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How California Became America’s Housing Market Nightmare

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Re: How California Became America’s Housing Market Nightmare

#11

Post by claudeganon »

rcpt wrote: post #2

> California also has a distinct burden: Proposition 13, a measure approved by voters in 1978 that limits property-tax increases on homes until they’re sold. That’s been a boon for Baby Boomers who’ve lived in their houses for decades and aren’t assessed at anything close to their property’s market value. But it’s especially unfair to their children, who are in effect subsidizing their parents’ generation. yup

Repealing Proposition 13, state-level permissive zoning, and using the resulting money to build social housing is the only way I can see out of the crisis. Everything else is just a put-off so the financialized speculation and money laundering can continue apace.

Re: How California Became America’s Housing Market Nightmare

#12

Post by klipt »

malvosenior wrote: post #7
rcpt wrote: post #2

> California also has a distinct burden: Proposition 13, a measure approved by voters in 1978 that limits property-tax increases on homes until they’re sold. That’s been a boon for Baby Boomers who’ve lived in their houses for decades and aren’t assessed at anything close to their property’s market value. But it’s especially unfair to their children, who are in effect subsidizing their parents’ generation. yup

I don't know that it's more "unfair" to the younger generations to not increase property taxes than it would be to the home owners to do so. Why would someone who bought a house for 100k be expected to pay taxes on 2M years later? A lot of these people probably had normal jobs and incomes, they didn't chose for Google/Apple/Facebook to move into town and send the property prices sky high. Yes, they benefit as owners…

Of course prop 13 "seems" fair, that's how it got passed. But it has terrible consequences.

Adjusted for inflation, it makes taxes drop to 0 in the limit, which means there's no incentive for rich people to ever sell. Which means real estate becomes hoarded across generations by the wealthy class, which recreates the main feature of feudalism.

Re: How California Became America’s Housing Market Nightmare

#13

Post by BubRoss »

malvosenior wrote: post #7
rcpt wrote: post #2

> California also has a distinct burden: Proposition 13, a measure approved by voters in 1978 that limits property-tax increases on homes until they’re sold. That’s been a boon for Baby Boomers who’ve lived in their houses for decades and aren’t assessed at anything close to their property’s market value. But it’s especially unfair to their children, who are in effect subsidizing their parents’ generation. yup

I don't know that it's more "unfair" to the younger generations to not increase property taxes than it would be to the home owners to do so. Why would someone who bought a house for 100k be expected to pay taxes on 2M years later? A lot of these people probably had normal jobs and incomes, they didn't chose for Google/Apple/Facebook to move into town and send the property prices sky high. Yes, they benefit as owners…

It's not like these things happened over night. If someone bought a house for 100k and it is now worth two million, I'm not sure they can claim they are being gouged on a 2000% increase of equity.

Buying land still doesn't entitle you to be able to perpetually afford to live in one of the most desirable places on earth.

Re: How California Became America’s Housing Market Nightmare

#14

Post by coenhyde »

malvosenior wrote: post #7
rcpt wrote: post #2

> California also has a distinct burden: Proposition 13, a measure approved by voters in 1978 that limits property-tax increases on homes until they’re sold. That’s been a boon for Baby Boomers who’ve lived in their houses for decades and aren’t assessed at anything close to their property’s market value. But it’s especially unfair to their children, who are in effect subsidizing their parents’ generation. yup

I don't know that it's more "unfair" to the younger generations to not increase property taxes than it would be to the home owners to do so. Why would someone who bought a house for 100k be expected to pay taxes on 2M years later? A lot of these people probably had normal jobs and incomes, they didn't chose for Google/Apple/Facebook to move into town and send the property prices sky high. Yes, they benefit as owners…

Because they have a house and ~$1.9M in free equity. The younger generation doesn't have that opportunity. If they can't afford the property tax they can downsize easily. It's not easy for young people to afford $2M houses, especially when paying high state income taxes to make up for the lack of sufficient property taxes.

Re: How California Became America’s Housing Market Nightmare

#15

Post by FreakyT »

malvosenior wrote: post #7
rcpt wrote: post #2

> California also has a distinct burden: Proposition 13, a measure approved by voters in 1978 that limits property-tax increases on homes until they’re sold. That’s been a boon for Baby Boomers who’ve lived in their houses for decades and aren’t assessed at anything close to their property’s market value. But it’s especially unfair to their children, who are in effect subsidizing their parents’ generation. yup

I don't know that it's more "unfair" to the younger generations to not increase property taxes than it would be to the home owners to do so. Why would someone who bought a house for 100k be expected to pay taxes on 2M years later? A lot of these people probably had normal jobs and incomes, they didn't chose for Google/Apple/Facebook to move into town and send the property prices sky high. Yes, they benefit as owners…

> The alternative is that we basically force people out of houses they've bought by gouging them with taxes.

I would argue that being able to afford a place in the 1970s does not endow one with an inalienable right to remain there forever. Locking the property taxes creates an artificial incentive to hold onto property forever, thus creating market stagnation.

Re: How California Became America’s Housing Market Nightmare

#16

Post by x0x0 »

malvosenior wrote: post #7
rcpt wrote: post #2

> California also has a distinct burden: Proposition 13, a measure approved by voters in 1978 that limits property-tax increases on homes until they’re sold. That’s been a boon for Baby Boomers who’ve lived in their houses for decades and aren’t assessed at anything close to their property’s market value. But it’s especially unfair to their children, who are in effect subsidizing their parents’ generation. yup

I don't know that it's more "unfair" to the younger generations to not increase property taxes than it would be to the home owners to do so. Why would someone who bought a house for 100k be expected to pay taxes on 2M years later? A lot of these people probably had normal jobs and incomes, they didn't chose for Google/Apple/Facebook to move into town and send the property prices sky high. Yes, they benefit as owners…

Why should someone who bought a house for $100k get $2m years later?

Re: How California Became America’s Housing Market Nightmare

#17

Post by jread »

rcpt wrote: post #2

> California also has a distinct burden: Proposition 13, a measure approved by voters in 1978 that limits property-tax increases on homes until they’re sold. That’s been a boon for Baby Boomers who’ve lived in their houses for decades and aren’t assessed at anything close to their property’s market value. But it’s especially unfair to their children, who are in effect subsidizing their parents’ generation. yup

With follow-on Props 58 and 193, property tax assessments can be inherited/assumed by children and grandchildren. So not only do they inherit the property tax-free, but get the added benefit of often well-below market property tax rate in perpetuity. Then expand this to not only primary residences, but also second homes and commercial property.

Re: How California Became America’s Housing Market Nightmare

#18

Post by spaced-out »

malvosenior wrote: post #7
rcpt wrote: post #2

> California also has a distinct burden: Proposition 13, a measure approved by voters in 1978 that limits property-tax increases on homes until they’re sold. That’s been a boon for Baby Boomers who’ve lived in their houses for decades and aren’t assessed at anything close to their property’s market value. But it’s especially unfair to their children, who are in effect subsidizing their parents’ generation. yup

I don't know that it's more "unfair" to the younger generations to not increase property taxes than it would be to the home owners to do so. Why would someone who bought a house for 100k be expected to pay taxes on 2M years later? A lot of these people probably had normal jobs and incomes, they didn't chose for Google/Apple/Facebook to move into town and send the property prices sky high. Yes, they benefit as owners…

I think you would agree, though, that people shouldn't be able to get Prop 13 benefits on properties that aren't their primary residence. For example, someone owning multiple houses and renting them out at market rates.

Re: How California Became America’s Housing Market Nightmare

#19

Post by Kalium »

malvosenior wrote: post #7
rcpt wrote: post #2

> California also has a distinct burden: Proposition 13, a measure approved by voters in 1978 that limits property-tax increases on homes until they’re sold. That’s been a boon for Baby Boomers who’ve lived in their houses for decades and aren’t assessed at anything close to their property’s market value. But it’s especially unfair to their children, who are in effect subsidizing their parents’ generation. yup

I don't know that it's more "unfair" to the younger generations to not increase property taxes than it would be to the home owners to do so. Why would someone who bought a house for 100k be expected to pay taxes on 2M years later? A lot of these people probably had normal jobs and incomes, they didn't chose for Google/Apple/Facebook to move into town and send the property prices sky high. Yes, they benefit as owners…

> The alternative is that we basically force people out of houses they've bought by gouging them with taxes. That seems much more unfair than the alternative.

Oh no! People with a multiple millions in assets have to choose between paying taxes on their immense wealth or selling it!

Sarcasm aside, this is how it's done most places in the US. It works just fine in those places and isn't considered unfair. Why is paying taxes on your wealth considered unreasonable here?

Re: How California Became America’s Housing Market Nightmare

#20

Post by JOnAgain »

malvosenior wrote: post #7
rcpt wrote: post #2

> California also has a distinct burden: Proposition 13, a measure approved by voters in 1978 that limits property-tax increases on homes until they’re sold. That’s been a boon for Baby Boomers who’ve lived in their houses for decades and aren’t assessed at anything close to their property’s market value. But it’s especially unfair to their children, who are in effect subsidizing their parents’ generation. yup

I don't know that it's more "unfair" to the younger generations to not increase property taxes than it would be to the home owners to do so. Why would someone who bought a house for 100k be expected to pay taxes on 2M years later? A lot of these people probably had normal jobs and incomes, they didn't chose for Google/Apple/Facebook to move into town and send the property prices sky high. Yes, they benefit as owners…

It's what it costs to provide the services around it. They are getting all the benefits that tax dollars are paying for and not paying an equitable contribution towards those benefits.

Yes, they would be forced to sell for 10x-20x their investment and be forced to move somewhere more affordable.

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