How California Became America’s Housing Market Nightmare • Hacker News Board

Re: How California Became America’s Housing Market Nightmare

#31

Post by tremon » Wed, Nov 06, 2019, 6:19 PM UTC

FreakyT wrote: post #15

malvosenior wrote: post #7

Earlier quoted context omitted.

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.

Yes, of course, and after we've driven them from their home, maybe we can put them in a reservation instead /s

Re: How California Became America’s Housing Market Nightmare

#32

Post by ariwilson » Wed, Nov 06, 2019, 6:19 PM UTC

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…

We live in society; everyone is interconnected. One's own self interest cannot outweigh the needs of the group and, in California, all the stats are showing that the group is suffering due to the needs of the few. Prop 13 is part of the problem and should be reduced in effect (commercial property taxes, max rise of 3% annually) alongside changes to zoning until the housing crisis abates.

Re: How California Became America’s Housing Market Nightmare

#33

Post by rcpt » Wed, Nov 06, 2019, 6:19 PM UTC

novok wrote: post #23

spaced-out wrote: post #18

Earlier quoted context omitted.

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.

Or corporate properties such as office towers.

Or golf courses. My god how are people ok with private golf courses in the middle of cities?

Re: How California Became America’s Housing Market Nightmare

#34

Post by Merrill » Wed, Nov 06, 2019, 6:20 PM UTC

klipt wrote: post #12

malvosenior wrote: post #7

Earlier quoted context omitted.

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.

Other disincentives to sell are fairly high realtor commissions and fees, as well as capital gains taxes on the amount over the exclusion, which isn't very high given CA prices.

Think of Prop 13 as "rent control" for homeowners.

Re: How California Became America’s Housing Market Nightmare

#35

Post by willyg123 » Wed, Nov 06, 2019, 6:20 PM UTC

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 think the greater impact of Prop 13 is the disincentive to downgrade into a smaller house after the kids move out. A better measure of housing supply would be in terms of bedrooms. I imagine there is a massive gap in CA relative to other states in terms of the efficiency of bedroom allocation.

Re: How California Became America’s Housing Market Nightmare

#36

Post by fortran77 » Wed, Nov 06, 2019, 6:20 PM UTC

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

Everyone benefits, not just "boomers". Anyone who buys a house ever gets the same protection. No more than 2% property tax increase/year. So if you bought a house in Silicon Valley for $1.5Million and the house next door sell for $3MM because someone had a lot of cash from their facebook stock, your property tax doesn't double.

Re: How California Became America’s Housing Market Nightmare

#37

Post by BubRoss » Wed, Nov 06, 2019, 6:22 PM UTC

claudeganon wrote: post #11

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.

Is social housing really a good focus in extremely valuable real estate areas? Many places in the world are too expensive for most people to live in. Places like Vancouver and Toronto though, have a skyline of cranes building high rises to meet the demand. Social housing in high prices areas is manipulation that doesn't help many people. Letting the demand be met on the high end and shooting for social housing in more reasonable areas makes much more sense. I'm not convinced that market distortion in pricey areas helps anyone when people who are in danger of not having basic needs met need something accessible, not a multi-year process to win a cheaper place in a hot area.

Re: How California Became America’s Housing Market Nightmare

#38

Post by cactus2093 » Wed, Nov 06, 2019, 6:22 PM UTC

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 would someone who bought a house for 100k be expected to pay taxes on 2M years later?

Well why would someone who bought a 2M house today be expected to pay taxes on it? Because the community has a lot of expenses - fire fighters and police will protect their valuable asset, the school system needs to pay its teachers to live somewhere in the vicinity of this expensive neighborhood, the lawmakers (who these homeowners have elected) need money to regulate vaping and plastic straws and run the most inefficient homeless services in the country.

Someone who bought a house 30 years ago is getting all these same benefits as someone who just bought a house. And since they've been voting there longer, they're arguably an even bigger part of the reason that all these costs exist than the newcomers. They're also a much bigger part of why the housing supply is so constrained, they've been going to community hearings for decades to block any new construction.

Why shouldn't they have to pay for it?

If anything I would be more convinced by an argument that newcomers should pay a lower tax rate than people who've been there a long time. But that's obviously quite an extreme position, I would settle for everyone paying the same property tax rate that our elected officials have set. If we think that's too high, then lower it for everyone equally.

Re: How California Became America’s Housing Market Nightmare

#39

Post by nerfhammer » Wed, Nov 06, 2019, 6:22 PM UTC

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…

You're saying that taxes on a 2 million dollar windfall is unfair.

Re: How California Became America’s Housing Market Nightmare

#40

Post by rcpt » Wed, Nov 06, 2019, 6:22 PM UTC

triceratops wrote: post #28

malvosenior wrote: post #7

Earlier quoted context omitted.

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. So presumably you're also in favor of rent control^? The alternative is that we basically force people of out houses they've lived in forever by letting landlords (themselves benefiting from Prop 13) gouge them with crazy rent increases^^. ^ For the record I think both Prop 13 and rent control are bad ideas. ^…

CA didn't have rent control until after Prop 13 passed. Howard Jarvis rallied renters by claiming that landlords would be nice and pass the tax savings onto their tenants. Somehow people believed this and, when it didn't happen, lashed out with aggressive rent control laws in our major cities.