[amunicio]

>> They don't need the highest property tax, too.

Prop 13 doesn't change the property tax rate, it changes WHO pays the full "nub" rate and who enjoys a "nobility" rebate.

It disincentives home owners from moving, even when their new jobs are far away, increasing commuting time.

It also creates a resource allocation imbalance. Folks that are retired and don't benefit so much by living in highly concentrated job areas tend to remain there. Even when younger people who would benefit more from living in these areas would be willing to pay more, providing an incentive for retired owners to move to a less concentrated area and making a profit.

But with Prop 13, we have instead a system that artificially distorts the housing market(and not in a "just" or "deserving" way).

[rcpt]

> Prop 13 doesn't change the property tax rate

Part of it was capping rates.

[generalpass]

Do you feel that it is fair to evict an old couple because they purchased their house in the 70s when it was in the woods, but now that people have built up a town around them, they have to go because they didn't plan on paying $7,400 per year in property taxes in their retirement planning, and then also can't afford to take on a new mortgage in the region, so move really far away from where they saved for and planned for retiring?

[triceratops]

Or they could sell to a condo developer, get a brand new unit, with lesser maintenance needed, in the same location. It doesn't have to be a binary choice between "sell and move away" and "stay and keep prop 13".

With Prop 13 and zoning restrictions, "sell to an upzoner" is essentially off the table.

Also an old couple who have been renting since the 70s could be evicted until state-wide rent control was passed this year. No one cared about them this whole time.

It's also not clear what things like commercial properties or family farms have to do with "keeping old people in their homes". All these are covered under Prop 13.

[pound]

And don't forget non-primary residences. Not only prop13 "helps" you to stay in that old estate of yours that you may not be able to afford with increasing taxes, it also allows you to keep the cabin (or two) in Tahoe.

[fortran77]

I'm all for SB50. Get rid of zoning restrictions. Don't conflate Prop 13 and SB50.

[triceratops]

Just curious, are you in favor of statewide rent control too?

> Don't conflate Prop 13 and SB50.

The existence of Prop 13 has created a large class of voters opposed to rationalizing zoning laws - such as by SB50. It benefits these people to restrict housing supply, and Prop 13 ensures they don't pay the cost. Prop 13 is one of the root causes of all of California's housing supply issues.

[fortran77]

I think we should build a lot more housing and make housing affordable by increasing supply.

[triceratops]

How do you convince the opponents of SB50 to come around?

[amunicio]

I never say it is fair to evict them. What is unfair is to have a two tier tax system: one for nubs and one for the established.

The noob faces a double whammy, he needs to put a lot of money for the house and he has to pay a higher tax rate (and he has to live there because his livelihood depends on it). The established has an incredible investment in his home with a big market value giving him many options.

[roca]

Financial instruments can turn their equity into an annuity which will pay the taxes, or the taxes can be deferred until they die or sell.

The rest of the world manages without Prop 13.

[fortran77]

"A total of 44 states and the District of Columbia have at least some limit on the amount local communities can raise property taxes."

[fortran77]

Right. And $7,400? Try $30,000! That's what the starting property tax is on a $2.5MM house in Sunnyvale is today.

That's what people moving into Sunnyvale California in 2020 are paying.

https://homeguides.sfgate.com/calculate-california-property-...

[fortran77]

So a retired person should be forced to move from his little 3 bedroom house because some Googler decided the house next door was worth $3.5MM and his property tax goes up to $75,000/year? That's pure evil.

I fully supported SB50. Build. More. Housing.

[amunicio]

>> So a retired person should be forced to move from his little 3 bedroom house because some Googler decided the house next door was worth $3.5MM and his property tax goes up to $75,000/year? That's pure evil.

Nope. A retired person should have the CHOICE to pocket the $3.5MM the Googler is ready to pay for his house in Palo Alto and buy an even fancier house in Livermore knowing that his property taxes is not going to substantially change much.

But with the present system instead, another Googler, let say the food service employee, will never be able to pay the mortgage for a one room apartment PLUS exorbitant "nub" real state taxes. At least the retired guy has a large amount of equity in the house and choices.

[refurb]

Yeah, I feel really sorry for the retired person sitting on millions of dollars of equity. Real sob story.

Why not just give the option to defer increases in property taxes?

It makes zero sense to give tax breaks to people who won the housing lottery.

[fortran77]

Well, I don't have the feelings of "envy" that you do. The fact is, there's little he can do with his "millions of dollars of equity" unless he moves far away from family, friends, and social network. It's cruel to force people to move. I'm not envious or cruel, so I support Prop 13.

[refurb]

It’s not envy. Happy that he made a ton of money.

But, yes, there is plenty he can do. Stay in the house and keep paying low property taxes.

Once he dies or sells, then all those accrued property tax increases get paid, with interest.

You know, the same way a lot of governments in Canada and the US do it.

[amunicio]

He doesn't have to move far and away, he can go live to the other side of the San Mateo bridge and pocket at least a million dollars on the house price difference.

And as others have mentioned, there are other mechanisms to defer the tax payment based on the house equity.

The real cruel thing is to lower the bar for the "have" (as in have a house in SV) and higher it for the "have not".

[jelliclesfarm]

I guess at the end of the day those who own property will do what feels good for them.

It’s funny to see non owners seem up of ways property owners could do with their ‘wealth’.

Guess what, they own property in the hot Bay Area market by virtue of..wait for it..being here and working before most of us were born!

So we can sit here on hacker news and think of all that they need to do to make us feel better, but it means nothing, you know. It’s like the French peasants wondering how Louis XIV should redistribute his kingdom to them. There are no victims. They aren’t the villains...they are just old folks who want to continue to live and die in the towns they funded and built and not be bothered by kids who were likely educated in free public schools they helped build.

[dodobirdlord]

> There are no victims.

What a ridiculous take. Besides, the problem of people wanting to remain in their existing homes is trivially solvable by deferring property taxes as liens against the property to be paid on the death of the owner. Average property tax in California is ~1%, so a person could live an entire lifetime without having to pay anything. But of course that was never the real reason anyone supported these absurd initiatives. It was always about rent-seeking.

[harryh]

Anyone in this situation can easily take out a home equity loan to pay the taxes and come out way ahead. Your assertion that the higher taxes would force them to move is wrong.

[scarface74]

Say you have equity in a non public company, would you be okay if the government taxed your equity forcing you to take out a loan against it?

[neilparikh]

These 2 scenarios aren't equivalent. Land is an exclusionary good; you using it means I can't. Equity is non-exclusionary. Additionally, the city has to provide services to owners of land, which requires money. The government has no such obligation to owners of equity.

[harryh]

I don't understand why that is a relevant question.

[oh_sigh]

You could allow for partial tax deferral until home ownership is transferred(sale, death, etc). So, retired person keeps paying $100/month while their neighbors are paying $10000/month for the same exact services, but if they accrued $150k in taxes by the time they died, that chunk is taken out of the sale price of the home.

[triceratops]

It's also pure evil that a retired person can't sell his 3 bedroom house to a quad- or 5-plex developer, not move (except temporarily while it's being rebuilt), and get a nice chunk of cash, because his other neighbors don't want the "neighborhood character" to change.

[fortran77]

I agree with you 100%. That's why I support SB50!