a sale. If its a sale because the owner can't afford the property tax it is likely someone with limited/fixed income. Once you force a sale, a buyer, rich enough to buy the home takes ownership, they have exactly the same incentive to approve or disapprove new homes as the original owner. The person you've forced out on the other hand, now pays the tax, the transfer costs with a real estate agent and likely repair costs on the home, has the same fixed income, and now has to find a home to live in, but now has 5-10% less capital to work with then they had before. It's a bubble, and likely real estate costs in the near area are just as high. So what has been accomplished at the end of this other than harming the living situation of the original property owner and kicking out someone of limited income for someone with more income?
georgeecollins 9y ago
All you have to do is convince property owners that it is OK to pass a law that will probably lower the value of their property and raise their taxes. Or, figure out how to pass a bill that is opposed by property owners, by getting the support of the powerful California lobby that doesn't own property. Wait.. what is that lobby?

deleted 9y ago

[deleted]

dv_dt 9y ago

In general principle, I want to favor owners living in their property. That creates social stability, instead of upheavals of neighborhood on every bubble. Without prop 13, the stronger the bubble, the more people with deep pockets are favored because they can hold out longer on property taxes. You'll just end up kicking people out of their homes sorted from poorest to richest as the bubble intensifies. Without prop 13, you may end up exacerbating bubbles - the system ends up favoring risky behavior: the uptake of buyers willing to take out the larger loans, or people taking out taking out loans to pay their taxes and try and ride out real estate bubbles. When the bubble bursts, there will be more people with more highly leveraged loans. Cities working on random rules to help subsets of property owners is, by definition, coding loopholes. By comparison, a primary residence of a homeowner isn't a loophole, that's a basic tax status used by the IRS.

aianus 9y ago
> You'll just end up kicking people out of their homes sorted from poorest to richest as the bubble intensifies. No, it's the richest people with the smallest cash flow that get kicked out first. Property tax for a salaried worker with a $1m mortgaged house is totally manageable, property tax for a retiree with a $2m paid-off house could be unaffordable. The latter person (who's much richer) has to move, the former doesn't.
- dv_dt 9y ago
  I think you're splitting silly hairs - technically its anyone with bad cash flow. If someone has no liquid assets and their "wealth" is only tied in the property they're living in, it's monopoly bubble money, and you're kicking them out because they're fixed income doesn't match the real estate market values (which may be unrealistic in a bubble). If you're truly wealthy, and want to preserve the property, then you'll have many options to transition even fairly illiquid assets to keep a property.
  - aianus 9y ago
    I don't agree it's hair-splitting. You can't get kicked out by surprise by repealing Prop 13 unless you've enjoyed huge capital gains and are therefore likely rich. It would make no difference for poor people who don't own property that was acquired at low cost many years ago. It's really the opposite situation of what you said.
    - tehlike 9y ago
      At the rates real estate prices are rising in bay area, you would be kicking people out of where they called home for years. Whether they sit on huge gains or not is irrelevant, they wouldnt be able to afford it.
    - dv_dt 9y ago
      That capital gain isn't accessible unless there is a sale. If its a sale because the owner can't afford the property tax it is likely someone with limited/fixed income. Once you force a sale, a buyer, rich enough to buy the home takes ownership, they have exactly the same incentive to approve or disapprove new homes as the original owner. The person you've forced out on the other hand, now pays the tax, the transfer costs with a real estate agent and likely repair costs on the home, has the same fixed income, and now has to find a home to live in, but now has 5-10% less capital to work with then they had before. It's a bubble, and likely real estate costs in the near area are just as high. So what has been accomplished at the end of this other than harming the living situation of the original property owner and kicking out someone of limited income for someone with more income?

georgeecollins 9y ago

All you have to do is convince property owners that it is OK to pass a law that will probably lower the value of their property and raise their taxes. Or, figure out how to pass a bill that is opposed by property owners, by getting the support of the powerful California lobby that doesn't own property. Wait.. what is that lobby?