The contract: If you save, invest, and pay off your home mortgage so that you own it free and clear, later in life when you are retired and living on a fixed income no one can come along and confiscate the property that you bought and paid for fair and square.
The contract breech: Property taxes going up so fast that the only possible solution was to sell your home. Now, of course the value of the home was going up, which was what was driving the taxes. But forcing pensioners to sell their homes, disrupting/destroying a life-time of plans and work was never going to be a smooth ride -- who could have thought that it would be?
The government pre-Prop 13 was viewed as kleptocratic by a sizeable portion of the population, with arguably good reason.
So, do you have a better solution that has empathy for pensioners that played by the rules all their lives and have plans to settle into modest enjoyment of their so-called "golden years"? Prop 13 was an attempt to stop perceived thievery, a crude bludgeon, perhaps, but a sufficient number of desperate people saw it as a solution to get it enacted.
Financial instruments that prevent that already exist. If your home is worth millions of dollars it's not that hard to find a way to pay the property tax. "Having more money" is rarely a real problem.
> a sufficient number of desperate people saw it as a solution to get it enacted.
No, people who's material interests are in direct conflict with a functional society pushed for it. It passed through a combination of "think of the elders" concern-trolling and libertarian dark money.
That’s not a great one either.
What it needed is a way for people whose homes had only gone up a small amount from getting budget busting increments. Once your home has doubled in value, there are other financial mechanisms to solve that problem and you can afford to pay the increase.
If you are a retiree who has worked hard the paper value of your home if you were forced to sell is not a real gain.
What do you mean by "is not a real gain"?
Also - a financial instrument based on the value of collateral can easily go south if the value of the collateral falls.
There is no guarantee that home values will remain stable nor that whatever assets you put the loan into will perform adequately too.
Given that retirees typically don’t have the ability to correct for investments gone wrong out of future earnings, your recommendations would be foolhardy for most.
Simply buying a house to live in is fine.
The only reason we are having this discussion is that the people complaining about prop 13 want a mechanism to force older people out of their homes so they can take have them instead.
That's not how a reverse mortgage works: https://en.wikipedia.org/wiki/Reverse_mortgage
> The only reason we are having this discussion is that the people complaining about prop 13 want a mechanism to force older people out of their homes so they can take have them instead.
That's just not true. We want baby boomers to pay their fair share of taxes and not squirrel away their wealth for their heirs at our expense. In addition, because of Prop 13 (and similar programs else where) mean OTHER tax payers are paying a higher rate than they need to in order to cover the short fall.
Also, what about all of the other people lives you’d destroy? I live in Oakland in a neighborhood where most homes are either rented, or owned by families that are neither boomers, nor high income tech employees.
Any honest discussion about this has to admit that these are would be hardest hit and their communities decimated so that beneficiaries of the tech boom can buy them out.
You are clearly very emotional about this topic but it's NOT about "techbros" "stealing" property from "poor" retirees on a fixed income.
It’s clear that you don’t care about the consequences to anyone who owns a home other than the ‘Boomers’ who you want to make pay.
I didn’t say ‘tech bros’. But I did mention tech. I stand by that but I agree that it is narrow - It’s a stand in for anyone who is young and in a position to have high future earnings.
It's clear that you are so emotional about this issue that you can't help but personally attack those who disagree with you. Let's leave it here.
You could have actually answered my point about the people who were adversely affected instead doing that.
Instead you chose the intellectually dishonest route.
Let’s leave it there instead shall we?
A better solution would be offering up a property lien instead of taxes. The govt collects when the property is eventually sold. People get to stay in their home and property taxes remain fair.
1) It doesn't solve the immediate revenue problems of the taxing authority
2) It doesn't provide any more incentive to move than the current situation in California
3) It exposes taxing authorities to risk in a housing market downturn where people may start surrendering their property rather than sell because selling would net them little money, or even cost them money.
It also allows older people to move without 'losing' a prop 13 tax benefit, since they can retain more value of the large house they don't need anymore with a smaller lower maintenance condo.
Without putting more thought into it, I don't know. I don't see how this changes the revenue picture.
> reduces the lost taxes to a far smaller number of units (every corporation and person vs some older people)
That is independent of the tax lien idea.
> It also allows older people to move without 'losing' a prop 13 tax benefit, since they can retain more value of the large house they don't need anymore with a smaller lower maintenance condo.
This I can see. I know Florida had issues with people who wanted to downsize but couldn't afford to because of the tax jump from selling their homesteaded property.
That said, I'm not sure this alone would open up enough inventory to actually reduce prices.
The government gets all of the deferred taxes on the next sale. That’s immensely better than the current scenario where they don’t get any reasonable amount.
And the deferred revenue can be significant. A friend bought a house where the owner was paying $600 per year when the rate for the same home should have been $11,000 per year.
Usually although, you have provide some sort of incentive to people adopt something, and no taxes vs some small amount taxes is attractive to a voting block. And democracy is getting enough voting blocks to get you over the pass rate.
Also since government works over large numbers and is very long term, they can do actuarial calculations to see when revenue would kick in and issue fairly reliable bonds based on it.
I don’t like taxes being used to take away property from people just because you want what they have.
This is just a variant of "the left is just jealous of rich people" argument. That's not an argument and I'm not jealous, I'm actually quite rich by most standards, I just don't think it's earned or justified, especially in a country with a vivid history of genocide.
It’s not meaningful to say something is a bad strategy if you can’t articulate an alternative.
It's hard for me to have much sympathy for the dream of keeping your home forever when the great majority of people I know have basically no hope of ever owning a home in the area.
(Serious question - how do you justify sending retirees away from their homes, rather than simply working somewhere else?)
My impression, as a person under 60, is that the older land-owning generation largely had things much, much easier, and have been blissfully unaware of the changes society has undergone. Or else perfectly aware, but unwilling to recognize their debts to society and circumstance and pay it forward.
Those low property taxes translate directly into booming tuition, as the state funding for higher education has been systematically gutted. The higher tuitions, in turn, imply massive student debt. Simply get a summer job, rite?
As for me? I work where it makes most sense for me to work. Not-working can happen anywhere.
So for retirees, my advice is this: Sell the house, take the millions of dollars in windfall, and go to Bali or Florida or something already. I'm sorry if you have to make new friends; please consider this outcome the next time you settle for a societal structure without robust community. But in getting out, you'll reduce the demand pressure slightly, improve the depressed tax base, and have enough money for a long, long vacation.
In California they are linked, in that property tax rollback and the procedural impediments to raising other taxes at either state or local levels were part of the same initiative constitutional amendment.
More importantly who do you think should decide what the ‘potential’ is for what you own?
What makes a particular property owner into a ‘squatter’?
Unless you take seriously the idea that most homeowners in California are squatters and NIMBYs.
Prop 13 is a blunt instrument that rewards speculators more than it protects homeowners. What would be a much better system is some sort of forbearance, that the owner does not have to pay the full property tax until the property is sold, and then the back taxes are paid from the profits.
Immortal entities like corporations should not have Prop 13 protection.
Just so you're aware, the phrase "sent to a quiet farm upstate" is a euphemism for "killed", usually applied to animals like family pets.
Note well: I said "obvious", not "easy" or even "politically possible". But I think it's useful to note that, in important ways, California is doing this to itself.
When it's put in an ideologically biased way that ignores practical solutions to paying taxes on an increasing property value, it implies another ideologically biased solution that favours the material interests of the rich...
Sure.
I'm arguing against hiding your ideological motive (lower taxes) under the guise of 'logical deduction' or 'obviousness'.
See this thread:
https://news.ycombinator.com/item?id=20780064
Lots of right-wing arguments upvoted with almost no evidence:
> [The city] grant[s] de facto immunity to homeless people committing petty crime, stop all police enforcement of drug laws, and shame everyone who dares to complain.
This isn't an argument, and has no sources other than a vague 'feeling' by the poster. It even includes a bit of a cut at the left ("shame anyone who dares to complain").
I'm not really complaining about that individual comment, but it's also upvoted and contains no argument or substantive discussion. Similar comments I've made are always deeply downvoted.
This has a chilling effect on discourse from leftists, where it feels like it's not worthwhile to write a substantive comment only to have it downvoted with nothing other than pithy right-libertarian ideological comments in return.
So I haven't really bothered with this account, hence spewing ideology.
> So I haven't really bothered with this account, hence spewing ideology.
You just told us to ignore anything you say.
Note that AnimalMuppet was also downvoted for the same reasons.
> The contract: If you save, invest, and pay off your home mortgage so that you own it free and clear, later in life when you are retired and living on a fixed income no one can come along and confiscate the property that you bought and paid for fair and square.
That doesn't explain why Prop 13 applies to commercial, industrial, and rental properties.
Sob stories about retirees on fixed incomes getting taxed out of their homes was only the propagandistic sales pitch, a clever way to convince a majority of voters to support the referendum.
The wealthy anti-tax activists who promoted prop 13 didn’t actually care about unwealthy elderly people per se. If such people had been the main focus, it would have been straightforward to come up with a much less dramatic remedy.
I am sure there are reasonable solutions other than: "Do nothing and let the country rot."
Also, nothing is "banned" by Prop 13.
It also seems nice to not tax small businesses out of existence.
On the other hand, it would be nice to not have as many closed storefronts and vacant lots in prime locations.
The State of California offers another solution. It's called Property Tax Postponement: https://www.sco.ca.gov/ardtax_prop_tax_postponement.html
"The State Controller’s Property Tax Postponement Program allows homeowners who are seniors, are blind, or have a disability to defer current-year property taxes on their principal residence if they meet certain criteria including 40 percent equity in the home and an annual household income of $35,500 or less."
The taxes are deferred until a change of control, like due to a sale or transfer to next of kin. Many or most high-cost-of-living jurisdictions have similar programs.
It's a totally different problem from prop 13.