patrick.net

Prop 13 getting a repeal, so naturally propaganda is everywhere promoting repeal and blaming all ills on it.

If government can’t tax you into the grave and give money out to their faggot and socialist friends, freedom has no meaning.

tovarichpeter says

https://www.nbcbayarea.com/news/local/making-it-in-the-bay/making-it-in-the-bay-how-the-bay-areas-housing-crisis-spiraled-out-of-control/2230410/

All a crock of shit. Mass importation or illegals, entitlements, and the destruction of the middle class destroyed housing. Prop 13 is the only thing holding what middle class is left in CA do away with that and we turn into a sunny Illinois, CA dems have already proven all they do is make things worse in here.

Fortwaynemobile says

Prop 13 getting a repeal, so naturally propaganda is everywhere promoting repeal and blaming all ills on it.

If government can’t tax you into the grave and give money out to their faggot and socialist friends, freedom has no meaning.

Just got my mail in ballot. No prop 13 repeal on it. There’s a prop 13, but it’s just the usual wasteful bond measures for “schools” we always see.

I have heard of a partial prop 13 repeal coming on the next election in November. Supposedly it’s to reassess the corporate property to current value. I haven’t made up my mind about this. On one hand, if I have to pay current value on my house, why should massive corporations pay a fraction of their tax? On the other hand, California corporations are already heavily regulated, and this one thing might be a bridge too far. I wouldn’t want to drive jobs out of the state.

If the government didn't allow non US citizens/residents to buy up properties after the 2009 bust, I think the situation would have been very different today.

There are 2 prop 13th on ballot. One now and one later.

Both will increase property taxes, language is deceptive on it.


Shaman says

Fortwaynemobile says

Prop 13 getting a repeal, so naturally propaganda is everywhere promoting repeal and blaming all ills on it.

If government can’t tax you into the grave and give money out to their faggot and socialist friends, freedom has no meaning.

Just got my mail in ballot. No prop 13 repeal on it. There’s a prop 13, but it’s just the usual wasteful bond measures for “schools” we always see.

I have heard of a partial prop 13 repeal coming on the next election in November. Supposedly it’s to reassess the corporate property to current value. I haven’t made up my mind about this. On one hand, if I have to pay current value on my house, why should massive corporations pay a fraction of their tax? On the other hand, California corporations are already heavily regulated, and this one thing might be a bridge too far. I wouldn’t want to drive jobs out of the state.

Prop 13 is a crock of shit. It screws new purchasers of homes and benefits people who inherit homes and the ultra low tax base it comes with. While I like low property taxes, and limiting how much they can increase, passing that tax base to my kids only zombifies the market. Houses just end up being rented or sitting stale because the cost of carrying the home is nothing.

Amend prop 13 so that it is not transferable after death and you will see a ton of houses hit the market because instead of a 1000 annual tax bill they will get a 10,000 bill. Increased inventory will lead to reduced prices.

I’m all for property taxes not being inherited.
Would be nice if they were 0 got 65+ year olds too so old aren’t kicked to the curb.

Current proposals don’t do that.

Dholliday126 says

Prop 13 is a crock of shit. It screws new purchasers of homes and benefits people who inherit homes and the ultra low tax base it comes with. While I like low property taxes, and limiting how much they can increase, passing that tax base to my kids only zombifies the market. Houses just end up being rented or sitting stale because the cost of carrying the home is nothing.

Amend prop 13 so that it is not transferable after death and you will see a ton of houses hit the market because instead of a 1000 annual tax bill they will get a 10,000 bill. Increased inventory will lead to reduced prices.

I totally get the argument how Prop 13 distorts the market.

But I would not consider any changes to Prop 13 unless it comes with simultaneous decreases in the income and sales tax levels in California. It has to be tax neutral at minimum. Prop 13 is the only thing keeping alot of people like me being able to afford to live out here and raise a family in a decent school district.

Besides, I don't want to reward Sacramento and the Local government with another freaking dime of tax money until they implement massive reforms to their pension ponzi schemes bankrupting our cities.

socal2 says

Prop 13 is the only thing keeping alot of people like me being able to afford to live out here and raise a family in a decent school district.

Why do you deserve to be here in a good school district? Off to Modesto sir.

At least you bought. What about the huge volume of people that grew up here that cannot buy? You don’t care about them? But prop13 should keep YOU here and in a good school district because?

And it would be tax neutral. Prop13 people pay more than they would otherwise. Non-prop13 people pay less than they would otherwise.

BayArea says

New buyers people pay less than they would otherwise.

hahahahahahaha

just_dregalicious says

BayArea says

New buyers people pay less than they would otherwise.

hahahahahahaha

Yes I know I know, I’m speaking in theoretical terms 😄

BayArea says

just_dregalicious says

BayArea says

New buyers people pay less than they would otherwise.

hahahahahahaha

Yes I know I know, I’m speaking in theoretical terms 😄

In theory there is no difference between theory and practice. In practice, there is. :D

Dholliday126 says

Prop 13 is a crock of shit. It screws new purchasers of homes

Not including the Crazy Rich Asians cash buyers, purchases are mainly based on the ability of the buyer to pay, or what they are willing to spend.

Whether the monthly servicing cost is loan interest or property tax, it's the total that matters. It's the reason if the property taxes on new sales were lower, the prices would be higher. Of if the property taxes were higher like in the Chicago area, the purchase price and loan principal will be lower.

A nuanced difference is that if you borrow to buy, you can pay off the loan. But you cannot pay off the property tax.

B.A.C.A.H. says

Dholliday126 says

Prop 13 is a crock of shit. It screws new purchasers of homes

Not including the Crazy Rich Asians cash buyers, purchases are mainly based on the ability of the buyer to pay, or what they are willing to spend.

Whether the monthly servicing cost is loan interest or property tax, it's the total that matters. It's the reason if the property taxes on new sales were lower, the prices would be higher. Of if the property taxes were higher like in the Chicago area, the purchase price and loan principal will be lower.

A nuanced difference is that if you borrow to buy, you can pay off the loan. But you cannot pay off the property tax.

Yes, most homebuyers stretch themselves to the limits set by the banks.

Dholliday126 says

Prop 13 is a crock of shit. It screws new purchasers of homes and benefits people who inherit homes and the ultra low tax base it comes with. While I like low property taxes, and limiting how much they can increase, passing that tax base to my kids only zombifies the market. Houses just end up being rented or sitting stale because the cost of carrying the home is nothing.

Amend prop 13 so that it is not transferable after death and you will see a ton of houses hit the market because instead of a 1000 annual tax bill they will get a 10,000 bill. Increased inventory will lead to reduced prices.

I agree with this.

Not a fan of taxes in general, but Prop 13 is a truly horrible law, screwing young families most of all.

The idea of transferring Prop 13 tax rates after death is even worse. It's pure self-interest leading to self-deception that it must be good somehow. It's not good. It's "Fuck you, I got mine and I am going to make you to pay the carrying costs of my property forever."

It's like businesses importing illegals and exporting jobs to China to lower their immediate wage costs, not caring that they are fucking over the country, and the poor in particular. Which comes around and bites businesses on the ass.

Prop 13 is just like that. It lowers an owner's immediate tax, but fucks over the state, and fucks over poor young couples in particular. This is coming around to bite house owners and California slowly degrades into shitsville.

Prop 13 is a $30B+/year grand theft by boomers from young and still growing while blaming the victims.

No it’s not.
Government taxes is theft, they don’t have to tax you, but they will because they are government and you are the peasant bitch who will pay the tax. Just like me.


Blue says

Prop 13 is a $30B+/year grand theft by boomers from young and still growing while blaming the victims.

Patrick says

Prop 13 is just like that. It lowers an owner's immediate tax, but fucks over the state, and fucks over poor young couples in particular. This is coming around to bite house owners and California slowly degrades into shitsville.

It's a form of wealth inequality. Both are bad for the country overall.

KILL PROP 13 PARASITES! KILL THEM ALL!

Boy, if it really does go down, it is going to be interesting to see the mass bail from the state that ensues. Do you like your scumbag criminals, free shitters and the obscenely rich? You can keep your scumbag criminals, free shitters and obscenely rich, only more so.

Prop 13 doesn’t make houses cost more. It makes them cost less.

Original article is stupid for stupid audience. Show me one penny it adds to a cost of a house.

If anything, it stabilizes the market and reduces turnover by removing incentives to move or move up.

As commentators previously have noted, it isn't Prop 13 homeowners so much being significant at tax avoidance as they extended Prop 13 by fiat to strip malls and business properties to get it passed, and that is where the major tax losses occur.

The inter generational thing is kind of puzzling. In Santa Cruz, you see all kinds of dumps that some families keep just because they are basically free, but they don't maintain them and only rent under the radar. i don't know if that is significant, because inheriting families tend to feud over assets and they mostly wind up liquidated and divvied.

The only homeowner beneficiaries are the people who stay in their homes long enough to benefit from the tax margin of the appreciation aka OldFucks.

Taxes are a huge factor in the pricing of goods and services. If commercial property in California loses its prop 13 status, expect higher prices for goods and services to offset those higher taxes. Some prices, especially in older areas will not make economic sense with the modifications.

Patrick says

The idea of transferring Prop 13 tax rates after death is even worse.

I could get behind getting rid of this. With a carve out for farms and ranches.

Patrick says

Prop 13 is just like that. It lowers an owner's immediate tax, but fucks over the state, and fucks over poor young couples in particular. This is coming around to bite house owners and California slowly degrades into shitsville.

Lots of people in CA aren't FROM CA. Have a chat with someone who IS and who's in their 70s about 'how it was'.

Misc says

If commercial property in California loses its prop 13 status, expect higher prices for goods and services

This is why I don't feel the same about revoking for Corporations. Let me retire and get out of here first please.

just_dregalicious says

Let me retire and get out of here first please.

I love your "me first" mindset :-)

If it's one thing that CA teaches you (while you're here at least) is look out for #1. I may get the fuck out of here before I retire who knows.

Fortwaynemobile says

Prop 13 doesn’t make houses cost more.

Of course Prop 13 makes houses far more expensive.

Prop 13 keeps property taxes artificially low.

What do you think will happen to the price of a house if Prop 13 finally gets repealed and the taxes rise to fair value?

Patrick says

What do you think will happen to the price of a house if Prop 13 finally gets repealed and the taxes rise to fair value?

House prices will stay high, we'll continue to be gauged by existing taxes, house taxes will go up higher than any sort of drop in house prices may compensate for.

I think the only thing (other than temporary recessions/depressions) that will drive down home prices (rents/ownership) is a financial collapse of the state govt and a commensurate huge money grab from the state.

Still way too many people want to move here from abroad where it's more expensive.

Alternatively we could get some new sort of government that unleashes development without all the crap that goes with it, i.e., paying off the city/county/state etc. It was booming here when I was a kido in the 70s. Plenty of scrap wood available to snatch to build tree houses, underground forts, etc.,

If property taxes increase, then the monthly cost of housing increases (i.e., principal + interest + taxes + insurance + HOA fee).

That means less demand for housing since the monthly housing cost increases.

I do know for a VA mortgage that they will only lend up to 40% of household net income.

BayArea says

Why do you deserve to be here in a good school district? Off to Modesto sir.

At least you bought. What about the huge volume of people that grew up here that cannot buy? You don’t care about them? But prop13 should keep YOU here and in a good school district because?

And it would be tax neutral. Prop13 people pay more than they would otherwise. Non-prop13 people pay less than they would otherwise.

While my friends were buying big homes on interest only loans, I sat on the sidelines and rented a small shitbox for nearly 10 years waiting for prices to drop and bought in 2011 when prices were finally affordable. I really credit Patrick and his blog keeping me sober and informed during the bubble years when all of my friends were crowing about how great of a deal they got.

I studied the rules and tax burdens and calculated what I could afford over a 30 year fixed interest loan.

It is simply not fair to change the rules on tens of millions of people like me who made life plans based on existing tax laws. If we are grandfathered in, that is a different story.

Also - I simply refuse to agree to more taxes in California until our pathetic government in Sacramento and Local governance gets their acts together.

Fortwaynemobile says

Show me one penny it adds to a cost of a house.

If 1 house pays less taxes, the other house has to make up for it by paying more. As for the price of the house itself? Housing is not being built in sufficient numbers to keep housing from reaching the sky.

socal2 says

I really credit Patrick and his blog keeping me sober and informed during the bubble years when all of my friends were crowing about how great of a deal they got.

Is it safe to assume you're all for the current bubble? What bubble, right?

WineHorror1 says

If 1 house pays less taxes, the other house has to make up for it by paying more. As for the price of the house itself? Housing is not being built in sufficient numbers to keep housing from reaching the sky.

I agree, as something has to give. Its too costly to do business in California because of high housing prices, sales and income taxes, etc.

Eventually companies in California explore relying less on Californian employees.

What are the stats for the current bubble as far as % that get interest-only mortgages with no down payments, median home price to median household income ratio, etc. ?

WineHorror1 says

Is it safe to assume you're all for the current bubble? What bubble, right?

I am not sure what that means ("all for the current bubble").

While my house is apparently worth almost double from what I bought it for 9 years ago - I have no intention of selling until I am older and my kids are out of school. I fully expect my house value to drop or stagnate over the coming years and have no plans on trying to cash out and move out of State or into a bigger home. I haven't foolishly pulled out equity and spent it on cars, vacations or expensive home remodels like alot of my friends did during the bubble years.

Since the quality and quantify of my government services haven't doubled in 9 years (they have actually gotten worse) - I don't see how I should be expected to double my property tax simply living in the same house.

Again, I totally understand and appreciate how Prop 13 distorts the market. All I am saying is that we need major tax reform on California Income/Sales tax if we are going to massively hike the taxes on millions and millions of California property owners.

Believe it or not, there are alot of people like me who played by the rules and didn't inherit our houses or wealth. While I got a great deal in 2011, the people we bought it for still made a mint as they bought the house in the 1990's and had a ton of equity.

I am going to look for more data pertaining to California.

https://www.longtermtrends.net/home-price-median-annual-income-ratio/

https://www.jchs.harvard.edu/blog/price-to-income-ratios-are-nearing-historic-highs/

OccasionalCortex says

Likewise, if Calizeula were to just double property tax rates, property values...particularly at the upper end, would collapse by several order of magnitude, I bet.

Exactly, the ones who have very little equity in their homes would be hurt the most with the rise in California property taxes. They likely would become "underwater" with their home ownership.

I suspect if Prop 13 was eliminated there would be some type of gradual increase in property taxes (over 10 to 20 years) so as to not result in a sudden drastic drop in home values.

Prop 13 was partly just greed, but also a response to drastically increasing property taxes during the 1970s. I think there are better ways to stabilize property taxes that would be more market-neutral (i.e.: not giving one set of people or businesses a permanent benefit over others).

A better tax system, for example, could cap total overall California property tax revenue at increases of 2% per year by setting appraisal values accurately but adjusting the tax rate up or down for everyone so that the 2% revenue gain is achieved overall. i.e.: if everyone's house were suddenly appraised for 2x as much, then the tax rate would be cut in half for everyone so that the total revenue would remain stable.