26 ms·

> The extremely backwards property tax policies that favor existing landowners over anyone new, young, poor (though this admittedly is California's problem, not

> The extremely backwards property tax policies that favor existing landowners over anyone new, young, poor (though this admittedly is California's problem, not just one city or county) and make everything else attempted bandaids -- and misguided bandaids, at that -- to fix the system. It's bizarre how much Prop 13 appeals to folks, even those who don't benefit from it. When you explain it to people, their initial reaction is to express worry about the millionaires who own the houses that have quintupled in value, as though they are in need of protection. I hope someone eventually finds the right sales pitch to get rid of it: the policy distorts not only price but liquidity.

zepto 6y ago
> It's bizarre how much Prop 13 appeals to folks, even those who don't benefit from it. It should appeals to anyone who buys a house at any age. Without Prop 13, home owners tax rates rise just because nearby businesses are successful, which is absurdly regressive. Prop 13 appeals to and benefits people who don’t own real-estate yet, because it means that when they can do so, they know that their costs will be predictable, and they won’t be forced out of their homes by the next wave of IPOs or whatever else beyond their control (such as government money printing) pushes prices up.
- caturopath 6y ago
  Property tax rates rise WHEN YOU HAVE MADE MONEY ON THE HOUSE. It's as simple as that. If you don't want to pay them, sell the house for a huge profit and leave. If you do want to pay your fair share and continue to live there, take out a second mortgage. We're talking about millionaires, not vulnerable victims.
  - zepto 6y ago
    > Property tax rates rise WHEN YOU HAVE MADE MONEY ON THE HOUSE. It's as simple as that. That’s not how property taxes work. You pay them whether you make money on the house or not. You only make money on a house when you sell it. > We're talking about millionaires, not vulnerable victims. This makes no sense. Buying or owning a house doesn’t make you a millionaire. Most people take out large loans to do so, and generally their net worth goes down at the point when they do so because of the costs. Purchase prices may go up, but they also go down when the economy weakens.
    - caturopath 6y ago
      I don't know why you think value doesn't exist until a transaction. Nonetheless, people are welcome to contest the price if it's wrong and they're welcome to sell the house and leave if they don't want to pay the tax. They're actually welcome to stay and have a lien on their house: if you're living there you aren't going to have it taken away for a property tax lien. (If they will where you are, they can fix that in the same bill that repeals property tax distortions.) > Buying or owning a house doesn’t make you a millionaire. I'm focusing on the millions of houses in California that have went up in value by huge amounts since the last market snapshot for the tax basis whose owners are millionaires.
      - pwg 6y ago
        > if you're living there you aren't going to have it taken away for a property tax lien. I don't know if that is true for CA, but in some localities, you most certainly will, eventually, be evicted from your own property for a property tax lien. It will take quite some time for the court case to wind its way to completion, but eventually the Sheriff will show up one day with an eviction notice and forcibly remove you from the property.
      - zepto 6y ago
        > I don't know why you think value doesn't exist until a transaction. Value is determined by what the market actually pays, not by someone’s model of what it would pay. That isn’t the value - that is an estimate of what someone would receive if and only if they sell at that moment. Contesting an estimate doesn’t change that. Whenever prices fall, do you propose paying cash to homeowners to reimburse them for all of the overpaid taxes? Forcing someone to take a loan on a volatile asset that they can’t sell without losing their home is a brutal policy. > I'm focusing on the millions of houses in California that have went up in value by huge amounts since the last market snapshot for the tax basis whose owners are millionaires. Ok - so you just don’t care how many other people get hurt or displaced as long as you get to take money from some millionaires?
        deleted 6y ago
        [deleted]
  - 8ytecoder 6y ago
    At a tax rate of 1.3% the jump in monthly taxes for a house valued at 400k to 1.2M is about $433 to $1300. It's not nothing but it's also backed by a house that's now worth $800,000 more - allowing them to take a second mortgage or a HELOC. In no way am I dismissing the concerns here. It probably affects some people more than others and we can talk about specific targeted exclusions. Right now, even the proposal to eliminate this for commercial buildings was rejected. Like rent control, this is indiscriminate welfare. Qualified welfare reaches the people who need it the most.
    - gowld 6y ago
      "qualified welfare" doesn't reach people who can't navigate the bureaucracy.
      - caturopath 6y ago
        Aiming it at the people who have made lots of money is the worst of all worlds.
        zepto 6y ago
        Prop 13 benefits everyone who owns property. It is not aimed at people who have made lots of money.
        caturopath 6y ago
        Only in the sense that food stamps benefit everyone with kids and medicaid benefits everyone with a body. Is that what you mean, you're valuing prop 13 as a potentially-out-of-the-money option / a safetynet? The people who are actually receiving the value of the benefit for prop 13 are those who have made lots of money on their house -- the more money they've made, the more benefit they get.
        zepto 6y ago
        My point is that just from the outset, property taxes are a tax that transfers wealth from those who own property to those who do not. All property taxes are always a transfer from property owners to everyone else. Prop 13 or no Prop 13 this is true. So then when we’re talking about Prop 13, we are talking about a putative transfer only between property owners - long-standing vs recent. When I say that it’s also not a transfer, what I mean is that anyone who holds property will end up with the same relative gain over time. This of course assumes that prices continue to rise. If they don’t then these schemes to tax people on unrealized gains fail too.
  - hindsightbias 6y ago
    Millions of Californians are millionaires on paper because they bought their house 30 years ago and held onto it. Millions of them are also retired or on SS and if they had to pay market value property taxes they would be not be able to. Take a huge profit and leave, for where? You've lived somewhere most of your life and should be kicked to Stockton? For some reason I hear Tom Selleck's voice talking about reverse mortgages. There's a winner for public policy.
    - caturopath 6y ago
      They would have options like 1. Move 2. Take out a loan 3. Take in a boarder 4. Refuse to pay and know they will not be evicted for their lien (this could be codified statewide if this were the real problem) I don't know why anyone would think that poorer, less-established people should be paying for these millionaires to stay there.
      - zepto 6y ago
        > I don't know why anyone would think that poorer, less-established people should be paying for these millionaires to stay there. I don’t know why anyone would think that they are.
      - hindsightbias 6y ago
        The median valuation in Stockton would be $350K. Your poorer 1/3rd millionaires will be screwed also. Which is pretty much everyone in CA who has owned for 10 years. I guess they can all move to trailer parks in the Mojave and make way for the real millionaires.
      - souprock 6y ago
        My "millionaire" grandma in the middle of San Francisco would literally die from those options. She is fragile due to age. Her house is familiar to her. Familiarity reduces stress, confusion, and accidents. She is close to family. She will die soon enough. You can wait. Better yet, you can do what she did many decades ago. Get a house built on undesirable land, then be part of a community that makes the value go up. The home you now covet is only valuable because of people like her. Nothing stops you from doing likewise. Pick some crummy land out in Mississippi or West Virginia and create a community.
  - majormajor 6y ago
    > Property tax rates rise WHEN YOU HAVE MADE MONEY ON THE HOUSE. That's not true. You have only made money on the house when you sell it. Should we force people to sell their own houses because other people have more money than them? I don't think "if you have enough money you can push others out" is great policy.
- jdxcode 6y ago
  I literally pay 10x as much tax as my next door neighbor in a house with the same value. The schools need to be funded and the cost should be shared far more equally.
  - zepto 6y ago
    > The schools need to be funded and the cost should be shared far more equally. You’ll get no argument for me on that one. Property taxes are an absolutely terrible way to fund local government. Other countries don’t do it that way, and there is no reason we should. England for example just has a flat tax per person living in a given county or borough, with some exemptions for people who don’t have enough income. Income taxes, sales taxes and business taxes are of course other possibilities. Taxing economic activity on the basis that a well serviced community supports that activity is very reasonable.
    - caturopath 6y ago
      Taxing wealth -- albeit in this limited form -- is fairly attractive, and especially the taxation of land (rather than improvements) is. (We should be incentivizing folks to make efficient use of land.)
      - zepto 6y ago
        > We should be incentivizing folks to make efficient use of land. Yes - why don’t we invest in places where house prices are lower? Stockton keeps being mentioned. The incentives are for people to live there and for businesses to set up offices there, and amenities to be created for the people who live and work there. Why would you be against developing areas that are not as nice right now?
        paconbork 6y ago
        >The incentives are for people to live there and for businesses to set up offices there Clearly not, otherwise people would move there. As it turns out, network effects exist, causing jobs to be near each other and for some reason people like to be close to their jobs rather than commuting 90 minutes from Stockton. >Why would you be against developing areas that are not as nice right now? These aren't mutually exclusive and you know that.
- lokar 6y ago
  IMO it is best to view conflicts like this in terms of trying to provide a benefit to some people, and how to pay for it. Prop 13 is promoted as helping people of modest means (lower income, or retired) who see the value of their property go way up, thus imposing an unaffordable tax burden and forcing them to sell and move. The cost of this benefit is currently (AIUI), higher income taxes generally, and particularly on high earners, as well as higher sales tax. If you look at state and local revenue over time you will see a shift away from property tax and towards these other taxes. The thing to focus on is that the total amount of state revenue is going to end up about the same, laws like this just shift who pays it.
  - caturopath 6y ago
    Equity is not the only concern, though Prop 13 is certainly a transfer of wealth too established, richer people from poorer, less-established ones. Prop 13 also incentivizes people _not to move_. This adds friction to an already high-friction market: people are disincentivized to upsize/downsize, move closer to work, etc., which harms the market beyond just the fact that it's an inequitable wealth transfer.
    - zepto 6y ago
      And yet California has a buoyant real estate market. It’s not an inequitable wealth transfer. Only people who own property pay these taxes, and all property owners benefit from Prop 13.
- throwaway6734 6y ago
  >Without Prop 13, home owners tax rates rise just because nearby businesses are successful, which is absurdly regressive. Because the value of the asset they own has increased. Prop 13 discourages people from moving and unfairly shifts the tax burden on new residents
  - zepto 6y ago
    > Because the value of the asset they own has increased. Ok, so do you propose giving cash payments to home owners whenever there is a dip in their property price? Also, what’s wrong with being able to call a place home and be able to live there without being driven out? Seems like a human right since we first moved into caves.
    - strange_quark 6y ago
      Property taxes aren't like income taxes -- the tax rate is incredibly variable and set at at the local level when cities make their budgets. So if the city doesn't need more revenue, the tax rate can just be adjusted down to keep property tax payments the same. But if the city does need more revenue, hopefully it's because more public services are being provided, in which case, it's entirely fair that the people who live there and benefit from the increased services pay for them.
      - zepto 6y ago
        This doesn’t actually address anything in my comment. It sounds like you are saying tax rates should have nothing to do with home values and should just be arbitrarily adjusted to make property owners pay for whatever the local government wants.
    - throwaway6734 6y ago
      Why would they get more money when the price dips? Property tax rates should be fair to all property owners, not favor those that got in first which is what prop13 does. >Also, what’s wrong with being able to call a place home and be able to live there without being driven out? Nothing, just don't make others pay for it. Prop13 has created a distorted housing market that hurts many more people than it helps
- pbuzbee 6y ago
  I feel that the solution to the issue you raise is to reform property tax in CA, not to stick with Prop 13. Prop 13 definitely doesn't benefit people who don't own real estate because property owners have an incentive not to sell: they can keep their lower tax rate and their expensive home! This restricts supply and raises property prices.
  - zepto 6y ago
    Property prices in CA have risen because salaries and IPOs have enabled people to compete for property. Property owners should be able to keep an affordable tax and their home, regardless of what their home cost. Raising property taxes based on market values, is taxing people based on how much other people want their homes. I agree that property taxes should be reformed. Let’s not make houses even more risky and expensive to own. Instead, let’s fund public services in other ways, so school quality isn’t dependent on the average income bracket of the neighborhood, for example.
    - tqi 6y ago
      Property owners are also artificially inflating their own home values by blocking any and all attempts to build more houses.
      - zepto 6y ago
        That’s not typically how the relationship between building and home values works over time. Places where density increases also see increases in prices for existing homeowners. But sure - Prop 13 and new building are separate issues.
        tqi 6y ago
        Home owners definitely believe that proximity to multitenant housing lowers property values, and vote accordingly (whether that is actually the case is up for debate, but also less relevant to voting behavior than perception). [1] page 4: https://www.jchs.harvard.edu/sites/default/files/rr07-14_obrinsky_stein.pdf https://www.jchs.harvard.edu/sites/default/files/rr07-14_obr...
- vladgur 6y ago
  With prop 13, the burden of paying for infrastructure and services provided to you and your neighbors falls to new generation of owners who pay 5 times in property taxes than their neighbors. This is unfair and is absurdly regressive. Most other states regularly reassess the property of your home for taxation purposes and many have mechanisms to reduce tax liability of people living in their homes(vs renting them out) or seniors. In california however due to prop 13, both the state and the city are forced to find different ways to pay for their costs, such as raising sales tax(which went up significantly since passing of prop 13 in 1978) or passing local bond measures to pay for schools, sewage etc. The only people who win are those who won a lottery of being able to afford a home in CA 10/20/30 years ago.
  - zepto 6y ago
    > With prop 13, the burden of paying for infrastructure and services provided to you and your neighbors falls to new generation of owners who pay 5 times in property taxes than their neighbors. At first yes, but over time you become one of the people who pays relatively less compared to new buyers. Nobody won a lottery 10 , 20 or 30 years ago. If you buy a home today, then in 10, 20, 30 years time people will be saying you won the lottery.
    - rcpt 6y ago
      > At first yes, but over time you become one of the people who pays relatively less compared to new buyers. So we should all be looking forward to the Utopia where dumpy old single family homes are selling for checks notes $15M.
      - zepto 6y ago
        I mean, you must be aware that will eventually happen because of inflation.
        imtringued 6y ago
        After 35 years, assuming 2% inflation.
- dragonwriter 6y ago
  > Without Prop 13, home owners tax rates rise just because nearby businesses are successful, which is absurdly regressive. No, they don't. The tax bill rises, the tax rate does not. > Prop 13 appeals to and benefits people who don’t own real-estate yet, because it means that when they can do so, they know that their costs will be predictable It doesn't, though. First of all, because it makes it less likely that they will be able to (not just because of what it does to buy v. rent pricing, but also because it pushes needs that would be paid out of real estate taxes into other taxes, which means people who don't own property are less likely to be able to say to buy property, since they are paying extra other taxes to subsidized ultralow property taxes for property owners (Prop. 13, in addition to it's restrictions on assessed value increases, also limits California’s nominal maximum property tax rate to well below the national average property tax rate.) But even if they manage to get to own real estate, it doesn't do anything to guarantee greater predictability overall, just greater predictability of the taxes associated with ownership. The financing gap it creates is closed through factors which change over time and to which homeowners are exposed.
jjav 6y ago
> express worry about the millionaires who own the houses You don't become a millionaire just because the paper value estimate of your house becomes larger. A low-income person who scraped by to buy a modest home in a cheap area doesn't become any less low-income just because suddenly the demographics change and rich people move in. Forcing them out of their home where they have built their life just so one more rich newcomer can get in, is not fair. For example, East Palo Alto.
- imtringued 6y ago
  If the neighborhood refuses to change, then the people inside it will have to change, even if that means leaving the neighborhood.
rcpt 6y ago
> I hope someone eventually finds the right sales pitch to get rid of it It's racist. Prop 13 enshrines discrimination of the past into today's tax law. White families have lower tax rates: https://twitter.com/alfred_twu/status/1327821019931787264?s=21 https://twitter.com/alfred_twu/status/1327821019931787264?s=...

zepto 6y ago

> It's bizarre how much Prop 13 appeals to folks, even those who don't benefit from it. It should appeals to anyone who buys a house at any age. Without Prop 13, home owners tax rates rise just because nearby businesses are successful, which is absurdly regressive. Prop 13 appeals to and benefits people who don’t own real-estate yet, because it means that when they can do so, they know that their costs will be predictable, and they won’t be forced out of their homes by the next wave of IPOs or whatever else beyond their control (such as government money printing) pushes prices up.

caturopath 6y ago
Property tax rates rise WHEN YOU HAVE MADE MONEY ON THE HOUSE. It's as simple as that. If you don't want to pay them, sell the house for a huge profit and leave. If you do want to pay your fair share and continue to live there, take out a second mortgage. We're talking about millionaires, not vulnerable victims.
- zepto 6y ago
  > Property tax rates rise WHEN YOU HAVE MADE MONEY ON THE HOUSE. It's as simple as that. That’s not how property taxes work. You pay them whether you make money on the house or not. You only make money on a house when you sell it. > We're talking about millionaires, not vulnerable victims. This makes no sense. Buying or owning a house doesn’t make you a millionaire. Most people take out large loans to do so, and generally their net worth goes down at the point when they do so because of the costs. Purchase prices may go up, but they also go down when the economy weakens.
  - caturopath 6y ago
    I don't know why you think value doesn't exist until a transaction. Nonetheless, people are welcome to contest the price if it's wrong and they're welcome to sell the house and leave if they don't want to pay the tax. They're actually welcome to stay and have a lien on their house: if you're living there you aren't going to have it taken away for a property tax lien. (If they will where you are, they can fix that in the same bill that repeals property tax distortions.) > Buying or owning a house doesn’t make you a millionaire. I'm focusing on the millions of houses in California that have went up in value by huge amounts since the last market snapshot for the tax basis whose owners are millionaires.
    - pwg 6y ago
      > if you're living there you aren't going to have it taken away for a property tax lien. I don't know if that is true for CA, but in some localities, you most certainly will, eventually, be evicted from your own property for a property tax lien. It will take quite some time for the court case to wind its way to completion, but eventually the Sheriff will show up one day with an eviction notice and forcibly remove you from the property.
    - zepto 6y ago
      > I don't know why you think value doesn't exist until a transaction. Value is determined by what the market actually pays, not by someone’s model of what it would pay. That isn’t the value - that is an estimate of what someone would receive if and only if they sell at that moment. Contesting an estimate doesn’t change that. Whenever prices fall, do you propose paying cash to homeowners to reimburse them for all of the overpaid taxes? Forcing someone to take a loan on a volatile asset that they can’t sell without losing their home is a brutal policy. > I'm focusing on the millions of houses in California that have went up in value by huge amounts since the last market snapshot for the tax basis whose owners are millionaires. Ok - so you just don’t care how many other people get hurt or displaced as long as you get to take money from some millionaires?
      - deleted 6y ago
        [deleted]
- 8ytecoder 6y ago
  At a tax rate of 1.3% the jump in monthly taxes for a house valued at 400k to 1.2M is about $433 to $1300. It's not nothing but it's also backed by a house that's now worth $800,000 more - allowing them to take a second mortgage or a HELOC. In no way am I dismissing the concerns here. It probably affects some people more than others and we can talk about specific targeted exclusions. Right now, even the proposal to eliminate this for commercial buildings was rejected. Like rent control, this is indiscriminate welfare. Qualified welfare reaches the people who need it the most.
  - gowld 6y ago
    "qualified welfare" doesn't reach people who can't navigate the bureaucracy.
    - caturopath 6y ago
      Aiming it at the people who have made lots of money is the worst of all worlds.
      - zepto 6y ago
        Prop 13 benefits everyone who owns property. It is not aimed at people who have made lots of money.
        caturopath 6y ago
        Only in the sense that food stamps benefit everyone with kids and medicaid benefits everyone with a body. Is that what you mean, you're valuing prop 13 as a potentially-out-of-the-money option / a safetynet? The people who are actually receiving the value of the benefit for prop 13 are those who have made lots of money on their house -- the more money they've made, the more benefit they get.
        zepto 6y ago
        My point is that just from the outset, property taxes are a tax that transfers wealth from those who own property to those who do not. All property taxes are always a transfer from property owners to everyone else. Prop 13 or no Prop 13 this is true. So then when we’re talking about Prop 13, we are talking about a putative transfer only between property owners - long-standing vs recent. When I say that it’s also not a transfer, what I mean is that anyone who holds property will end up with the same relative gain over time. This of course assumes that prices continue to rise. If they don’t then these schemes to tax people on unrealized gains fail too.
- hindsightbias 6y ago
  Millions of Californians are millionaires on paper because they bought their house 30 years ago and held onto it. Millions of them are also retired or on SS and if they had to pay market value property taxes they would be not be able to. Take a huge profit and leave, for where? You've lived somewhere most of your life and should be kicked to Stockton? For some reason I hear Tom Selleck's voice talking about reverse mortgages. There's a winner for public policy.
  - caturopath 6y ago
    They would have options like 1. Move 2. Take out a loan 3. Take in a boarder 4. Refuse to pay and know they will not be evicted for their lien (this could be codified statewide if this were the real problem) I don't know why anyone would think that poorer, less-established people should be paying for these millionaires to stay there.
    - zepto 6y ago
      > I don't know why anyone would think that poorer, less-established people should be paying for these millionaires to stay there. I don’t know why anyone would think that they are.
    - hindsightbias 6y ago
      The median valuation in Stockton would be $350K. Your poorer 1/3rd millionaires will be screwed also. Which is pretty much everyone in CA who has owned for 10 years. I guess they can all move to trailer parks in the Mojave and make way for the real millionaires.
    - souprock 6y ago
      My "millionaire" grandma in the middle of San Francisco would literally die from those options. She is fragile due to age. Her house is familiar to her. Familiarity reduces stress, confusion, and accidents. She is close to family. She will die soon enough. You can wait. Better yet, you can do what she did many decades ago. Get a house built on undesirable land, then be part of a community that makes the value go up. The home you now covet is only valuable because of people like her. Nothing stops you from doing likewise. Pick some crummy land out in Mississippi or West Virginia and create a community.
- majormajor 6y ago
  > Property tax rates rise WHEN YOU HAVE MADE MONEY ON THE HOUSE. That's not true. You have only made money on the house when you sell it. Should we force people to sell their own houses because other people have more money than them? I don't think "if you have enough money you can push others out" is great policy.
jdxcode 6y ago
I literally pay 10x as much tax as my next door neighbor in a house with the same value. The schools need to be funded and the cost should be shared far more equally.
- zepto 6y ago
  > The schools need to be funded and the cost should be shared far more equally. You’ll get no argument for me on that one. Property taxes are an absolutely terrible way to fund local government. Other countries don’t do it that way, and there is no reason we should. England for example just has a flat tax per person living in a given county or borough, with some exemptions for people who don’t have enough income. Income taxes, sales taxes and business taxes are of course other possibilities. Taxing economic activity on the basis that a well serviced community supports that activity is very reasonable.
  - caturopath 6y ago
    Taxing wealth -- albeit in this limited form -- is fairly attractive, and especially the taxation of land (rather than improvements) is. (We should be incentivizing folks to make efficient use of land.)
    - zepto 6y ago
      > We should be incentivizing folks to make efficient use of land. Yes - why don’t we invest in places where house prices are lower? Stockton keeps being mentioned. The incentives are for people to live there and for businesses to set up offices there, and amenities to be created for the people who live and work there. Why would you be against developing areas that are not as nice right now?
      - paconbork 6y ago
        >The incentives are for people to live there and for businesses to set up offices there Clearly not, otherwise people would move there. As it turns out, network effects exist, causing jobs to be near each other and for some reason people like to be close to their jobs rather than commuting 90 minutes from Stockton. >Why would you be against developing areas that are not as nice right now? These aren't mutually exclusive and you know that.
lokar 6y ago
IMO it is best to view conflicts like this in terms of trying to provide a benefit to some people, and how to pay for it. Prop 13 is promoted as helping people of modest means (lower income, or retired) who see the value of their property go way up, thus imposing an unaffordable tax burden and forcing them to sell and move. The cost of this benefit is currently (AIUI), higher income taxes generally, and particularly on high earners, as well as higher sales tax. If you look at state and local revenue over time you will see a shift away from property tax and towards these other taxes. The thing to focus on is that the total amount of state revenue is going to end up about the same, laws like this just shift who pays it.
- caturopath 6y ago
  Equity is not the only concern, though Prop 13 is certainly a transfer of wealth too established, richer people from poorer, less-established ones. Prop 13 also incentivizes people _not to move_. This adds friction to an already high-friction market: people are disincentivized to upsize/downsize, move closer to work, etc., which harms the market beyond just the fact that it's an inequitable wealth transfer.
  - zepto 6y ago
    And yet California has a buoyant real estate market. It’s not an inequitable wealth transfer. Only people who own property pay these taxes, and all property owners benefit from Prop 13.
throwaway6734 6y ago
>Without Prop 13, home owners tax rates rise just because nearby businesses are successful, which is absurdly regressive. Because the value of the asset they own has increased. Prop 13 discourages people from moving and unfairly shifts the tax burden on new residents
- zepto 6y ago
  > Because the value of the asset they own has increased. Ok, so do you propose giving cash payments to home owners whenever there is a dip in their property price? Also, what’s wrong with being able to call a place home and be able to live there without being driven out? Seems like a human right since we first moved into caves.
  - strange_quark 6y ago
    Property taxes aren't like income taxes -- the tax rate is incredibly variable and set at at the local level when cities make their budgets. So if the city doesn't need more revenue, the tax rate can just be adjusted down to keep property tax payments the same. But if the city does need more revenue, hopefully it's because more public services are being provided, in which case, it's entirely fair that the people who live there and benefit from the increased services pay for them.
    - zepto 6y ago
      This doesn’t actually address anything in my comment. It sounds like you are saying tax rates should have nothing to do with home values and should just be arbitrarily adjusted to make property owners pay for whatever the local government wants.
  - throwaway6734 6y ago
    Why would they get more money when the price dips? Property tax rates should be fair to all property owners, not favor those that got in first which is what prop13 does. >Also, what’s wrong with being able to call a place home and be able to live there without being driven out? Nothing, just don't make others pay for it. Prop13 has created a distorted housing market that hurts many more people than it helps
pbuzbee 6y ago
I feel that the solution to the issue you raise is to reform property tax in CA, not to stick with Prop 13. Prop 13 definitely doesn't benefit people who don't own real estate because property owners have an incentive not to sell: they can keep their lower tax rate and their expensive home! This restricts supply and raises property prices.
- zepto 6y ago
  Property prices in CA have risen because salaries and IPOs have enabled people to compete for property. Property owners should be able to keep an affordable tax and their home, regardless of what their home cost. Raising property taxes based on market values, is taxing people based on how much other people want their homes. I agree that property taxes should be reformed. Let’s not make houses even more risky and expensive to own. Instead, let’s fund public services in other ways, so school quality isn’t dependent on the average income bracket of the neighborhood, for example.
  - tqi 6y ago
    Property owners are also artificially inflating their own home values by blocking any and all attempts to build more houses.
    - zepto 6y ago
      That’s not typically how the relationship between building and home values works over time. Places where density increases also see increases in prices for existing homeowners. But sure - Prop 13 and new building are separate issues.
      - tqi 6y ago
        Home owners definitely believe that proximity to multitenant housing lowers property values, and vote accordingly (whether that is actually the case is up for debate, but also less relevant to voting behavior than perception). [1] page 4: https://www.jchs.harvard.edu/sites/default/files/rr07-14_obrinsky_stein.pdf https://www.jchs.harvard.edu/sites/default/files/rr07-14_obr...
vladgur 6y ago
With prop 13, the burden of paying for infrastructure and services provided to you and your neighbors falls to new generation of owners who pay 5 times in property taxes than their neighbors. This is unfair and is absurdly regressive. Most other states regularly reassess the property of your home for taxation purposes and many have mechanisms to reduce tax liability of people living in their homes(vs renting them out) or seniors. In california however due to prop 13, both the state and the city are forced to find different ways to pay for their costs, such as raising sales tax(which went up significantly since passing of prop 13 in 1978) or passing local bond measures to pay for schools, sewage etc. The only people who win are those who won a lottery of being able to afford a home in CA 10/20/30 years ago.
- zepto 6y ago
  > With prop 13, the burden of paying for infrastructure and services provided to you and your neighbors falls to new generation of owners who pay 5 times in property taxes than their neighbors. At first yes, but over time you become one of the people who pays relatively less compared to new buyers. Nobody won a lottery 10 , 20 or 30 years ago. If you buy a home today, then in 10, 20, 30 years time people will be saying you won the lottery.
  - rcpt 6y ago
    > At first yes, but over time you become one of the people who pays relatively less compared to new buyers. So we should all be looking forward to the Utopia where dumpy old single family homes are selling for checks notes $15M.
    - zepto 6y ago
      I mean, you must be aware that will eventually happen because of inflation.
      - imtringued 6y ago
        After 35 years, assuming 2% inflation.
dragonwriter 6y ago
> Without Prop 13, home owners tax rates rise just because nearby businesses are successful, which is absurdly regressive. No, they don't. The tax bill rises, the tax rate does not. > Prop 13 appeals to and benefits people who don’t own real-estate yet, because it means that when they can do so, they know that their costs will be predictable It doesn't, though. First of all, because it makes it less likely that they will be able to (not just because of what it does to buy v. rent pricing, but also because it pushes needs that would be paid out of real estate taxes into other taxes, which means people who don't own property are less likely to be able to say to buy property, since they are paying extra other taxes to subsidized ultralow property taxes for property owners (Prop. 13, in addition to it's restrictions on assessed value increases, also limits California’s nominal maximum property tax rate to well below the national average property tax rate.) But even if they manage to get to own real estate, it doesn't do anything to guarantee greater predictability overall, just greater predictability of the taxes associated with ownership. The financing gap it creates is closed through factors which change over time and to which homeowners are exposed.

jjav 6y ago

> express worry about the millionaires who own the houses You don't become a millionaire just because the paper value estimate of your house becomes larger. A low-income person who scraped by to buy a modest home in a cheap area doesn't become any less low-income just because suddenly the demographics change and rich people move in. Forcing them out of their home where they have built their life just so one more rich newcomer can get in, is not fair. For example, East Palo Alto.

imtringued 6y ago
If the neighborhood refuses to change, then the people inside it will have to change, even if that means leaving the neighborhood.

rcpt 6y ago

> I hope someone eventually finds the right sales pitch to get rid of it It's racist. Prop 13 enshrines discrimination of the past into today's tax law. White families have lower tax rates: https://twitter.com/alfred_twu/status/1327821019931787264?s=21 https://twitter.com/alfred_twu/status/1327821019931787264?s=...