5 ms·

Ahead of most of this, you probably need to remove or heavily adjust Prop 13. The primary problem, as detailed in the article, is that homeowners have every in

Ahead of most of this, you probably need to remove or heavily adjust Prop 13. The primary problem, as detailed in the article, is that homeowners have every incentive to be against new construction and no incentives to be for it. If property taxes rose appropriately with property values, homeowners would have an interest in maintaining housing prices rather than doing everything they can to keep them rising. There's also a range of beneficial secondary effects. For example, I've talked to retired folks that have considered leaving the bay due to the increased cost of living. But because they have owned their house for decades + P13, if they bought a _cheaper_ house elsewhere in CA to downsize, they'd be paying _more_ in property taxes, to the point of the move not being worth the cost. (I believe there's been talk of transferable tax rates to fix this specific problem, or maybe something was even passed, but it just goes to show the distortions P13 has beyond the obvious). Aligning incentives (where possible) is, imo, almost always a better way to do things than creating a new batch of regulations/laws to deal with a problem.

jdhn 7y ago
>But because they have owned their house for decades + P13, if they bought a _cheaper_ house elsewhere in CA to downsize, they'd be paying _more_ in property taxes, California homeowners who are 55 or older get a one time chance to sell their existing primary residence, and transfer its property tax assessment to another house[0]. Only catch is that the valuation of the new property has to be equal or less than the property that you sold, but if you live in the Bay Area you probably meet that qualification. [0] https://www.sfgate.com/business/networth/article/How-to-transfer-property-tax-from-old-home-to-new-3643095.php https://www.sfgate.com/business/networth/article/How-to-tran...
- hcknwscommenter 7y ago
  "if you live in the Bay Area you probably meet that qualification" Only if you are leaving the Bay Area. Often, these older houses have a lot of deferred maintenance and the retired seller wants to downsize into something in the Bay Area that is newer build/renovated.
  - njarboe 7y ago
    And you can't leave the Bay Area as the transfer has to be in the same county in most cases.
    - fortran77 7y ago
      Correct. There are many people who come on this forum and others specifically to lie about Prop 13. I wonder who they work for? Maybe the teacher's union?
    - masonic 7y ago
      Proposition 5 would have made this fully portable throughout the state and freed up a lot of Bay Area real estate, but it was defeated. https://ballotpedia.org/California_Proposition_5,_Property_Tax_Transfer_Initiative_(2018) https://ballotpedia.org/California_Proposition_5,_Property_T...
bcrosby95 7y ago
I don't know a single long time home owner that is NIMBY because they want their house's value to rise. They're NIMBY because they want their neighborhood to stay the same. > For example, I've talked to retired folks that have considered leaving the bay due to the increased cost of living. But because they have owned their house for decades + P13, if they bought a _cheaper_ house elsewhere in CA to downsize, they'd be paying _more_ in property taxes, to the point of the move not being worth the cost. (I believe there's been talk of transferable tax rates to fix this specific problem, or maybe something was even passed, but it just goes to show the distortions P13 has beyond the obvious). Tax rates are transferable in the same county, under certain restrictions (less expensive I think). Some counties have deals with eachother to transfer tax rates. I think a big benefit would be to have all counties to be able to transfer rates with eachother. Another problem with transferable tax rates is most smaller housing units tend to be condos - and all they build new are 'luxury' condos. Even if you could pay for it outright, and get a transferred tax rate, you probably have an insane HOA attached to it. This alone can make it not worthwhile. But still, I think the best, most realistic way out of the prop 13 mess is to get rid of it for newly bought homes, but allow the transfer rate for downsizing state-wide. And for the love of god, get rid of it from inheritance. Most of these people massively benefiting from it are in their 60s and 70s, so the circle of life will eventually take care of things. If we don't pass something soon the next generation of inheritors will force us to wait another lifetime to fix the problem.
- mlyle 7y ago
  > I don't know a single long time home owner that is NIMBY because they want their house's value to rise. They're NIMBY because they want their neighborhood to stay the same. There's lots of people who move into a neighborhood near a airport, landfill, etc, and who over some time living there decide the airport is a big problem because it's holding property values down.
- deepakhj 7y ago
  Prop 13 would be easy to fix: 1) Limit to primary residence. 2) Charge market rate tax for everyone but for homeowners that want to defer assess it as a lien on the house that is collected once sold. New homeowner tax will drop once tax revenue is more equitable. Make this deferment income based. 3) Remove from commercial property.

jdhn 7y ago

>But because they have owned their house for decades + P13, if they bought a _cheaper_ house elsewhere in CA to downsize, they'd be paying _more_ in property taxes, California homeowners who are 55 or older get a one time chance to sell their existing primary residence, and transfer its property tax assessment to another house[0]. Only catch is that the valuation of the new property has to be equal or less than the property that you sold, but if you live in the Bay Area you probably meet that qualification. [0] https://www.sfgate.com/business/networth/article/How-to-transfer-property-tax-from-old-home-to-new-3643095.php https://www.sfgate.com/business/networth/article/How-to-tran...

hcknwscommenter 7y ago
"if you live in the Bay Area you probably meet that qualification" Only if you are leaving the Bay Area. Often, these older houses have a lot of deferred maintenance and the retired seller wants to downsize into something in the Bay Area that is newer build/renovated.
- njarboe 7y ago
  And you can't leave the Bay Area as the transfer has to be in the same county in most cases.
  - fortran77 7y ago
    Correct. There are many people who come on this forum and others specifically to lie about Prop 13. I wonder who they work for? Maybe the teacher's union?
  - masonic 7y ago
    Proposition 5 would have made this fully portable throughout the state and freed up a lot of Bay Area real estate, but it was defeated. https://ballotpedia.org/California_Proposition_5,_Property_Tax_Transfer_Initiative_(2018) https://ballotpedia.org/California_Proposition_5,_Property_T...

bcrosby95 7y ago

I don't know a single long time home owner that is NIMBY because they want their house's value to rise. They're NIMBY because they want their neighborhood to stay the same. > For example, I've talked to retired folks that have considered leaving the bay due to the increased cost of living. But because they have owned their house for decades + P13, if they bought a _cheaper_ house elsewhere in CA to downsize, they'd be paying _more_ in property taxes, to the point of the move not being worth the cost. (I believe there's been talk of transferable tax rates to fix this specific problem, or maybe something was even passed, but it just goes to show the distortions P13 has beyond the obvious). Tax rates are transferable in the same county, under certain restrictions (less expensive I think). Some counties have deals with eachother to transfer tax rates. I think a big benefit would be to have all counties to be able to transfer rates with eachother. Another problem with transferable tax rates is most smaller housing units tend to be condos - and all they build new are 'luxury' condos. Even if you could pay for it outright, and get a transferred tax rate, you probably have an insane HOA attached to it. This alone can make it not worthwhile. But still, I think the best, most realistic way out of the prop 13 mess is to get rid of it for newly bought homes, but allow the transfer rate for downsizing state-wide. And for the love of god, get rid of it from inheritance. Most of these people massively benefiting from it are in their 60s and 70s, so the circle of life will eventually take care of things. If we don't pass something soon the next generation of inheritors will force us to wait another lifetime to fix the problem.

mlyle 7y ago
> I don't know a single long time home owner that is NIMBY because they want their house's value to rise. They're NIMBY because they want their neighborhood to stay the same. There's lots of people who move into a neighborhood near a airport, landfill, etc, and who over some time living there decide the airport is a big problem because it's holding property values down.
deepakhj 7y ago
Prop 13 would be easy to fix: 1) Limit to primary residence. 2) Charge market rate tax for everyone but for homeowners that want to defer assess it as a lien on the house that is collected once sold. New homeowner tax will drop once tax revenue is more equitable. Make this deferment income based. 3) Remove from commercial property.