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Well the only solution is a ballot initiative to repeal prop 13. That will change things.
by sjg007 7y ago
Well the only solution is a ballot initiative to repeal prop 13. That will change things.
- generalpass 7y ago> Well the only solution is a ballot initiative to repeal prop 13. That will change things. This seems to always be stated as if stating it makes it true. Prop 13 has little to do with high housing prices and a lot to do with getting more revenue for governments. Prices are influenced by supply and demand. The artificial limiting of supply by all of the governments in California is the biggest factor in why the prices are outrageously high.
- fortran77 7y agoExactly right. And every time a property is turned over, the base tax rate gets reset, plus prop 13 allows for a 2% increase every year. California has the highest sales and income tax (for incomes over $500,000) in the Nation. They don't need the highest property tax, too.
- lern_too_spel 7y agoThe reason California has the highest sales and income taxes is that it has the lowest property tax. People who have held property for a very long time are taxed very little relative to how they would be taxed in other states, and people who are new are taxed a lot.
- fortran77 7y agoCalifornia does NOT have the lowest property tax. It is very distasteful for you to try to win an argument by lying. http://www.tax-rates.org/taxtables/property-tax-by-state http://www.tax-rates.org/taxtables/property-tax-by-state And if you rank the states by percentage revenue from property tax, you'll see they are right in the middle https://www.urban.org/policy-centers/cross-center-initiatives/state-and-local-finance-initiative/projects/state-and-local-backgrounders/property-taxes https://www.urban.org/policy-centers/cross-center-initiative...
- AnimalMuppet 7y agoIt is also very distasteful to accuse others of lying. It's about the least charitable assumption you could make, and therefore against the site guidelines. Not everyone who disagrees with you is lying. Not everyone who disagrees with you and is factually wrong is lying. Some repeat what they've heard. Some just lazily assume without doing the research. Some mis-remember. State that they're mistaken. Cite the evidence. But don't claim that they're lying unless you can prove that they are deliberately stating what is false.
- generalpass 7y ago> California does NOT have the lowest property tax. It is very distasteful for you to try to win an argument by lying. (moderators @dang) > http://www.tax-rates.org/taxtables/property-tax-by-state http://www.tax-rates.org/taxtables/property-tax-by-state > And if you rank the states by percentage revenue from property tax, you'll see they are right in the middle > https://www.urban.org/policy-centers/cross-center-initiative.. https://www.urban.org/policy-centers/cross-center-initiative.... Since the California median home price is more than double the national average for median home prices, your two claims seem clearly to not tell the whole story. What prop 13 does is keep tax rates from increasing beyond a very small percentage of the original purchase price. Thus, property values increase by a lot while taxes collected do not. So the first sentence is sort of true. Anecdotal, but a guy on my street purchased his property with no house on it in the 70s and pays like $100 per year even though it is easily worth over a million, which will heavily skew the stats. The second sentence is completely true: > People who have held property for a very long time are taxed very little relative to how they would be taxed in other states, and people who are new are taxed a lot.
- dang 7y ago> It is very distasteful for you to try to win an argument by lying Whoa. Please edit personal swipes out of your comments here. Your comment would be fine without that bit. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- lern_too_spel 7y agoIt is very misleading of you to post aggregate statistics when people who have owned property a long time pay very different property taxes from people who have not, as I stated in my earlier post.
- amunicio 7y ago>> They don't need the highest property tax, too. Prop 13 doesn't change the property tax rate, it changes WHO pays the full "nub" rate and who enjoys a "nobility" rebate. It disincentives home owners from moving, even when their new jobs are far away, increasing commuting time. It also creates a resource allocation imbalance. Folks that are retired and don't benefit so much by living in highly concentrated job areas tend to remain there. Even when younger people who would benefit more from living in these areas would be willing to pay more, providing an incentive for retired owners to move to a less concentrated area and making a profit. But with Prop 13, we have instead a system that artificially distorts the housing market(and not in a "just" or "deserving" way).
- fortran77 7y agoSo a retired person should be forced to move from his little 3 bedroom house because some Googler decided the house next door was worth $3.5MM and his property tax goes up to $75,000/year? That's pure evil. I fully supported SB50. Build. More. Housing.
- amunicio 7y ago>> So a retired person should be forced to move from his little 3 bedroom house because some Googler decided the house next door was worth $3.5MM and his property tax goes up to $75,000/year? That's pure evil. Nope. A retired person should have the CHOICE to pocket the $3.5MM the Googler is ready to pay for his house in Palo Alto and buy an even fancier house in Livermore knowing that his property taxes is not going to substantially change much. But with the present system instead, another Googler, let say the food service employee, will never be able to pay the mortgage for a one room apartment PLUS exorbitant "nub" real state taxes. At least the retired guy has a large amount of equity in the house and choices.
- refurb 7y agoYeah, I feel really sorry for the retired person sitting on millions of dollars of equity. Real sob story. Why not just give the option to defer increases in property taxes? It makes zero sense to give tax breaks to people who won the housing lottery.
- Apocryphon 7y agoHow about repealing Prop 13, and replacing it with a land value tax? https://www.econlib.org/land-taxes-the-return-of-henry-george/ https://www.econlib.org/land-taxes-the-return-of-henry-georg...
- TulliusCicero 7y agoProp 13 has a TON to do with high housing prices, because it eliminates the downside of high housing prices: higher property taxes. Once higher property taxes are out of the picture, higher property values are purely beneficial for homeowners, which means there's every incentive to vote for anti-housing policies to enrich themselves at the expense of transplants and immigrants.
- omgwtfbyobbq 7y agoI wouldn't say it eliminates it. When you buy a property, you still pay taxes on whatever your purchase price is. Prop 13 just mediates the rate of increase, which is beneficial, but not immediately.
- technofiend 7y ago>When you buy a property, you still pay taxes on whatever your purchase price is. And again every year after that, including whatever increase your taxing authority may legally apply, usually the maximum allowed by law unless you actively fight it. Texas has no state income tax and property taxes are (so they tell me) quite high as a result. My property tax is $7k+ each year. Not onerous because I have a full time job, but many of the retirees and landlords in my area did find it onerous enough to sell. Bad for renters because a lot of reasonably priced rental properly was lost, good for the city because a house like mine was torn down and 5-7 condos or townhomes took their place. Now the city is looking at easily 8 or 9 times the tax revenue for a single lot like mine since these new homes also appraise higher than mine. If anything prop 13 represents one extreme and Texas the other. It would be nice if we could meet somewhere in the middle.
- ummonk 7y agoIt isn’t any coincidence that Texas is one of the few places in the US that has experienced large population growth without a corresponding affordability crisis.
- 7y ago
- fortran77 7y agoNo it won't. It would displace even more people. The only way to get lower-cost housing is to build more housing. It's that simple.
- btilly 7y agoYes, it will. One of the problems with housing is that local governments get less revenue from housing than business. That gives them every incentive to approve commercial construction and deny residential. Take away the financial perverse incentive., and there is a lot of money to be made by approving badly needed dense residential housing near existing commercial buildings.
- wahern 7y agoProp 13 also applies to commercial real estate. The difference is that commercial properties require fewer public services, so costs are less. But the real difference is that there's usually much less NIMBY opposition to changes in commercial zoning than residential. Talk is cheap. What matters is who shows up to zoning board meetings. People tend to only show up when it effects their neighborhood, not so much when it effects the business district a mile down the road. Likewise for voting preferences. Rescinding Prop 13 is unlikely to change anything because assessed values will be even more if developers can build bigger, multifamily dwellings in the neighborhood. So, yes, taxes would go up, but the local pressure to restrict zoning won't change as the incentives still line up the same way relatively.
- omgwtfbyobbq 7y agoRepealing prop 13 might help a little, but it's a weaker driver than recessions and interest rates. https://fred.stlouisfed.org/series/CASTHPI https://fred.stlouisfed.org/series/CASTHPI https://fred.stlouisfed.org/series/JHDUSRGDPBR https://fred.stlouisfed.org/series/JHDUSRGDPBR https://fred.stlouisfed.org/series/MORTGAGE30US https://fred.stlouisfed.org/series/MORTGAGE30US
- kec 7y agoHow do those graphs support this claim?
- omgwtfbyobbq 7y agoIt supports them because the inflation adjusted difference in monthly payments correlates very well with the 30 year mortgage rate. As interest rates fall, home values appreciate based on how much of a monthly payment someone can afford, less the effect of recessions and including other things like prop 13. Take Q1 of 1995 for instance. The inflation adjusted home value at that time was ~340, and the interest rate was 9%. In that case, a $340k home would have a $2.7k monthly payment. A $680k home today with interest rates at 3.75% today would have a $3.1k monthly payment, and I believe that most of it's appreciation is because of low interest rates. If housing prices were driven by prop 13, then when interest rates go up, housing prices should stay the same. If housing prices depend on mortgage rates, then they should decrease over time as interest rates increase.
- jnordwick 7y agoProp 13 was created because it was forcing people out of their houses because of inflation property values on paper. That is detrimental. You shouldn't scrap it completely; you should limit it to primary residences (spend more than half the year there). That would get rid of some of the worse issues. It shocks me every time I hear fellow left-of-center people talk about scrapping Prop 13, but then also rail against gentrification or some other issues. Absent Prop 13, people would literally be forced from their homes from high taxes. Prop 13 was a response to the inflation of the 1970s that drove asset and investment prices higher.
- rcpt 7y agoLimit to primary residence and cap the increase at 10% instead of 2% (I think Michigan does this) might be okay. Low income seniors have https://www.sco.ca.gov/ardtax_prop_tax_postponement.html https://www.sco.ca.gov/ardtax_prop_tax_postponement.html so Prop 13 is wholly unnecessary for them.
- refurb 7y agoJesus Christ. I didn’t know CA already had that law. As you said Prop 13 is absolutely not required. That law basically says if you can’t afford the increases, we’ll bank it. If you can, pay up.
- jnordwick 7y agoThat isn't nearly enough. It only applies to 65+ or with disability who make $35k or less. This is part of the problem is that people are unwilling to compromise. On one side you have those who view even the risk of a single person being displaced by gentrification and rising housing prices as unacceptable. On the other side you have those will accept nothing less than displacing everything. I make enough that I don't care, and I don't really want to live in CA long term (from NYC). But I think a primary residence carve-out that applies to everybody would be a good compromise, but that seems to be a dirty word in CA politics.
- 7y ago
- usaar333 7y agoWhat will be the actual process by which things change? It's not obvious to me that say rents will drop if prop 13 is repealed.