[yonran]

> Why should your property taxes go up just because the market around you skyrockets, when this is completely outside of your control?

The fallacy of the argument for tax breaks to homeowners is that the problem of rising prices is entirely orthogonal to homeownership. Renters face the exact same challenge of affording to live in an increasingly popular place, except without the cushion of an appreciating asset and without any tax relief under Proposition 13. If renters and homeowners face the exact same problem, then clearly subsidies to property owners is not the solution.

The finances of homeownership should be decomposed into two parts: 1) the rental cost of the property, and 2) what fraction of the rent goes to the government in property taxation.

The remedy for rising rents is obvious: more construction of housing and rental subsidies to the poor. This is how to address the underlying problem for homeowners and especially for renters. Temporary rent controls and tax caps can also be helpful to provide relief for people who were caught off guard by the rapid changes. Note that the solution should help all those who are affected by the problem, not only the ones who own more assets.

When property values are rising, this is not an excuse to enact regressive tax breaks for property owners; that just makes inequality worse without solving the underlying problem of lack of housing, which then becomes worse for renters and future homeowners. Property taxation is the most progressive form of taxation available to local governments, and if anything tax rates should be increased when there is a property value boom in order to reduce the incentive to speculate on land prices and to raise money to solve the problems associated with inequality such as homelessness. Basically, when I bought a house in San Francisco, I paid a windfall of a few hundred thousand dollars to the previous owner, who took that money out to a different county. It would have been better for the city to collect that money and use it to incentivize housing construction and subsidize the poor in the city, rather than to let it be lottery winnings to the person who left.