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Prop 13 is bad policy as demonstrated by every single area of the world that gets by without it. Most cities assess property values on a lagging window basis w
by TimPC 5y ago
Prop 13 is bad policy as demonstrated by every single area of the world that gets by without it. Most cities assess property values on a lagging window basis where your value for property taxes is set every few years based on the value from a few years ago. This generally gives you time to prepare for the increase or make whatever financial decisions you need to. One thing to keep in mind is that percentage property tax rates are necessarily set higher when some people pay taxes on values far below market. My region has a 0.63% property tax rate which amounts to about $6,300 a year on a million dollar home. That might be larger than one month of a mortgage payment but it's a reasonable price to pay for all the services the city provides. I live in a city where this includes garbage, mail, police, fire, transportation and sewage infrastructure and a number of other important services. The idea that someone who bought a house in 1963 should pay less than 10% of the taxes that other taxpayers do means that someone or several someone's are footing the remainder of the bill. You pay a substantial price for that as new homes become less affordable with the higher % rates of property tax. It's also not clear that being forced to sell over high property tax bills is a bad thing as it creates new supply on the market. Most people selling a single family home could easily afford to live in a condominium in the same neighborhood without losing touch with the people they care about. Keep in mind the necessary condition for selling is the property has gone up by enough to make the property tax bill unaffordable. This means whomever is selling their home is making a substantial profit and portraying them as low/middle income people who are hard done by is doing a disservice to anyone struggling in the artificial market created by prop 13 and paying the higher base rates associated with it.
- Dig1t 5y ago>prepare for the increase or make whatever financial decisions you need to What does this statement actually mean for an individual family? Most working class people cannot just demand more money from their employer. So really it just means "get ready to move out and find a new home", which means uprooting your family, commuting further, finding new schools for your kids to attend, potentially worse ones because its probably a cheaper/poorer neighborhood. >It's also not clear that being forced to sell over high property tax bills is a bad thing I just plain old disagree with this; my family would have been forced to move because some rich people would have displaced my working class parents, and it honestly sounds like you consider that a good thing, "well they're poorer so they don't deserve to live in a place where a lot of people want to live" is really what that argument boils down to. Even though they worked hard and saved for many years to afford to buy that place. There are very few condos in the neighborhood I grew up in, and the ones that exist are on the edge of the city in much less desirable areas. I would have had to go to a different (worse) school, lose touch with my friends and generally have much less space than I had as well. Your argument only makes sense if you consider people as wanting to live somewhere purely as a financial enterprise rather than a good safe place to raise a family. If you eliminated the zoning restrictions and power of the NIMBYs then this would allow for the best of both worlds. We could continue to allow a tax rate for working class people, but also allow the development of more profitable/denser units. As people naturally move around, companies could buy the houses and redevelop them into denser units.