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That's not going to happen without some sort of equalization. Prop 13 benefits people that have owned property for a LONG time. I cringe every time I see my pr

That's not going to happen without some sort of equalization. Prop 13 benefits people that have owned property for a LONG time. I cringe every time I see my prop tax bill while my neighbors who have been here for decades pay a fraction of taxes only because they were here first [1]. But Prop 13 props up housing prices which would drop like a rock if Prop 13 were outright abolished. So there would need to be some sort of retro tax event to help lessen the pain. Additionally, I would make the distinction of this tax event for primary residence, investment property and commercial property. Maybe it should just apply for primary residence, I don't know the right answer to this but longer term, I agree that rent control and Prop 13 need to be revisited. [1] http://www.planetizen.com/node/40895 http://www.planetizen.com/node/40895

kansface 12y ago
The repeal of prop 13 is straightforward. Let property taxes rise more than inflation each year. It could be capped at 2x or 3x, etc. It would be slow enough to let people prepare, but fast enough to be painful.
- gojomo 12y ago
  Indeed. Catch-up rates could also be a function of how far out-of-whack the current property tax bill is. This could even be part of a hybrid approach where owners have some protection against rapid changes, but bills slowly catch-up to their neighbors… restoring equal protection under the law regardless of date-of-purchase. For example, the increase-cap could be "the larger of 1% [like Prop 13] or a rate that, compounded 20 years, would reach parity with peer properties". As long as your bill is only ~22% less than comparable properties, you're still on the Prop 13 1% plan. But when things really get out of whack, your rates go up slightly more... and you have very strong visibility into the next two decades' of rises, if you assume property values hold. (If you're paying half your comparable-property new neighbors, your bill would go up around 3.5%/year.) No surprises, small annual changes, but (over time) far less of a giant tax-handout to the already-property-rich.
rconti 12y ago
How do you think prop13 props up prices? It's an incentive for people to stay in a house, which reduces churn, but it's arguably a disincentive for a renter to buy, because of the outlandish tax rates they'd need to pay (which offset the low taxes of long-term owners). I don't understand your logic.
- bhickey 12y ago
  It increases prices by reducing supply.
kelnos 12y ago
Is it feasible (from a reporting/enforcement perspective; I'm sure it's not feasible politically) to modify prop 13 so that live-in owners receive prop 13 benefits, but owners of investment property & rentals are still subject to normal increases?
- acomjean 12y ago
  Where I live-in owners get 150,000$ off their property value for taxs purposes. So it can be done.

kansface 12y ago

The repeal of prop 13 is straightforward. Let property taxes rise more than inflation each year. It could be capped at 2x or 3x, etc. It would be slow enough to let people prepare, but fast enough to be painful.

gojomo 12y ago
Indeed. Catch-up rates could also be a function of how far out-of-whack the current property tax bill is. This could even be part of a hybrid approach where owners have some protection against rapid changes, but bills slowly catch-up to their neighbors… restoring equal protection under the law regardless of date-of-purchase. For example, the increase-cap could be "the larger of 1% [like Prop 13] or a rate that, compounded 20 years, would reach parity with peer properties". As long as your bill is only ~22% less than comparable properties, you're still on the Prop 13 1% plan. But when things really get out of whack, your rates go up slightly more... and you have very strong visibility into the next two decades' of rises, if you assume property values hold. (If you're paying half your comparable-property new neighbors, your bill would go up around 3.5%/year.) No surprises, small annual changes, but (over time) far less of a giant tax-handout to the already-property-rich.

rconti 12y ago

How do you think prop13 props up prices? It's an incentive for people to stay in a house, which reduces churn, but it's arguably a disincentive for a renter to buy, because of the outlandish tax rates they'd need to pay (which offset the low taxes of long-term owners). I don't understand your logic.

bhickey 12y ago
It increases prices by reducing supply.

kelnos 12y ago

Is it feasible (from a reporting/enforcement perspective; I'm sure it's not feasible politically) to modify prop 13 so that live-in owners receive prop 13 benefits, but owners of investment property & rentals are still subject to normal increases?

acomjean 12y ago
Where I live-in owners get 150,000$ off their property value for taxs purposes. So it can be done.