When property changes ownership, its tax basis bumps up to market value anyway. Properties bought to be flipped don't benefit from Prop 13; it's not like rent control that carries over.
I think the parent comment is saying it could incentivize owner-occupied properties over rentals by untethering the taxable values for long-time landlords who are benefiting from Prop 13.
Of course, you'd probably also have to drop rent control to keep things "fair" (otherwise your taxes go up, but you can't increase your rent), but that's probably the right move anyways:
"There’s probably no topic that economists agree more on than rent control... It is not an effective way in the long run to preserve affordable housing in an area in which demand is rapidly rising" [1]
To me, the core of the problem seems to boil down to this:
- if I move somewhere cheap and build up the area's value, I should get to stay there and enjoy it without paying a lot more (in taxes) and/or being forced to move because I can't pay
vs
- if a community chooses to invest in an area's infrastructure, all those who benefit (local residents) should all pay their fair share
I don't know what's the right solution, but if it falls closer to the "pay your fair share" side then we as a society need to accept the psychic cost of sometimes forcing long-term/elderly/poor residents out (softening the blow by the dramatically increased sale price of their home).
Although Futurebot's innovative "develop their land and give them a place in the new building for life" idea seemed to be heading towards an interesting place as well.
Living in a rapidly gentrifying area myself, I see the struggle every day. I understand the emotional appeal of "let longtime residents stay in their homes despite economic hardship", but can anyone elucidate more clearly what (if any) argument exists around the economic value of their contribution for "finding it first" and building up the value there?
Of course, you'd probably also have to drop rent control to keep things "fair" (otherwise your taxes go up, but you can't increase your rent), but that's probably the right move anyways:
"There’s probably no topic that economists agree more on than rent control... It is not an effective way in the long run to preserve affordable housing in an area in which demand is rapidly rising" [1]
To me, the core of the problem seems to boil down to this:
- if I move somewhere cheap and build up the area's value, I should get to stay there and enjoy it without paying a lot more (in taxes) and/or being forced to move because I can't pay
vs
- if a community chooses to invest in an area's infrastructure, all those who benefit (local residents) should all pay their fair share
I don't know what's the right solution, but if it falls closer to the "pay your fair share" side then we as a society need to accept the psychic cost of sometimes forcing long-term/elderly/poor residents out (softening the blow by the dramatically increased sale price of their home).
Although Futurebot's innovative "develop their land and give them a place in the new building for life" idea seemed to be heading towards an interesting place as well.
Living in a rapidly gentrifying area myself, I see the struggle every day. I understand the emotional appeal of "let longtime residents stay in their homes despite economic hardship", but can anyone elucidate more clearly what (if any) argument exists around the economic value of their contribution for "finding it first" and building up the value there?
[1] http://www.moneytalksnews.com/why-rent-control-wont-make-hou...