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

Re: How California Became America’s Housing Market Nightmare

#41

Post by TulliusCicero » 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…

There's tons of other alternatives.

For example, you could deduct the market rate taxes that would've been paid from the eventual sale price.

You could also give people a choice: they can either pay property taxes based on an artificially low valuation, and then sell at that low valuation, OR they can choose to accept the market rate property taxes and be able to sell at market rate.

Another thing that could be done is only apply Prop 13 to:

- Residential property, not commercial

- Only your primary residence, not second homes or homes you rent out

- People who bought the home, not their kids they left it to in a will

- People for whom the increase in property taxes represents an actual burden relative to their income

Re: How California Became America’s Housing Market Nightmare

#42

Post by la6470 » Wed, Nov 06, 2019, 6:23 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.

The taxes should simply increase for the folks who has brought it in the 70s adjusted for inflation and senior citizen discount. But it should not stay the same. Gawd why can’t we ever take the middle road and only have to take fucking extreme positions in every damn thing???

Re: How California Became America’s Housing Market Nightmare

#43

Post by almost_usual » Wed, Nov 06, 2019, 6:23 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.

I honestly think it has less to do with money than the younger HN community realizes. Older people don't like change, especially significant changes like moving. Most of the people who have been here for decades stay because it's their home and they have no where else to go. Getting rid of Prop 13 and raising taxes to tech market rate is the equivalent of deporting someone from their home.

Re: How California Became America’s Housing Market Nightmare

#44

Post by charlesju » Wed, Nov 06, 2019, 6:23 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 would say it's especially unfair to new California residents and great for their children.

I grew up in Silicon Valley and almost everyone I grew up with have parents that live very comfortably if for nothing else than their property value skyrocketing over the last 3 decades. Everyone that bought a house in the 1980s or 90s are now millionaires a couple times over.

As children of wealthy parents, the natural benefits are going to be passed down to us, if not in the short term through day-to-day subsidies but in the long term future through generational wealth.

The real issue with Silicon Valley was the tech boom after 2004, tech companies went from being worth a couple billion to several being worth multiple hundreds of billions. That amount of wealth in a 15 year time frame is really hard for the public infrastructure to keep up with.

Re: How California Became America’s Housing Market Nightmare

#45

Post by fortran77 » Wed, Nov 06, 2019, 6:23 PM UTC

tstrimple wrote: post #8

m15i wrote: post #6

So build more houses?

More houses? Not in MY back yard! Building more houses will depress housing prices. Home owners tend to value their equity more than ensuring housing is affordable for others.

I own a house in Silicon Valley and I would love for them to build more housing. Keep building until housing is affordable again. Many homeowners here feel the same way.

Re: How California Became America’s Housing Market Nightmare

#46

Post by nerfhammer » Wed, Nov 06, 2019, 6:23 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.

A more palatable argument is that it would create incentives to keep housing prices stable, rather than expecting a lifetime skyrocketing windfall at everyone else's expense.

Re: How California Became America’s Housing Market Nightmare

#47

Post by satya71 » Wed, Nov 06, 2019, 6:23 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

The ideal way to tax the increase of property value is at a liquidity event (ie sale) when the owner has the cash, and limit the cash required of the owner just because there's a bubble. That's kind of how capital gains on stocks are cashed.

Re: How California Became America’s Housing Market Nightmare

#48

Post by Mathnerd314 » Wed, Nov 06, 2019, 6:23 PM UTC

Paris is 55k people per square mile, San Francisco is 17k per square mile. So there is room for growth.

I think it's more likely that people will just continue fleeing the state though. It's tech work so there's nothing preventing people from working remotely.

Re: How California Became America’s Housing Market Nightmare

#49

Post by Starkus » Wed, Nov 06, 2019, 6:24 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

A Californian law that is inefficient and restrictive? No surprise there.

California has been extremely fortunate with major economic forces driving their economy for decades, but paired with ineffective governance to this beautiful state, is incredibly disappointing. No pity for CA though, a lot of their voters over the years enabled this

Re: How California Became America’s Housing Market Nightmare

#50

Post by la6470 » Wed, Nov 06, 2019, 6:25 PM UTC

ariwilson wrote: post #32

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…

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.

Sensible take the middle road folks