Just looked it up, and prop 60 allows you do this everywhere in CA as long as you buy and sell in the same county. Prop 90 allowed inter-county sales, but only a few counties have signed on. My county, Santa Clara, is one that has signed on.
OK. Not sure what that has to do with anything.
Then you don’t understand why Prop 13 passed so overwhelmingly. That has everything to do with everything.
John Mace, any interest in taking a stab at this one?
I understand 100% why it passed, and it has nothing to do with anything.
I think anything that is at least somewhat predictable; something home values are not. Just because your house doubled in value doesn’t mean that the government needs you to give them 2x the amount in taxes. We do a similar thing with cars where you tax on your car every year isn’t so much if you have an older car, but then jumps up if you buy a newer one.
Better to tie increases to the amount of inflation or have voters approve increases in taxes. Just don’t peg it to something as unpredictable as the house value.
So, you buy a house for a long term, that why we have 30 year mortgages. Buying or selling your home every few years due to weird fluctuations caused by outside speculators is not a Good Thing.
When you buy a home, you set up a budget- how much home can I afford? Having your taxes quintuple in a short time fucks that over.
Not to mention, buying a home costs $5K or so in costs, and so does selling. Not to mention moving. And it’s a drain on your life, on the kids, etc.
It passed in large part for exactly the reason DrDeth posted. If you don’t understand that, then no, you don’t understand why it passed. And if you really think you understand why, then hows about you tell us?
Keep in mind that we live in a democracy. If most of the voters are homeowners, then they are NOT going to approve policies that hurt them badly. That’s just a fact of life.
Not to mention voters are going to take rash measures to rein in politicians when they are irresponsible, which California politicians have been for decades. Even with Prop 13, can anyone seriously claim that California homeowners are undertaxed?
Like I said. I understand why it passed. I understand that in a democracy, people are sometimes going to vote to get their neighbors to subsidize their lifestyles.
By the way. I owned a house in San Francisco until very recently. I sold it and moved to a nearby area. I have benefited from prop 13 (though I was a baby when it was passed). I don’t fault people from benefiting from poorly written laws. But, I do advocate rewriting them to be better.
I have moved 12 times in the less than 20 years since college, including 6 addresses in California. I’ve rented. I’ve owned. I flow with the economics and live how it makes the most economic sense. I’m sitting at my kitchen table with boxes around me because I’m moving again. I have three kids. We deal. We wouldn’t have had to move nearly this much if there was more mobility in the housing market here, and that mobility is stymied by prop 13.
I get it. Prop 13 really, really benefits some people. But guess what? It really, really screws some people through no fault of their own too.
I am against prop 13. I don’t think that being “forced” to sell you home for a million dollars and move to somewhere that you can buy for $200k is in any way terrible. Worst case they could pull a home equity line of credit and use that to pay for their taxes until they die.
These people are artifically propping up housing prices by decreasing supply where they would otherwise be forced to sell because of taxes and at the same time they are shifting the burden doubly to the new residents. Also if everyone’s rates were tacked to the value of their house the actual rate collected could be lower. So really new comers pay more for their home, pay a greater percentage of their homes value, and pay from a much higher base cost all so the old people can live in their empty house with their memories and leave more money for their kids. Of course most of my friends who stayed in California ended up living with their parents even after they were married with kids in most cases until a grandparent died.
That’s not why it passed.
Except you can’t do that unless you’re wiling to move to another state. Thank Og very few people agree with you! People cherish their homes, their neighbors and relatives who live nearby, etc.
Maybe it’s different down in California, but in Washington, prior to our own Prop-13ish laws, the way it worked was the governments (state, county, and city, plus water districts, school districts, etc) set the total amount of money they’d need from property tax, and then the bills are allocated out to property owners based on the fraction of total assessed property value they own. So, for example, if your property value has doubled, but the mean property value has also doubled, your bill doesn’t go up. Your bill only jumps if your property increased significantly relative to others’. (Conversely, your tax bill could actually go down even though your property value increased so long as the mean property value increased faster.)
I don’t want people to be kicked out of their homes because they now live in a hot neighborhood, for example, but should there be no additional tax raised at all from that bump in wealth?
But it’s OK to force newcomers who could afford your monthly payment with your subsidized tax rate into a renter class because they can’t afford their monthly payment at their subsidizing tax rate to not have homes, neighbors and relatives to cherish?
Listen, I don’t want Nana and PopPop forced out of the house they love either, but prop 13 is not the way to do it.
They can also leave the house to their kids at the old tax rate. Which flies directly in the face of all of the above arguments that it’s about letting grandma keep her house.
Keep in mind that the Proposition 13 “tax cap” value does not reset if the owners sell to their children (or, ever since the “Grandparents Rights Act” was passed, their grandchildren). As a result, when owners are replaced by their kids/grandkids, the tax base remains low in that area.
However, the tax cap does not reset if the assessed value drops below it - a lesson I learned the hard way when my property tax doubled since two years ago.
Not only that, but they don’t even have to live there. They can rent it and maintain the tax rate from 1978.
But, again, this law was voted into effect in order to maintain financial stability for the elderly or whatever.
There were good reasons to pass property tax reform in 1978. Inflation was pushing up property values, and the economic stagnation of the period meant that wages weren’t keeping up. Many voters were also pissed that, at a time when property taxes were following house prices upwards, the state had a large cash surplus sitting there and not getting spent.
The problem wasn’t just reform, but the way they went about it. Too many defenders of Prop 13 dishonestly portray it as a choice between fairness, on the one hand, and forcing granny out of her house, on the other. There are dozens of ways they could have reformed property taxes in ways that were not so draconian, that didn’t unbundle the local tax/spend nexus, that didn’t lead to dramatic inequities in tax burdens among neighbors, and that didn’t substantially shift the state’s overall tax burden away from businesses and towards new homeowners.
On the one hand, i understand the significance that owning your own home has for many Americans; on the other, it’s stupid to (rather arbitrarily) decide that massive increases in housing values should be somehow ignored when considering wealth for the purposes of taxation. Sure, some people who are housing-rich but cash-poor might suffer as property taxes go up, but there are ways to mitigate that without tossing the baby with the bathwater. Some critics argue that higher property taxes might slow housing price increases, as if that’s a really bad thing. But while housing inflation has benefits in some sectors of the economy, it shouldn’t be treated as some sort of holy grail.
As others have pointed out, the consequences of Prop 13 spread well beyond property taxes. Prop 13 placed the legislative and budgetary process more firmly in the hands of ballot initiatives. While such initiatives were an admirable Progressive-era measure to make the political process less corrupt and more democratic, they have, in some important ways, become precisely the type of special-interest politics that they were designed to eliminate.
To get a measure onto the ballot in the first place, you have to be able to collect hundreds of thousands of signatures, and the easiest way to do that is to pay signature collectors. It’s generally only well-funded groups that can do this, paying collectors to stand outside supermarkets and go door-to-door collecting signatures, while ordinary citizens find it much more difficult to get a proposition in front of the voters.
Peter Schrag discusses this issue in his nice book California: America’s High-Stakes Experiment. He points out that it generally costs over $1.00 per signature in the early stages of a campaign, and if things are getting tight in the last days of the campaign, the cost can go up to $5 per John Hancock. This gets expensive very quickly, especially because you generally have to collect at least 20-30 percent more than you need, to make allowance for duplicates, non-citizens, and other problems that might disqualify signatures.
Basically, in the modern system of ballot initiatives, the million-dollar question is: Do you have a million dollars?
Just as bad is the ratchet effect, whereby it requires a supermajority to raise taxes, but a simple majority to lower them. This, in combination with the mandated spending that often comes with ballot initiatives, gives the legislature little room to reallocate money or engage in discretionary taxing and spending to deal with short-run problems. Sure, it’s easy to complain about legislatures, and to argue that taking the process out of their hands might be a good thing, but if there’s anyone less responsible than legislators, it’s special interest groups that can afford to get their pet projects funded by spending millions on ballot initiatives.
Schrag, in the book i mentioned above, also notes that term limits for California legislators means that many members of the legislature spend half of their time in Sacramento getting up to speed, and are termed out of office just as they are getting familiar with the process. As a result, the most experienced political operatives in Sacramento are paid lobbyists, who outlast legislators and have a sustained influence on policy.
I think that one of the funniest things about the Prop 13 vote was the outrage generated by the state budget surplus. This is one of those areas where conservatives can’t lose. If the state runs a deficit, it means that politicians have been profligate in their spending and need to cut back. If the state has a surplus, it means that it’s been taxing too much and therefore taxes should go down. In this political worldview, there is no possible way that the state can spend responsibly, which is precisely the story conservatives want to tell. It’s worth noting, by the way, that California’s “massive” and “excessive” surplus (as described by Prop 13 supporters) was eliminated (and then some) by lost revenue in the first year after the measure was passed.
A fundamental contradiction underlining this whole issue is that fact that Californians, time and again, have made clear that they like a bunch of the things that state and local governments spend money on. They make clear that these things should be funded. And many of them don’t want to pay out of their own pockets to fund those things. This does not describe all California voters, of course, but the way that Californians have often voted in favor of tax reduction but also in favor of spending increases suggests that there is a substantial overlap between these two groups, comprised of people who want to spend money on social programs, as long as it’s other people’s money.
There must be alternatives to Prop 13, because most other states do not have an equivalent. Yet many other states have seen some large housing increases in value over 40 years.
Defending what has become a bad system because it was imposed when people were angry and stupid is pretty much exactly why so many people hate current day politics. It is also why so many people are upset by today’s angry and stupid voters. You can’t defend one without defending the other - and you can’t defend both.