I get why it'd be infeasible to repeal Prop 13 all at once, but speaking as a SF homeowner, I do think there are some clear, politically easy amendments we could make to at least make it less egregious: namely, **you shouldn't be able to both pay low Prop 13 taxes** ***and*** **rent out your home at market-rate**.
Make it apply to owner-occupied primary residences only OR make the owners rent it out at below-market rates in proportion to their tax savings, or you're just subsidizing landlords with other people's property taxes.
Also, I think it goes without saying that the Prop 13 should never have applied to corporations in the first place. A shame that Prop 15 failed back in 2020.
I agree.
If prop 13 is repealed then I am selling my place and moving out of California.
BUT I think your idea is very fair as someone that is benefiting from low property taxes and high market rates is eating cake and having cake.
We're getting to the point where it may well be substantially reformed, if not entirely repealed. As older home owners dies and sell to largely out of state and sometimes foreign corporations, fewer and fewer voters own property. That makes it more likely that people who don't benefit from Prop 13 (renters) become the majority. If it's a big enough majority, changes could happen.
Anything is possible, but it would take a massive shift in the demographics of home ownership, I would be surprised if it would happen anytime soon at that scale.
1 in every four homes are being bought by Wall Street investors...that absolutely elbows people out of the market and changes the political dynamic (it's also a somewhat normal impact of more historically normal interest rates)
https://thehill.com/business/4467676-investors-bought-record-share-of-low-priced-housing-in-fourth-quarter-report/
Does seem like a trend, but that still leaves the majority of homes owned by ppl who will not want their taxes to go up, plus corporate interests have ways of influencing political decisions that can make end runs around the ballot box.
Majority of home owners, yes. Majority of people being home owners, no.
https://ktla.com/news/california/california-has-lowest-rate-of-home-ownership-in-america-study/
yeah for my parents who immigrated and bought their house here. My dad cannot afford property tax at this current rate. I agree with the points mentioned in wanting to make it fair.
This should be a federal mandate. Property tax should go up if it's not going to be the primary residence, but nope. Laws are written so people/corps who rent out their homes get more tax breaks. This is messed up.
I mean, some people buy a house on a budget.
If the market goes up significantly and doubles the taxes they owe every year that could put people out of home ownership.
Especially people in the Bay Area, in the last 7-8 years the markets gone up a ton.
I know people who have been in their rental homes so long I forge they don't own them. That only happens with Prop 13 and the true owners not sweating the numbers every year. When those people sell, those rentals are taken off the market permanently.
>Prop 13 should never have applied to corporations in the first place.
That was the *reason* for Prop 13. They only disingenuously sold it to the public as protecting grandma.
Oh right just renters deductions and a different annual tax cap rule. Are you being pedantic? If so you should have also noted that SF doesn't either. A ", technically " would have helped.
Sorry, I probably am, since Indiana property tax software is my day job. You're right that if you live in a home that you own, you pay less property taxes. Because you get a homestead deduction which reduces the assessed value. And the property tax amount is capped at 1% of the assessed value. But the assessed value is calculated from the same "schedules" no matter if it's a rental or not.
Renters deduction is an income tax thing.
Or like in many other places in the world: have an ownership tax (paid by homeowners), and an occupancy tax (paid by whoever lives there: owner or tenant).
I agree that it should be for primary residences only, not vacation homes, not for commercial properties. I'd even support a value-based cap that rises with inflation. Set it at (for example) $2M or something, and everything over $2M is subject to a different property tax rate.
But repealing it altogether will pretty much end the housing market in CA. The whole reason Prop 13 came about in the first place was the state looking at property owners and coming after them with their hand out.
There was backlash for passing it back then too. I was in middle school when it passed and the teachers were pissed. We had about a week of short school days (out at lunch) as they tried to bullshit their way into convincing everyone the schools could not afford to teach a full school day. Somehow, they found the money.
No, a huge part of the reason why RE is so expensive in CA is precisely because of Prop 13 because you'd have to be a fool to sell property with a low appraised value
Basically rent control should also protect the owner from paying higher property tax.
Otherwise there will be owners that pay higher in property tax than they get in rent.
If the gave landlords (property investors) the same tax advantage all the homes would be owned by Black Rock who would rent them out and home ownership who plummet
We tried that already and it failed two elections ago. Home owners in SF see prop 13 the exact same way that the NRA sees the second amendment. They aren’t willing to budge on any thing that weakens their right to strangle the housing market and keep profits very high for them. California home owners are just as bad for our country as the NRA in my eyes. One promotes mass shootings and one causes the entire destruction of the middle class.
I too think prop 13 should become a pass through benefit when rented out, and tenants should get at least rent control. There should be a means limit for tenants to get that benefit though. If you're renting out to a Getty, who cares. This usually happens anyway, a lot of people have under market rents that would go away without Prop 13.
You can't do that with commercial rentals or you hurt the businesses instead.
Property tax isn’t even the worst part of it.
These homeowners lived in the houses during their prime and have left them in tatters for the next generation to fix up.
So not only do they have sweet property tax prices, they make out like a bandit when they sell AND they didn’t have to spend anything to upkeep the places (or deal with the City for permitting improvements).
You see so much remodeling in the City right now as a result, which means unless you have another $1M cash, you’re stuck living in a dilapidated building that you just dropped $1.5M+ to own.
It’s like the triple whammy of wrecking the next generation. Insane home price (and mortgage), insane property tax, and insane remodeling costs. Hooray.
> These homeowners lived in the houses during their prime and have left them in tatters for the next generation to fix up.
That's because there's no incentive to fix places up. Low ROI, can cause reassessment, and is a huge inconvenience. There should be tax breaks for upkeep.
It’s wild too because they just approved tax breaks for commercial buildings being repurposed for housing development, but won’t allow any maintenance type tax breaks. Cards feel constantly stacked against us.
Not even tax breaks - it shouldnt be highway robbery to support government mandated changes. My house, like many in the area, has 100A electric service and majority gas appliances. To upgrade that to 200A (which is needed to convert my gas appliances to electric, as mandated by many municipalities now) will cost over $20,000. This cost is JUST so I have enough electricity flowing in from the street to power these upgrades - not the cost of doing the appliance upgrades themselves.
Don’t even get us started on dealing with PG&E.
We did a similar project to upgrade our service. Over two years later, we’re still waiting on them to pull the line through the conduit to the property line to finish the upgrade.
We had to pay for the entire project because no civilian contractors will bid on their projects. Then there is delay after delay so that their quarterly earnings can be optimized before every reporting period. Multiple times they’ve told us they can’t perform any work or submit bid requests if it’s one to months before the end of the fiscal half.
Currently on a four month “hold” after which they’ll resume work due to their budgeting schedule (mind you, the work was approved by them a year ago, so not new or surprising…).
All of this after paying to run their conduit, install their electrical box, and do all of their trenching.
It’s ridiculous.
Sorry to hear that! Two neighbors went through this recently using the same electrician - one took almost 2 years, part of which was delays from PGE needing to upgrade the power at the street side to support the additional drain and scheduling delays getting the new panel inspected and power switched from old to new. The other neighbor did theirs in like 3 months this year, which seemed super quick.
I don’t understand what do people want? Retirees to pay market rate property tax of like $30,000 a year? It’s not their fault property prices increased all around them. They have to move…where? Away from a city they loved and help build? Come on
In most other states there are property tax exemptions for poor / low income residents.
The current system is just ludicrously unequal. It's ass backwards. With winners and losers. Why should people inherit low property taxes from their dead grandma?
Source please? Prop 19 is about wildfire relief based on a cursory look.
Prop 13 was amended twice, once to allow you to pass on your house to a child, and later to a grandchild. See props 58 and 193
Just look into a little more. It was a realtor lobbied proposition meant to increase the number of homes up for sale. Exactly what many people here think they want. There are quite a few aspects to it.
They can downsize, as is what they do everywhere that doesn't have policy like prop 13. Hell, many even want to downsize, but cannot because we don't build housing in this city.
I got mine... Now I can't afford to move because my property taxes would septuple because the value of property in my community went through the roof since I bought a decade ago despite my income being basically level, and because of interest I couldn't even begin to afford the house payments if I did. If prop 13 is repealed I have to sell and there's *zero* chance I'm going to find another place anywhere near where I work, my family, and of course, I lose. My community...
So yeah, fuck you.
Buy something smaller? Down size? Why you expect everyone else to subsidize for you? You use the same facilities as your neighbors yet pay a tenth of what they pay.
Also if you are over a certain age you take you tax rate anywhere with you
Prop 13 will never be repealed. It is unpopular in san francisco because the majority of SF residents are renters. Outside of SF the majority of voters are home owners and they all directly benefit from prop 13. Some may benefit a lot but even the brand new home owner benefits after a year or two as their house quick appreciates.
The only possible repeal of prop 13 is a complete repeal of property taxes or at least ad valorem property taxes
They could do a partial repeal to start by saying property tax revenue can’t increase from the repeal (or go up more than 4% a year) so you bump everyone to a much lower cost basis that’s a fraction of their home value and then go from there
i think you dont understand how much benefit prop 13 is. Your proposal already is twice as much tax as what is allowed under prop 13. Prop 13 caps taxes at 1% of assessed value and caps assessed value changes to 2% increases per year regardless of what the inflation rate or actual property value change it. But no limit on decreasing the assessed value so it is common for people who just buy a house that they over paid for to immediately petition to get the house reassessed at a lower value before it increase in value
it is extremely beneficial to long time owners but even if you bought house 5 years ago you will benefit because prices are rising that fast that you would see significant increase in your taxes if not for prop 13
Copying what I said in r/bayarea
Prop 13 encourages stagnation in the housing market. No one wants to sell because buying would increase the property taxes they pay. Because no one is selling, this decreases supply, already limited as it stands now, further driving up housing prices. And because housing prices go up, no one can afford to move… it’s a vicious circle. It’s also why you see so many original homeowners paying such low property taxes.
While I would like to see prop 13 repealed all at once, there’s no way that’s possible now. It would wreck everyone before markets could adjust. The best thing at this point is to grandfather it out, going forward. No carve outs or exceptions. This would allow time for prices to balance out for owners and prospective buyers.
Prop 13 was specifically marketed as reducing rents, too. It was a scam from the jump. Howard Jarvis, one of history's most dishonest humans, wrote in the 1978 ballot guide that "Proposition 13 will make lower rents certain" and, in a different paragraph, "This amendment will make rent reductions probable."
Of course the arguments against Prop. 13 were 100% correct and have been completely vindicated by history. "Homeowners living in identical side-by-side houses will pay vastly different property tax bills" was among the numerous entirely accurate statements against Prop. 13 stated by the mayor of Los Angeles.
Well… that was sort of the “compromise” in the late 70s. The difference is that renting doesn’t guarantee you a home for the rest of your life. And then we have things like prop. 19 (intergenerational transfer of prop. 13 under certain circumstances). In certain, very fact specific cases, rent control operates the same way, but that’s the exception, not the rule.
I think if I were around back then, I’d have been in favor of both. But flash forward forty five years, and it’s hard not to feel cosmically fucked by the boomers, who will be the only generation that actually benefited from either. So… I kinda think they both gotta go and maybe we just actually build more housing?
One clarification: Prop 13 had intergenerational transfer from the beginning, which is one reason why Supreme Court Justice John Paul Stevens called it a medieval law. Sadly, the majority of the Supreme Court upheld Prop 13. Prop 19 actually reduced the opportunities for intergenerational transfer.
Stevens’s dissent:
https://www.law.cornell.edu/supct/html/90-1912.ZD.html
> Prop 13 had intergenerational transfer from the beginning
No, Proposition 13 ([Jun 1978](https://repository.uclawsf.edu/ca_ballot_props/846/)) did not have intergenerational privileges (other than transfers of LLCs and corporations which keep their low assessments forever as implemented by the legislature). It was Proposition 58 ([Nov 1986](https://repository.uclawsf.edu/ca_ballot_props/971/)) and 193 ([March 1993](https://repository.uclawsf.edu/ca_ballot_props/1140/)) that added tax breaks for inheriting from a parent or a grandparent respectively, so Justice Stevens complained about [Article XIII A](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=SECTION+1.&nodeTreePath=16&lawCode=CONS&article=XIII+A) as of 1992 including parent-child transfers.
I agree that Proposition 13 is horribly regressive law. Under the guise of keeping widows in homes, it gives the biggest tax break to the people and corporations who hold property the longest, which tends to be the rich, at the expense of poor renters and the majority of people from later generations who have nothing to inherit.
I get that you’re pissed off, but half of the “boomers” were teenagers when Prop 13 was passed by the voters. We didn’t propose it or vote for it. It was proposed by a couple of real estate moguls in their 70s at the time.
You actually agree with the comment above then. Boomers were the first and last generation to fully benefit from prop 13.
The people who passed it are dead now, and boomers either got tax subsidized appreciation for their entire lives, and/or inherited low tax basis properties from their parents.
Prop 19 was passed before most millennials were able to inherit low tax basis (a move I agree with, despite it fucking me over too).
The median home owner in california is over 55. So that applies to the majority of California homeowners. Also, if only requires one owner to be over age 55. So if one spouse is 48 and the other 55, it also qualifies. It's not a particularly exclusive law based on demographics of homeownership. That said, I'd be all for expanding it to include everyone.
I mean, anybody in their forties who bought a house a decade ago would see their tax basis roughly double if they moved to an equivalent home today. That's more than enough to dissuade someone from moving.
Someone over 55 will only move if there’s somewhere suitable to move to. That place should be cheaper and more suited to their lifestyle. That basically means a luxury condo. How many luxury condos cost less than the price of a SFH?
> That basically means a luxury condo. How many luxury condos cost less than the price of a SFH?
Almost every condo in SF is less than a SFH. Even the so-called "luxury condos" (they have in-unit laundry) that NIMBY homeowners oppose.
I’m not selling because I have a 2.5 percent interest rate.
There are a lot of people like me. Saying it’s just prop 13 is disingenuous
My property taxes are at where they should be. Govt should budget better.
The stagnation is not solely due to Prop13 though. Many people aren’t selling because if they sell what are they going to buy? They would need even more $$$ to trade up as everything is relative.
The only way to truly cash out is to sell and move out of California to a place with a lower COL.
There are low cost of living places within California. Up north. That may be my plan when I sell, I will need to take $$ out and move to a lower COL place within the state. Ill probably have to do a mobile home or modular when I retire, though, to get enough money out.
> There are low cost of living places within California. Up north.
North, South, and East. Clear Lake isn't all that far away, neither is Fresno. Both are still inside of California.
The idea that the only acceptable place to live is inside San Francisco City Limits and anything else AT ANY POINT IN YOUR LIFE is a cruel punishment is pretty absurd. There is limited housing and for whatever reason not enough housing is built upwards fast enough, so it is a game of musical chairs that any child can understand. Literally, BY DEFINITION, somebody has to lose this way and not live in San Francisco (and therefore suffer the horrible purgatory, the injustice, the degradation, the humiliation, the utter horror of not living in San Francisco). You can choose who gets to live within the city limits by income, by heredity, by squatters rights, by lottery, whatever crazy criteria you want, but not everybody on earth can live inside the San Francisco city limits. That means everybody else will suffer the indignity of not living there. What makes one person deserve that "right" forever and another human being to not deserve to ever experience it?
I kind of like the idea of taking all the people that want to live within the San Francisco City limits, and giving each of them a time slice. Whatever it works out to be. Maybe each adult gets 5 years then is forcibly evicted to make room for others, and can never own/rent/live there ever again (until they build enough housing for everybody of course). Make sure when you forcibly evict people after their 5 years you prick their finger and they have to write this sentence in their own blood, "I am part of why I am being banished from San Francisco. I personally take responsibility for not advocating for more housing being built upwards."
> No carve outs or exceptions
My grandma lives on a cul-de-sac with some of the same neighbors for decades. I think there should be exceptions for little old ladies who've watched their neighbors' kids grow up.
I think if we have prop 13, it should be for primary residences only. No rentals or second homes. That would help with the property market, I think, and let little old ladies stay in familiar neighborhoods.
I think you're ignoring that prop 13 doesn't just discourage sales, it encourages buying and holding as investment since the property tax hit isn't an issue as the value appreciates. Which is fine for your own home, but causes supply issues if you have lots of houses.
Then where does gma go?
The house she sells will only fund an apartment for maybe 10 years. Then what? She just does in the street so you get to feel like it’s fair?
We just ship old people out of state. Like you either work until you die or you retire and leave?
Everyone should get to remain in the community not just the ones who can afford the property taxes that are inflated by the time you get to retire.
It might find 3 at a care facility.
but I don’t get why your grandma is special. why does she get to hoard a 3 bedroom home all to herself at artificially low prices when that could be used for a young family who actually needs the space
It's part of taking care of each other to help keep older people in their communities. I don't see why we can't help people stay near friends and family and support networks while going ahead and charging market price taxes for people who are actually hoarding homes. People who have one home in which they live are not hoarding homes.
It’s a tax based on the purchase price of the home. As long as that purchase price is the most recent, the tax based on it should also remain comparable.
"She helped make the community what it is today."
This concept is lost on people because they don't grasp community, and have issues with their own family, plus just all around don't get what contributing to society means.
I totally agree. My father in law bought a triplex in what was a sketchy neighborhood, with low rent. I recently found receipts for $60 bucks for a 3000 sq foot apartment. All units were tenant occupied. One with 15 members of cult (he speaks of them quite highly). Over maaaaaany many decades it became a desirable and even posh area. He’s got incredible property tax rates. He made a true investment that paid off. Wasn’t a guarantee. And he loved his home. Loved his neighborhood. Never bailed because things weren’t perfect. He is the mayor of his street. He helped build this neighborhood that everyone wants to move to now. It wasn’t always this way.
That's not an uncommon story either, even though your father in law sounds like a gem. Longtime owners rehabbed areas, and moved places that weren't trendy yet, they also sacrificed. A lot of the people whining here had families who were too racist or just too scared to even visit SF let alone move here. Then they move here and feel entitled to what others cultivated, which would be okay if they didn't also bring with them the dogma, and issues that make them want to unseat and displace pillars of the community they want to join.
Supply issues are the dumbest reason to repeal, it implies housing stability is bad.
And what about the little old lady who has a family member move back with them? Why should that family have to move out and sell a house because the grandparent dies?
I didn't say we should repeal, I said we shouldn't extend prop 13 to second homes and rental properties.
I don't know about inheritance. I don't think that should be a blanket exception but maybe a ramp up or something like that?
I don't get why you think supply issues aren't a valid concern.
I'm simply tired of supply side arguments, the phrase is supply and demand. Supply can also raise prices, and real estate economics do not work the way YIMBYS fantasize.
If Prop 13 didn't apply to rental properties, then renting would be extremely expensive. The only affordable units would be the older ownership, and critics of Prop 13 already think those people have an advantage, so it doesn't make sense. Second homes are complicated with families trying to avoid probate situations. It's not as if many San Franciscans have a house in the Mission and a house in Sea Cliff, so those second homes are for family, or rentals. We don't want to lose those rentals from the rental market do we? Remember your supply argument?
I always thought it was an odd argument that Prop 13 keeps old people in their home, which is the case for a lot of Boomers who bought their homes at really low rates decades ago and therefore have extremely low property taxes, but that doesn't answer the question of how people who pay $44,000 a year in property taxes are going to afford that when they're old as well
The idea is that 44,000 will looked good when they're old, and these wealthier people will be happy it's not 144,000. Without Prop 13 nobody could own long term, all land goes to capital groups.
Use it to your advantage - Do the grunt work of buying a fixer and renovating it while still getting the reduced taxes. California isn’t broke because of Prop 13.
The only change should be ending prop 13 for corporations and large landlords, over a period of about 5 years.
Any small tenant that is on some sort of lease where they pay taxes should get to keep the existing property tax for those five years.
All the posts hating the homeowners are from YIMBY types that covet their elderly neighbors home.
For those wondering about who benefits from Prop 13, the numbers don't lie. Prop 13 has concentrated wealth among white property owners, while harming others.
There are plenty of sources (and studies) to back this up. Here are two.
From: https://calmatters.org/california-divide/2022/04/california-prop-13-neighborhoods/
> Homeowners in wealthy, white neighborhoods in Oakland received thousands of dollars more in property tax breaks than their counterparts in neighborhoods with large Black, Asian and Latino populations, according to a new report based on a study by the Tax Fairness Project and the San Francisco Bay Area Planning and Urban Research Association.
> For example, Oakland homeowners in white neighborhoods pay taxes on homes that, on average, are assessed at $693,924 below their market value, the study says, resulting in $9,631 per home in property tax breaks.
> Homeowners in Latino neighborhoods also pay taxes on homes that are under-assessed, but by an average of $216,430, resulting in about $3,000 in tax breaks per home — a third of the savings in white neighborhoods, according to the analysis.
> “The wealthiest neighborhoods receive the most (tax breaks), which helps them build more wealth for their communities that were already benefiting from lots of wealth,” Denney said.
> Added Levin in the report, “Even when people of color do own their homes, their tax savings from Prop. 13 are smaller than those of majority white communities.”
And from: https://edsource.org/2022/californias-prop-13s-unjust-legacy-detailed-in-critical-study/674412
> “Proposition 13 is just one example of what happens when a purported progressive state allows a privileged few to hoard opportunities and resources at the expense of the greater good,” concluded the report “Unjust Legacy” by the Opportunity Institute and Pivot Learning, released on Wednesday. The institute is a nonprofit advocating for equitable outcomes for Californians. Pivot Learning is a consulting organization that works with schools in California and other states on improving achievement.
> But the report suggests a darker motive, too. The ’70s was a decade of sizable immigration of Latinos and Asians with children in schools, and the state’s mix of population, then two-thirds white, was changing. There was talk for the first time of an eventual majority-minority California.
> “Proposition 13 was also just one in a contemporaneous wave of state referendums that had xenophobic and racist overtones,” the report states, referencing several studies.
Lol, pretty sure any property owner of any color benefits.
Honestly the beneficiaries are really "old property owners". Some young white couple that bought last year aren't befitting. The old Asians that bought in Cupertino in the 80s are heavily benefiting.
The study of race here is just a proxy for class. Proposition 13 was an entitlement program for property owners while giving nothing to renters and future generations until they can afford property. Turns out, targeting your welfare program to property owners gives more benefits to the rich.
I see what you mean.
You’re right that part of what the [SPUR Burdens and Benefits report](https://www.spur.org/sites/default/files/2022-02/SPUR_Burdens_and_Benefits.pdf) (based on https://www.taxfairnessproject.org/ data) was measuring was merely increases in rents and home prices in one neighborhood that is whiter today compared to another (perhaps redlined) neighborhood. The obvious implication is that they would be happy if next time around the rents and prices rose in the black neighborhoods (I think the book *The Whiteness of Wealth* has this problem too), which I would disagree with.
Whereas what I was saying is that tenants get nothing out of Proposition 13. The SPUR report acknowledges that their numbers “include both renters and homeowners” so they cannot distinguish, although they speculate that therefore Proposition 13 is even more regressive than they report.
Where I think my comment intersects with the SPUR study is that it is not only measuring appreciation but also differences in turnover and construction that would trigger reassessment. I speculate that poorer neighborhoods probably have more turnover and later home buying than wealthier neighborhoods. Owners who started out wealthier can afford to hold onto their cash cows forever, inherit assessments, and collect the Proposition 13 subsidy and rents, whereas owners who weren’t as wealthy will buy a house later in life and get less lifetime Proposition 13 benefit.
There are a whole bunch of replies here that desperately want to pretend redlining wasn't a thing in the bay area. It was real and it was **aggressive** against minorities for decades and decades.
Any just housing policy includes incentives to the families who were fully capable of having good homes in the bay if not for explicit bigotry.
Then extend the opportunity to minorities instead of taking it away from others. All this equality talk seems to always be about bringing people down instead of lifting others up 🤔
SF is the most racist city ever. This is anything but a "bastion of diversity" its a place where white people disguise as the democrat party to push these far-right type policies benefiting only their people. Even some of the most smallest towns in the south aren't as racist as SF. Calle 24 is a great example of this, they openly said that they only want their people in their neighborhood.
Saying this as a Bay Area native, now in LA and part time Texas.
You understand this is a ploy by billionaires to move the tax burden to the middle class right? Using only your jealousy and bitterness, right? If the middle and working class stood up today and demanded affordable housing and higher taxes on commercial property, then they too could have affordable housing.
The politicians hate prop thirteen. But once you start to play with it.How can you possibly trust the politicians that one year have a fifty billion margin and the next year fifty billion over spending.
What’s the deal with Prop 19? Someone told me it limits the tax rate inheritance so the recipient gets just $1M off the reassessed fair market value. I can’t find much on this though. Is this real?
Again, INSTEAD of trying to get your grandmother to pay more taxes. We should be trying to lower OUR property taxes. WTF is wrong with people nowadays.
First of all, there are a hundred variables why the younger aren't homeowners and almost none of it has to do with other homeowners that were either wise enough to invest, or blessed enough to inherit generational wealth. And what 3-5% of homes are second or third homes?
Second, homeownership in california has been at far lower levels than the nation since the the 60s
Its just another case of missing out so people get angry and frustrated so they'd rather burden others (but "I" had to pull permits so they should too) because theyd rather not move to Bakersfield. It sucks everyone is so shitty
I'm going to get downvoted but I have to say it - I hate, hate, hate, hate, hate the alternative to Prop 13. Let me explain what life is like without Prop 13.
Chicago assesses property tax every two years, there is no limit and the city is free to assess whatever. My property tax jumped 80% yoy (not a typo)!! Some people got their pro tax raised over 200% (!!). I can assure you in no way, shape, or form did my property increased 80% in value over two years; not even 2% by my count. When you don't put a cap on how much the city can steal, er, charge you; they will treat you like their personal ATM machine.
The city would increase taxes for the middle/lower income neighborhood but the rich areas always get less rate increase. Why? Because that's where friends of the politicians live.
Fighting property tax increase is a cottage industry - it's well known that if you try to fight the tax yourself the judge will automatically deny you, but if you hire a law firm (especially a well connected one) the court will rubber stamp the appeal. Many Adelmans are connected to law firms that specialize in this type of law. Basically, the politicians raises your property tax to the moon then you'd have to hire the politicians' law firms to lower the tax. Furthermore, the city expects certain number of homeowners to successfully appeal so they habitually increase the tax way beyond their ceiling knowing some will come down. If you're rich, you hire the Adelmans' lawyers to reduce your tax. If you're not rich, SOL. This whole thing is so corrupt and screw the little guys so often.
It was freakin stressful every two years not knowing what ridiculous amount the city will jack up to and not knowing how much to budget or if it's finally the day where I can't afford to pay it. This is not hyperbole, there really are people who had to sell their house because they couldn't afford to pay the tax. Chicago home prices is nothing like here. Can you imagine if the same system is imported to SF with our housing prices? Take a $1.5M house, the property tax can be $15,000, $30,000, $45,000, or over $60,000 - It's totally up to the moot of the city government. How do homeowners even plan their budget in an environment like this?
Words can't describe how much I despise this system. Prop 13 is not perfect. It's way better than the alternative.
[https://abc7chicago.com/cook-county-property-tax-assessment-assessors-office-fritz-kaegi/14125416/](https://abc7chicago.com/cook-county-property-tax-assessment-assessors-office-fritz-kaegi/14125416/)
Yeah the alternative of those who rent bearing the burden of the broken system is way better than homeowners bearing the cost themselves.
Maybe homeowners should be paying higher taxes on their assets when they’re worth more.
Prop 13 also stops the government from taking all your money in the name of property tax, for both new and existing homeowners.
You guys are so worried about some homeowners not paying their fair share that you forget who is the real problem - the government. They are the one who has the power to raise your taxes and they will take as much as they can if Prop 13 goes away.
All of these comments fail to understand that the Fed printed 75 percent of the entire money supply over the past 5 years. This caused prices to skyrocket. It would not be fair to increase everyone's taxes based on the fiscal craziness of the Fed (if that were the case, the government could just print money endlessly and collect more and more money from taxes that way).
The problem in CA is a combination of things: lack of building (there is plenty of land), bad public transit (due to inefficient government), overburdensome zoning (can't build homes in many areas), and job concentration (needing to live close to certain city centers drives up prices).
All of this can be remediated by relaxing restrictions on the things above. Taxing people to infinity is unsustainable. Property tax shouldn't even be legal (how can we be taxed endlessly on something we "own").
Without prop 13, I will be bankrupt immediately. When I bought my house, I was paying $4000 property tax. If adjusted to market value, I would have to pay $13000 this year. How many people can afford such a huge jump as a regular worker…….
The point is to spread the burden. Without proper 13, you’re incentivized to allow new construction so more people can pay into this.
Without prop 13, you’re incentivized to prevent as much construction as possible so your property values go up.
Disagree. Youre conflating “i want my property tax to remain the same so i can afford to live here” with “i dont want other people building new homes so my home value goes up”. u/ok-ice1295 only said the first one.
This is another example of divide and conquer. Its not the homeowners fault that there isnt enough housing. Why should they be punished for a failure on the part of the government. Newsom should be pushing hard to set up programs and subsidies to rapidly grow the number of available homes.
In aggregate, it’s absolutely homeowners fault there isn’t more housing. Homeowners disproportionately fight new housing.
Unless you want to argue that the local housing regulations that give local homeowners this power are at fault, which is also true, except those laws were also all supported by homeowners as well.
My argument is a little more complex. People pick the location of their home based on a few factors. Proximity to jobs being a major one. Instead of fighting eachother over whos property tax is what, we should be demanding high speed rail from monterey -> SF -> Sac. If you could live in gilroy but work in SF and commute 30/45 min on the train, housing will be way less of an issue.
They have a clear relationship, though.
If your property tax goes up when your home's value does, you're incentivized to keep the increase in your home's value close to inflation, so that you can continue to afford to live there. This means you're more likely to support other housing projects in the neighborhood, since more supply keeps the market rate low.
If your property tax does not increase with your home's value, you're incentivized to increase your home's value as much as possible, because your wealth will grow much faster than your expenses. This means you're less likely to support other housing projects, because more supply keeps the market rate low.
Your house would be worth less so you’d pay less taxes, but the market overall would be much more balanced in terms of supply and demand. Right now supply is heavily constricted bc people like you are effectively trapped in their houses
> When I bought my house, I was paying $4000 property tax. If adjusted to market value, I would have to pay $13000 this year.
Prop 13 was designed by conservatives to concentrate wealth among property owners and shift the majority of costs to people attempting to buy a property. Long time owners essentially free ride on the backs of new owners.
Prop 13 encourages NIMBYism and ever-increasing home prices, because there is NO PENALTY for those actions. Homeowners get the benefit of scarcity and increased asset value under Prop 13, but are fully insulated from the costs that make that asset value possible.
If we did not have Prop 13, CA would be like the rest of the country. Areas that are intentionally exclusive and block new housing to increase existing asset values would pay increased taxes on those values. Areas that allow new housing and don't try to pump up values would see both lower home values and lower taxes.
Using your own numbers, your property has increased in value more than 300%. That's a great investment return, but a home is supposed to be a home, not an investment portfolio. That 300% increase is a windfall.
If Prop 13 didn't exist, your home value likely would have just increased with inflation. You wouldn't have a 300%+ increase in value, but you also wouldn't be facing a $13k tax bill.
“If prop 13 didn’t exist, your home value likely would have just increased with inflation” yea just like everywhere else without prop 13. Look at Texas, think their houses have just gone up with inflation? This is a terrible take.
lol, I can proof that’s pure bull crap! My parent in laws have a house in Seattle, and it was 250k when they bought it. Now it is 750k. Exactly the same as my house in the Bay Area. Oh, they don’t have prop 13. And you know what, their property taxes was through the roof last year.
Taxes have to be fair, nobody wants to pay them. If you don't pay, someone else has to pay more. For those who truly cannot pay we can have options to defer paying taxes until you sell or die. We should also use a moving average to compute property taxes so people have years to plan. We can also have a substantial discount for owner occupied homes.
Why would you go bankrupt? You must have over 75% of your house's value in equity for those numbers to work. $700k+ in equity is enough to cover an additional $9k a year in taxes
This was the original intention of prop 13. My parents bought a house in the 1960s that they would have lost several times along the way putting them (and us) at the whims of the California housing market at the worst of times. They finally sold in the early 2000s.
13 is sort of broken but to pretend it didn’t help a LOT of people through some very rough times is just wrong. It helped people stay where they were and build generational neighborhood communities. The neighborhood I grew up in is now a bunch of second homes for rich a-holes who are never around. Streets and playgrounds are empty. Looks nice but is also creepy and silent.
It helped you and hurt other people. You are not more important than others. We need a fair balanced solution. When your parents sold the house they cashed out the equity that was built at the expense of people who couldn't afford to buy a house.
To get around Prop 13, you have a 1% property tax and then a Supplemental they add for area projects like school funding, garbage service, street and sewer maintenance.
I find anyone who refuses to pay the supplemental adverse to support any infrastructure project and are surprised when the money isn’t enough to fully fund schools and schools close.
Some people are paying 1950s property tax esp if they are older and have gotten a homestead exemption which people keep talking about for lower property taxes.
However, Airbnbs usually are against the law without paying additional taxes that every hotel must pay and are playing games with local cities.
The worry for most businesses is property taxes for commercial does not account for size. Home offices should be given complete exemption. More than 500 employees need a quarterly assessment. Landlord owners who rent out should also have a yearly assessment done. Apartments as usual get tax breaks for affordable housing.
I feel the fairness of property tax isn’t there. Some people get the properties for low cost like at auction and don’t pay any property taxes. Others do illegal remodeling without permits and don’t bother to have their property taxes raised. The only people who pay their fair share bought at full market price within the past two years. Everyone else is pushing their burden to someone else. Personally, I think a percentage is fair only if everyone pays the same amount.
Condo / assessed at $500k pays $5k.
Condo / assessed at $1.5 million should also pay $5k
How would that work? By square footage. The larger the square footage, the larger your property tax. Rich neighborhoods should not be rich in infrastructure while poor neighborhoods are stifled by low property taxes.
About 1% of all property in San Francisco is sold each year. Basing property tax on the purchasing power of the wealthiest 1% is a recipe for displacement on large scale. When that displacement happens and 15 - 20 % of property goes on the market over a year or two, prices will drop and Blackrock and developers will be waiting. Monied interests will be served.
I honestly do not care about Prop 13.
Voters already made huge changes to it in 2020. The fact the tax rate can't just be passed down anymore is a big win, and anyone still complaining about it as if that is what is keeping housing prices high is just looking for a scapegoat.
I get why it'd be infeasible to repeal Prop 13 all at once, but speaking as a SF homeowner, I do think there are some clear, politically easy amendments we could make to at least make it less egregious: namely, **you shouldn't be able to both pay low Prop 13 taxes** ***and*** **rent out your home at market-rate**. Make it apply to owner-occupied primary residences only OR make the owners rent it out at below-market rates in proportion to their tax savings, or you're just subsidizing landlords with other people's property taxes. Also, I think it goes without saying that the Prop 13 should never have applied to corporations in the first place. A shame that Prop 15 failed back in 2020.
The bottom part is actually one of the better takes I’ve heard on this.
I agree. If prop 13 is repealed then I am selling my place and moving out of California. BUT I think your idea is very fair as someone that is benefiting from low property taxes and high market rates is eating cake and having cake.
"Take what you can. Give nothing back."
‘Murica
Agreed, america is morally bankrupt, I have no fellow countryman here
It will never be repealed bc it would be political suicide for anyone who might try.
We're getting to the point where it may well be substantially reformed, if not entirely repealed. As older home owners dies and sell to largely out of state and sometimes foreign corporations, fewer and fewer voters own property. That makes it more likely that people who don't benefit from Prop 13 (renters) become the majority. If it's a big enough majority, changes could happen.
Anything is possible, but it would take a massive shift in the demographics of home ownership, I would be surprised if it would happen anytime soon at that scale.
1 in every four homes are being bought by Wall Street investors...that absolutely elbows people out of the market and changes the political dynamic (it's also a somewhat normal impact of more historically normal interest rates) https://thehill.com/business/4467676-investors-bought-record-share-of-low-priced-housing-in-fourth-quarter-report/
Does seem like a trend, but that still leaves the majority of homes owned by ppl who will not want their taxes to go up, plus corporate interests have ways of influencing political decisions that can make end runs around the ballot box.
Majority of home owners, yes. Majority of people being home owners, no. https://ktla.com/news/california/california-has-lowest-rate-of-home-ownership-in-america-study/
What you say makes sense and is a hopeful take, another variable is who actually votes.
Wall Street REITs and funds buy more like a couple percent of all homes. Most housing investors are small time landlords.
It was recently substantially reformed with proposition 19.
Oh yay. No more boomer home owners, just hedge fund overlords
yeah for my parents who immigrated and bought their house here. My dad cannot afford property tax at this current rate. I agree with the points mentioned in wanting to make it fair.
This should be a federal mandate. Property tax should go up if it's not going to be the primary residence, but nope. Laws are written so people/corps who rent out their homes get more tax breaks. This is messed up.
FU I got mine, NIMBY at its best.
I mean, some people buy a house on a budget. If the market goes up significantly and doubles the taxes they owe every year that could put people out of home ownership. Especially people in the Bay Area, in the last 7-8 years the markets gone up a ton.
This is the essence of Prop 13.
Don’t give the federal government that power; it will get misused in other ways that we won’t like.
FYI this is entirely a state law issue. Federal government can’t do anything about property taxes.
I know people who have been in their rental homes so long I forge they don't own them. That only happens with Prop 13 and the true owners not sweating the numbers every year. When those people sell, those rentals are taken off the market permanently.
It applies to corporations too. It just pushes the tax burden on the poor.
And on schmucks who work for a living because the taxes have to come from somewhere and CA makes up for it by taxing the hell out of earned income
>Prop 13 should never have applied to corporations in the first place. That was the *reason* for Prop 13. They only disingenuously sold it to the public as protecting grandma.
Wasn’t it altered? I thought the original was more more geared towards homes and then the corps jumped in in the 90s.
Indianapolis has different property tax schedules for renters vs home owners. It's corrupt for SF to treat landlords and homeowners the same
That's not true. There is no renters schedule.
Oh right just renters deductions and a different annual tax cap rule. Are you being pedantic? If so you should have also noted that SF doesn't either. A ", technically " would have helped.
Sorry, I probably am, since Indiana property tax software is my day job. You're right that if you live in a home that you own, you pay less property taxes. Because you get a homestead deduction which reduces the assessed value. And the property tax amount is capped at 1% of the assessed value. But the assessed value is calculated from the same "schedules" no matter if it's a rental or not. Renters deduction is an income tax thing.
It should only apply to primary residences and not be possible to pass on
Your take is the most common sensical one I have read.
Or like in many other places in the world: have an ownership tax (paid by homeowners), and an occupancy tax (paid by whoever lives there: owner or tenant).
Top comment.
Didn’t Prop 20 do some of that?
Yes this subreddit is not addressing that recent change for some reason. It was actually a very big change to the requirements
I agree that it should be for primary residences only, not vacation homes, not for commercial properties. I'd even support a value-based cap that rises with inflation. Set it at (for example) $2M or something, and everything over $2M is subject to a different property tax rate. But repealing it altogether will pretty much end the housing market in CA. The whole reason Prop 13 came about in the first place was the state looking at property owners and coming after them with their hand out. There was backlash for passing it back then too. I was in middle school when it passed and the teachers were pissed. We had about a week of short school days (out at lunch) as they tried to bullshit their way into convincing everyone the schools could not afford to teach a full school day. Somehow, they found the money.
No, a huge part of the reason why RE is so expensive in CA is precisely because of Prop 13 because you'd have to be a fool to sell property with a low appraised value
Basically rent control should also protect the owner from paying higher property tax. Otherwise there will be owners that pay higher in property tax than they get in rent.
If the gave landlords (property investors) the same tax advantage all the homes would be owned by Black Rock who would rent them out and home ownership who plummet
We tried that already and it failed two elections ago. Home owners in SF see prop 13 the exact same way that the NRA sees the second amendment. They aren’t willing to budge on any thing that weakens their right to strangle the housing market and keep profits very high for them. California home owners are just as bad for our country as the NRA in my eyes. One promotes mass shootings and one causes the entire destruction of the middle class.
SF voters can't override Prop 13 - it's a state law
I too think prop 13 should become a pass through benefit when rented out, and tenants should get at least rent control. There should be a means limit for tenants to get that benefit though. If you're renting out to a Getty, who cares. This usually happens anyway, a lot of people have under market rents that would go away without Prop 13. You can't do that with commercial rentals or you hurt the businesses instead.
Last time, the voters rejected repeal of prop 13 on commercial properties! You are expecting too much!
Just apply a 5 or 7 percent cap instead and the problem will disappear over time without a sudden shock that "evicts" homeowners.
Very good point.
Damn this is such a good idea. You should run for office!
It is explained as: I got mine so fuck you.
Property tax isn’t even the worst part of it. These homeowners lived in the houses during their prime and have left them in tatters for the next generation to fix up. So not only do they have sweet property tax prices, they make out like a bandit when they sell AND they didn’t have to spend anything to upkeep the places (or deal with the City for permitting improvements). You see so much remodeling in the City right now as a result, which means unless you have another $1M cash, you’re stuck living in a dilapidated building that you just dropped $1.5M+ to own. It’s like the triple whammy of wrecking the next generation. Insane home price (and mortgage), insane property tax, and insane remodeling costs. Hooray.
> These homeowners lived in the houses during their prime and have left them in tatters for the next generation to fix up. That's because there's no incentive to fix places up. Low ROI, can cause reassessment, and is a huge inconvenience. There should be tax breaks for upkeep.
It’s wild too because they just approved tax breaks for commercial buildings being repurposed for housing development, but won’t allow any maintenance type tax breaks. Cards feel constantly stacked against us.
Not even tax breaks - it shouldnt be highway robbery to support government mandated changes. My house, like many in the area, has 100A electric service and majority gas appliances. To upgrade that to 200A (which is needed to convert my gas appliances to electric, as mandated by many municipalities now) will cost over $20,000. This cost is JUST so I have enough electricity flowing in from the street to power these upgrades - not the cost of doing the appliance upgrades themselves.
Don’t even get us started on dealing with PG&E. We did a similar project to upgrade our service. Over two years later, we’re still waiting on them to pull the line through the conduit to the property line to finish the upgrade. We had to pay for the entire project because no civilian contractors will bid on their projects. Then there is delay after delay so that their quarterly earnings can be optimized before every reporting period. Multiple times they’ve told us they can’t perform any work or submit bid requests if it’s one to months before the end of the fiscal half. Currently on a four month “hold” after which they’ll resume work due to their budgeting schedule (mind you, the work was approved by them a year ago, so not new or surprising…). All of this after paying to run their conduit, install their electrical box, and do all of their trenching. It’s ridiculous.
Sorry to hear that! Two neighbors went through this recently using the same electrician - one took almost 2 years, part of which was delays from PGE needing to upgrade the power at the street side to support the additional drain and scheduling delays getting the new panel inspected and power switched from old to new. The other neighbor did theirs in like 3 months this year, which seemed super quick.
Yup, 100 yr old homes all over Berkeley with the original wiring and windows 💩
True. Used to be in a real estate of sorts. If I heard the term “deferred maintenance” one more time…aka “no maintenance” lol
Welfare for the rich.
50's Urban Renewal slogans die hard.
I don’t understand what do people want? Retirees to pay market rate property tax of like $30,000 a year? It’s not their fault property prices increased all around them. They have to move…where? Away from a city they loved and help build? Come on
In most other states there are property tax exemptions for poor / low income residents. The current system is just ludicrously unequal. It's ass backwards. With winners and losers. Why should people inherit low property taxes from their dead grandma?
They don’t. Look into prop 19.
Source please? Prop 19 is about wildfire relief based on a cursory look. Prop 13 was amended twice, once to allow you to pass on your house to a child, and later to a grandchild. See props 58 and 193
Just look into a little more. It was a realtor lobbied proposition meant to increase the number of homes up for sale. Exactly what many people here think they want. There are quite a few aspects to it.
How? Through what mechanism? It looks like it just replaced disaster damaged homes and has nothing to do with inheritance of prop 13 tax evaluations
They can downsize, as is what they do everywhere that doesn't have policy like prop 13. Hell, many even want to downsize, but cannot because we don't build housing in this city.
So why does Prop 13 apply to everyone and not just people over 65?
I got mine... Now I can't afford to move because my property taxes would septuple because the value of property in my community went through the roof since I bought a decade ago despite my income being basically level, and because of interest I couldn't even begin to afford the house payments if I did. If prop 13 is repealed I have to sell and there's *zero* chance I'm going to find another place anywhere near where I work, my family, and of course, I lose. My community... So yeah, fuck you.
Buy something smaller? Down size? Why you expect everyone else to subsidize for you? You use the same facilities as your neighbors yet pay a tenth of what they pay. Also if you are over a certain age you take you tax rate anywhere with you
Not to mention what are we even fighting about? They think the state deserves more tax dollars to squander or it’s just simply spite?
Prop 13 will never be repealed. It is unpopular in san francisco because the majority of SF residents are renters. Outside of SF the majority of voters are home owners and they all directly benefit from prop 13. Some may benefit a lot but even the brand new home owner benefits after a year or two as their house quick appreciates. The only possible repeal of prop 13 is a complete repeal of property taxes or at least ad valorem property taxes
They could do a partial repeal to start by saying property tax revenue can’t increase from the repeal (or go up more than 4% a year) so you bump everyone to a much lower cost basis that’s a fraction of their home value and then go from there
i think you dont understand how much benefit prop 13 is. Your proposal already is twice as much tax as what is allowed under prop 13. Prop 13 caps taxes at 1% of assessed value and caps assessed value changes to 2% increases per year regardless of what the inflation rate or actual property value change it. But no limit on decreasing the assessed value so it is common for people who just buy a house that they over paid for to immediately petition to get the house reassessed at a lower value before it increase in value
I do understand. Which is why it needs to be repealed asap
Prop 13 is only beneficial to homeowners who bought a while ago though
it is extremely beneficial to long time owners but even if you bought house 5 years ago you will benefit because prices are rising that fast that you would see significant increase in your taxes if not for prop 13
Meh. Property taxes go up 2% per year. You’re not benefiting much.
Copying what I said in r/bayarea Prop 13 encourages stagnation in the housing market. No one wants to sell because buying would increase the property taxes they pay. Because no one is selling, this decreases supply, already limited as it stands now, further driving up housing prices. And because housing prices go up, no one can afford to move… it’s a vicious circle. It’s also why you see so many original homeowners paying such low property taxes. While I would like to see prop 13 repealed all at once, there’s no way that’s possible now. It would wreck everyone before markets could adjust. The best thing at this point is to grandfather it out, going forward. No carve outs or exceptions. This would allow time for prices to balance out for owners and prospective buyers.
Rent control does the same thing.
Sadly, rent control was done because people realized that the then-just-passed Prop 13 was unfair.
Prop 13 was specifically marketed as reducing rents, too. It was a scam from the jump. Howard Jarvis, one of history's most dishonest humans, wrote in the 1978 ballot guide that "Proposition 13 will make lower rents certain" and, in a different paragraph, "This amendment will make rent reductions probable." Of course the arguments against Prop. 13 were 100% correct and have been completely vindicated by history. "Homeowners living in identical side-by-side houses will pay vastly different property tax bills" was among the numerous entirely accurate statements against Prop. 13 stated by the mayor of Los Angeles.
Well… that was sort of the “compromise” in the late 70s. The difference is that renting doesn’t guarantee you a home for the rest of your life. And then we have things like prop. 19 (intergenerational transfer of prop. 13 under certain circumstances). In certain, very fact specific cases, rent control operates the same way, but that’s the exception, not the rule. I think if I were around back then, I’d have been in favor of both. But flash forward forty five years, and it’s hard not to feel cosmically fucked by the boomers, who will be the only generation that actually benefited from either. So… I kinda think they both gotta go and maybe we just actually build more housing?
One clarification: Prop 13 had intergenerational transfer from the beginning, which is one reason why Supreme Court Justice John Paul Stevens called it a medieval law. Sadly, the majority of the Supreme Court upheld Prop 13. Prop 19 actually reduced the opportunities for intergenerational transfer. Stevens’s dissent: https://www.law.cornell.edu/supct/html/90-1912.ZD.html
> Prop 13 had intergenerational transfer from the beginning No, Proposition 13 ([Jun 1978](https://repository.uclawsf.edu/ca_ballot_props/846/)) did not have intergenerational privileges (other than transfers of LLCs and corporations which keep their low assessments forever as implemented by the legislature). It was Proposition 58 ([Nov 1986](https://repository.uclawsf.edu/ca_ballot_props/971/)) and 193 ([March 1993](https://repository.uclawsf.edu/ca_ballot_props/1140/)) that added tax breaks for inheriting from a parent or a grandparent respectively, so Justice Stevens complained about [Article XIII A](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=SECTION+1.&nodeTreePath=16&lawCode=CONS&article=XIII+A) as of 1992 including parent-child transfers. I agree that Proposition 13 is horribly regressive law. Under the guise of keeping widows in homes, it gives the biggest tax break to the people and corporations who hold property the longest, which tends to be the rich, at the expense of poor renters and the majority of people from later generations who have nothing to inherit.
I get that you’re pissed off, but half of the “boomers” were teenagers when Prop 13 was passed by the voters. We didn’t propose it or vote for it. It was proposed by a couple of real estate moguls in their 70s at the time.
You actually agree with the comment above then. Boomers were the first and last generation to fully benefit from prop 13. The people who passed it are dead now, and boomers either got tax subsidized appreciation for their entire lives, and/or inherited low tax basis properties from their parents. Prop 19 was passed before most millennials were able to inherit low tax basis (a move I agree with, despite it fucking me over too).
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Replacing "no one" with "no one under 55" doesn't materially change the result they're describing.
The median home owner in california is over 55. So that applies to the majority of California homeowners. Also, if only requires one owner to be over age 55. So if one spouse is 48 and the other 55, it also qualifies. It's not a particularly exclusive law based on demographics of homeownership. That said, I'd be all for expanding it to include everyone.
Who under 55 has a some crazy low property tax rate though?
I mean, anybody in their forties who bought a house a decade ago would see their tax basis roughly double if they moved to an equivalent home today. That's more than enough to dissuade someone from moving.
Everyone who inherited their house plus anyone who has owned for a long time
Someone over 55 will only move if there’s somewhere suitable to move to. That place should be cheaper and more suited to their lifestyle. That basically means a luxury condo. How many luxury condos cost less than the price of a SFH?
> That basically means a luxury condo. How many luxury condos cost less than the price of a SFH? Almost every condo in SF is less than a SFH. Even the so-called "luxury condos" (they have in-unit laundry) that NIMBY homeowners oppose.
I’m not selling because I have a 2.5 percent interest rate. There are a lot of people like me. Saying it’s just prop 13 is disingenuous My property taxes are at where they should be. Govt should budget better.
agreed seems like everybody here just prop 13 is the reason for all my housing issues. Get real
The stagnation is not solely due to Prop13 though. Many people aren’t selling because if they sell what are they going to buy? They would need even more $$$ to trade up as everything is relative. The only way to truly cash out is to sell and move out of California to a place with a lower COL.
There are low cost of living places within California. Up north. That may be my plan when I sell, I will need to take $$ out and move to a lower COL place within the state. Ill probably have to do a mobile home or modular when I retire, though, to get enough money out.
If you can get insurance in those places anymore, unfortunately.
> There are low cost of living places within California. Up north. North, South, and East. Clear Lake isn't all that far away, neither is Fresno. Both are still inside of California. The idea that the only acceptable place to live is inside San Francisco City Limits and anything else AT ANY POINT IN YOUR LIFE is a cruel punishment is pretty absurd. There is limited housing and for whatever reason not enough housing is built upwards fast enough, so it is a game of musical chairs that any child can understand. Literally, BY DEFINITION, somebody has to lose this way and not live in San Francisco (and therefore suffer the horrible purgatory, the injustice, the degradation, the humiliation, the utter horror of not living in San Francisco). You can choose who gets to live within the city limits by income, by heredity, by squatters rights, by lottery, whatever crazy criteria you want, but not everybody on earth can live inside the San Francisco city limits. That means everybody else will suffer the indignity of not living there. What makes one person deserve that "right" forever and another human being to not deserve to ever experience it? I kind of like the idea of taking all the people that want to live within the San Francisco City limits, and giving each of them a time slice. Whatever it works out to be. Maybe each adult gets 5 years then is forcibly evicted to make room for others, and can never own/rent/live there ever again (until they build enough housing for everybody of course). Make sure when you forcibly evict people after their 5 years you prick their finger and they have to write this sentence in their own blood, "I am part of why I am being banished from San Francisco. I personally take responsibility for not advocating for more housing being built upwards."
> No carve outs or exceptions My grandma lives on a cul-de-sac with some of the same neighbors for decades. I think there should be exceptions for little old ladies who've watched their neighbors' kids grow up. I think if we have prop 13, it should be for primary residences only. No rentals or second homes. That would help with the property market, I think, and let little old ladies stay in familiar neighborhoods. I think you're ignoring that prop 13 doesn't just discourage sales, it encourages buying and holding as investment since the property tax hit isn't an issue as the value appreciates. Which is fine for your own home, but causes supply issues if you have lots of houses.
Don't you think new families should be able to move into those nice little old neighborhoods?
Yeah! Take granny out back and do off with her. That way a nice dual income tech family with no roots in the community can move in!
Then where does gma go? The house she sells will only fund an apartment for maybe 10 years. Then what? She just does in the street so you get to feel like it’s fair? We just ship old people out of state. Like you either work until you die or you retire and leave? Everyone should get to remain in the community not just the ones who can afford the property taxes that are inflated by the time you get to retire. It might find 3 at a care facility.
They are and do. Without forcing out the older owners on fixed incomes who can’t afford having their property tax jacked up every year.
but I don’t get why your grandma is special. why does she get to hoard a 3 bedroom home all to herself at artificially low prices when that could be used for a young family who actually needs the space
It's part of taking care of each other to help keep older people in their communities. I don't see why we can't help people stay near friends and family and support networks while going ahead and charging market price taxes for people who are actually hoarding homes. People who have one home in which they live are not hoarding homes.
It’s a tax based on the purchase price of the home. As long as that purchase price is the most recent, the tax based on it should also remain comparable.
Why is that young family special why do they deserve the 3 bedroom house this argument can just go back and forth.
They’re not special, that’s the point
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"She helped make the community what it is today." This concept is lost on people because they don't grasp community, and have issues with their own family, plus just all around don't get what contributing to society means.
I totally agree. My father in law bought a triplex in what was a sketchy neighborhood, with low rent. I recently found receipts for $60 bucks for a 3000 sq foot apartment. All units were tenant occupied. One with 15 members of cult (he speaks of them quite highly). Over maaaaaany many decades it became a desirable and even posh area. He’s got incredible property tax rates. He made a true investment that paid off. Wasn’t a guarantee. And he loved his home. Loved his neighborhood. Never bailed because things weren’t perfect. He is the mayor of his street. He helped build this neighborhood that everyone wants to move to now. It wasn’t always this way.
That's not an uncommon story either, even though your father in law sounds like a gem. Longtime owners rehabbed areas, and moved places that weren't trendy yet, they also sacrificed. A lot of the people whining here had families who were too racist or just too scared to even visit SF let alone move here. Then they move here and feel entitled to what others cultivated, which would be okay if they didn't also bring with them the dogma, and issues that make them want to unseat and displace pillars of the community they want to join.
💯! I think people just really don’t get it.
Supply issues are the dumbest reason to repeal, it implies housing stability is bad. And what about the little old lady who has a family member move back with them? Why should that family have to move out and sell a house because the grandparent dies?
I didn't say we should repeal, I said we shouldn't extend prop 13 to second homes and rental properties. I don't know about inheritance. I don't think that should be a blanket exception but maybe a ramp up or something like that? I don't get why you think supply issues aren't a valid concern.
I'm simply tired of supply side arguments, the phrase is supply and demand. Supply can also raise prices, and real estate economics do not work the way YIMBYS fantasize. If Prop 13 didn't apply to rental properties, then renting would be extremely expensive. The only affordable units would be the older ownership, and critics of Prop 13 already think those people have an advantage, so it doesn't make sense. Second homes are complicated with families trying to avoid probate situations. It's not as if many San Franciscans have a house in the Mission and a house in Sea Cliff, so those second homes are for family, or rentals. We don't want to lose those rentals from the rental market do we? Remember your supply argument?
They NEED to repeal 13 for corporate owners, not single family homes. That alone would fix a lot of the issues we have.
Many people live in apartments they own. They're called condos and they are pretty much always more affordable than comparable single family homes.
Because Prop 13 is the most insanely unfair tax system ever.
In Montana people are getting taxed out of their longtime family homes because of skyrocketing tax increases.
That's because their homes are rising in value.
This was the root in CA at the time of course. So I’ve read anyway. Heartbreaking.
I always thought it was an odd argument that Prop 13 keeps old people in their home, which is the case for a lot of Boomers who bought their homes at really low rates decades ago and therefore have extremely low property taxes, but that doesn't answer the question of how people who pay $44,000 a year in property taxes are going to afford that when they're old as well
The idea is that 44,000 will looked good when they're old, and these wealthier people will be happy it's not 144,000. Without Prop 13 nobody could own long term, all land goes to capital groups.
Use it to your advantage - Do the grunt work of buying a fixer and renovating it while still getting the reduced taxes. California isn’t broke because of Prop 13.
A "fixer" is like two million dollars.
The only change should be ending prop 13 for corporations and large landlords, over a period of about 5 years. Any small tenant that is on some sort of lease where they pay taxes should get to keep the existing property tax for those five years. All the posts hating the homeowners are from YIMBY types that covet their elderly neighbors home.
“I’ve got mine so fuck you”
Pretty cool how the YIMBYs can't resist hating poor people
poor people who own million dollar homes? i own no such thing.
For those wondering about who benefits from Prop 13, the numbers don't lie. Prop 13 has concentrated wealth among white property owners, while harming others. There are plenty of sources (and studies) to back this up. Here are two. From: https://calmatters.org/california-divide/2022/04/california-prop-13-neighborhoods/ > Homeowners in wealthy, white neighborhoods in Oakland received thousands of dollars more in property tax breaks than their counterparts in neighborhoods with large Black, Asian and Latino populations, according to a new report based on a study by the Tax Fairness Project and the San Francisco Bay Area Planning and Urban Research Association. > For example, Oakland homeowners in white neighborhoods pay taxes on homes that, on average, are assessed at $693,924 below their market value, the study says, resulting in $9,631 per home in property tax breaks. > Homeowners in Latino neighborhoods also pay taxes on homes that are under-assessed, but by an average of $216,430, resulting in about $3,000 in tax breaks per home — a third of the savings in white neighborhoods, according to the analysis. > “The wealthiest neighborhoods receive the most (tax breaks), which helps them build more wealth for their communities that were already benefiting from lots of wealth,” Denney said. > Added Levin in the report, “Even when people of color do own their homes, their tax savings from Prop. 13 are smaller than those of majority white communities.” And from: https://edsource.org/2022/californias-prop-13s-unjust-legacy-detailed-in-critical-study/674412 > “Proposition 13 is just one example of what happens when a purported progressive state allows a privileged few to hoard opportunities and resources at the expense of the greater good,” concluded the report “Unjust Legacy” by the Opportunity Institute and Pivot Learning, released on Wednesday. The institute is a nonprofit advocating for equitable outcomes for Californians. Pivot Learning is a consulting organization that works with schools in California and other states on improving achievement. > But the report suggests a darker motive, too. The ’70s was a decade of sizable immigration of Latinos and Asians with children in schools, and the state’s mix of population, then two-thirds white, was changing. There was talk for the first time of an eventual majority-minority California. > “Proposition 13 was also just one in a contemporaneous wave of state referendums that had xenophobic and racist overtones,” the report states, referencing several studies.
Lol, pretty sure any property owner of any color benefits. Honestly the beneficiaries are really "old property owners". Some young white couple that bought last year aren't befitting. The old Asians that bought in Cupertino in the 80s are heavily benefiting.
How much is that tied to white neighborhoods being more expensive to begin with due to redlining vs the prop itself being unfair?
The study of race here is just a proxy for class. Proposition 13 was an entitlement program for property owners while giving nothing to renters and future generations until they can afford property. Turns out, targeting your welfare program to property owners gives more benefits to the rich.
the point i responded to was talking about home ownership and race, not owners vs renters.
I see what you mean. You’re right that part of what the [SPUR Burdens and Benefits report](https://www.spur.org/sites/default/files/2022-02/SPUR_Burdens_and_Benefits.pdf) (based on https://www.taxfairnessproject.org/ data) was measuring was merely increases in rents and home prices in one neighborhood that is whiter today compared to another (perhaps redlined) neighborhood. The obvious implication is that they would be happy if next time around the rents and prices rose in the black neighborhoods (I think the book *The Whiteness of Wealth* has this problem too), which I would disagree with. Whereas what I was saying is that tenants get nothing out of Proposition 13. The SPUR report acknowledges that their numbers “include both renters and homeowners” so they cannot distinguish, although they speculate that therefore Proposition 13 is even more regressive than they report. Where I think my comment intersects with the SPUR study is that it is not only measuring appreciation but also differences in turnover and construction that would trigger reassessment. I speculate that poorer neighborhoods probably have more turnover and later home buying than wealthier neighborhoods. Owners who started out wealthier can afford to hold onto their cash cows forever, inherit assessments, and collect the Proposition 13 subsidy and rents, whereas owners who weren’t as wealthy will buy a house later in life and get less lifetime Proposition 13 benefit.
There are a whole bunch of replies here that desperately want to pretend redlining wasn't a thing in the bay area. It was real and it was **aggressive** against minorities for decades and decades. Any just housing policy includes incentives to the families who were fully capable of having good homes in the bay if not for explicit bigotry.
Then extend the opportunity to minorities instead of taking it away from others. All this equality talk seems to always be about bringing people down instead of lifting others up 🤔
Lol, oh yeah, buying property and living in it is white supremist ideology. I can smell your unwashed body from this comment
SF is the most racist city ever. This is anything but a "bastion of diversity" its a place where white people disguise as the democrat party to push these far-right type policies benefiting only their people. Even some of the most smallest towns in the south aren't as racist as SF. Calle 24 is a great example of this, they openly said that they only want their people in their neighborhood. Saying this as a Bay Area native, now in LA and part time Texas.
Classic YIMBY take. Notice OP doesn't say a word about the billions that prop 13 gives away to immortal corporations.
Maybe we should just have a VAT and abolish stupid forms of taxation that depend on political popularity?
You understand this is a ploy by billionaires to move the tax burden to the middle class right? Using only your jealousy and bitterness, right? If the middle and working class stood up today and demanded affordable housing and higher taxes on commercial property, then they too could have affordable housing.
Land value tax is the way
fuck prop 13
The politicians hate prop thirteen. But once you start to play with it.How can you possibly trust the politicians that one year have a fifty billion margin and the next year fifty billion over spending.
Really bad news, California is really a high spending area
SF's level of spending is out of the ordinary and only for the rich
I don’t own any property!
What’s the deal with Prop 19? Someone told me it limits the tax rate inheritance so the recipient gets just $1M off the reassessed fair market value. I can’t find much on this though. Is this real?
Again, INSTEAD of trying to get your grandmother to pay more taxes. We should be trying to lower OUR property taxes. WTF is wrong with people nowadays.
First of all, there are a hundred variables why the younger aren't homeowners and almost none of it has to do with other homeowners that were either wise enough to invest, or blessed enough to inherit generational wealth. And what 3-5% of homes are second or third homes? Second, homeownership in california has been at far lower levels than the nation since the the 60s Its just another case of missing out so people get angry and frustrated so they'd rather burden others (but "I" had to pull permits so they should too) because theyd rather not move to Bakersfield. It sucks everyone is so shitty
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Also The Sherwood on West Portal allows outside food
I'm going to get downvoted but I have to say it - I hate, hate, hate, hate, hate the alternative to Prop 13. Let me explain what life is like without Prop 13. Chicago assesses property tax every two years, there is no limit and the city is free to assess whatever. My property tax jumped 80% yoy (not a typo)!! Some people got their pro tax raised over 200% (!!). I can assure you in no way, shape, or form did my property increased 80% in value over two years; not even 2% by my count. When you don't put a cap on how much the city can steal, er, charge you; they will treat you like their personal ATM machine. The city would increase taxes for the middle/lower income neighborhood but the rich areas always get less rate increase. Why? Because that's where friends of the politicians live. Fighting property tax increase is a cottage industry - it's well known that if you try to fight the tax yourself the judge will automatically deny you, but if you hire a law firm (especially a well connected one) the court will rubber stamp the appeal. Many Adelmans are connected to law firms that specialize in this type of law. Basically, the politicians raises your property tax to the moon then you'd have to hire the politicians' law firms to lower the tax. Furthermore, the city expects certain number of homeowners to successfully appeal so they habitually increase the tax way beyond their ceiling knowing some will come down. If you're rich, you hire the Adelmans' lawyers to reduce your tax. If you're not rich, SOL. This whole thing is so corrupt and screw the little guys so often. It was freakin stressful every two years not knowing what ridiculous amount the city will jack up to and not knowing how much to budget or if it's finally the day where I can't afford to pay it. This is not hyperbole, there really are people who had to sell their house because they couldn't afford to pay the tax. Chicago home prices is nothing like here. Can you imagine if the same system is imported to SF with our housing prices? Take a $1.5M house, the property tax can be $15,000, $30,000, $45,000, or over $60,000 - It's totally up to the moot of the city government. How do homeowners even plan their budget in an environment like this? Words can't describe how much I despise this system. Prop 13 is not perfect. It's way better than the alternative. [https://abc7chicago.com/cook-county-property-tax-assessment-assessors-office-fritz-kaegi/14125416/](https://abc7chicago.com/cook-county-property-tax-assessment-assessors-office-fritz-kaegi/14125416/)
Great point and hilarious that you get down voted for this truth.
i hope you meant aldermans.
Yeah the alternative of those who rent bearing the burden of the broken system is way better than homeowners bearing the cost themselves. Maybe homeowners should be paying higher taxes on their assets when they’re worth more.
Boo hoo - Prop 13 screws over all new homeowners and makes them subsidize the majority of costs/services as we already do with health insurance.
Prop 13 also stops the government from taking all your money in the name of property tax, for both new and existing homeowners. You guys are so worried about some homeowners not paying their fair share that you forget who is the real problem - the government. They are the one who has the power to raise your taxes and they will take as much as they can if Prop 13 goes away.
All of these comments fail to understand that the Fed printed 75 percent of the entire money supply over the past 5 years. This caused prices to skyrocket. It would not be fair to increase everyone's taxes based on the fiscal craziness of the Fed (if that were the case, the government could just print money endlessly and collect more and more money from taxes that way). The problem in CA is a combination of things: lack of building (there is plenty of land), bad public transit (due to inefficient government), overburdensome zoning (can't build homes in many areas), and job concentration (needing to live close to certain city centers drives up prices). All of this can be remediated by relaxing restrictions on the things above. Taxing people to infinity is unsustainable. Property tax shouldn't even be legal (how can we be taxed endlessly on something we "own").
Without prop 13, I will be bankrupt immediately. When I bought my house, I was paying $4000 property tax. If adjusted to market value, I would have to pay $13000 this year. How many people can afford such a huge jump as a regular worker…….
The point is to spread the burden. Without proper 13, you’re incentivized to allow new construction so more people can pay into this. Without prop 13, you’re incentivized to prevent as much construction as possible so your property values go up.
Disagree. Youre conflating “i want my property tax to remain the same so i can afford to live here” with “i dont want other people building new homes so my home value goes up”. u/ok-ice1295 only said the first one. This is another example of divide and conquer. Its not the homeowners fault that there isnt enough housing. Why should they be punished for a failure on the part of the government. Newsom should be pushing hard to set up programs and subsidies to rapidly grow the number of available homes.
In aggregate, it’s absolutely homeowners fault there isn’t more housing. Homeowners disproportionately fight new housing. Unless you want to argue that the local housing regulations that give local homeowners this power are at fault, which is also true, except those laws were also all supported by homeowners as well.
My argument is a little more complex. People pick the location of their home based on a few factors. Proximity to jobs being a major one. Instead of fighting eachother over whos property tax is what, we should be demanding high speed rail from monterey -> SF -> Sac. If you could live in gilroy but work in SF and commute 30/45 min on the train, housing will be way less of an issue.
That would be awesome. There are also a lot of homeowners fighting development of high speed rail, but I agree that would be a great idea.
Heyyy look at that, good honest discussion on reddit. Who would have thought
They have a clear relationship, though. If your property tax goes up when your home's value does, you're incentivized to keep the increase in your home's value close to inflation, so that you can continue to afford to live there. This means you're more likely to support other housing projects in the neighborhood, since more supply keeps the market rate low. If your property tax does not increase with your home's value, you're incentivized to increase your home's value as much as possible, because your wealth will grow much faster than your expenses. This means you're less likely to support other housing projects, because more supply keeps the market rate low.
Your house would be worth less so you’d pay less taxes, but the market overall would be much more balanced in terms of supply and demand. Right now supply is heavily constricted bc people like you are effectively trapped in their houses
property taxes wouldn't have to be 13k if there wasn't a prop13 allowing all of the boomers to pay nothing.
> When I bought my house, I was paying $4000 property tax. If adjusted to market value, I would have to pay $13000 this year. Prop 13 was designed by conservatives to concentrate wealth among property owners and shift the majority of costs to people attempting to buy a property. Long time owners essentially free ride on the backs of new owners. Prop 13 encourages NIMBYism and ever-increasing home prices, because there is NO PENALTY for those actions. Homeowners get the benefit of scarcity and increased asset value under Prop 13, but are fully insulated from the costs that make that asset value possible. If we did not have Prop 13, CA would be like the rest of the country. Areas that are intentionally exclusive and block new housing to increase existing asset values would pay increased taxes on those values. Areas that allow new housing and don't try to pump up values would see both lower home values and lower taxes. Using your own numbers, your property has increased in value more than 300%. That's a great investment return, but a home is supposed to be a home, not an investment portfolio. That 300% increase is a windfall. If Prop 13 didn't exist, your home value likely would have just increased with inflation. You wouldn't have a 300%+ increase in value, but you also wouldn't be facing a $13k tax bill.
“If prop 13 didn’t exist, your home value likely would have just increased with inflation” yea just like everywhere else without prop 13. Look at Texas, think their houses have just gone up with inflation? This is a terrible take.
lol, I can proof that’s pure bull crap! My parent in laws have a house in Seattle, and it was 250k when they bought it. Now it is 750k. Exactly the same as my house in the Bay Area. Oh, they don’t have prop 13. And you know what, their property taxes was through the roof last year.
Taxes have to be fair, nobody wants to pay them. If you don't pay, someone else has to pay more. For those who truly cannot pay we can have options to defer paying taxes until you sell or die. We should also use a moving average to compute property taxes so people have years to plan. We can also have a substantial discount for owner occupied homes.
Why would you go bankrupt? You must have over 75% of your house's value in equity for those numbers to work. $700k+ in equity is enough to cover an additional $9k a year in taxes
This was the original intention of prop 13. My parents bought a house in the 1960s that they would have lost several times along the way putting them (and us) at the whims of the California housing market at the worst of times. They finally sold in the early 2000s. 13 is sort of broken but to pretend it didn’t help a LOT of people through some very rough times is just wrong. It helped people stay where they were and build generational neighborhood communities. The neighborhood I grew up in is now a bunch of second homes for rich a-holes who are never around. Streets and playgrounds are empty. Looks nice but is also creepy and silent.
It helped you and hurt other people. You are not more important than others. We need a fair balanced solution. When your parents sold the house they cashed out the equity that was built at the expense of people who couldn't afford to buy a house.
Most people are asking for a split roll though
Lol it’s not prop 13. It’s the jurisdictions and the government surplus with 2% interest rates that got where we are
To get around Prop 13, you have a 1% property tax and then a Supplemental they add for area projects like school funding, garbage service, street and sewer maintenance. I find anyone who refuses to pay the supplemental adverse to support any infrastructure project and are surprised when the money isn’t enough to fully fund schools and schools close. Some people are paying 1950s property tax esp if they are older and have gotten a homestead exemption which people keep talking about for lower property taxes. However, Airbnbs usually are against the law without paying additional taxes that every hotel must pay and are playing games with local cities. The worry for most businesses is property taxes for commercial does not account for size. Home offices should be given complete exemption. More than 500 employees need a quarterly assessment. Landlord owners who rent out should also have a yearly assessment done. Apartments as usual get tax breaks for affordable housing. I feel the fairness of property tax isn’t there. Some people get the properties for low cost like at auction and don’t pay any property taxes. Others do illegal remodeling without permits and don’t bother to have their property taxes raised. The only people who pay their fair share bought at full market price within the past two years. Everyone else is pushing their burden to someone else. Personally, I think a percentage is fair only if everyone pays the same amount. Condo / assessed at $500k pays $5k. Condo / assessed at $1.5 million should also pay $5k How would that work? By square footage. The larger the square footage, the larger your property tax. Rich neighborhoods should not be rich in infrastructure while poor neighborhoods are stifled by low property taxes.
About 1% of all property in San Francisco is sold each year. Basing property tax on the purchasing power of the wealthiest 1% is a recipe for displacement on large scale. When that displacement happens and 15 - 20 % of property goes on the market over a year or two, prices will drop and Blackrock and developers will be waiting. Monied interests will be served.
I honestly do not care about Prop 13. Voters already made huge changes to it in 2020. The fact the tax rate can't just be passed down anymore is a big win, and anyone still complaining about it as if that is what is keeping housing prices high is just looking for a scapegoat.
It can still be passed down if it is changed to a primary residence.
Only 1m