Millions of them are also retired or on SS and if they had to pay market value property taxes they would be not be able to. Take a huge profit and leave, for where? You've lived somewhere most of your life and should be kicked to Stockton?
For some reason I hear Tom Selleck's voice talking about reverse mortgages. There's a winner for public policy.
As it is today, young families are the ones buying in far out places like Tracy, Stockton, etc., and they still might pay higher property taxes than a retiree in the heart of the Bay Area. It seems backwards to me to have an incentive structure that keeps the labor force farther from work than retirees.
That is a problem that we don’t have to solve by destroying communities through eviction.
We can build workplaces where property is affordable, and those communities can develop into attractive places to live, and their property prices will rise too.
It seems like a weird non-goal to try to create a society where there are only a few places where there is work and amenities.
The natural response to one place becoming too expensive is to invest in making more places where people can live and work.
There are multiple ways to destroy a community. Apparently, one way is to artificially cap tax on long-time residents until only old people are left.
[1] https://www.mercurynews.com/2020/09/14/cupertino-district-pl...
I am convinced that California is hell on earth. It's designed to maximize human suffering and when you tell Californians how to get rid of the heat they tell you that they like it this way and actually would like it even more if it was hotter.
That is due to wage stagnation, not prop 13.
> Median household income (in 2019 dollars), 2015-2019
> Cupertino: $171,917 [1]
> USA: $62,843 [2]
[1] https://www.census.gov/quickfacts/fact/table/cupertinocityca...
[2] https://www.census.gov/quickfacts/fact/table/US/INC110219#IN...
It’s because wages haven’t grown in line with investment returns over time.
This is not controversial, and is nothing to do with Prop 13 or whether Cupertino has a higher average income than other US cities.
Trying to tax people out of homes because someone else wants them just means underinvestment in other communities.
"Beat it grandpa; young people want to live here now..."
1. Move
2. Take out a loan
3. Take in a boarder
4. Refuse to pay and know they will not be evicted for their lien (this could be codified statewide if this were the real problem)
I don't know why anyone would think that poorer, less-established people should be paying for these millionaires to stay there.
She will die soon enough. You can wait.
Better yet, you can do what she did many decades ago. Get a house built on undesirable land, then be part of a community that makes the value go up. The home you now covet is only valuable because of people like her. Nothing stops you from doing likewise. Pick some crummy land out in Mississippi or West Virginia and create a community.
We can roll-back prop 13 going forward for properties purchased some buffer of time after the new law goes into effect, without harming your grandma.
Why don’t you go somewhere where prices are cheaper and make a nice community there?
If her property taxes aren't artificially constrained by prop 13, she'll see her taxes go up over time, and decide how much she values staying in the house and paying the increasing taxes, versus retiring sooner or investing her resources in other areas of her life. The market at work.
Also, ideally we wouldn't simply remove prop 13, but replace it with a better, progressive-not-regressive tax code, eg. allowing homeowners of limited means to defer portions of their property taxes until the sale of their property. This would make it easy for grandma to stay put, and be vastly more fair and healthy for society than the status quo.
> Why don’t you go somewhere where prices are cheaper and make a nice community there?
Would you rephrase this in a kinder way please?
Incentivize usually means offering something to someone to make something attractive.
That is not what you are proposing. You are proposing to take away her money by force until she can’t afford to live there.
> If her property taxes aren't artificially constrained by prop 13
Taxes that rise based on a tax inspector estimating the value of an unsold property are at least as artificial as taxing based on transactions. There is nothing ‘natural’ about property taxes. It’s a system constructed and imposed by the local government.
> she'll see her taxes go up over time
Yes, through no fault of her own, if and only if other people continue to drive up prices.
> and decide how much she values staying in the house and paying the increasing taxes
Agreed. If other people drive up the price, they’ll be able to force her out of her home.
> Society benefits from incentivizing her to move, so that more humans can occupy the space she is currently occupying, which will improve regional productivity, reduce highway and transit overcrowding, reduce greenhouse gas emissions, all sorts of good stuff.
A kinder way would be - why force grandma to move, when not doing so would bring all of these benefits to areas which need them more, and frankly, have better incentives in the form of currently lower costs?
I don't see why (2) or (4) would affect her lifestyle much.
> Better yet, you can do what she did many decades ago. Get a house built on undesirable land, then be part of a community that makes the value go up. The home you now covet is only valuable because of people like her. Nothing stops you from doing likewise. Pick some crummy land out in Mississippi or West Virginia and create a community.
I don't follow any of this. I don't understand why this viewpoint would mean it makes sense that people who have made tons of money should contribute less of it to their societies.
Winning by taking from others ain't the goal. When new people arrive, they should be getting the same deal from the government you are, not getting hosed because they're less established.
(Obviously your prescience is rewarded: you made tons of money on your house.)
But that’s just it - they do get the same deal.
Everyone pays the same percentage of what their house cost when they buy it.
Grandma got the same deal you do.
If you buy a house now, it too will be worth more if you wait 30 years.
You just have to wait as long as grandma did. That is literally the same deal.
> If you buy a house now, it too will be worth more if you wait 30 years.
It might be. Or I might have bought it in Redding or Vicksburg and pay tax on the market value, same as my neighbors who buy today. Prop 13 only kicks in meaningfully for people who basically won the lottery, in proportion to their gains.
To do that, it distorts the market, adding friction to what is already a market with unhealthily-high friction.
Grandma already paid her taxes and now you want to force her out of her home.
Have properties in Redding or Vicksburg not appreciated in the last 30 years?
> Prop 13 only kicks in meaningfully for people who basically won the lottery
You keep saying ‘won the lottery’, when what you mean is they bought a property in a place where properties appreciated in value.
That just sounds like a good investment decision.
I guess they can all move to trailer parks in the Mojave and make way for the real millionaires.
Basically, for residential properties, keep the existing Prop 13 tax increase logic, but apply the difference in taxes between the Prop 13 rate and the real rate as a lien against the property, to be paid when it changes hands.
That preserves the (utterly unfounded) objection of "throwing out grandma on the street", while still recouping unpaid tax. There are some complexities with the lien happening for a very long time, like that happens when the lien matches the property value, but as long the lien is strictly called in, they should be minor.
I don’t know why anyone would think that they are.
Just allow a homeowner to defer taxes until sale or death. When the house is eventually sold the city can get back their $800,000 in back taxes, with interest.
That’s what my Canadian province does.
And the govt already provides healthcare for retirees. It’s called Medicare.
And how can the govt afford to provide healthcare and such when people sitting on assets with million dollar appreciation don’t pay any tax on it?
Also, no, they wouldn't have to move to Stockton, they wouldn't have to leave their home town. Sell your house for $2M, buy two condos, for $1M million each, move into one of them, rent out the other, and you're set for life, and you will still have your original $2M to pass to your grandchildren after you die. Or you can invest your $2M in ETF, and live in the rented condo, cashing $100k of capital gains profits every year.
For someone with $2M (or 1.5M, or even 1M) net worth possibilities are endless and living off of taxpayers money shouldn't be one of them.
Does this apply to all people who have $2M regardless of whether it’s invested in a house?
> For someone with $2M (or 1.5M, or even 1M) net worth possibilities are endless and living off of taxpayers money shouldn't be one of them.
It isn’t one of them.
Is supposed to be some joke? You know, if people knew they were going to get knocked out by property taxes they would have a strong incentive to prevent that from happening by simply building enough housing for themselves.