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> California also has a distinct burden: Proposition 13, a measure approved by voters in 1978 that limits property-tax increases on homes until they’re sold. Th

• willyg123 7y ago
  I think the greater impact of Prop 13 is the disincentive to downgrade into a smaller house after the kids move out. A better measure of housing supply would be in terms of bedrooms. I imagine there is a massive gap in CA relative to other states in terms of the efficiency of bedroom allocation.
• fortran77 7y ago
  Everyone benefits, not just "boomers". Anyone who buys a house ever gets the same protection. No more than 2% property tax increase/year. So if you bought a house in Silicon Valley for $1.5Million and the house next door sell for $3MM because someone had a lot of cash from their facebook stock, your property tax doesn't double.
  • sjg007 7y ago
    One $3M cash buyer doesn't change the taxable FMV on your house. That price isn't considered in assessments. Now if 10 houses in your neighborhood sold similarily and are roughly equivalent to your house, then your tax would go up. This actually happened in Palo Alto when Zuckerberg bought the houses around his home.
  • d1zzy 7y ago
    If you think that a house bought today will see the same relative increase in value over the next 20 years then yes, you'd be right. I'd argue that seems extremely unlikely for a whole set of reasons but the time will who was right. Note that we're not just talking here about paying lower tax for 1-5 years where the property prices go up, we're talking about taking advantage of this benefit over the course of multiple decades, that's where it adds up and I doubt the same will be true for those that buy a house in Silicon Valley today at market price.
    • rcpt 7y ago
      > the same relative increase in value over the next 20 years Which will just get us what Hong Kong has now
• NTDF9 7y ago
  yup
  • mylons 7y ago
    yup
• malvosenior 7y ago
  I don't know that it's more "unfair" to the younger generations to not increase property taxes than it would be to the home owners to do so. Why would someone who bought a house for 100k be expected to pay taxes on 2M years later? A lot of these people probably had normal jobs and incomes, they didn't chose for Google/Apple/Facebook to move into town and send the property prices sky high. Yes, they benefit as owners but this rule only takes effect if they don't sell their house and continue to live in it. The alternative is that we basically force people out of houses they've bought by gouging them with taxes. That seems much more unfair than the alternative.
  • ariwilson 7y ago
    We live in society; everyone is interconnected. One's own self interest cannot outweigh the needs of the group and, in California, all the stats are showing that the group is suffering due to the needs of the few. Prop 13 is part of the problem and should be reduced in effect (commercial property taxes, max rise of 3% annually) alongside changes to zoning until the housing crisis abates.
    • la6470 7y ago
      Sensible take the middle road folks
  • WWLink 7y ago
    Apple has been in the same general area since the 1970s, and all of the many companies that came before them lol.
    • malvosenior 7y ago
      Yes, but they weren't the money printing machine back then that they are now and it's highly doubtful they had a meaningful impact on Bay Area real estate prices in the 1970s.
  • klipt 7y ago
    Of course prop 13 "seems" fair, that's how it got passed. But it has terrible consequences. Adjusted for inflation, it makes taxes drop to 0 in the limit, which means there's no incentive for rich people to ever sell. Which means real estate becomes hoarded across generations by the wealthy class, which recreates the main feature of feudalism.
• claudeganon 7y ago
  Repealing Proposition 13, state-level permissive zoning, and using the resulting money to build social housing is the only way I can see out of the crisis. Everything else is just a put-off so the financialized speculation and money laundering can continue apace.
  • BubRoss 7y ago
    Is social housing really a good focus in extremely valuable real estate areas? Many places in the world are too expensive for most people to live in. Places like Vancouver and Toronto though, have a skyline of cranes building high rises to meet the demand. Social housing in high prices areas is manipulation that doesn't help many people. Letting the demand be met on the high end and shooting for social housing in more reasonable areas makes much more sense. I'm not convinced that market distortion in pricey areas helps anyone when people who are in danger of not having basic needs met need something accessible, not a multi-year process to win a cheaper place in a hot area.
    • claudeganon 7y ago
      Vienna is consistently ranked among the best cities in the world and has a high degree of social housing. And the same is true for places like Singapore and cities across the more social democratic parts of Europe. If anything, the availability of social housing puts a downward pressure on prices and makes sure that people who perform many of the vital functions of running cities (healthcare workers, teachers, infrastructure maintenance workers) can afford to live there. Leaving something as necessary to survival as housing open to a highly financialized, global capital markets has proven time and time again to be a rolling disaster of homelessness and unaffordability.
      • BubRoss 7y ago
        What Singapore does is not at all the same as what is talked about here. Singapore isn't building housing in the hottest areas and selling it for cheaper than a market rate, they are building their own housing and selling it at market rates to Singaporean citizens with restrictions. San Francisco forces developers to have certain amounts of units that get rented out for half the normal price as a stipulation for building. This is directly counter to market prices in desirable areas.
• jread 7y ago
  With follow-on Props 58 and 193, property tax assessments can be inherited/assumed by children and grandchildren. So not only do they inherit the property tax-free, but get the added benefit of often well-below market property tax rate in perpetuity. Then expand this to not only primary residences, but also second homes and commercial property.
  • georgeecollins 7y ago
    As a 5th generation Californian this is the thing I see in my life. My parent's have a house that has become really expensive (to be fair it was always nice) and they pay a lot less property tax than I do on my more modest California home. That crazy low tax rate is ultimately transferable to one of us, even if we move. Me or my sister will inherit the ability to own $x amount of real estate and pay $y worth in property taxes. Insanity.
• RubberSoul 7y ago
  The injustice is actually larger than this paragraph makes it seem. First, people can pass their low property taxes on to their children using trusts, creating a sort of landed nobility in California. Second, Prop 13 results in neighbors who receive the same public services paying vastly different taxes to fund them. Taxing similarly situated individuals differently violates the norm of horizontal equity.
• charlesju 7y ago
  I would say it's especially unfair to new California residents and great for their children. I grew up in Silicon Valley and almost everyone I grew up with have parents that live very comfortably if for nothing else than their property value skyrocketing over the last 3 decades. Everyone that bought a house in the 1980s or 90s are now millionaires a couple times over. As children of wealthy parents, the natural benefits are going to be passed down to us, if not in the short term through day-to-day subsidies but in the long term future through generational wealth. The real issue with Silicon Valley was the tech boom after 2004, tech companies went from being worth a couple billion to several being worth multiple hundreds of billions. That amount of wealth in a 15 year time frame is really hard for the public infrastructure to keep up with.
• satya71 7y ago
  The ideal way to tax the increase of property value is at a liquidity event (ie sale) when the owner has the cash, and limit the cash required of the owner just because there's a bubble. That's kind of how capital gains on stocks are cashed.
• Starkus 7y ago
  A Californian law that is inefficient and restrictive? No surprise there. California has been extremely fortunate with major economic forces driving their economy for decades, but paired with ineffective governance to this beautiful state, is incredibly disappointing. No pity for CA though, a lot of their voters over the years enabled this
  • d1zzy 7y ago
    But to make some things clear for those that might be reading and aren't familiar with California politics, Prop 13 is not the result of some politicians voting against the public interest or being populist or our out of touch any of those things, it's the result of direct democracy[1]. "The People" thought this is in their best interest, so they are now going to deal with the consequences. [1] https://en.wikipedia.org/wiki/1978_California_Proposition_13 https://en.wikipedia.org/wiki/1978_California_Proposition_13
    • masonic 7y ago
      The Legislature could have changed it with a Legislative Constitutional Amendment at any time. After that, it only needs a simple majority of the voters to take effect.
• jayd16 7y ago
  Its easy to complain but the reality of what your demanding is that many more elderly citizens should be unable to afford their homes and be forced out of them. That's not a preventable side effect, that's the desired outcome. It seems obvious to me why many don't think that's ideal. If opponents of prop 13 want it repealed they're going to have to buy out existing homeowners to get the votes. I won't pretend to know what that would take but you won't get the moral high ground with a straight repeal so you might as think of some sugar coating.
  • yonran 7y ago
    Proposition 13 was advertised to protect the poor and elderly citizens, but its design does not target them. In particular, it benefits those who don’t need help: commercial landlords, rental landlords, and (after Proposition 58/193) feudal estates. And it harms those poor and elderly who are unable to purchase a house. In short, it is an entitlement that benefits homeowners, at the expense of renters and home-seekers. It takes some tautological reasoning to defend its poor design if the goal is protecting lower income households; see the Stevens dissent to Nordlinger v Hahn https://www.law.cornell.edu/supct/html/90-1912.ZD.html https://www.law.cornell.edu/supct/html/90-1912.ZD.html
• Shivetya 7y ago
  well the proposition system is near as many will get to straight up democracy, which comes down to voting everything yourself and people like yourself with occasional as in infrequent guilt trip votes. 13 was part of the problem but it really all comes down to a system by which politicians and special interest groups can simply tie up development until they get their pound of flesh. it simply is too easy to burden new development with requirements and also too easy to nimby it behind well meaning suits that merely mask the bigotry underneath