on average prop 13 overwhelmingly benefits wealthy homeowners. So why not add an income level qualification to prop 13 so that it only benefits people that actually need it?

That's the first time I've heard this suggestion but it seems to make a lot of sense

This might well be a good thing to do, but it should be noted that income qualifications come with their own entire bag of tricky problems and potential perverse incentives.

What income level do you set it at? Is it a cliff or phased out? If the latter, what does the curve look like? How does it change with inflation? Are these questions set up front or negotiated by politicians at some frequency? How is wage vs. capital-based income handled? These are the kinds of tricky questions that come up (and are usually not answered very well) with any program that attempts to inject some income-based fairness into some government system.

So I think the answer to your "why not?" is that it will be hard to get it right and is likely to become a political football that may end up making things worse in some way. But the argument for doing it may still be stronger (it seems so to me, without knowing much about it), I'm just saying that there is also a fairly strong counterargument to this sort of thing.

If you would get it wrong, such as setting the income level too high, how would it be worse than now?

And it’s not set in stone, why not try? You would increase tax revenue and thus have more resources to deal with the problens. And there’s lots of examples across the world that have done this and can share experiences of what to look out for.

But it would selectively drive out productive members of community. Adding more rules to an already broken legislation would not work in the long run.

What are "productive members of the community"? People who seek profit, hide their wealth, and flip houses to make more money?

Oh be serious...is this the new reasoning, homeowners are mustache-twirling villains?

Yes? I mean, as a perma-renter who's continually demonized for being a renter and suggesting the construction of more housing so I can afford to live somewhere in commuting distance from work, most of the people yacking in city meetings about how I "ruin the community" are, well, homeowners. And usually really nativist ones with a nasty undercurrent of racism, which doesn't even make any sense since I'm usually the same race as them.

... I think they meant people who work, who make more income than retired people.

Then homes would simply get deeded only in the name of the stay-at-home spouse who has no income.

Someone with little to no income can still be very wealthy. You're also discouraging people from getting better paying jobs. You also gotta deal with properties deeded in trusts and stuff.

That discourages people from moving up in pay. It'd likely be cheaper to make less money.

You'd also encourage rich people to hide their money. Especially trust fund kids who's income is low as they only take out what they need to spend.

>That discourages people from moving up in pay. It'd likely be cheaper to make less money.

It discourages people from moving up in pay AND selling their homes.

>You'd also encourage rich people to hide their money. Especially trust fund kids who's income is low as they only take out what they need to spend.

Still creates more friction and difficulty for the wealthy.

This also makes sense to me.

How would your friend feel about property taxes that scale with market value, but can be deferred until the moment the home is sold, at which point the deferred taxes are paid from the home's appreciation? We could even add a provision capping the maximum tax bill to the actual amount of appreciation since the home was bought. That way nobody is priced out of their home, but the taxes to pay for services that everybody uses are still distributed equitably among all residents.

Housing changes hands much less because the tax gap means all other factors things being equal the house is worth more to the seller than the buyer - they can't live in a similar place for the same money. Deferring taxes just makes that gap in value bigger. And there's not necessarily a point where the city gets money for services, tax rates are passed down with inherited housing.

"How would your friend feel about property taxes that scale with market value, but can be deferred until the moment the home is sold"

I can't speak for him but this makes sense to me.

I think that would be an essential part of a comprehensive solution but on it's own wouldn't incentivize efficient land use in the interim.

But why wouldn’t you just have the mill rate decline with increasing property values across the community? The city shouldn’t need orders of magnitude more income just because the value of homes blew up.

>If he did not have those tax protections he would lose the home he raised his family in and have to move immediately.

He would not “lose” his house immediately. He would be forced to sell it for an outrageous profit and move somewhere he can afford to pay the taxes. Subsidies are subsidies, and I have zero sympathy for those who don’t feel like they’re getting enough when people are literally being forced into homelessness from the knock-on effect of this policy to low-net worth renters.

You can't force people to move this way, there is no way Prop 13 will change with this stance.

It's essentially the same sentiment as "Don't like the laws and don't want to pay more than natives? Leave the Bay Area then, you have the whole rest of the country to move to."

Both sides are extreme, comprises need to be made to get anything through.

>You can't force people to move this way

There's 49 other states in this country where that's exactly what happens every single day. Should the city of Palo Alto subsidize them, too?

>Both sides are extreme, comprises need to be made to get anything through.

This is just a false equivalence. Prop 13 is the extreme here. There's nothing even remotely comparable anywhere else in the country. Asking people to pay their fair share of taxes is not "extreme". If we need to subsidize older homeowners who can't afford their homes, that's another discussion to be had and another funding source should be found. Doing it through property taxes has made this place unlivable.

>There's 49 other states in this country where that's exactly what happens every single day. Should the city of Palo Alto subsidize them, too?

So there's 49 other states __you__ can move to and not deal with Prop 13?

That's reality right now and if you're going to be headstrong that's how the community will respond to your reasoning.

>So there's 49 other states __you__ can move to and not deal with Prop 13? That's reality right now and if you're going to be headstrong that's how the community will respond to your reasoning.

Ah yes, and there's the classic "I got mine, so screw you" mentality of California. What a nightmare.

Or if low-density zoning didn't hold sway everywhere, that person could sell up to a condo developer, get a condo in the new building + some cash. Win-win.