# Save Prop. 13? (California campaign sign) Huh? **URL:** \ **Category:** Politics & Elections\ **Created:** [May 27, 2016, 9:59am UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798 "2016-05-27T09:59:01Z")\ **Posts on this page:** 20\ **Page:** 9
**Author:** ![Johnny\_Ace](https://avatars.discourse-cdn.com/v4/letter/j/6bbea6/32.png) [@Johnny\_Ace](https://boards.straightdope.com/u/Johnny_Ace)\ **Post date:** [May 31, 2016, 9:29am UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/161 "2016-05-31T09:29:26Z")
> [@slash2k](#): > > There absolutely are financial products available that could work in such situations, and there’d likely be others offered if Prop13 hadn’t altered the market. For example, reverse mortgages have been around in since the 1960s, albeit on a limited scale until the 1990s. You borrow against the equity, and you make no payments whatsoever until the property is sold. Mum stays in her house and the taxes get paid, regardless of her income level. Reverse mortgages are the single biggest fraud perpetrated on seniors in history. They’re ARMs, which is almost never good in the long term for the small borrower. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [May 31, 2016, 1:37pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/162 "2016-05-31T13:37:14Z")
> [@](#): > > Quoth **octopus** : > > Everyone wants a handout but not everyone wants to pay. Except that they (meaning a majority) _do_ want to pay. But Prop 13 won’t let them, because there’s still a 1/3 minority who doesn’t want to pay. Seriously, do no conservatives understand the concept of “you get what you pay for, and you pay for what you get”? ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [May 31, 2016, 2:32pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/163 "2016-05-31T14:32:03Z")
**DrDeth** , you do realize that there are other ways protect poor people from being taxed out of their homes (if that ever actually happens outside of the orphanage in the Blues Brothers movie and many Three Stooges shorts) than to freeze tax payments, right? For example, here in DC, folks can get a substantial break on their property taxes if they are low income. You asked on the first page whether it’s fair that a family that bought a $200k house that is now worth $1 million to be taxed on the $1 million. Let me say that I think it is fair that Michael Douglas, who bought a $1 million estate in Malibu in 1982, should be taxed on the value of the $50 million estate he still owns. Moreover, this is an absurd tax policy that nobody would think to apply to any other taxes. Let’s say Joe starts working as a bus driver, making $15 an hour, and paying taxes at a 15% Federal rate. The stability of his taxes is necessary for him to make a budget, right? So should his tax rate be frozen at 15% for as long as he remains in that job? ---
**Author:** ![jsc1953](https://avatars.discourse-cdn.com/v4/letter/j/5daacb/32.png) [@jsc1953](https://boards.straightdope.com/u/jsc1953)\ **Post date:** [May 31, 2016, 3:04pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/164 "2016-05-31T15:04:53Z")
> [@Ravenman](#): > > [ > Moreover, this is an absurd tax policy that nobody would think to apply to any other taxes. Let’s say Joe starts working as a bus driver, making $15 an hour, and paying taxes at a 15% Federal rate. The stability of his taxes is necessary for him to make a budget, right? So should his tax rate be frozen at 15% for as long as he remains in that job? Apples and oranges; or more appropriately, wealth and income. When your income goes up, you see it every payday. When the value of your home goes up, it doesn’t do you any good until you sell. So if your income goes up at a lower rate than your home’s value (and therefore, your property taxes) your cash flow is getting worse and worse every year. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [May 31, 2016, 3:09pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/165 "2016-05-31T15:09:48Z")
The insurance on your house should also go up as the value of the house increases, but nobody talks about capping that cost. Should insurance be capped? After all, it’s quite possible in California that the cost of earthquake coverage would dwarf any grandfathered-in property taxes. ---
**Author:** ![jsc1953](https://avatars.discourse-cdn.com/v4/letter/j/5daacb/32.png) [@jsc1953](https://boards.straightdope.com/u/jsc1953)\ **Post date:** [May 31, 2016, 3:15pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/166 "2016-05-31T15:15:50Z")
> [@Ravenman](#): > > Should insurance be capped? After all, it’s quite possible in California that the cost of earthquake coverage would dwarf any grandfathered-in property taxes. It does – earthquake coverage is prohibitively expensive. ---
**Author:** ![Pork\_Rind](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pork_rind/32/111_2.png) [@Pork\_Rind](https://boards.straightdope.com/u/Pork_Rind)\ **Post date:** [May 31, 2016, 3:18pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/167 "2016-05-31T15:18:07Z")
> [@slash2k](#): > > Sure, the taxes would very likely be less for later purchasers without Prop 13. The streets need maintaining and the teachers need paying, but the governing body can’t raise tax broadly to pay the bills. In the example given earlier in the thread, they need roughly $16K out of the three properties to pay their bills, but with taxes on two of them capped, the balance has to be made up out of the third. > > The math is actually more complicated than that, because the third’s taxes are also capped, just at a different level, but the general idea is the same in that whenever a property is reassessed for tax purposes, the level has to be set high enough to generate sufficient taxes to pay the locale’s bills. In a more equitable system, the taxes might be 5/5/6K instead of 1/1/14 to generate that same $16K, or could conceivably by 6/6/6 or 6/6/7, generating a little more, but on what do you base the notion that the taxes would “likely” be 14/14/15 (generating 43K instead of 16K) or even higher? …and this was the point that I was alluding to. And to the degree that I spend any time worrying about Prop 13 (very little), most of my aggravation is around my new understanding that commercial properties are also capped, and in a way that seems even less fair at that. I don’t live in some fantasy land where I fully believe that without Prop 13 that my taxes would go down in exact proportion to how my neighbors’ taxes would go up, but neither do I accept DrDeth’s example that I would instead be paying $30k/yr. In that case, this grouping of three properties would be paying $90k/yr in total, instead of the $16k/yr currently. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [May 31, 2016, 4:02pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/168 "2016-05-31T16:02:48Z")
> [@Truman\_Burbank](#): > > Well, I am not an economist, but I think you’re missing the larger point - not only were values increasing, but RATES were increasing as well. Did you factor that into your calulation? In any event, the “on paper” valuation was essentially pointless to my mother’s value of being able to afford to keep the home in the family. Someone above suggested a home equity loan as a solution, but that’s just borrowing money and paying additional costs (interest) on top of the expense of the escalating taxes. It might have made sense as a ‘holding action’ (if Mom could have qualified) but not solve the problem. You mean tax rates or interest rates? The objection here is not to the cap on tax rates, which is much more reasonable than a cap on assessed values, it is to the cap on assessed values that keep taxes low for long time homeowners at the expense of newer homeowners. I don’t want to sound heartless but if your home has quintupled in value and you can no longer afford the real estate taxes then why should society subsidize your desire to continue to live in a home that you can no longer afford? Why can’t you sell that home for a huge profit and buy a home in a cheaper neighborhood or a smaller home in the same neighborhood? ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [May 31, 2016, 4:02pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/169 "2016-05-31T16:02:49Z")
> [@Ravenman](#): > > The insurance on your house should also go up as the value of the house increases, but nobody talks about capping that cost. > > Should insurance be capped? After all, it’s quite possible in California that the cost of earthquake coverage would dwarf any grandfathered-in property taxes. Not a good analogy. If the cost of a house rises, then the cost of replacing that house rises, too. But most of the cost is in the land, not the house, so the increase could be commensurate with the cost of building. As we know, though, prices are set by the market, not be the cost to the seller. The point of property taxes is that just because my house doubled in value, doesn’t mean the government needs 2x the revenue from me, or form anyone else for that matter. Taxes are set by the will of the people, and the people have spoken. ---
**Author:** ![slash2k](https://avatars.discourse-cdn.com/v4/letter/s/439d5e/32.png) [@slash2k](https://boards.straightdope.com/u/slash2k)\ **Post date:** [May 31, 2016, 4:12pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/170 "2016-05-31T16:12:33Z")
> [@Johnny\_Ace](#): > > Reverse mortgages are the single biggest fraud perpetrated on seniors in history. They’re ARMs, which is almost never good in the long term for the small borrower. Fixed-rate reverse mortgages [certainly](https://www.reversefunding.com/products/) [exist](https://reverse.mortgage/rates); however, the relative benefits and risks of fixed-vs-adjustable are very very different for reverse mortgages than for standard repayment mortgages. For example, fixed-rate reverse mortgages require borrowers to take the entire loan proceeds as one lump sum, which then starts accruing interest immediately. With adjustable-rate reverse mortgages, you have the option of withdrawing funds as you need them, meaning you pay no interest until the money is actually needed. What works better for an individual borrower depends on how much money they need when, and your blanket condemnation is based on faulty premises. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [May 31, 2016, 4:23pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/171 "2016-05-31T16:23:50Z")
> [@jsc1953](#): > > It does – earthquake coverage is prohibitively expensive. If someone can explain [CA Earthquake Insurance to me](http://www.insurance.ca.gov/01-consumers/105-type/95-guides/03-res/eq-ins.cfm), I would be obliged. My understanding is that you buy it through your insurer, but it’s actually run by the state. Or something like that. My earthquake insurance, alone, is about equal to my regular, non-earthquake insurance. Prices went up quite a bit after our Big One in '89 (Loma Prieta). ---
**Author:** ![slash2k](https://avatars.discourse-cdn.com/v4/letter/s/439d5e/32.png) [@slash2k](https://boards.straightdope.com/u/slash2k)\ **Post date:** [May 31, 2016, 4:27pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/172 "2016-05-31T16:27:19Z")
> [@John\_Mace](#): > > Not a good analogy. If the cost of a house rises, then the cost of replacing that house rises, too. **But most of the cost is in the land, not the house** , so the increase could be commensurate with the cost of building. As we know, though, prices are set by the market, not be the cost to the seller. Cite for bolded part? Per the [California Legislative Analyst](http://www.lao.ca.gov/reports/2015/finance/housing-costs/housing-costs.aspx), “Residential land in an average U.S. metro was valued at around $20,000 per acre, compared with over $150,000 in California’s coastal metros.” That’s high, but it’s still not “most.” > [@John\_Mace](#): > > The point of property taxes is that just because my house doubled in value, doesn’t mean the government needs 2x the revenue from me, or form anyone else for that matter. Taxes are set by the will of the people, and the people have spoken. If your home doubled in value, however, that usually means that the cost of government went up by a substantial percentage in that area, too, because everybody else’s rents/mortgages increased (including the people who work for the government–wages in San Francisco, et al., are substantially higher than the U.S. average), and other costs of government, such as the amount they pay for land needed for infrastructure, also goes up. It’s unlikely to be a straightly 2x increase, but you can’t pretend there was _no_ difference. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [May 31, 2016, 4:31pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/173 "2016-05-31T16:31:33Z")
> [@Fiveyearlurker](#): > > The road on my block of ten people with identical houses has a huge pothole that needs filling. This costs money. Everyone on the block uses the road in one way or another. Either they drive on it, the mail trucks that deliver to their house drives on it, the ambulance, police and fire trucks that ensure their safety drive on it. The cost of maintaining streets comes from property taxes. We all need that pothole filled, person A bought his house 10 years after person B-J and therefore his property taxes are five times higher than theirs. He ends up paying five houses worth to fill that pothole, while the other nine people on the block pay 0.55 houses worth to fill that pothole. Person A has subsidized persons B through J. That’s a meaningless definition of a subsidy. Essentially anyone paying more than anyone else would qualify as a subsidy. If I don’t send as much mail as you, I’m subsidizing your use of the USPS. If use less electricity than you, I’m subsidizing your use and maintenance of the power grid. It’s true your neighbor in a comparable property could be paying significantly different property tax amounts, but it’s not like there is an agreed upon amount that everyone should pay. And I’m positive any county will gladly accept a donation if you think you are being undertaxed. I was out most of this weekend so I’m not going to respond to each of the bad ideas you’ve suggested, taking out additional debt to finance tax payments being chief among them. Yes the story typically involves elderly being forced out of their homes - that’s a sympathetic story. But really, it applies to everyone. What you are really suggesting is imposing a tax on unrealized gains. To cover the tax, people would have to sell their homes. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [May 31, 2016, 4:40pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/174 "2016-05-31T16:40:12Z")
> [@John\_Mace](#): > > If someone can explain [CA Earthquake Insurance to me](http://www.insurance.ca.gov/01-consumers/105-type/95-guides/03-res/eq-ins.cfm), I would be obliged. My understanding is that you buy it through your insurer, but it’s actually run by the state. Or something like that. My earthquake insurance, alone, is about equal to my regular, non-earthquake insurance. Prices went up quite a bit after our Big One in '89 (Loma Prieta). What’s your question about earthquake insurance? All carriers who sell home insurance in CA must also give you the option of purchasing earthquake coverage. Because this is a crappy risk, after the 1994 quake many carriers stopped offering home insurance all together. > [@](#): > > Under the mandatory offer law, insurance companies are required to offer earthquake insurance whenever they sell a homeowners policy. Fearing that they wouldn’t have enough money to pay damage claims to homeowners if another Northridge-like quake hit, many insurance companies vastly limited the number of homeowners policies they wrote. > > By January of 1995, companies representing 93 percent of the California homeowners insurance market had either restricted or stopped writing homeowners policies altogether, sending the California housing market into a tailspin. To combat this, we now have the [California Earthquake Authority](http://www.earthquakeauthority.com/whoweare/Pages/history.aspx). The home insurance carrier is now a pass through - though they take a slight commission on selling the policies. This is done because no carrier would offer coverage because the risk pool is not profitable. This organization was created in 1996, motivated by the 1994 quake. ---
**Author:** ![slash2k](https://avatars.discourse-cdn.com/v4/letter/s/439d5e/32.png) [@slash2k](https://boards.straightdope.com/u/slash2k)\ **Post date:** [May 31, 2016, 4:57pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/175 "2016-05-31T16:57:29Z")
> [@Bone](#): > > Essentially anyone paying more than anyone else would qualify as a subsidy. If I don’t send as much mail as you, I’m subsidizing your use of the USPS. If use less electricity than you, I’m subsidizing your use and maintenance of the power grid. I’m not sure I understand your logic here. I don’t know about where you are, but my electric bill includes a customer charge (the same for everybody in my rate class, which pays for the infrastructure) and a per-kilowatt charge, which covers the amount of electricity I actually use. Similarly, every time I put a stamp on a letter, I am paying an amount the Postal Regulatory Commission has approved to cover a predetermined percentage of the marginal cost of mailing that letter. With property tax, though, it’s not like I in the house next door am making substantially less use of the road and the sidewalk and the traffic light at the corner commensurate with my lower taxes, and I enjoy exactly as much protection provided by the fire department and animal control as my neighbor paying fourteen times as much in taxes. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [May 31, 2016, 4:58pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/176 "2016-05-31T16:58:31Z")
> [@slash2k](#): > > Cite for bolded part? Are you joking? We’re talking about CA, not an average US metro area. Scroll down to [figure #6 in this cite](http://www.lao.ca.gov/reports/2015/finance/housing-costs/housing-costs.aspx). Most of the population is in that type of area. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [May 31, 2016, 5:00pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/177 "2016-05-31T17:00:52Z")
> [@slash2k](#): > > If your home doubled in value, however, that usually means that the cost of government went up by a substantial percentage in that area, too, OK, your turn for a cite for the bolded part. > [@](#): > > because everybody else’s rents/mortgages increased (including the people who work for the government–wages in San Francisco, et al., are substantially higher than the U.S. average), and other costs of government, such as the amount they pay for land needed for infrastructure, also goes up. It’s unlikely to be a straightly 2x increase, but you can’t pretend there was _no_ difference. Then it’s a goo thing I didn’t pretend that! ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [May 31, 2016, 5:03pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/178 "2016-05-31T17:03:32Z")
> [@John\_Mace](#): > > Are you joking? We’re talking about CA, not an average US metro area. Scroll down to [figure #6 in this cite](http://www.lao.ca.gov/reports/2015/finance/housing-costs/housing-costs.aspx). Most of the population is in that type of area. I think you may have switched the things you were comparing. The majority of a home’s assessed value is generally the dwelling, not the land itself. Though the land is a significant portion. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [May 31, 2016, 5:04pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/179 "2016-05-31T17:04:39Z")
> [@Bone](#): > > I think you may have switched the things you were comparing. The majority of a home’s assessed value is generally the dwelling, not the land itself. Though the land is a significant portion. CA tax assessment is based on the sale price. Other states might intentionally skew the assessment, but that’s not true in CA. In Santa Clara County, where I live, a typical 3 BR 2B home of about 1,800 SQ FT on a 6,000 SQ Ft lot sells for about $1M. Where do you think the majority of the cost is? ---
**Author:** ![slash2k](https://avatars.discourse-cdn.com/v4/letter/s/439d5e/32.png) [@slash2k](https://boards.straightdope.com/u/slash2k)\ **Post date:** [May 31, 2016, 5:11pm UTC](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798/180 "2016-05-31T17:11:52Z")
No, I’m not joking. Looking at that report, the average home in California coastal communities currently costs around $700K, with land prices averaging $150K/acre. Are you asserting that typical homes in coastal urban California sit on multiple acres of land? My (limited) experience is that California lots are typically tiny. The paragraph immediately above Figure 6 says: > [@](#): > > Renters and home buyers compete for a limited number of apartments and homes, bidding up prices far in excess of building costs. Building costs account for around one–third of home prices in California’s coastal metros. Under these circumstances, as Figure 6 shows, building costs explain only a small portion of growth in housing costs. Instead, increasing competition for limited housing is the primary driver of housing cost growth in coastal California. They’re not claiming that land prices are the primary driver; they point to community resistance (land use authority, growth controls, cumbersome permitting processes), the environmental reviews required under California law, local government favoritism towards commercial rather than residential development, and a shortage of developable vacant land as more important factors than the price of the land itself. Figure 6 shows prices rising faster than construction costs, but it doesn’t show that LAND PRICES are the main reason for the disparity, and that’s what I’m asking for a cite on. [Previous page](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798.md?page=8) [Next page](https://boards.straightdope.com/t/save-prop-13-california-campaign-sign-huh/755798.md?page=10)