[cameldrv]

They are also limited to a total tax of 1%. In most other states, the property tax rate is higher than this, and the income tax rate is lower. With a 1% cap, and a cap on the increase, it's hard for residential taxes to pay for city services. Office buildings require a lot less services, and so they make sense for the city to allow. This isn't the only answer, but it's certainly a major consideration when these things get taken up by city councils and planning commissions.

[toast0]

If a house in the Bay area is $1M and a house in the Midwest is $200k, 1% property tax in the Bay area is about the same as 5% in the other places. Also, be sure to compare tax amounts / ratio to real market value, a lot of jurisdictions say they tax at say 10%, but the tax valuation is always way under market value, so it's confusing.

Either way, it is more expensive to provide services in a high housing cost area, but doesn't scale one to one.

Office buildings are also more likely to never get a reassememt because of corporate ownership shell games that are much harder to do with single family homes.