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Comment by bombcar | Hacker News Reader

I know so many people 20 years ago who "I'll sell my CA house and retire elsewhere" was a majority of their plan.

As of now, I can only count a very few who actually did it, turns out it's hard to leave where you've lived your entire working life to move somewhere you've never been, and the price differential isn't as amazing as it once was (since Covid flattened that out somewhat).

The ones who did end up doing it ended up following their children (who were priced out of where they grew up).

Normally you'd expect measured, predictable, steady inflation to be the method to "defuse the bomb" but so far that hasn't been really tried (if houses keep going up 1-2% a year, but inflation is 5%, you have a 3% drop in value each year even though on paper, you have an increase).

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20 years ago is when the bomb probably could have been diffused, but I think the recovery out of the GFC put it on the back burner and then it was too late.

Housing should have been getting built like crazy in places like CA so that those people thinking of selling had a reason to sell. By not building houses property values keep booming, and even if you plan to sell and move somewhere it's easy to endlessly delay that decision when you're getting rich as hell.

CA housing cannot be fixed without across the board reassessment. Otherwise the winner with an old property paying 2% of their 1980s purchase price will never sell. The immediate tax hit for moving to a similar house would be financial insanity.

And reassessing across the board is not going to happen either because it would price out grandma living on a fixed income.

I bought my house (in CA) in 2019, and my property tax bill is ~$30k/yr. My literal nextdoor neighbor's property tax bill is less than $1k/yr (it last sold in the 1960s and has been passed down within the same family).

And to fix the problem, they added Prop 90 and 19, which now let you transfer the base value around! What an amusing shell game.

https://www.boe.ca.gov/prop19/#FAQs

But more efficiently shuffling existing supply doesn't create new supply.

Tax deferral to the estate for anyone over X age or that has owned a property for more than Y years. Or some gradient on either age or property ownership duration would address some of the issue. Even if you mitigate things with some kind of blanket exemption either of the estate or just to for life for a small set of folks that qualify, you need to stop it from new homeowners getting locked in.

If we have supply start matching demand, we'd get closer to the the "houses keep going up 1-2% a year, but inflation is 5%, you have a 3% drop in value each year even though on paper, you have an increase" approach.

Most metro areas are still not keeping up with demand. Even the ones that are doing better in things like zoning (such as in TX, NC, FL) are getting enough growth from other locations that the induced demand is still outpacing supply.

We need state and federal policies that can override the local NIMBYism. CA's recent experience is both a good start but also provides a bunch of lessons learned on how these policies can fail and should be improved both in CA in other jurisdictions - especially when localities are actively trying to work around them.

What is demand? People who want to live somewhere and people who want to park their money in land or real estate. Prices won't go down if you deal with only one kind of demand.

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