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That seems like a terribly inefficient way of achieving exclusivity, if that’s the goal. If the neighborhood is indeed more desirable, wouldn’t the higher value

by qzw 6y ago

That seems like a terribly inefficient way of achieving exclusivity, if that’s the goal. If the neighborhood is indeed more desirable, wouldn’t the higher value of the houses themselves (which would also result in higher prop taxes anyway) serve the same function? In fact, the artificially high property tax must have a depressive effect on the house values in that neighborhood. I can’t think of why relatively well off people would voluntarily move into such a neighborhood. If anything, the high tax rate sounds punitive toward those who live there.

deleted 6y ago
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Dracophoenix 6y ago
>>That seems like a terribly inefficient way of achieving exclusivity, if that’s the goal. It's not a goal, it's a secondary consequence that happens often enough to be commented upon. >>If the neighborhood is indeed more desirable, wouldn’t the higher value of the houses themselves (which would also result in higher prop taxes anyway) serve the same function? Yes and no. Some people can save enough money to purchase a house from a middle class job or making it big in short-term/seasonal high-risk, high-reward activities (e.g. professional gambling, oil drilling, undersea welding, etc.) if there is only a large (but not untenable) one-time cost. However a property tax is a subscription fee on the basis of an invented metric that is as elastic as what the tax assessor can get away with. Paying thousands of dollars every year for the "privilege" of living in your own property would make doing the kinds of jobs that were adequate for purchaser, insufficient or unsustainable for a resident. The result, at best, is being house rich and cash poor. >>In fact, the artificially high property tax must have a depressive effect on the house values in that neighborhood. Sometimes they do, sometimes they don't. High property taxes can be seen as a form of economic signaling in areas like Manhattan or Beverly Hills. They can also be a result of local politics run amok. The former creates self-sustaining bubbles that will take a long time to (but will eventually) burst. The second will cause residential flight to lower cost areas as is currently happening with San Franciscans moving to Austin at first sight of a downturn. >>I can’t think of why relatively well off people would voluntarily move into such a neighborhood. If anything, the high tax rate sounds punitive toward those who live there. It's not that people want to move to higher property tax areas because they want higher taxes. These areas tend to be much safer and family-friendly, have better schools and amenities, are (in some cases) closer to one's workplace, and look aesthetically pleasing. A property tax, just like purchase price, is one factor in the equation of "is it worth it?". It's just not the factor, punitiveness notwithstanding.
- qzw 6y ago
  I agree with most of what you say in a general sense, but the OP seemed to believe that the high tax rate for the neighborhood in question was a deliberate strategy employed by the residents themselves, presumably in order to stand out from surrounding neighborhoods. I found that specific scenario hard to comprehend. But until we get more details from the OP, which isn’t likely, we can only guess at the actual cause of the unusual tax situation.

by qzw 6y ago

deleted 6y ago

[deleted]

Dracophoenix 6y ago

>>That seems like a terribly inefficient way of achieving exclusivity, if that’s the goal. It's not a goal, it's a secondary consequence that happens often enough to be commented upon. >>If the neighborhood is indeed more desirable, wouldn’t the higher value of the houses themselves (which would also result in higher prop taxes anyway) serve the same function? Yes and no. Some people can save enough money to purchase a house from a middle class job or making it big in short-term/seasonal high-risk, high-reward activities (e.g. professional gambling, oil drilling, undersea welding, etc.) if there is only a large (but not untenable) one-time cost. However a property tax is a subscription fee on the basis of an invented metric that is as elastic as what the tax assessor can get away with. Paying thousands of dollars every year for the "privilege" of living in your own property would make doing the kinds of jobs that were adequate for purchaser, insufficient or unsustainable for a resident. The result, at best, is being house rich and cash poor. >>In fact, the artificially high property tax must have a depressive effect on the house values in that neighborhood. Sometimes they do, sometimes they don't. High property taxes can be seen as a form of economic signaling in areas like Manhattan or Beverly Hills. They can also be a result of local politics run amok. The former creates self-sustaining bubbles that will take a long time to (but will eventually) burst. The second will cause residential flight to lower cost areas as is currently happening with San Franciscans moving to Austin at first sight of a downturn. >>I can’t think of why relatively well off people would voluntarily move into such a neighborhood. If anything, the high tax rate sounds punitive toward those who live there. It's not that people want to move to higher property tax areas because they want higher taxes. These areas tend to be much safer and family-friendly, have better schools and amenities, are (in some cases) closer to one's workplace, and look aesthetically pleasing. A property tax, just like purchase price, is one factor in the equation of "is it worth it?". It's just not the factor, punitiveness notwithstanding.

qzw 6y ago
I agree with most of what you say in a general sense, but the OP seemed to believe that the high tax rate for the neighborhood in question was a deliberate strategy employed by the residents themselves, presumably in order to stand out from surrounding neighborhoods. I found that specific scenario hard to comprehend. But until we get more details from the OP, which isn’t likely, we can only guess at the actual cause of the unusual tax situation.