3 ms·

Thanks for this knowledge. Where can I find more info regarding Prop 13 and the parking lot property taxes? Thank you!

stefan_ 7y ago
There is nothing much to know except that Prop 13 also applies to commercial property, not just the American homeowner with a mortgage and truck. I'm not quite sure why, but asking the people who voted in the 70s to give themselves a massive tax cut is probably not going to yield anything useful (ask your parents some time!).
ladberg 7y ago
https://en.wikipedia.org/wiki/1978_California_Proposition_13 https://en.wikipedia.org/wiki/1978_California_Proposition_13 I feel like the intuition behind prop 13 is similar to rent control but for land owners. Basically it freezes the price owners have to pay in taxes, so if the price of land goes up dramatically, people who have owned the land for longer pay far less in taxes. For example, person A bought a house in SF 25 years ago for 300k. Person B buys an identical house today for 1.5M, therefore paying 5x as much in taxes every year even though both houses are worth the same value. This stifles development because any time land changes hands, the taxes dramatically increase. Even though you could make more money turning a parking lot into housing, people often don't because the taxes would increase to a point where it wouldn't be worth it. The simplified end result for prop 13 (and rent control) is that young people are basically subsidizing old people through their taxes (and rents), keeping prices artificially high. It is incredibly hard to repeal these laws because most of the voters are unfairly benefiting from them or don't comprehend that rent control hurts them.
- fortran77 7y ago
  Under Prop 13, property taxes can go up 2%/year. So he's not paying 5x because the 300,000 house's property tax has been increasing every year by 2%. It's hard to me to imagine why you would be so evil as to want to force a person out of a home because some dot-com-specuvestor bought a 300,000 home next door to some little old lady for 3,000,000 dollars and caused her property tax to go up 10x. Prop 13 is necessary. What we need to do is BUILD MORE HOUSES.
- greggman2 7y ago
  It sounds like most of the people here want prop 13 repealed but from your suggestion that would just make every pay the high tax so the "people often don't because the taxes would increase to a point where it wouldn't be worth it." would be true for everyone always right?
  - ericd 7y ago
    At least in SV, the older people are much, much more active in local politics, probably because they're not busy with a job/kids. When I was on a sabbatical/funemployed, I used to go to city council meetings pretty frequently, especially for meetings discussing one of these anti-development laws that are currently on the books, and it would be like 3-6 of us on the pro-development side, typically skewing on the younger side (though there were some exceptional older homeowners who would argue for our side), and then 50+ retirees on the anti-development side. In the example I'm thinking of, it was a meeting about a law that was due to expire that limited new development to 5 stories, and effectively limited average height to 3-4 stories due to floor area ratios, and simultaneously put strict limits on the number of housing units you could build per acre. Mind you, this expiration would affect just the dense downtown core around the train station, not the vast majority of the city, which is zoned single family. They still hated the idea, it'd cause too much traffic. One lady gave an impassioned speech about how the drive to their second home in Tahoe, which used to take 4 hours now took 6-8 on Friday due to traffic. This came right after a speech from someone who was about to lose their primary residence due to rent spiking. I don't know how she was able bring herself to follow that, but she certainly tried.
  - ladberg 7y ago
    The basic idea is that people are being disproportionally taxed, usually in favor of the rich (i.e. people who have owned property in high CoL places for a long time). By raising the taxes on these people to "fair" levels, a bunch of good things happen. First, a lot of property is opened up to the market because people are now willing to sell it, which should lower housing/land prices in general and enable more development. Second, the state gets a lot more tax money to use for education and whatever else.

There is nothing much to know except that Prop 13 also applies to commercial property, not just the American homeowner with a mortgage and truck. I'm not quite sure why, but asking the people who voted in the 70s to give themselves a massive tax cut is probably not going to yield anything useful (ask your parents some time!).

ladberg 7y ago

https://en.wikipedia.org/wiki/1978_California_Proposition_13 https://en.wikipedia.org/wiki/1978_California_Proposition_13 I feel like the intuition behind prop 13 is similar to rent control but for land owners. Basically it freezes the price owners have to pay in taxes, so if the price of land goes up dramatically, people who have owned the land for longer pay far less in taxes. For example, person A bought a house in SF 25 years ago for 300k. Person B buys an identical house today for 1.5M, therefore paying 5x as much in taxes every year even though both houses are worth the same value. This stifles development because any time land changes hands, the taxes dramatically increase. Even though you could make more money turning a parking lot into housing, people often don't because the taxes would increase to a point where it wouldn't be worth it. The simplified end result for prop 13 (and rent control) is that young people are basically subsidizing old people through their taxes (and rents), keeping prices artificially high. It is incredibly hard to repeal these laws because most of the voters are unfairly benefiting from them or don't comprehend that rent control hurts them.

fortran77 7y ago
Under Prop 13, property taxes can go up 2%/year. So he's not paying 5x because the 300,000 house's property tax has been increasing every year by 2%. It's hard to me to imagine why you would be so evil as to want to force a person out of a home because some dot-com-specuvestor bought a 300,000 home next door to some little old lady for 3,000,000 dollars and caused her property tax to go up 10x. Prop 13 is necessary. What we need to do is BUILD MORE HOUSES.
greggman2 7y ago
It sounds like most of the people here want prop 13 repealed but from your suggestion that would just make every pay the high tax so the "people often don't because the taxes would increase to a point where it wouldn't be worth it." would be true for everyone always right?
- ericd 7y ago
  At least in SV, the older people are much, much more active in local politics, probably because they're not busy with a job/kids. When I was on a sabbatical/funemployed, I used to go to city council meetings pretty frequently, especially for meetings discussing one of these anti-development laws that are currently on the books, and it would be like 3-6 of us on the pro-development side, typically skewing on the younger side (though there were some exceptional older homeowners who would argue for our side), and then 50+ retirees on the anti-development side. In the example I'm thinking of, it was a meeting about a law that was due to expire that limited new development to 5 stories, and effectively limited average height to 3-4 stories due to floor area ratios, and simultaneously put strict limits on the number of housing units you could build per acre. Mind you, this expiration would affect just the dense downtown core around the train station, not the vast majority of the city, which is zoned single family. They still hated the idea, it'd cause too much traffic. One lady gave an impassioned speech about how the drive to their second home in Tahoe, which used to take 4 hours now took 6-8 on Friday due to traffic. This came right after a speech from someone who was about to lose their primary residence due to rent spiking. I don't know how she was able bring herself to follow that, but she certainly tried.
- ladberg 7y ago
  The basic idea is that people are being disproportionally taxed, usually in favor of the rich (i.e. people who have owned property in high CoL places for a long time). By raising the taxes on these people to "fair" levels, a bunch of good things happen. First, a lot of property is opened up to the market because people are now willing to sell it, which should lower housing/land prices in general and enable more development. Second, the state gets a lot more tax money to use for education and whatever else.