Prop 13 distorts the supply incentives for cities. SF doesn’t mind building office buildings. Planning commission doesn’t mind building offices. It only dislikes residential. Why? Follow the money.
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Just vote your conscience.
I met with the El Dorado county assessor today. He explained prop 5. He also pointed out that every proposition that has allowed people to reduce their property tax when moving has passed.
Prop 5 allows you to transfer your current tax anywhere in the state. Your tax will stay at the current rate unless you buy something more than the market value of your sold home. If the next home costs more you will be responsible for the tax on the difference between the market rate of the old vs new home.
Now you’ve pivoted to a different argument, since the prop 13 ruins local tax revenue is thoroughly debunked.
Prop 13 applies to commercial RE as well. How often do you see commercial RE for sale? I’m sure commercial property pays much less as a percent of market value than home owners pay.
The biggest reason to not want housing is schools. Schools are so expensive thanks to CA rules that require numerous administrative positions at each school. That’s a government created problem that could easily be fixed.
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There’s no pivoting. Prop 13 has more problems than one.
Property tax used to be 5% of state economy. Now it’s around 3%. In its place we are over-relying on income tax. That makes state revenue susceptible to boom and bust economic cycle. At times we need to spend on social services, aka when economy is in the toilets, that’s exactly when revenue got slashed as well.
Property tax on commercial are capped too under Prop 13 but other taxes paid by businesses are not capped and scale higher as economy expands. For residential housing service costs scales at inflation rate or higher but property tax revenue does not.
Well, you might go and buy a nicer primary but most folks when they get old are not going to do that. They will stay in place or go smaller for less upkeep. One main reason why people don’t move is the higher taxes, and that is fact. Changing that aspect of the equation could very well free up some housing. How do we know until we try it?
San Francisco has one of the strictest rent control in the nation and prices have gone up the fastest. What makes you think prop 10 is going to change that?
Well, Prop 10 worsens the situation if more and more rent control related legislation gets passed at the local level. The big one potentially is the inability of owners to change the rent once a tenant has vacated. How is that remotely fair to the owner? It certainly does not enable the owner to earn a fair return on his investment if cost keep rising but rents can’t, right?
Prop 10 promises that landlords will just that, a fair return on their investment. Any rent control measure that doesn’t give a landlord a fair return will be invalid. Yes, you may have to take them to court in some cities, but once one person does it will help everyone. In fact, San Francisco’s rent control law may be ruled illegal because of large payments given to departing tenants.
Here is where we can compare Prop 13 to rent control (but for homeowners) . Prop 5 would extend the negative consequences of subsidizing owners who have benefited from rising housing prices to other (receiving) areas. It’s like offering low rent for life when you move to a new city. Not only is it an unnecessary bonus, but it may also then drive up prices in the receiving communities where buyers (some with low tax bonuses in hand) need to again compete for limited housing supply as everyone has incentive to stay put at least until they are 55+.
I think most people here with rentals are more sensitive to Prop 10 and understand why rent control does not achieve its purpose and has many negative side effects including reduced housing supply. Costa-Hawkins at least puts limits on local rent control ordinances. For instance, in Berkeley the rent adjustment rate is 1.8% yearly for apartments and MFH. The rent ceiling may be reset when the tenants vacate (“vacancy decontrol”) on their own will (or there is “just cause” for eviction). Now if Prop 10 passes, there are already talks that SFH will also be rent controlled as well. If the rent cannot be reset to market rate between tenants, it will fall behind the costs of servicing the property.
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One question, what’s the easiest way to vote? I have registered last week and have not received any mail. Can I vote online or download the form?
The easiest way is by mail. I got my ballots last week. But if you just registered I am not sure if they can still mail it to you.
These ballots are super long. I have 4 loooooong double sided pages. I started this afternoon and still not finished. But if you just want to vote on Prop 10 and nothing else that shouldn’t take you too long to vote in person.
We’re even more reliant on the top 1% who pay 40% of the income tax, and they have the most volatile incomes. That’s why tax revenue is volatile.
Why do you keep saying property tax revenue isn’t scaling? It’s literally growing at over 5% a year. How much property tax revenue growth do you want?
Yeah, not sure there is enough time for the Registrar’s office to get your mail in ballot to you in time. Unfortunately, can’t do online or download the form. You can either vote in person at your designated location by your house on election day or I believe you can go to City Hall and vote there between now and election day with proper id. Check on that last part.
Dear @sheriff, did you know that “fair return” is calculated as ([gross income] - [operating expenses]) / [purchase price], or, in other words, debt and its cost (“interest”) or its service (“P+I”) is of no consideration?
More simply said, a hopeful investor bought a house in San Jose for $1,000,000 and rents it for $3000/mo … $36k a year, allowable expense are actual repairs & maintenance, tax and insurance, which might amount to $15k a year, so the return is
(36 - 15)/1000 = 21/1000 = 2.1%
Add to that the obscene appreciation, and the landlord cannot expect rent to rise.
In reality, the investor may have a $750k loan at 5% = $38k, so his income is 36-15-38= negative $17k
Not the rent board’s fault that he decided to take a loan.
Proposed rent control in Santa Cruz excludes debt related expenses from operating expenses. I’m sure it’s similar in Richmond and some other cities.
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Are you not a citizen? Then you can give up your green card to retire in Singapore. No inheritance tax, no capital gains tax, almost no property tax (extremely low)
Voting in person is unimaginable. I need to google about those justices and judges to decide which one should receive a NO. I gave a few NO to those legal “activists”.
If the activists take over our courthouse and make judgement based on their feelings instead of law and facts, the state will be toasted
In aggregate it grows at 5% a year, but individually each house is capped at the rate allowed by Prop 13.
In a way that arrangement resembles a Ponzi scheme. Older homeowners are freeloading and rely on younger buyers to put money into the system to pay them off. Young people are taking a double whammy. Not only are their property taxes much higher than older owners, they are also paying much higher prices for their houses because Prop 13 suppresses housing supply.
For a city to bring in one new resident, it will have to recruit many more in future years just to pay for that one person’s services down the road. At the same time it’s darn hard to build with all the NIMBY’ism. Because new households are not by themselves self-sustaining, the natural conclusion for cities is to say no do residential development. Much easier to build commercial.
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Nimbyies and bureaucrats and reducing supply not Prop 13. Those of us that built homes and have been paying property tax for 40 years owe newcomers nothing.
So now you’re changing your argument again. At least now we know your argument is that prop 13 isn’t fair to newcomers. It has nothing to do with local tax revenue amounts.