11 ms·

> Why does the person who moved in yesterday, perhaps far needier than the longer-term resident/owner (and just as deserving of basic civic services) have to pa

• JonFish85 12y ago
  Let's also not forget that a resident in an area does have a say in property taxes. That's the whole idea around local government. Show up to town hall, be vocal about your opinions and listen to others' opinions. This is how it should work. If you want lower property taxes, make your case! Convince your friends & neighbors.
  • bradleyjg 12y ago
    Also the money isn't being taken for the sake of encouraging productive use of land, it is paying for government services. Perhaps people who have locked in lower tax assessments should have their garbage picked up less frequently, have limited use of parks, and have lower priory status for police and fire services. Or do prop 13 supporters prefer a heads I win, tails you lose system?
• JoeAltmaier 12y ago
  If your car payment got untenable, we won't see folks lobbying for car-payment support or caps. You'd just have to sell the car. Houses get some sort of special treatment, I guess because people emotionally bond with them. But in a free market we'd not scotch-tape all these special rules around them.
  • MRSallee 12y ago
    What car-owning scenario is comparable to government driving someone out of their home via unaffordable tax assessment?
    • samstave 12y ago
      Not comparable, but related in its idiocy: governments making the purchase of a Tesla illegal in their state.
    • JoeAltmaier 12y ago
      You said 'home'; I said 'house'. This underlines the emotional aspect perfectly, thank you.
    • lmm 12y ago
      The government raising road/gas taxes to the point where you can't afford to run a car any more?
  • gigawhat 12y ago
    Terrible comparison. Your car payment doesn't tend to increase unpredictably with your car's value over time, as property taxes almost certainly would.
    • JoeAltmaier 12y ago
      Yeah but your income can, with the same effect.
    • muzz 12y ago
      I agree that it's not a good comparison. Property tax is more like a cost of ongoing operation, so a better comparison would be to the cost of gas.
  • zippergz 12y ago
    Selling your car has hugely less impact on your life than having to move. It's not just an "emotional bond" with a house. It's your commute. Your kids' schools. Your friends. Your daily shopping routines. The cost and labor involved with packing your stuff and moving it to another location. And so on. Moving can be very disruptive, especially if you have to move to a totally different town or neighborhood as would likely be the case if you got pushed out by rising property taxes (as the other housing in your vicinity would have the same issue).
• muzz 12y ago
  This is the essence of the arguments for Prop 13. In places with re-adjusted and higher property taxes (like Texas), the property tax serves to keep a lid on housing prices.
• thrownaway2424 12y ago
  Give me a moment while I play sad songs on this tiny violin for old people who are sitting on valuable assets. tiny violin songs, very sad OK then, let's talk about reality. Letting incumbents under-utilize valuable real estate is a bad policy. Anyway nobody gets thrown out of their house for owing property taxes in California because the local authorities just put liens on the property. Once the old folks kick the bucket, the local govt collects on their lien from the heirs or buyers. There are also several other non-old-people-getting-evicted problems with Prop 13 and its siblings. There certainly is not any excuse for the ability to pass your property tax assessment on to your children or grandchildren.
  • MRSallee 12y ago
    > Letting incumbents under-utilize valuable real estate is a bad policy. If the value of the property increases, there is incentive for owners to sell. If a developer wants to "utilize valuable real estate," is it not better that they make an offer and that people have choice in what happens to their property, rather forcing out "incumbents" with no choice due to escalating tax costs? Buying a house with potentially wild inflation of tax costs is about as attractive as buying a house with a variable APR.
    • muzz 12y ago
      > If the value of the property increases, there is incentive for owners to sell. Prop 13 counter-acts the incentive given by market appreciation of the value. The value may go up according to the market, but the owner's taxes are capped. This is an incentive to stay, as an owner would face higher taxes and thus higher costs if they simply moved to an identically-priced home.
      • vonmoltke 12y ago
        Florida recently solved that problem by making homestead caps transferrable after a certain period of time.
        • 12y ago
• raldi 12y ago
  I see your point, but when that person decides one day to sell their house, suddenly they're done pretending it never appreciated in value. In other words, instead of the state foregoing that person's property tax adjustments, it should defer them until the time of sale, and at that point, recover them.
  • Xdes 12y ago
    >In other words, instead of the state foregoing that person's property tax adjustments, it should defer them until the time of sale, and at that point, recover them. In other words a lien.
    • raldi 12y ago
      Exactly. If you'd have owed $11,000 this year without Prop 13, but because of it are just paying $1000, the other $10,000 should be applied as a lien against your house. Even 30 years of these liens will leave a sizable chunk of profit to you, considering you're capturing 30 years of appreciation.
      • prostoalex 12y ago
        There's an assumption here that property prices always go up. What if assessed value during the boom times of 2006-2008 was so high, that accumulated tax obligation exceed or are close to the current value of the property?
        • ScottBurson 12y ago
          That's what I'm talking about here: https://news.ycombinator.com/item?id=7593235 https://news.ycombinator.com/item?id=7593235
    • encoderer 12y ago
      My first impression is: That will add an even bigger chilling effect than we already have w/ Prop13. More people would stay put (or just avoid selling.) Also it's not like values are an eternally increasing step function. Suppose I bought in '95, saw my paper net worth rise thru the boom, then I need to sell at a depressed price in 2001. Without this lien waiting for me, I can take comfort knowing that I'm selling at a depressed price but also buying again at a depressed price. But when you take tens of thousands off the table to pay back taxes, my down payment has eroded significantly, increasing my borrowing cost. Of course outside of California most people are used to periodic reassessment. It's just part of life. But I think tinkering w/ Prop13 in the ways you describe are possibly worse than just eliminating it and replacing it with an expanded homestead exemption of some kind.
• outside1234 12y ago
  I think a balanced proposal would be to enable someone to lock in their property tax but forfeit some percentage of the capital gains to the state at death.
• deleted 12y ago
  [deleted]
• eqdw 12y ago
  > just because a bunch of other people swoop in and drive up prices around them. Because they are now wealthier, and can convert the wealth of that house into liquid assets (through sale, remortgage, etc), or income-generating assets (by becoming landlords). That's one of the points of property taxes: to encourage people to do productive things with their asset instead of just sitting on it. An equally anecdotal counterpoint: "Why should a real estate speculator who bought a house twenty years ago not be forced to pay increasing amounts of property tax on it as they wait for its value to go up?"
  • ubernostrum 12y ago
    So the argument here is... that people who are wealthier than I am and/or better at playing the finance game than I am should have my property transferred to them through coercive state action, since they can be trusted to use my property "productively" while I can't? Is this really HN I'm on here?
    • ScottBurson 12y ago
      Remember, the whole problem here is that your property is now worth more than you paid for it. That "coercive state action" will leave you with a substantial pile of cash, which the income tax laws will even let you keep. Anyway -- you've never heard of a home equity loan? If you really want to hang on to the property, take out a loan, pay the property taxes with part of it, and use the rest to make the payments. Zero cash flow impact. Or, sell a partial interest in the property to a speculator. There are solutions. And as 'raldi points out, Prop. 13 could have been written so the accumulated difference between tax assessed and tax paid would have been collected at the time of sale. That would have addressed the owner's cash flow problem without requiring financing, without cheating localities of taxes they need to provide services -- not least, education -- and (getting back to the point of the article) without disincentivizing residential development vs. commercial.
      • ubernostrum 12y ago
        I'm still not sure I'm on HN. Where is the person explaining that property tax is theft via government literally holding a gun to your head?
• Domenic_S 12y ago
  > Why should someone who lives within their means and bought an affordable house be punished just because a bunch of other people swoop in and drive up prices around them Indeed one of the huge stories around Prop 13 was an elderly woman with a paid-off house, about to be evicted because she couldn't pay the ridiculous uncapped property tax. She went to city hall with Howard Jarvis to ask for help and when turned away, had a heart attack and died right there in city hall. http://www.hjta.org/propositions/proposition-13/proposition-13-look-back http://www.hjta.org/propositions/proposition-13/proposition-...
  • dragonwriter 12y ago
    "Stories used to sell political positions" ⊄ "Facts"
  • alanlewis 12y ago
    From the article (which note is published on the Howard Jarvis Tax Association website): "Howard Jarvis told the story of watching an elderly lady suffering a heart attack while visiting the Los Angeles assessor's office when she couldn't convince the authorities to change her tax bill." Doesn't mention the woman dying, just that she had a heart attack. Also, the anecdote comes from Howard Jarvis himself. Was he lying to further his agenda? This source casts doubt on his story: http://www.americanlibrariesmagazine.org/blog/happy-birthday-prop-13 http://www.americanlibrariesmagazine.org/blog/happy-birthday... - from that source: "White notes that “even though the age of the deceased woman varied as Jarvis repeatedly told this story, the feelings it generated resonated with the public.”" Smells fishy to me...
  • SilasX 12y ago
    That's, like, the firstest of first world problems: - My land value has skyrocketed. - Now I can't afford the property taxes and have to sell the land and retire several times over.
    • zippergz 12y ago
      If you can afford to retire several times over, it would by definition have to involve living in a less expensive place (otherwise you'd have the same tax issue). Being forced to downgrade housing quality and/or location is not an obvious win.
• avz 12y ago
  Each asset has ownership costs and risks associated with it. The uncertainty of the future cost of ownership is a risk you take on when you buy the asset. It seems fair to me that the risk of the future variability of the cost of ownership of a property is assigned to the owner of the property. I understand why you'd rather have someone else take on the risks, but newcomers are an unfair pick. How about an insurer or another financial counterparty? I'm sure it's possible to come up with some synthetic instrument which mimics the price movement of the property and can serve as a reliable hedge.
• cpwright 12y ago
  If done correctly, the price appreciation of a home and tax increases should be unrelated. At least in NY, your share of the property tax levy is the value of your property divided by the value of all properties in the taxing district, multiplied by the total tax levy. If everyone's property appreciates 10%, but the tax levy stays the same no one has higher property taxes. The reason we have higher property taxes is that school boards and the town/county government continually pass budgets that outpace inflation.
• mikeash 12y ago
  What's special about property taxes that they should be held constant? A person could just as easily be pushed out of their house by a general rise in the cost of living in their area, or increasing traffic, or a regional economic collapse. Shall we legislate those to be constant as well? If the local government is well run, then an individual's property taxes should approximate the cost of providing local government services to them, regardless of the value of their house. If real estate values in a local jurisdiction double without changing the government's costs, property tax rates should be cut in half to compensate. I realize that there's a big "if" when it comes to the "well run" part, but if that's not being done, then you need to fight over the "well run" part, not giving people massively different tax rates based purely on when they bought their house. I don't think this idea is all that outlandish either. My understanding is that a lot of jurisdictions work this way, either explicitly or effectively through the legislative process. A budget is set, required revenue decided upon, and property tax rates set such that the required amount is obtained. If values go up, rates fall, and vice versa. This doesn't solve the problem of hyper-local changes, like if just one section of a county becomes extremely popular and prices are driven through the roof, while the rest is unaffected. But again, what's the difference between being driven out due to that and having, say, the local food stores double their prices to to huge demand and drive you out that way?
  • malandrew 12y ago
    You raise an interesting point related to something I always point out to people in economics debates: Every time you see a dysfunctional market, look for the policy which creates an asymptotic condition. That asymptotic condition (or the sum of several asymptotic conditions) is the likely culprit behind the dysfunction. By asymptotic condition I mean and hard cap or limit that is unchanging based on circumstance (such as time). The reason asymptotic conditions are so toxic is because they become barriers to natural market corrections.