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Comment by yegle | Hacker News Reader

One big reason that CA has a reduced housing supply (therefore higher housing price) is https://en.wikipedia.org/wiki/1978_California_Proposition_13

The retired people who brought their house in 80s/90s can stay and hold onto the house for much longer, since the property tax is very "affordable". Whereas in other states, the property tax will push people to move to cheaper places during retirement years, thus increasing the supply to the market.

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This will _eventually_ get phased out with recent changes, but only as the owners die off. You can still pass on a residence to an heir but they have to actually live in it (within 1 year of you dying, IIRC).

The effects of prop 13 are overstated. The problem is California didn't build enough where people want to live. Many states have laws restricting property tax growth, my own state limits it to the lesser of inflation or 5%. It's the lack of building that pushed prices so high that selling only makes sense to leave the state.

No, the effects of prop 13 are not overstated. NIMBYism is a bigger problem, but prop 13 makes it financially reckless to ever move. Yimby policy would lead to less drastic divergence between value and tax rate as value increases slower, but there would still be a gap as people who bought SFHs in the town center would see the properties value grow due to the lack of land value tax.

It's not prop 13 that made property values 10x in the last 30 years. It's the lack of supply forcing bids ever higher. Downsizing and rebasing taxes isn't a big deal if you went from a 1980s 100k 4-bedroom house to a modern 300k 2-bedroom condo, it's a huge problem if the cheapest option is over 1 million.

That leaves 49 other states + territories to live in

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