4 ms·

Let me give a clear example of why repealing Prop 13 would be a bad idea: my Mom. My Mom has a fixed income and owns her home. Plenty of savings for retirement

Let me give a clear example of why repealing Prop 13 would be a bad idea: my Mom. My Mom has a fixed income and owns her home. Plenty of savings for retirement like a responsible person. My Dad retired in 1986. This is in Fremont, California. Since then, prices have skyrocketed. In your example, she would have to pay $30K/year in taxes. So here's the problem: how do you plan for retirement if reassessments are a thing? Depending on luck, you may live for 40 years or more past retirement. Must one move away from family that serves as a support system? Some states do reassess, but recognize that that is a policy choice. California has made a choice which results in predictable tax consequences which can be planned for. It's not a perfect policy choice, but it is a legitimate choice that results in predictable outcomes.

cbr 9y ago
One way to handle this would be with a reverse mortgage. Effectively, the $30k/y of taxes are counted against the value of the home when it's sold. Since the home has gotten enormously more valuable (which is why the taxes would be higher) the homeowner still comes out very much ahead.
kevinburke 9y ago
One solution is to sell your home and rent. You'd be a millionaire renter, and a lot of renters would want to trade places with you. Another solution would be to design the reform bill to grandfather in people who have lived in their homes for some long amount of time, or are above a certain age, or whatever. In some sense, though, the way we are using land is currently very inefficient and improvements necessarily mean changing how we use the land.
jdavis703 9y ago
If people had "skin in the game" with regards to the housing market you'd see a lot more people out ensuring an adequate supply of houses are constructed. Instead, you have large amounts of people living off of Prop. 13 and rent control "subsidies" who are actively opposing new housing construction. We need to slowly phase out these "subsidies" to ensure that people making the policy decisions also live with the consequences (whether they be positive or negative). There are many other metro areas in the U.S. that don't have Prop. 13-style controls or rent control, and have a much larger supply of affordable houses.
Balgair 9y ago
What about your own nuclear family, your children? The younger/new home-owners of CA are subsidizing your mother's housing costs, not the other way around. I'm happy that my folks are happy and healthy, and I know if they paid more taxes, they'd be in Reno or Phoenix. But the couple next door to them? She's a teacher and he's a recruiter for some tech-firm in SF. He drives 2 hours each way, 4 a day, to get into SF each morning and then out again. We think her parents are helping out with the costs, there is almost no other way they can make those payments. Their little boy can't see his dad most of the days of the week, and when he does, it's after 2 hours of traffic. That's 2 families, one working full time and one retired (we assume, so heavy caveats here) that are now required to make ends meet for one little boy. How the hell are they gonna pay for his college? Will that boy know his father at all? What happens when Daddy gets laid off? Are they going to continue to be my folk's neighbors? Where are they going to go then? Prop 13 is taxing the younger/newer homeowners for the benefit of the older homeowners. Many of these younger/newer people can't make the payments, not even close. So they need help from their own parents who are benefiting from the tax structure. This assumes that those parents are alive themselves, willing to help, and can help at all. Not all younger couples have that; it shouldn't be a requirement. I'm saying that you should just let the market decide how these taxes are allocated, it seems to work pretty well for nearly every other state in this country. Yes, it would be chaos for a few years. No doubt, my own folks would be forced to move. Just nuts all around. But every day that Prop 13 continues, it gets worse and worse for the youth of California and for their children too. Via Prop 13, California is directly hurting it's sons and daughters futures and therefore it's own. California is eating it's seed corn. The dam has to break sometime.

cbr 9y ago

One way to handle this would be with a reverse mortgage. Effectively, the $30k/y of taxes are counted against the value of the home when it's sold. Since the home has gotten enormously more valuable (which is why the taxes would be higher) the homeowner still comes out very much ahead.

kevinburke 9y ago

One solution is to sell your home and rent. You'd be a millionaire renter, and a lot of renters would want to trade places with you. Another solution would be to design the reform bill to grandfather in people who have lived in their homes for some long amount of time, or are above a certain age, or whatever. In some sense, though, the way we are using land is currently very inefficient and improvements necessarily mean changing how we use the land.

jdavis703 9y ago

If people had "skin in the game" with regards to the housing market you'd see a lot more people out ensuring an adequate supply of houses are constructed. Instead, you have large amounts of people living off of Prop. 13 and rent control "subsidies" who are actively opposing new housing construction. We need to slowly phase out these "subsidies" to ensure that people making the policy decisions also live with the consequences (whether they be positive or negative). There are many other metro areas in the U.S. that don't have Prop. 13-style controls or rent control, and have a much larger supply of affordable houses.

Balgair 9y ago

What about your own nuclear family, your children? The younger/new home-owners of CA are subsidizing your mother's housing costs, not the other way around. I'm happy that my folks are happy and healthy, and I know if they paid more taxes, they'd be in Reno or Phoenix. But the couple next door to them? She's a teacher and he's a recruiter for some tech-firm in SF. He drives 2 hours each way, 4 a day, to get into SF each morning and then out again. We think her parents are helping out with the costs, there is almost no other way they can make those payments. Their little boy can't see his dad most of the days of the week, and when he does, it's after 2 hours of traffic. That's 2 families, one working full time and one retired (we assume, so heavy caveats here) that are now required to make ends meet for one little boy. How the hell are they gonna pay for his college? Will that boy know his father at all? What happens when Daddy gets laid off? Are they going to continue to be my folk's neighbors? Where are they going to go then? Prop 13 is taxing the younger/newer homeowners for the benefit of the older homeowners. Many of these younger/newer people can't make the payments, not even close. So they need help from their own parents who are benefiting from the tax structure. This assumes that those parents are alive themselves, willing to help, and can help at all. Not all younger couples have that; it shouldn't be a requirement. I'm saying that you should just let the market decide how these taxes are allocated, it seems to work pretty well for nearly every other state in this country. Yes, it would be chaos for a few years. No doubt, my own folks would be forced to move. Just nuts all around. But every day that Prop 13 continues, it gets worse and worse for the youth of California and for their children too. Via Prop 13, California is directly hurting it's sons and daughters futures and therefore it's own. California is eating it's seed corn. The dam has to break sometime.