This is an often-repeated myth, but that is not how prop 13 works.
Property taxes do increase every year. What prop 13 does is that it sets the yearly increase to 2%. This makes the increases predictable so one can budget for it, but it certainly increases every year.
https://en.wikipedia.org/wiki/California_Proposition_13_%281...
(I bought a house in 1997. During the dot.com boom, the market value far exceeded the assessed value. Later when housing crashed, the market value dipped below the assessed value. In the current boom market value has again gone above the assessed value. I expect in the next crash values may reverse again. So all prop 13 does is that it damps the increases to prevent wild swings year to year.)
Ah. Thanks much for the correction! Coincidentally, my rent controlled rent increases by just about 2% each and every year: http://www.sfrb.org/Modules/ShowDocument.aspx?documentid=193...
A landlord can recover increases in the cost of servicing his building-operation-related debt from his tenants with an O&M rent increase. I expect that he can also recover increases in any kind of taxes that are related to running the building.
I would be pleased if you could find some SF Rent Board guidance or enough Rent Board decisions to form a pattern to demonstrate the incorrectness of my statement.
I mean this in the nicest way possible:
Do you live in California, and/or rent in San Francisco?
Prop 13 ensures that property values -and thus the taxes due on that property- are only reassessed when a property changes hands. If you've held on to a property since Prop 13's passage, your property taxes have not increased in 37 years.
If you're a landlord in San Francisco, the following additional things apply:
You can recover the 100% of the cost of any legally mandated building improvements from your tenants through rent increases.
If you pay for your tenants' utilities, you can recover 100% of utilities cost increases from your tenants.
You can recover either 100% or 50% (depending on the number of units in your building) of capital improvement costs from your tenants.
In the case of increases in Operating and Maintenance expenses, you can permanently increase your tenants' base rent by up to 7%. Small landlords can do this every year. Large landlords can do this once every five years. Unlike the capitol improvements and legally-mandated-improvements recovery mechanisms (which end when the landlord has recovered what he can legally recover), this increase never goes away.
There are even provisions for increasing rents, if they are extraordinarily below "market rate" for extraordinary reasons.
Read this and be enlightened: http://www.sfrb.org/index.aspx?page=947
In the five years I've been here, I've only ever a landlord ask for an O&M rent increase once. His petition included a wide variety of line items that even a child could have seen were inapplicable, [0] so his petition was denied. [1]
Landlords who hang on to properties to provide housing see only slow, gradual changes in their operating costs, which can almost always be completely recovered from their tenants. Their property taxes will never go up for as long as they live. Frankly, they have a pretty sweet deal.
[0] The landlord was clearly using an O&M petition to attempt to recover the cost of renovations whose primary purpose were to double the number of "bedrooms" in each newly vacated unit in the building so they could collect 1.5x to 1.75x the rent.
[1] Given that a landlord can trivially recover increases in his O&M costs, why have I never had an O&M-related rent increase in five years? Is it -perhaps- that landlords in the city just don't see significant increases in their O&M expenses?