4 ms·

No problem. To an outsider like me, this seems like one of the worst features of Prop 13. Over time it separates people into two classes: those whose family ha

by roca 7y ago

No problem. To an outsider like me, this seems like one of the worst features of Prop 13. Over time it separates people into two classes: those whose family has owned property for a long time, and everyone else who can't afford to buy a house because the taxes are prohibitive. (Even if you're very rich, it will make more sense to rent than to trigger tax reevaluation.) Call it neo-feudalism.

majormajor 7y ago
Taxes in CA are far from prohibitive, even with today's prices. The gap between affording something in the first place and being able to cover the tax is not that large. But the base prices are the killer. But that's also largely a factor of mostly high-income people moving in, while mostly lower-income people are moving out. Keep up the business climate that fuels the inward funnel of money, and you'll keep prices high. Even if you reduce restrictions to building supply, you'll have a game theory bit of not lowering prices in any hurry since people can so clearly afford them and are so clearly willing to pay them.
- Gibbon1 7y ago
  My thought on that is prices reflect the ability of people to pay principal, interest, taxes, and maintence. Lower the property tax rate and prices just go up. Difference is taxes go to pay for public goods and services. Principal and interest do not. Prop 13 benefits corporations, long term property owners, and people that inherit property. At the expense of renters, new home buyers, and beneficiaries of public goods and services.
  - rconti 7y ago
    Precisely true. Give a mortgage interest deduction, or lower interest rates? Good news! You can afford more house! _and so can everybody else_
thedance 7y ago
This is not a feature of prop 13. Generational transfers were added in two later propositions, first for parents to children, later for generation-skipping transfers.
BurningFrog 7y ago
...but even this Prop 13 Landed Gentry has a big problem: They have to live in their fabulously high priced and undertaxed home to enjoy the benefits. They can't move to another town or maybe not even take a job in the other side of town.
- triceratops 7y ago
  They actually could, until December 2018. https://en.wikipedia.org/wiki/1978_California_Proposition_13#Proposition_5_(2018)_(defeated_on_November_6,_2018) https://en.wikipedia.org/wiki/1978_California_Proposition_13...

by roca 7y ago

majormajor 7y ago

Taxes in CA are far from prohibitive, even with today's prices. The gap between affording something in the first place and being able to cover the tax is not that large. But the base prices are the killer. But that's also largely a factor of mostly high-income people moving in, while mostly lower-income people are moving out. Keep up the business climate that fuels the inward funnel of money, and you'll keep prices high. Even if you reduce restrictions to building supply, you'll have a game theory bit of not lowering prices in any hurry since people can so clearly afford them and are so clearly willing to pay them.

Gibbon1 7y ago
My thought on that is prices reflect the ability of people to pay principal, interest, taxes, and maintence. Lower the property tax rate and prices just go up. Difference is taxes go to pay for public goods and services. Principal and interest do not. Prop 13 benefits corporations, long term property owners, and people that inherit property. At the expense of renters, new home buyers, and beneficiaries of public goods and services.
- rconti 7y ago
  Precisely true. Give a mortgage interest deduction, or lower interest rates? Good news! You can afford more house! _and so can everybody else_

thedance 7y ago

This is not a feature of prop 13. Generational transfers were added in two later propositions, first for parents to children, later for generation-skipping transfers.

BurningFrog 7y ago

...but even this Prop 13 Landed Gentry has a big problem: They have to live in their fabulously high priced and undertaxed home to enjoy the benefits. They can't move to another town or maybe not even take a job in the other side of town.

triceratops 7y ago
They actually could, until December 2018. https://en.wikipedia.org/wiki/1978_California_Proposition_13#Proposition_5_(2018)_(defeated_on_November_6,_2018) https://en.wikipedia.org/wiki/1978_California_Proposition_13...