Prop 13 definitely doesn't benefit people who don't own real estate because property owners have an incentive not to sell: they can keep their lower tax rate and their expensive home! This restricts supply and raises property prices.
Property owners should be able to keep an affordable tax and their home, regardless of what their home cost.
Raising property taxes based on market values, is taxing people based on how much other people want their homes.
I agree that property taxes should be reformed.
Let’s not make houses even more risky and expensive to own.
Instead, let’s fund public services in other ways, so school quality isn’t dependent on the average income bracket of the neighborhood, for example.
Property tax - especially on the land value rather than the improvements - is good. It can provide a feedback of the cost of what someone is using.
Funding schools based on tiny districts is of course a poor policy, and local taxes -- be it property taxes, income taxes, corporate taxes, sales tax, fees, whatever -- shouldn't be what dictates the funding of local schools. That's really a separate question.
> That's really a separate question.
Schools are just one example of a service funded by property taxes.
It’s not a separate question at all.
> Property tax - especially on the land value rather than the improvements - is good. It can provide a feedback of the cost of what someone is using.
What you are calling ‘value’ in this case is just a measure of how much other people want the property. It has nothing whatsoever to do with cost.
This just makes it easier for even richer people to take existing property rather than invest in developing other places.
Allocating resources to the people who want it most (and presumably make the most of it) seems like a good goal to have. Wouldn't that be the most effective use of resources?
Estimated property price doesn’t measure how much the existing owner wants the property.
If they don’t want to sell it, we can safely assume that they want it more than the other people do.
If that wasn't the case, developers wouldn't want to build denser buildings.
Consider how much would it cost to get a standalone house with a sizable yard on Manhattan?
More density usually doesn’t come close to satisfying actual demand, but it does make the existing real estate more valuable.
> but it does make the existing real estate more valuable.
No it doesn't. Existing real estate is valuable because there is a mismatch between commercial and residential real estate. By building more residential real estate you are reducing the mismatch.
But sure - Prop 13 and new building are separate issues.
[1] page 4: https://www.jchs.harvard.edu/sites/default/files/rr07-14_obr...
My guess is that other downsides, real and imagined, make people overestimate the impact on prices.
People who bought may feel more entitled to a stake than renters, but in either case it's necessary to have some kind of incentive (high property tax) to drive out people who don't want to pay the market rate for living somewhere, so that available housing slots end up being given to those people who are willing to pay the most for them.
What makes you think it was luck?
How about people who saw the potential in a place before other people did, and contributed to its success?
How about ordinary working class families who have lived there for generations?
> should entitle you to enjoy living there forever when others are willing to pay more for the same home.
I don’t see why people with money should have the right to force people out of their homes.
> that available housing slots end up being given to those people who are willing to pay the most for them
I see, so this is about people with lots of money being able to force people out of their homes.
Why are there limited slots? Why not just invest in other places? There are many underdeveloped towns even in California, where prices are cheaper.
The market signal is that people should go and invest in those places.
Why don't they move to a more equitable tax scheme based on, say, what the district requires rather than what the home was bought for? I already know the answer, because nobody would vote for it.
It is the same in Berlin, where I live. People voted for the Mietendeckel but the only group of people that benefitted from it are the long-term renters who already have all the house they need. Among the screwed: small-time landlords, new renters and new families who need bigger apartments.
Contributed to its success by following a tax policy that encourages commercial real estate at the expense of residential real estate? Are you sure those people aren't just taking the jobs that the commercial real estate is providing hostage and are now extorting people for the privilege of living near the job?
>The market signal is that people should go and invest in those places.
No, the market literally screams into your face that you should build more housing and fix the commercial vs residential mismatch.
Agreed. Opposition to prop13 essentially is a statement saying that whoever has more money because they hit it rich on an IPO deserves the right to kick out established residents just because they have more money.
What should buying a home mean if not that? Sure, if someone else is willing to pay a lot more, they're welcome to bid on it, but it's still up to you if you want to give that up and stay put where you have roots, friends, family, kids in school, etc.
If others are willing to pay more for the same home, then they should make the current owner of the home an offer.
(This is somewhat ameliorated by the fact we let people take the tax subsidy with them under many circumstances now, so people can move to a different part of the state and already pay less tax.)
A home is a home. Where your children are born and grow up. Where you get to know the neighbors and become part of the community.
It's not an investment and should not be taxed based on the highest bidder.
They have risen because nobody resists commercial development, only residential development. The reason? Commercial real estate still brings in taxes and it increases home values which also increases property taxes on homes. The insistence to only reap the benefits of commercial development without further residential development is what is causing problems in the first place.