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Comment by surfmike | Hacker News Reader

I think land-value taxation, with a cap on properties based on income (and wealth) for your first home, is the way.

I do think there is something special about the idea of home, and that home ownership should be encouraged. It brings people stability. People shouldn't be pushed out just because others have more income than them.

At the same time, we do need property taxes. In California, rate increases are capped, so older owners often pay pennies compared to new homeowners. Harmonize the taxes, while capping it.

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Why should there be a cap? If you're so rich as to own some property, why do you need protection from paying a reasonable rate of tax?

You don’t need to be rich to own. Some people are lucky to buy a home where/when it’s cheap. Imagine the value (and taxes) outpacing your income. Like an elderly person with fixed income.

Either it's really valuable, and they can borrow money to pay taxes, or it's not and taxes are low. But people shouldn't be allowed to freeload on the work others do to make the property valuable.

Borrow money needs to be paid back. It's entirely possible and it wouldn't be a surprise someone retired lives for 30 or 40 years, accruing all that back taxes have to be paid up until eventually the taxes are worth more than the house.

The boatman doesn't charge money, so what's the problem with that? They got to live somewhere other people invested to make nice without extra money out of their pocket.

If you're lucky. There are a lot of scams out there that are variations on the idea of well we'll pay various fees at your house or pay you this or that. Reverse mortgages...

Sometimes it works out and it's fine. It's not all the scam. But there are no scams out there that I would not have any confidence in working out. And as a government (which as a voter I'm part of), I certainly would refuse because there are too many ways that I can lose.

Well you might need to if the property taxes can spike like crazy, which is the point some people may be making. You could budget a mortgage but with taxes as a substantial wild card, it can blow up your budget.

Because a cap or exclusion or credit for your primary home lets people who can just barely afford it to purchase their own home. And that's a good thing.

Why not just subsidize this directly then?

How is "a discount on your property taxes on your first home" not a direct subsidy?

I'm not sure it is. If you can just barely afford a home, that also suggests that you don't have enough financial cushion to deal with all the little surprises that come with homeownership. Worse, you might be ill-positioned to weather a something like a recession. Recessions are nasty things and have a tendency to cause people to lose their jobs and become underwater on their home loans in rapid succession.

Now, apartments can suck too. Especially in places like the USA where we have a landlord cartel actively pushing up prices, and a professional landlord president who shut down an antitrust investigation into said cartel shortly after entering office.

I certainly can't say I have all the answers here; right now housing sucks every way you look at it. But I do believe quite firmly that this idea that going very deeply into debt and securing it with the actual roof over your head is somehow good for a person's financial security is an idea that mostly serves the interests of people who earn a commission on convincing people to get into that situation.

Even assuming things just increase at the rate of inflation, a house you can just barely afford today is a good investment because in 20 or 30 years that house is going to be worth far more while your payments have stayed the same and your income has increased.

Note that I'm very against cash out refinancing, which a lot of people are doing to get the cash that the house is worth. In my opinion the best reason to have a house is in 30 years it's paid off and now you can live there rent free for the rest of your life.

I just don't believe that that math works out so easily if you run real numbers.

I am a fairly recent homeowner. Before that I lived in an apartment in the same neighborhood. I like owning the house and having control over the space. I like having a bit more space. But, after I add up home loan interest, taxes, homeowner's insurance, higher utility bills, maintenance, etc., the amount of money that I will definitely never see again adds up to quite a bit more than I was paying to live in an apartment that, square footage aside, was aesthetically much nicer and better situated than the house.

And then, yeah, some additional amount goes to equity in an "investment" that is less liquid and historically earns a lower rate than a decent index fund.

When a person buys a home with a mortgage (congrats, by the way!), they gain the possibility of getting some return on the money they spend to have a place to live. It might work out long-term or it might not, but there's a chance (and it's often a pretty favorable one) that it works out well-enough as the years tick by that the light at the end of the tunnel keeps getting actually-closer.

Every day, thousands of folks do emerge from that tunnel and gain the ability to make profound statements like "Well, at least the house is paid for."

This is in stark contrast to renting, wherein: There is absolute certainty that none of the money spent towards having a place to live will ever be returned. It doesn't matter how much is spent: Whether a little, a lot, or a lot more, that money is always just unilaterally gone. There's no chance at all of anything else happening. The odds of winning are nonexistent. There is no light at the end of the tunnel, and there never can be -- it's just inescapable darkness in there.

In general, buying binds capital, more than renting.

If you include opportunity cost into the decision, then your contrast can and often will disappear (i.e. renting is financially superior or "winning" in your terminology).

Also, is this an AI comment? Because it's surely poetic about something that doesn't call for it.

> Also, is this an AI comment? Because it's surely poetic about something that doesn't call for it.

When I find these kinds of phrases to be directed my way, it is my most charitable interpretation that it is impossible for anything to be gained from the conversation.

Thanks for bringing this up! We're done here.

> But, after I add up home loan interest, taxes, homeowner's insurance, higher utility bills, maintenance, etc., the amount of money that I will definitely never see again adds up

So your landlord was renting your apartment to you at a loss?

The landlord may have been. Sometimes investments lose money.

But it's also probable that the loan is fixed at a lower rate than you can get now, the maintenance costs less if you put a few people on salary vs hiring them for one off repairs, and the utility bills are lower because it's a smaller space.

That doesn't matter for this discussion, because rent is set by supply and demand, not the landlord's profit margin.

Losing money sets a floor on rent because the landlord loses money is going to be looking at selling the place, possibly even at a loss, just to get out from under the burden and so that place disappears from the market. If profit is high, they'll be looking to build a possible, maybe not your landlord, but someone will, and if there's no place to build for whatever reason, then rent is just going to go up.

You need to report back again in 30 years. As a recent homeowner, you are absolutely correct. I don't even need to ask for details. However, things will change over the next 30 years. Your tax and insurance will go up with inflation and so it will actually be free to live there. However, in 30 years your loan is paid off and you get to live there for the rest of your life with no house payment ever again.

As a general rule of thumb, the break-even comes out to be about seven years. It can be as bad as 15 years if you get unlucky and when you buy it what the economy does, but by 30 years it is almost guaranteed you are overall money head buying a house.

Although I do have to point out that I did not consider other investment options. If you take an apartment for cheap rent and then invest the difference between what a house payment would be including all that insurance and taxes versus your apartment and apartment insurance (less buy important) - and invest the difference in stocks, that is going to change your financial situation. All those equal that expect to be equal over in the long run. Since by investing, you are investing less money. However, just to make things tricky, in the U.S., we can invest up to a certain maximum in a 401k or IRA, both of which are going to be much better because of taxes, but it doesn't matter if you have an apartment or you have a house, you're at the same maximum. And so someone with a house can get that advantage of that and their future rent is paid for while someone with an apartment is still going to be pay for that apartment all their life.

There's a few other assumptions above. I'm assuming you're relatively young and you're going to live a relatively long life in the same area. Moving houses that's going to change things, apartments are much easier to move. Be the umlucky person who dies young: you won't get to take advantage of either investment.

Overall apartments and houses can both be good things and you need to examine the situation for your own life. Life includes your future, which is of course unknown. Good luck.

Anyone who claims there is a universal answer for everyone is categorically, utterly wrong.

> I'm not sure it is. If you can just barely afford a home, that also suggests that you don't have enough financial cushion to deal with all the little surprises that come with homeownership. Worse, you might be ill-positioned to weather a something like a recession. Recessions are nasty things and have a tendency to cause people to lose their jobs and become underwater on their home loans in rapid succession.

'Tis better than to have owned and lost, than to have never owned at all.

> Now, apartments can suck too. Especially in places like the USA where we have a landlord cartel actively pushing up prices, and a professional landlord president who shut down an antitrust investigation into said cartel shortly after entering office.

So rather than ever own a home, just rent. It's about the same as taking a pile of money out into the middle of the street every month and setting it on fire, but what else can a person do?

Die?

That's looking at the ability to buy ONLY as a numbers game, but it says nothing of the emotional effect it has on actual buyers. I bought a house. I can ask for a raise I'm worth it. I am doing well now... I'll get a better job next. Now I have a wife and kid and they want me to do better. etc...

While not all stories are like that, many are (in fact most are).

You're just arguing what "barely afford a home" is. Ok, it has to include a maintenance budget. And maybe a financial buffer. But those are true regardless of taxes. That doesn't mean that there are lots of people who can afford the home and the maintenance and some taxes but not the full tax amount.

>"If you can just barely afford a home, that also suggests that you don't have enough financial cushion to deal with all the little surprises that come with homeownership. Worse, you might be ill-positioned to weather a something like a recession. Recessions are nasty things and have a tendency to cause people to lose their jobs and become underwater on their home loans in rapid succession."

Except you have to live somewhere, it's not like buying a boat. All of these dangers apply equally to owners and renters. Yet the protection you get from owning in that situation is massively advantaged over renting. Lose your job and can't afford your mortgage? Oh no, guess I'll have to take out a HELOC, or apply for forbearance, then wait years to be foreclosed on and declare bankruptcy. Lose your job and can't afford your rent? Sheriff's knocking on the door in 90 days to throw you on the street.

When supply is so constrained that the first home is unaffordable, measures like this generally just push the price up without actually increasing the number of people that can afford a house. You can see this in the UK where multiple 'making houses affordable' tax breaks for first-time buyers have mainly just lined the pockets of existing property owners (except when the existing owner is the local government, in which case they should obviously take the loss despite having all the obligations to provide services and none of the authority to raise tax income, with the all the predictable holes in their budgets that result).

You may not always be that rich, and having to liquidate your only house to pay the taxes is and should be an unpopular opinion.

Consider my neighborhood in Chicago. It has gentrified rapidly over the past couple decades. But it wasn't always so wealthy. My retireee neighbor probably bought her house for no more than about $100,000, but now the market rate for a house like hers is more like $500,000. With that comes about $20,000 per year in property taxes.

That might be reasonable for the wealthier families who are moving into the neighborhood and driving up the land values. But it's pushing her into poverty.

What poverty--she owns a house worth $500k. I think deferral schemes where certain individuals can pay taxes upon sale of the home (with fair interest) should be fine to avoid forcing anyone into a reverse mortgage.

Well she doesn't have the 500k. This is akin to saying we should force people out if market conditions make their house more expensive. That seems like a really strange consequence to all this, idk

Either housing is an economic asset subject to market forces, or it's not.

If it's not, then I would also like to live in a nice neighborhood for $100k and zero property tax, please.

On the other hand, if it is, then this person has a substantial economic asset that she could reverse mortgage, rent out, or sell.

It isn't because the comment had a second sentence suggesting tax deferrals were fair.

>This is akin to saying we should force people out if market conditions make their house more expensive.

Firstly, if housing wasn't treated as this appreciating asset to invest in (and NIMBY around), this wouldn't be a problem to begin with. So you can argue a part of this is the consequence of a generation's actions.

But in the context of a "single family" home, it's a question worth asking. Should an old couple who's long since had their children move out (and likely have their on children) still be able to sit on the property of a 3-4 bedroom household? Or should there be incentives for them to want to size down their house and free it up for next generation's families?

The population decline will already answer this question for us sooner than expected, but it's an interesting question to ponder on.

So people that keep buying low (because that's what they can afford) are constantly being forced to move.

So your solution is to force her to sell her home and move? Move where? I've seen this in so many areas of the country where property taxes on your property are tied to market value rather than purchase price. It drives retired and lower income people out of neighborhoods that they have lived in for decades, forcing them to move down the scale of home ownership.

Perhaps the retired person is living on a fixed income of $40k/year. Over time their proterty taxes on the home that they have lived in for decades can now be more than half of their total income? How is this fair at any level?

Reverse mortgage.

> How is this fair at any level?

How is it fair that working people have to pay 10x for housing than she did when she was young? How is it fair that the money goes to her inheritance while she made her working neighbors pay her share of taxes?

Of course, let's let yet another corporate land grab take even more residential property off the market for profit-based motives. This can't possibly do any more harm than locking property taxes at the time of sale.

Where I live, we are looking at locking property taxes once you hit a specified age (65) and have under a specified income ($40k+/-). The current debates revolve around exactly what those numbers are and at what level the taxes get locked. The goal is to protect the elderly who have already contributed to the economy and society for 40+ years and not force them into a financial situation forcing them to sell their home just to pay even more property taxes that they have paid for the entire ownership.

Meeting the basic needs of the population, by having enough housing and preventing hoarding of housing by wealthy individuals, is not a "coporare land grab."

Quite the opposite.

We are clearly talking about different things. I'm talking about protecting single home homeowners on a fixed income from being forced out of their homes. Staying in the only home she owns is not hoarding.

Telling people that the solution is to sell their home to an insurance company as a solution is most certainly a corporate land grab.

You seem to be arguing about people/corporations that own multiple homes or even entire portfolios of property. These are not the same argument.

The solution is not necessarily to sell, they should only do that if they want.

If their asset is gaining in price so much that the tax burden is getting high, then tax deferement until a liquidity event both keeps them in their home, but also keeps them honest about how much they are taking away from the rest of society by taking that piece of land.

> Of course, let's let yet another corporate land grab take even more residential property off the market for profit-based motives.

The premise does not warrant this conclusion.

A number of states have this. Basically if you are low income, where that may be calculcaed differently depending on cost of living of the county you live in, you can defer or freeze property taxes.

Oregon has a deferral where the delayed property tax comes from the value of the house when it is sold or I guess when you die. https://grantsforseniors.org/property-tax-relief-for-seniors....

Washington has a similar thing.

"All Washington counties offer senior citizens and disabled households property tax exemptions. Eligibility is based on your age or disability status, home ownership, residency in Washington, and income level. Seniors who are at least age 61, or retired from regular gainful employment by reason of a disability, with an income of $64,000 or less are eligible."

The idea is to help people stay in their houses. This is really really important. And if you can afford it, you should be paying property taxes. I'm lucky I can afford mine, but I highly support this strategy.

In my state I occasionally see people in online discussions saying they can't afford their property taxes - I think a lot of people aren't aware of these programs, people are amazed when I post a few pointers and tell them about it.

They don’t, they move to the ghetto like she did and start the gentrification cycle again

Why should this person take up a family home in a desirable area? It is inefficient. The pressure she is feeling to leave is the system working as intended.

We shouldn’t prioritize efficiency when it comes to moral matters. That’s a bad idea for the government.

People’s primary residences are more than just an economic asset. If you don’t understand that, it’s difficult to have a conversation as we have very different starting points about morality.

There is no inalienable right to live in a place because you were there first.

Housing is a fungible good. I have friends and family living in squalor because people have decided sentiment is a valid reason to keep people in these four walls instead of those four walls.

I think people’s primary residence should not be seen as assets in the way they are today at all. The only reason they are is substantial government intervention.

Bullshit. Your comment is wholly nonsensical. Housing is distinctly non-fungible. You can't move a housing unit around from its intrinsic location! Housing exists in a neighborhood and in particular jurisdictions. That is fundamentally unchangeable (I mean unless you've got a mobile home or a historic house that actually can move: that's the exception to the rule.)

Housing is also set up in a particular way. A McMansion is nothing like a 1BR apartment. A condo is nothing like a ranch-style SFH. The aforementioned mobile homes could never serve a family of 12 or be attached to a swimming pool. These are not interchangeable things! They are unlike a barrel of oil or a $100 bill, my dude! Not to mention, illiquid. You tie up some money in real estate, and you can't simply trade one house for another. You want to sell houses, that's a chore. That's not a diamond in your pocket; that's the definition of non-fungible.

"Housing" as property is additionally two separate things in one package: the structures on the land, and the land itself. You can't usually sell one without the other, you see. So how is that fungible, when these two intrinsically linked commodities are clearly not.

It's true that nobody cares "who was there first", but property ownership confers real rights. The right to stay put, and the right to expel unwelcome people from your property. The right to defend it, or at least have the authorities defend your life and property within. Even renting tenants have rights, as long as their bills are current. It's not a matter of "who is here first" but God-given and gov-granted rights of occupation. In a less civilized place, your property rights would be defended with guns and violence, as against invasions.

Housing is, like, one of the least fungible commodities possible. I don't even know how you say that. How do you define fungible so that it includes housing? Pray tell! Inquiring minds want to know!

Brother are you okay?

Would you define two apartment units next to each other, with the same floor plan as fungible?

What about the house next door?

For the purposes that people use them for, there is an immense allocation problem in the US. People are sitting on a 5b/5ba and living alone. Bizarre sets of incentives have culminated to make this possible. We have collectively decided that for some reason, it’s completely sane to live in a house that you don’t need. We should look at it the same way as owning a stretch hummer.

We’ve collectively decided this because the West developed a strong sense of property rights of the individual versus that of the collective. Typically it’s taxation that nudges these behaviors, at least in theory. It’s nuanced complex and incoherent at times, so no need to come after me for just trying to answer your question. I am not advocating that it’s the right balance or mix.

Houses are not the same thing as cash or other fungible assets.

Especially not when you're getting older, have limited ability to manage a move for yourself, built a life and raised your kids in the building, and would have to consider unloading a lifetime's worth of objects and/or moving infeasibly far away from your friends and community to get into a living situation that's more financially tenable.

> Houses are not the same thing as cash or other fungible assets.

> Especially not when you're getting older

Houses are wealth. And the wealth in them can be accessed while retaining use of the house. Especially when you are getting older.

Why are we replaying the dishonest “think of the retirees” now? It was bullshit in California in 1978 to sell Prop 13, and its even bigger (and more transparent) bullshit now when, especially when it is used to sell the same basic idea.

How can someone be so out of touch? A person buys a house, spend a whole life there, and through no action of her own happens to live in an area that drastically appreciates in value over the decades, all she wants is to spend her last few years in the same house that she loves and would never consider selling, and now we ask them to kindly pay all their income or more in property taxes, otherwise fuck off??

And where would she move to? All decent areas probably also increased in price, her property went up 10x in value but so did all other properties she would contemplate to buy. That’s the fallacy of thinking property is wealth when talking about your only residence.

What a morally bankrupt viewpoint.

It's classic neoliberalism think which for some reason the tech crowd is unreasonably susceptible to. "Oh you're poor? Can't afford your bills? Must be your fault." It's utterly disgusting.

Everyone needs a place to live, not only boomers. There's a generational injustice at play in the idea that you get for $10 what I must pay $100.

You're not wrong, but that's an entirely different discussion from whether or not someone should be forced out of their house simply because gentrification and inflation causes their taxes to go up year after year likely long after they're done working. Oftentimes people buy homes in low-cost areas because that's what they can afford. It's not their fault when the area gentrifies and their taxes skyrocket past their means through no fault of their own. We can advocate both for homes to be more affordable for people that need one and for people to not lose their homes due to constantly rising taxes.

Defered property tax for elderly can be (and usually is) implemented as a lien on the estate, to be settled upon the owners death. Do you heve any problem with that? Or should we now also think of (inheritance of) the children?

Yeah, _seriously_.

"And where would she move to?" -- Either the graveyard or the incinerator? She's dead... the bill doesn't come due until after her death and is settled from the value of the house.

GP is not forcing the retiree to move. GP is instead advocating retaining the use of property while reducing the cash flow burden. Asking someone to get a cash out refinance is not morally bankrupt; it is a pragmatic and fair solution. Some states also have deferred property tax schemes; these are even better. It is only fair for someone who, by luck, paid $100k to get a house that is now worth $500k and lives in a neighborhood that is now far better than when she bought the house.

The suggestion is that this person can get a mortgage to pay their property taxes over the next 20 or 30 years as part of their retirement - or they can sell their property and live well in a cheaper location.

Claiming that the retiree has a right to both the home value and the ability to live there is the friction point. It reads as hollow in the face of rising homelessness and the inability for young people and families to access housing.

The comment you are responding to is saying the opposite. They are saying that the person can access the wealth of the house (eg via a reverse mortgage) in order to pay the taxes while staying in the house. That's what this meant:

> Houses are wealth. And the wealth in them can be accessed while retaining use of the house. Especially when you are getting older.

Simple example. I bought the house at $100k. It's now worth $500k. That means I owe $20k/yr in taxes, but it also means I have $400k of additional wealth. A bank will lend me money with that wealth as collateral. If you imagine that the interest on the loan is roughly equivalent to the rate of appreciation of the property going forward, that's 20 years of taxes paid for by the increase in home value. Seems like a pretty good deal for everyone!

All else equal, I can see why the ability to live in the same house until you die would be given a high moral value. But in practice, IMO, this culture causes a number of problems. For instance, where I live, there was a lot of growth in the 70s and 80s, and a lot of young families, so they built a bunch of schools. It's an attractive place to live, so a lot of those people who lived in those houses when they were new and raised those families and attended those schools have kept living in those houses. But those kids that they raised there can't live in those same neighborhoods as adults, because there's no turnover, so they can't raise their own kids there. So now the schools are all half (or less) full, because the neighborhoods they were built to serve no longer have a lot of families living in them. So then they have to close and consolidate schools and everybody hates that. I don't really have a strong view on the moral question of whether houses "should" be owned by older people who have lived there a long time or by young people families, but from a pragmatic standpoint, this situation seems quite bad to me.

I think if we had a totally different culture, with multigenerational families living in the same house, then this might work better. But this model where we build new family friendly neighborhoods with parks and schools, and then nearly everyone ages in place and all the family amenities become empty over time, and the families all end up in the next new neighborhood and then it repeats, this doesn't seem ideal to me.

Schools aren't forever. They're just buildings that get built, expanded, replaced, upgraded, mothballed, abandoned, sold and/or destroyed all the time as the needs of the community using them changes. Some may last for decades, and some for centuries. Some have already lasted far too long.

It's OK that they don't last forever; they're schools, not irreplaceable shrines.

And speaking of things that also don't last forever: Homeowners. Grandma Sally isn't going to live forever. The house winds up on the open market in order to seek satisfaction of Grandma's debts, and then some new family buys it at market price and is free to breed a whole new fleet of kids to raise there.

There's still eventually churn in the marketplace, and in the neighborhood. The churn didn't disappear just because Grandma Sally was able to choose to keep living in the same place until she died quietly of an agonizingly painful heart attack as she stood in the kitchen making tomato sauce after church on a Sunday morning before the family dinner that afternoon.

People die all the time. It's often tragic, but it's natural and ultimately unavoidable.

People also get forced out their forever-homes all the time, too. That's also often tragic, but it happens for artificial reasons that could be avoided if we bothered with trying to do so.

> Schools aren't forever… Some may last for decades, and some for centuries. Some have already lasted far too long.

That seems a bit ironic?

> Grandma Sally isn't going to live forever. The house winds up on the open market in order to seek satisfaction of Grandma's debts

Not always, grandma can pass the home down to whoever. IIRC there are ways to do it without triggering a reevaluation on the original purchase price.

Ironic? Is it ferrous or something?

Anyway, Grandma is as dead as that Sunday dinner. She won't care that the new occupants are being complete heathens about smoking dope and makin' babies on the sofa.

Yes, ironic how in such a discussion over how we value land, we choose there to be intrinsic value in a private dwelling and little value in an institution that raised that person and an entire community. Grandma Sally gets to die with dignity while her grandchildren wonder thy they need to change schools all of a sudden and separate from their friends.

Perfectly encapsulates modern society's attitudes by generation.

I also weep for the children. I still remember being a kid.

And I feel a lot more reverence for the memories of the house that my grandma and grandpa always lived in for the entirety of the time that our lives overlapped than I do for the memories of the school buildings I attended that are now abandoned or demolished.

I spent more years with them around than I did attending school.

Schools closing are a symptom of a community that has not retained a healthy mix of people at different stages of life.

Unhealthy for whom? The people who get to keep living there?

For the whole community. For everyone.

So: "We're from the community, and we're here to tell you that you can't live here anymore" is...healthy?

It has never left me in a particularly healthy-feeling state when outside forces beyond my control have made me pack up and move.

Was I doing it wrong? Should I learn to embrace the masochism, instead?

No? I don't really understand what "outside forces" you're talking about. Property taxes? I'm sorry but that's just an incredibly silly and entitled way to think about land ownership.

Entitlement isn't a sin, my good sir! It is instead a thing that is worthy of accomplishing!

If you have a degree in mathematics from 1984, then you're still entitled to that degree today in 2026.

And if you bought a house and the land that it sits on in 1984, and paid for it wholly and own the title for it, then you're literally-entitled as the owner of that house and the property upon which it rests.

Words have meaning. Please do not disenfranchise them.

Pretty please.

---

Anyway: Everyone else loves what you and others have done with the neighborhood since you moved there in 1984, and they decide they love it so much that they want to move there too. It's a pretty great place to live.

Value goes up. You may not have changed anything more on your property, but they love what you've done with the place so far and want to be near it.

You had the place paid off and were entitled to it in 2014 after you completed the terms of the 30-year mortgage you took out in '84.

But now: Value goes up. Property taxes increase. And, fuckin' hell: You can't afford to stay there anymore.

You own the place, there's no question about that at all. It's completely your entitlement, and you absolutely paid for that entitlement, and everyone agrees that this is true: This entitlement is even recorded at the courthouse!

But you have to move, anyway, because you just can't afford to stay in the house that you fucking absolutely own and are entitled to anymore because the cool kids (nearby, and also on on the other side of the state, and nationally/globally because of inflation) are pushing you out.

---

So I guess that you aim to suggest that we shall own and keep nothing, and be happy about it? Fuck that! We're already fucking temporary! We're already run-limited by virtue of being human! We should be able to pay for decades of risk and eventually own a place, and then live the rest of our short fucking life in that same place without being forced to move around!

We all die. The property we were once entitled to will get recycled into the churn soon-enough no matter what our intention may have once been, after we check out.

>all she wants is to spend her last few years in the same house that she loves and would never consider selling, and now we ask them to kindly pay all their income or more in property taxes, otherwise fuck off??

Change that older lady to a 30 year old woman and the sentiment quickly shifts to "big deal, live in a house you can afford in. people need to move, get jobs, and work. Get hustling". And that is likely the story for a generation of renters.

Yes, it is morally bankrupt. But sympathy is a two way street and can quickly be lost when one side suffers pain.

It’s not a bullshit idea, it is realistic and the problem in California is that it includes commercial and second homes.

I don’t want my country to force old people to either move from their home, or take out risky debt.

There are absolutely problems and prop 13 has been awful for California but it’s a red herring to worry about the primary residence exceptions.

To actually realize this value she would have to sell it.

> But it's pushing her into poverty.

No, its pushing her into a cash flow problem. Its not poverty; she has substantial wealth, but its all in the house.

There are mechanisms, of course, to access that wealth without moving, including ones specifically geared toward income-limited house-rich retirees.

Now, those end up creating a debt that must be resolved before transferring the house, including via estate, so living on the value of the home reduces its utility as a vehicle for generational wealth, but...unless you want to reproduce California’s system which makes it much harder for people to become homeowners while rewarding those who already have, eapecially the wealthiest, making the rich richer and what would be the comfirtable middle class anywhere else in the country poor, that’s the way it works (and your exact scenario was the major sales pitch that was used to sell the California system; its maybe understadable how people without 50 years of California’s example fell for it then, but...)

So your solution is to take the house away via a second mortgage?

Why are we trying to take houses away from homeowners? Many who have lived in their homes for twenty years or more. What services that the city has could be so important to push residents out of the homes they've lived in all their lives? Most of it is inefficient pork on admin and roles the people living there didn't choose to hire for.

Build more. Encourage building multifamily. Pay to buy these homeowners out of their single family and convert the land to multifamily. If you can't pay, don't try to make it up with tax increases. That forces people out.

Deregulate and build.

Maybe a city failing to stretch services will send new residents seeking other cities, which would be healthier anyway.

Or maybe property taxes should be based on the services rendered. If they increased from $1,000/year to $20,000/year and you subtract away the inflation here is the city government delivering more value or less?

In my city and others our city council delivers large grants to non-profits and other entities under various auspices. “Defending gay rights” is one, or maybe helping the homeless or something. Of course I support both causes in general, but if the city gives a million dollars away maybe we just have to have some people kicked out of their homes to pay for these programs?

You can say well we will just raise taxes on the wealthy. Sure yea, whatever but that isn’t a viable long term strategy for places outside of California or New York which have an ability to capture wealth better due to intrisinic location value. There are only so many “rich” people. Could I afford another $10,000 in city taxes? Yea. I won’t be able to go out to eat or shop at local business as much though. So then what happens? Do those businesses go under? Raise prices? What about their property tax? Maybe instead I sell and take a loss on the house and the market value goes down so now that home pays less in taxes (depending on how this stuff is measured in a given jurisdiction).

> Maybe a city failing to stretch services will send new residents seeking other cities, which would be healthier anyway.

Yea. Tell Google and Meta and whoever to stop putting more jobs in the “cool” cities and come to Ohio where I live instead of these data centers.

This stuff is rather complicated, unfortunately. Even the case of a city let’s say “building affordable housing” is arguably a benefit to the local homeowners, but if you do that yea sorry Granny McPension has to pay for it too - she has a house, she’s wealthy!

> If they increased from $1,000/year to $20,000/year and you subtract away the inflation here is the city government delivering more value or less?

Probably less.

And probably irrelevant to the people that already live there.

> Probably less.

So probably the taxes should be lowered then and then grandma doesn’t need to be kicked out. Everyone wins

If you own a house you are the wealthy. If you own a house on which it is possible to owe significant property tax you are the very wealthy.

> If you own a house you are the wealthy.

Needs additional context and qualifiers. If you think just owning a house makes you wealthy maybe your view of the world and what money is and means is wrong. You can be a regular ole’ plumber in, idk, Indiana and own a house. I wouldn’t consider that wealthy.

> If you own a house on which it is possible to owe significant property tax you are the very wealthy.

What is “significant” in this context?

> Pay to buy these homeowners out of their single family and convert the land to multifamily.

But that's what the market is already doing? In your example from above, you can take a $400,000 windfall and move somewhere else, or take out a mortgage against that $400,000 of new equity to pay your taxes and still come out waaaaay ahead. I don't understand your characterization of a second mortgage as "taking the house away" at all.

There are ways other than California's for addressing this. Washington's system works quite well: a disposable income based property tax exemption for people over 61.

It exempts you from "excess levies" (basically levies that are voted on) and some statewide levies and freezes your taxable assessed value. If your disposable income is low enough it also starts excluding part of your assessed value from taxation.

Why can’t she pay from her retirement accounts? 20K/yr isn’t all that much considering today’s cost of living. The stock market has skyrocketed in the last decade and change.

I also don’t buy 20K of property tax on a 500K home, that’s a 4% tax which seems unlikely in Chicago.

Something isn’t right. Poor financial planning maybe?

$20k on $500k is 4% annually, which is really high. I'm not seeing any Chicago neighborhoods that are this high (looks like a max of maybe 2%) but perhaps I'm missing something about how Chicago works?

His neighbor is either lying or he's exaggerating.

Cook County has senior exemptions, senior freeze exemptions, and long-time homeowner freeze exemptions. They don't push any responsible homeowner into poverty. They also have a website so you can look up exactly what your neighbor's assessed value and annual tax is. There is no need to guess.

lol caps prevent "unreasonable" rates of tax

Maybe you’re referring to someone who owns multiple properties… But I think if someone owns the house they live in, there should be a cap once they reach a certain age. My Mom is retired and owns her home, but she still effectively pays rent on the property. She has a fixed income and the property tax comes in around 16% of her monthly income.

That doesn’t seem too bad, until you see all of her other costs have gone up dramatically because inflation has been high post pandemic. She only has so much money to spend every month, and if her property taxes kept going up too, she’d eventually be unable to afford to live in her house. She only owns her home because she was worried about being secure later in life and prioritized it above things like vacations or cars.

For a lot of folks as they age, even if they’re frugal, it’s not easy to survive. If you live for 20-30 years after retirement you’re likely to have your buying power cut by half if not more.

With that said, if someone’s home is worth more than say 10x the average price in your area, or your assets are $10+ million[1], I think there’s room for increased taxation. My primary point was simply being a property isn’t necessarily the right measure to determine a reasonable tax rate.

[1] The number obviously depends on where someone lives. Living in New York or SF, $10 million dollars of assets would be an extremely comfortable life but most likely not a lavish lifestyle. But… $10 million dollars in rural Mississippi is going to have you living an extremely lavish lifestyle.

If property taxes are increasing, the value of the home and the wealth of the resident are increasing far in excess of the home.

The only fair thing to do is to allow some portion of the taxes into a lien that is paid out when the he is sold.

It's extremely unfair to reward excess wealth to the wealthy people of a community, while everyone else is struggling just to find a place to live.

Not only is it unfair, but it skews financial incentives and results in very poor politics for improving the unfair housing situation.

Raise capital gains taxes then on those who inherit the property. It’s not extremely unfair to reward folks with a home to live the rest of their life in… I’m also not sure at all how it’s excess wealth to own a home. Most people in retirement now bought their homes at reasonable prices, that well exceed what they paid for or perhaps even made in life. If they sell they can’t buy something else.

By your logic anyone who is retired and has an asset appreciate should immediately sell it, and be forced to move somewhere else.

I cannot afford a home in Portland where I live. I could probably make the mortgage but it’s too risky in my opinion to have a 30 year debt obligation. None of my friends own their own home, not a single one. We’ve all just entered our 40s. The lack of somewhere to live won’t be fixed by a lien, nor will liens on an individuals actual home due at death fix it. It will absolutely incentivize investors who can exploit that, who will pay the liens and add to their portfolio.

If we want more housing at better prices we need to encourage development of more housing. That means making cities more dense and removing NIMBY policies which prevent it. Sure some of these homeowners may be voting for those policies, but they are the minority in larger cities.

They do get a home they get to live in for the rest of their life with tax deferment.

The wealth gains far outpace any potential tax increase. They just don't get to keep excess wealth that comes from keeping others out of the area.

Likely because of legacy homeowners who bought their $2m home 50 years ago for $25k and are now retired. They don’t have the income to pay those taxes even though their non-liquid net worth is way high

People are arguing about this but just making the cap income-dependent seems an easy fix.

Land-value taxation is an idea that only works because we restrict building homes. If we said, look starting tomorrow anyone who wants a permit to build housing can get it in 30 days and if the local control won't permit it we have a state-wide (I live in CA) office that will review your building permit (and zoning), issue you a building permit, and do the inspections, specifically for housing, there wouldn't be a housing shortage in 15 years.

Basically land-value scarcity is not because we lack the homebuilding capacity, its because we severely restrict building in places that have high demand

Land value taxes work better with less restrictions on zoning and development?

Get rid of the fixed mortgage rate. Owners will sell when they can't afford the mortgage rate; the new owner will pay property taxes at the current rate.

Apart from the US, there aren't may other countries that allow fixed rate mortgages, and not a 30-year fixed.

Land value taxation is the worst idea ever. I already don’t like the idea of property taxes, where you have to pay for a piece of land you own. The ideal should be that unless you’re making use of public services you can live a free life. You should not have to pay just to exist. I’d much rather that income is taxed for the higher tax brackets more.

Income taxes have much worse incentives, deadweight loss, and capital flight risks than property taxes or LVT.

We would be a poorer society if we followed your advice 50 years ago.

Possibly, but the ideal should be that unless someone uses services you should not have to pay to exist.

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