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There's also a fair amount of people "grandfathered" into the region. Bought back in the 90s/early 2000s in closer in cities or neighborhoods. They have it pret
by jorblumesea 9y ago
There's also a fair amount of people "grandfathered" into the region. Bought back in the 90s/early 2000s in closer in cities or neighborhoods. They have it pretty good, but at the expense of everyone else.
- polskibus 9y agoCould you explain that bit more? How is that at the expense of everyone else, did they achieve their wealth illegally?
- kbuchanan 9y agoHe's not making a political statement—he's simply saying that a "grandfathered" household enjoys a salary and house value that rose sharply with the area's demand. Newcomers, however, have no such head start. As long as Bay Area real estate remains restricted, newcomers will be permanently disadvantaged (in an absolute sense). It's kind of a classic small-town value: get in while it's good, and shut the door behind you.
- PopsiclePete 9y agoThey actively like to block high-density housing projects. The NIMBY movement is strong. Having affordable housing would make their homes' values plummet and they don't want it. So, yes, to the detriment of everyone else. Which is really America in a nut-shell - "I got mine, fuck you".
- abritinthebay 9y agoRead up on Prop 13 a bit. That’ll explain it.
- oldsklgdfth 9y agoRelated to prop 13 that is also how golf courses in cali metro areas are able to exist, despite taking up huge swaths of land and having very few members. There was a revisionist history episode on it: http://revisionisthistory.com/episodes/11-a-good-walk-spoiled http://revisionisthistory.com/episodes/11-a-good-walk-spoile...
- CalChris 9y agoThat’s because Prop 13 applies to commercial real estate as well because corporations are people too.
- taysic 9y agoWow. That makes sense. That explains why so many seemingly infrequently visited businesses still have storefronts in Berkeley. I always wonder how they stay in business. I thought perhaps commercial rent control.
- CalChris 9y agoMoes owns its building. Black Oak Books didn’t. If Prop 13 wreaks havoc on housing, it’s much worse on commercial RE where it literally it spawns a class of rent seekers.
- abritinthebay 9y agoFun fact about those golf courses: Remember when everyone was freaking out about Nestle using millions of gallons of CA water during the drought? Turns out they used the same amount as one large golf course.
- gnarcoregrizz 9y agoprop 13 is insane. heirs are even able to inherit their parents or grandparent's tax rate (prop 58/193). i was renting a ~$600k property, where the owner was paying $600/year in tax, and the last valuation was $60k... she actually bought the property for $150k, so I think she transfered the property tax rate from a different house (you can do that if you're 55 and older). ca's overall effective property tax rate is something like .8%, so the remaining .2% is basically subsidized by newcomers, some of who pay much more than their neighbors.
- revmoo 9y agohttps://en.wikipedia.org/wiki/California_Proposition_13_(1978) https://en.wikipedia.org/wiki/California_Proposition_13_(197...
- fooey 9y agoThe bay area suffers from extreme NIMBYism
- bduerst 9y agoSo much so there is a YIMBY organization to help combat it: http://www.sfyimby.org/ http://www.sfyimby.org/
- deleted 9y ago[deleted]
- damnyou 9y agoBreaking the law is for chumps and poor people. Rich people change the law to favor them.
- abc_lisper 9y agoDamn dude. That's very good insight!
- woolvalley 9y agoIf you bought a place even in 2011 your income / mortgage ratio is significantly better. If you bought a place before 2005, your also doing fairly well.
- mnglkhn2 9y agoProperty taxes are capped to the level they were at the time of last sale. So, if you bought 20 yrs ago, you pay taxes for the purchase value at that time. Re-adjustment is done when selling or after you finished an addition.
- xtacy 9y agoExpanding on the comment below, it's an unfortunate combination of many prevailing issues. 1. One of the things Prop 13 does is to cap the maximum rate at which a property tax grows per annum to 2%. However, due to housing demand, the property values grow at a much faster rate (7% is not unheard of). The property tax can change when there is a sale. 2. Bay area prices have skyrocketed. 3. The peninsula topography and zoning laws make it hard to expand housing capacity. So, if you are an aging home owner, sure you can cash out of a sale. But where would you go? Unless you can afford another place in the same area, existing home owners do not have incentives to sell their property, which results in a very low inventory. And, low inventory further puts pressure on the prices and drives it up.
- city41 9y agoThe flip side to that is without prop 13, families like this would quickly find they can no longer afford to pay the taxes on their house and are forced to leave. Which is also not a great situation.
- CalChris 9y agoNo, this doesn’t happen in other states that don’t have Prop 13. Instead in California the property tax burden is shifted to new home owners, young families just starting out.
- linkregister 9y agoIt does happen in other states, though not to the extent it was happening to seniors in California when the measure was enacted. Just because it’s a real phenomenon doesn’t mean they had to adopt the most destructive solution I’ve seen. Other states have a deep discount for seniors’ property taxes, while others have a lien on the property that the buyer has to pay (thus reducing the sale price). Other states just have very low tax increases due to stagnant property values.
- jogjayr 9y agoOr...homeowners might become slightly less NIMBY? They would be less enthusiastic about house price increases outpacing inflation and would be less likely to vote down new development?
- s0rce 9y agoProp 13 largely.