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Comment by sharkmerry | Hacker News Reader

Not to be a grump, but really we need to repeal Prop 13 in part or whole, while creating some new possible issues, I think it will solve more than it causes.

Converting to garages just passes more windfall to people who just happened to move to California a while ago.

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Prop 13 will never be repealed, especially not with housing prices the way they are now. If you want to see one issue unite every single demographic with great vengeance and furious anger, then try to take on prop 13.

I don't think prop13 needs to be repealed entirely, just changed so it only applies to the owner's primary home.

Then prop 13 will meet its ostensible purpose -- so the elderly don't get forced out of their homes by taxes, while those that own investment properties pay taxes on the market value of their property.

(note that I say this as someone that owns a couple rental properties in the California and benefit from Prop 13)

Or we can restrict it to just the elderly and disabled, instead of letting every single incumbent hitch a ride.

One of my favorite alternatives is to bring back regular tax reassessments, but owners can choose to cede excess property value to the city/state. This forces a choice between having your cake and eating it too.

Baby steps. Getting any change through at all is liable to cost several political careers.

I'm ok with rewarding people that choose to live in one community for a long time by reducing their property taxes -- living in one area is what helps build communities.

Long term communities need young adults forming new households to survive past a single generation.

True, but the elderly will leave through attrition, forcing them to leave through high taxes that make their homes affordable doesn't seem like a good way to ensure neighborhood turnover.

I lived in a rent controlled apartment in San Francisco, and about 30% of my neighbors were over the age of 60 including an 80 year old neighbor who'd been there for 40 years and had great stories to tell.

Then I lived in a 20 year old building with no rent control, and almost all of my neighbors were age 30 or below working in the tech field (few lived there for more than a couple years) -- with no elderly people that I was aware of. (we had a few months of of false fire alarm activations, so it was pretty easy to see all of the residents)

Grandma's low property tax bill is not the problem per se, it is the punitively high property tax bill we charge more recently sold properties to make up for it. This is popular because it punishes techie migrants, but it also punishes downsizing late and life and new household formation early in life.

If we don't need the extra revenue from rising property values, we should cut property tax rates accordingly. City residents getting the same public services for a smaller percentage of their wealth would be an immensely positive impact of tech's prosperity.

If we do need it (and I suspect we do, because higher prices mean government facilities and staff are more expensive), we should collect it fairly across the board. Maybe "fair" means flat, maybe it means progressive, maybe it even means "tenure in city" or "tenure in neighborhood," but "tenure in current address" is crazy. At least use a mechanism with some thought put into its incentives and possible unintended consequences.

Honestly though, wouldn’t you just pass on any property tax increase to your tenants, thus driving rent prices higher? I can’t imagine you would just eat that cost and potentially turn your real estate investments into money losing properties based on principle.

I don't think it would unite homeowners with non-homeowners.

Yeah, we kicked the poors out of the cities. Let's kick the elders out of the cities as well.

It’s weird how millionaires are the evil outsider enemy, but old people living in the million-dollar houses they own are sympathetic.

Maybe the progressive tax scheme will one day switch from an income-based gradient, to a function of both income and age.

Okay, how about as a first step we eliminate prop 13 only for 'new' houses, say bought after 2015 and also eliminate it for houses that change hands via estate transfer?

I'm still baffled Prop 13 applies to commercial properties and second/third/vacation homes. There's a greater conversation to be had about Prop 13 as a whole, but there's no good argument as to why the law as it stands should not only apply to the primary residence of the homeowners.

definitely need to repeal prop 13. This is creating housing dynasties. I personally know people who inherited rental properties from their parents who are paying taxes at 1980s-level valuation on these inherited properties because they never informed the city that their parents are dead. $40,000 tax valuation on a multifamily worth probably $2 million now.

wait -- is that allowed by prop 13?

this seems like a separate issue. these are individuals who are simply breaking the existing tax law combined with a miserably run local government that fails to do even the most basic job of enforcing that law.

i mean, when someone dies, a death certificate is issued. the county government finds out about that event and it's losing money by not putting 2 and 2 together -- but it still fails. IMHO a better-run government is the first remedy here.

Proposition 58 allows parents to transfer their properties to their kids and the kids get to keep the low taxes

Prop 193 allows grandparents to do the same with their grandkids.

ok. thanks. so it's prop 58 (an amendment to the state constitution) which would need to be repealed. and, I guess this proves the old saying that it's not breaking the law that's outrageous, it's what is actually legal that's outrageous.

Maybe just be repealed for commercial uses, I don't get it why commercial properties are exempts. There is a podcast by Malcolm Gladwell about a golf club in the heart of LA, the land worth north of $2B and they are paying property taxes on purchase price! this is insane, we need our laws to stop subsiding the rich!

one of the interesting special cases here is rental properties, in particular apartments. if the property tax is raised on these buildings, the costs will ultimately pass through to the tenants.

apartment buildings are still residentials! I am just talking about properties that nobody lives in it.

Cheap homeowner taxes doesn't really change anything. Isn't the real issue is just zoning high density housing in low density areas?

False.

http://www.savingcommunities.org/issues/taxes/landvalue/

What are you saying is false?

"Cheap homeowner taxes doesn't really change anything" is absolutely false.

Economic rents, unearned income, asset appreciation, constrained supply.

The real issue is that (1) people want housing to be affordable and (2) people want housing to be an investment, and this is simply not sustainable. It's obvious. Only the first few generations get to have both, everybody else gets fucked. They will give you a bunch of reasons that all sound very different but somehow all magically take the side that favors (2). Weird. At this point for housing to become affordable the prices need to tank. This can be achieved in many ways but nobody is going to vote for any of them because of (2). Housing is a massive political sticking point. Too many people have too much of their livelihood invested in their house. Their votes are easily manipulated. You say build more, I guarantee that the build rate will be such that prices are not affected negatively. You can try to lower demand by raising ongoing fees in order to make housing a worse investment in hopes to drive out foreign investors and other speculators but clearly this will only work if prices drop and that will not happen because of (2). Things outside of voter control, specifically owner-voter control, need to crash the housing prices for the current generation to afford a house. _And_ the growth must be kept down to around inflation levels, because otherwise the problem is just postponed. The problem with California is that there hasn't been anything outside of voter control to affect housing prices like in other states. People are adamant to stay where they are and there are no big enough disasters to damage the properties.

You can have affordability and home investment as long as the populations are not the same. If we rezone the vast amount of under two story residential we open up the ability for cheap high rise apartments and condos.

This doesn't lower the value of the two story homes, it simply allows them to be bought out and developed. You say people are adamant to stay but I'm not sure that's true. You do see turn over, it's simply a limited supply.

I don't understand. Investment growth means house/condo prices keep going up. New houses/condos sell for market rates. The smallest places, studios, are already out of control. Building more at these prices is not building affordable housing. And everything is interconnected because it is a market. The only way things get better for renters is if they get a lot worse for owners.

Single family homes and cheap apartments serve different populations. There's some market pressure, sure, but the family looking to buy a $1m+ home is not in the same market as a studio renter.

Adding more studios won't crash the single family home market but will mean cheaper studios.

Studios are already ridiculously expensive.

More supply would lower the cost. My point is more supply of studios would not greatly lower the cost of single family homes so we can have our cake and eat it too. Landlords would take a hit but they could also decide to redevelop at a higher density for more revenue. No one has to get screwed as long as we're willing to live near higher density construction.

Actually affordable studios would have impact, significant impact up stream. Also, what are you trying to solve? A semantic argument or the need for people to live comfortably? Last generation got there first so they get houses, this generation got here last so they get studios?

>Last generation got there first so they get houses, this generation got here last so they get studios?

This is a self defeating sentiment. You're not going to drive homeowners out without buying them off. You're not going to serve more people with low density housing. Its just how it is.

With the availability of cheaper high density housing young people can at least start saving. There can still be nice high rise condos but the idea that everyone in LA and SF can have a single story home is just not going to happen.

Property taxes are one of the few expenses in CA that isn’t exorbitant.

A repeal would only happen with reduced taxes in other areas, like income.

Repeal would be devastating to existing home owners who have been in their houses for more than a few years - what would this solve?

Exclude single primary residence. Bam - solved it.

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