https://journal.firsttuesday.us/home-sales-volume-and-price-...
https://njar-public.stats.10kresearch.com/docs/lmu/x/EntireS...
https://www.financialplannerla.com/transfer-california-prope...
> All because they happened to have bought a home before this law passed.
Again, do some research. Prop 13 passed in 1978, 45 years ago. The number of current homeowners who bought before then is vanishingly small. House prices were escalating before 13 passed, and the jumps in property taxes were in fact a prime reason why it passed.
> they can use that and borrow against it to play financial games and make their money make money
Do you have any data at all to support that assertion?
> This creates a bottlenecked supply of housing
there are all kinds of reasons why there's too little building. Grandfathered house values are only one of them. Regulations and high costs are much more important.
Prop 13 freezes your tax rate when you purchase the property. So the subsidy isn't given only to those who buy before the bill was passed -- it is given to anyone who buys before housing goes up, at any time while the law is in place.
It's extremely common for people to borrow against the equity of their home (even moreso if you are very wealthy). I think the parent is arguing that those who own property are borrowing against the value of their (subsidized) asset. Another thing to consider is that a yearly tax on an asset can significantly affect the valuation of that asset, far in excess of the amount of the tax itself.
Of course there's many reasons for the embarrassing lack of ability to solve the housing problem. Prop 13 is a big reason, certainly one worth looking at when considering solutions to this problem.
It's also just unfair. Most people who are subsidized by prop 13 are subsidized for no reason at all, just market timing. And there's another layer to it, which is that the earlier you have bought, the more you are subsidized. Guess what was more difficult for minorities to do 30 years ago? That introduces an additional dimension of racial unfairness to this. Not to mention, it's a subsidy for the rich (homeowners) paid for by the poor (everyone else).
Prop 13 is an anchor around our neck. It's kind of like that excruciatingly painful disease that causes your bones to fuse together, except for growth and prosperity in the state of California.
The only thing that would happen if Prop 13 were repealed is: all other taxes would stay the same, but that one would rise, and so would spending. That's why your arguments get no traction at all in CA.
Factually wrong. Prop 13 limits your tax increase to 2% per year.
Turns it into molasses? Coagulates it? Congeals it?
Property tax on a 10 year home might be half of what it should be. Property tax on a 20 year home might be a quarter. I sure would love a 75% discount on my income taxes!
This is incorrect, there are still county restrictions. Counties must opt-in to the tax transfers, and the purchased home must be of equal or lesser value. 10 of California's 58 counties permit it, most do not because they don't want to miss on tax revenue.
> Again, do some research. Prop 13 passed in 1978, 45 years ago. The number of current homeowners who bought before then is vanishingly small. House prices were escalating before 13 passed, and the jumps in property taxes were in fact a prime reason why it passed.
This is not relevant at all. The point is that people's effective property tax goes down over time, regardless of whether they bought before or after prop 13 was passed. Someone who bought a house in 1990 is probably paying less than a third of the normal property tax.
> there are all kinds of reasons why there's too little building. Grandfathered house values are only one of them. Regulations and high costs are much more important.
Great, we should eliminate restrictive regulations and Prop 13!
> all kinds of reasons why there's too little building
And you think that providing incentives for people to move houses has no effect on any of the other components? Come on.
The other commenter laid out the other reasons well enough so I won't repeat them.
When property taxes don't rise, people are disincentivized from selling their home because if they buy a new home they must pay property taxes at the new rate, not the grandfathered one. This creates a bottlenecked supply of housing because no one sells. Growth stagnates and then you get these wild fights about who's allowed to build where, how much they're allowed to build, and what kinds of undesirables might move in and "change the community". It's really a clever ploy to use people's conservative instincts to juice the real estate market since scarcity brings about insanely high costs. Now those with Prop 13 homes are even less incentivized to move because their house's worth just keeps rising. They can use that and borrow against it to play financial games and make their money make money. All because they happened to have bought a home before this law passed: entirely luck, nothing to do with merit or skill.