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There's resistance to change but economics are far more important and explain the consistent opposition across the state. It's not as simple as sell your house

There's resistance to change but economics are far more important and explain the consistent opposition across the state. It's not as simple as sell your house and make a profit, then find something nicer. If your neighbors sell first to the developer of the N-story apartment building it can drop the value of houses around it. Also, buying a house in California resets your property taxes to current property value (a legacy of Prop 13). I suspect it will be hard to solving the housing problem without unwinding Prop 13 and some of the other issues that make it harder for people to sell homes.

dv_dt 7y ago
How does Prop 13 make it hard to sell your home? It only affects the owners property taxes but not the property buyer's. At the time of purchase, there's no delta to the buyers taxes vs a property that was taxed at a full market rate assessment the whole time.
- AnthonyMouse 7y ago
  Affecting the seller's still creates a delta because the seller is also a buyer of wherever they're going to live next. Causing the new place to have much higher property tax than the existing place makes it harder to leave the existing place. And then fewer people do it, even if they e.g. don't need a place that big anymore.
  - dv_dt 7y ago
    That seems like a stretch, it doesn't increase the market price or the tax on the new property that the seller is acquiring, if anything it lets the owner save more money so they have more options to buy.
    - AnthonyMouse 7y ago
      It does increase the tax on the new property that the seller is acquiring, because for a given level of government spending, if the government gets less tax revenue from long-term owners they have to get more from newer owners. It also increases the minimum price the seller is willing to accept for the property, because they won't sell unless the buyer offers enough to compensate them for the higher tax rate they'll have to pay on the new property. It increases the bid/ask spread on long-held properties, so that more often no transaction takes place at all until e.g. the owner dies and the property is sold in an estate sale for less than the owner would have been willing to accept if they were still alive.
      - spoontoeat 7y ago
        I don't think you understand property ownership in CA. This is most definitely not what happens. Also to add to this discussion is the various props and "tax treaties" between counties that allow old homeowners the ability to transfer tax basis from their old property to the new one they're buying. But this is a once or twice in a lifetime deal.
      - dv_dt 7y ago
        No actually prop13 limits both the property tax percentage of market value as well as increase of the tax from year to year.
- rcpt 7y ago
  Lots of detail here: https://www.nber.org/digest/apr05/w11108.html https://www.nber.org/digest/apr05/w11108.html

dv_dt 7y ago

How does Prop 13 make it hard to sell your home? It only affects the owners property taxes but not the property buyer's. At the time of purchase, there's no delta to the buyers taxes vs a property that was taxed at a full market rate assessment the whole time.

AnthonyMouse 7y ago
Affecting the seller's still creates a delta because the seller is also a buyer of wherever they're going to live next. Causing the new place to have much higher property tax than the existing place makes it harder to leave the existing place. And then fewer people do it, even if they e.g. don't need a place that big anymore.
- dv_dt 7y ago
  That seems like a stretch, it doesn't increase the market price or the tax on the new property that the seller is acquiring, if anything it lets the owner save more money so they have more options to buy.
  - AnthonyMouse 7y ago
    It does increase the tax on the new property that the seller is acquiring, because for a given level of government spending, if the government gets less tax revenue from long-term owners they have to get more from newer owners. It also increases the minimum price the seller is willing to accept for the property, because they won't sell unless the buyer offers enough to compensate them for the higher tax rate they'll have to pay on the new property. It increases the bid/ask spread on long-held properties, so that more often no transaction takes place at all until e.g. the owner dies and the property is sold in an estate sale for less than the owner would have been willing to accept if they were still alive.
    - spoontoeat 7y ago
      I don't think you understand property ownership in CA. This is most definitely not what happens. Also to add to this discussion is the various props and "tax treaties" between counties that allow old homeowners the ability to transfer tax basis from their old property to the new one they're buying. But this is a once or twice in a lifetime deal.
    - dv_dt 7y ago
      No actually prop13 limits both the property tax percentage of market value as well as increase of the tax from year to year.
rcpt 7y ago
Lots of detail here: https://www.nber.org/digest/apr05/w11108.html https://www.nber.org/digest/apr05/w11108.html