4 ms·

One big reason that CA has a reduced housing supply (therefore higher housing price) is https://en.wikipedia.org/wiki/1978_California_Proposition_13 https://en.

by yegle 2y ago

One big reason that CA has a reduced housing supply (therefore higher housing price) is https://en.wikipedia.org/wiki/1978_California_Proposition_13 https://en.wikipedia.org/wiki/1978_California_Proposition_13 The retired people who brought their house in 80s/90s can stay and hold onto the house for much longer, since the property tax is very "affordable". Whereas in other states, the property tax will push people to move to cheaper places during retirement years, thus increasing the supply to the market.

foogazi 2y ago
That leaves 49 other states + territories to live in
CalRobert 2y ago
This will _eventually_ get phased out with recent changes, but only as the owners die off. You can still pass on a residence to an heir but they have to actually live in it (within 1 year of you dying, IIRC).
ryathal 2y ago
The effects of prop 13 are overstated. The problem is California didn't build enough where people want to live. Many states have laws restricting property tax growth, my own state limits it to the lesser of inflation or 5%. It's the lack of building that pushed prices so high that selling only makes sense to leave the state.
- HDThoreaun 2y ago
  No, the effects of prop 13 are not overstated. NIMBYism is a bigger problem, but prop 13 makes it financially reckless to ever move. Yimby policy would lead to less drastic divergence between value and tax rate as value increases slower, but there would still be a gap as people who bought SFHs in the town center would see the properties value grow due to the lack of land value tax.
  - ryathal 2y ago
    It's not prop 13 that made property values 10x in the last 30 years. It's the lack of supply forcing bids ever higher. Downsizing and rebasing taxes isn't a big deal if you went from a 1980s 100k 4-bedroom house to a modern 300k 2-bedroom condo, it's a huge problem if the cheapest option is over 1 million.

by yegle 2y ago

foogazi 2y ago

That leaves 49 other states + territories to live in

CalRobert 2y ago

This will _eventually_ get phased out with recent changes, but only as the owners die off. You can still pass on a residence to an heir but they have to actually live in it (within 1 year of you dying, IIRC).

ryathal 2y ago

The effects of prop 13 are overstated. The problem is California didn't build enough where people want to live. Many states have laws restricting property tax growth, my own state limits it to the lesser of inflation or 5%. It's the lack of building that pushed prices so high that selling only makes sense to leave the state.

HDThoreaun 2y ago
No, the effects of prop 13 are not overstated. NIMBYism is a bigger problem, but prop 13 makes it financially reckless to ever move. Yimby policy would lead to less drastic divergence between value and tax rate as value increases slower, but there would still be a gap as people who bought SFHs in the town center would see the properties value grow due to the lack of land value tax.
- ryathal 2y ago
  It's not prop 13 that made property values 10x in the last 30 years. It's the lack of supply forcing bids ever higher. Downsizing and rebasing taxes isn't a big deal if you went from a 1980s 100k 4-bedroom house to a modern 300k 2-bedroom condo, it's a huge problem if the cheapest option is over 1 million.