Re:The number of new apartments is at a 50-year high, but st...
by dragonwriter on Saturday May 03, 2025 @06:17AM
(#43878041)
> I wonder if there are structural reasons why California's housing construction is lower than Texas
Prop. 13 prevents localities from meaningfully taxing property values, capping nominal rates at lower than the national average effective rates and reducing effective rates even further by limiting assessment increases to much less than the usual value increase in between transfers.
This forces localities to rely on sales and income taxes (both local and redirected shares of state taxes, both directly and as allocations of state funding for particular functions), which are much more volatiles, and do not reward attracting moderate income residents who pay low income tax rates and for whom housing and sales tax exempt basics are a much larger share of their spending.
Prop. 13 prevents localities from meaningfully taxing property values, capping nominal rates at lower than the national average effective rates and reducing effective rates even further by limiting assessment increases to much less than the usual value increase in between transfers.
This forces localities to rely on sales and income taxes (both local and redirected shares of state taxes, both directly and as allocations of state funding for particular functions), which are much more volatiles, and do not reward attracting moderate income residents who pay low income tax rates and for whom housing and sales tax exempt basics are a much larger share of their spending.