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Comment by asdff | Hacker News Reader

The hard part is that we've structured life such that you are on a fixed income at the end of your life in no position really to deal with inflation. At least when you are still working, in theory at least your wages will go up with inflation. This is really why prop 13 happened to pass at all: the idea of being displaced at the end of your life out of the home you already paid off due to market forces you aren't even a participant in is actually widely unpopular even if it makes better economic sense.

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> the idea of being displaced at the end of your life out of the home

I would argue that this is unpopular not only amongst retirees but everyone. And it would have tons of negative side effects.

Why would I fix up my house to look nice, if I’ll be displaced? Why would I invest in my child’s local school system, if we could be displaced? Why would I do any community outreach or support, or get involved in local politics? How can banks underwrite loans if the affordability can fluctuate wildly? Look at the life of people who live in mobile homes and trailer parks - they essentially rent the land, and it’s oppressive because they can’t afford to move (actually moving or repurposing land is hard) but their cost to stay is unpredictable.

The only people this is appealing for are people who fancy themselves analytically minded economists with no interest in the practical humanity of the people living there and renters hoping to finally do the displacing for their own affordability.

> The only people this is appealing for are people who fancy themselves analytically minded economists with no interest in the practical humanity

Most states in the US do not have Prop-13-like laws and get by just fine. For the few states that do, they are less restrictive taxation-wise than California's.

Prop 13 has completely distorted the housing market; it is, perhaps unintuitively, a co-cause of CA's housing unaffordability issues. (Prop 13 discourages new development, and is an enabler of housing NIMBYism.)

We of course shouldn't just abolish Prop 13 overnight, or lots of people will get displaced, also overnight. But we should absolutely reform it and phase it out over time, while building more housing, as fast as we can (something that will be a little bit easier to do as all the NIMBYs realize that if they keep shooting down housing projects, their property taxes are gonna go up a ton).

Prop 13 is a bit of a nothingburger anyhow when you consider median homeownership period in CA is only like 2 years longer than national average, rather than the myth that seems to be perpetuated of every home being a 40+ year hold paying a couple dollars in property taxes. And when that home is sold the tax assessment of course goes right back to market rate, and boy that is substantial when you have what would be a 450k home outside of Boston go for 2.1m with a 1% tax. 21 thousand a year off a single 50ft wide lot is no slouch in terms of tax revenue.

> And when that home is sold the tax assessment of course goes right back to market rate, and boy that is substantial when you have what would be a 450k home outside of Boston go for 2.1m with a 1% tax. 21 thousand a year off a single 50ft wide lot is no slouch in terms of tax revenue.

The problem is all the tax revenue being lost at the municipality level for decades. National tenure average is ~12 years. Los Angeles is 20 years, SF is 16.5 and SJC is in between. It clearly has a meaningful effect, it's just harder to buy into the market and keep the home over a long period of time.

San Francisco receives over $3,000 per capita in property tax revenue alone. Dallas receives about $1,200 per capita. NYC is less than $1,000, though I gather NYC has their own property tax issues.

And California has an income tax, whereas Texas doesn't.

Prop 13 has it's problems, but I don't think they're as significant as the rhetoric claims. It makes for a great excuse, though. Politicians can blame Prop 13 for why they can't spend as much on services as people demand, and now it's become the common wisdom--but for Prop 13 California could afford to spend much more than it does, and the housing affordability crisis would end, too. It's just wishful thinking.

I don’t think the housing affordability crisis ends and I don’t think that’s the right way to model it. SF has one of, if not the highest, $/sq ft in the US. And prop 13 is suppressing it - estimates indicate that property taxes revenues would double meaning that 2.5k/person would become 5k.

And remember that that 2.5k/person is only for residential properties. commercial properties still fall under prop 13 and that’s about 50-60 of the other tax. So a full repeal would make it closer to 10k/person instead of the current 5k.

I agree the story on rents and home prices would be unclear because ultimately the people might move and just rent out their homes with property taxes baling into the new rental price.

What would they even do with $10k per person? That seems insanely high.

Also seems unlikely. It might depress housing prices and act as a natural counterbalance (but then rents and Col drops too). I think it’s really hard to model.

I don't think housing costs would drop that much, if at all. What matters is the monthly mortgage payment. Property prices drop when property taxes go up, but mortgage payments tends to stay similar.

In one sense that sounds like free money for the state. However, home equity constitutes the largest share of savings for people, and that's more true the lower down the income ladder you go. So you're taking money out of the working- and middle-class. In some circles home equity is considered a poor savings vehicle, but they don't seem to consider that it's the only secured loan most people can access for leveraged investment. It's the only investment available to most people that let's them leverage capital markets the way the very wealthy can.

And FWIW, residential rents also track monthly mortgage payments, so renters aren't likely to see any difference, either. On average renters pay roughly the same amount per month they'd pay as owners, just without building any equity. I suppose they might be slightly better off after accounting for transfer payments (i.e. public services, entitlements, etc), but they'd be even better off if they could become owners rather than renters.

"I don't think housing costs would drop that much, if at all."

That all depends on if people still want to live there, or can afford it. People tend to be sensitive to taxes, especially if they don't see it improving their lives. Businesses can be sensitive to this sort of thing too. And if they leave, people may leave too. California is already at a net negative when looking at joiners vs leavers. It's mostly been lower wage workers, but in recent years middle and high earners have also been leaving. The population is the same as it was 5 years ago.

"Property prices drop when property taxes go up, but mortgage payments tends to stay similar."

That might be roughly true for a person who just purchased and the federal property tax deduction is uncapped. A retiree who is getting a break on taxes is likely to see a big increase. Not to mention if the house is paid off, then there is no mortgage that could offset it.

> What would they even do with $10k per person?

Flock. We need more Flock.

I’m sure they can find some things to hire McKinsey to do feasibility studies on the feasibility of doing a feasibility study.

I remember when Prop 13 was on the ballot. The newspaper reported that if it passed, it would eviscerate the police and fire budgets. It passed, and nothing happened to the budgets.

> And California has an income tax, whereas Texas doesn't.

Which isn't just a few percent but around ~10% (depending on income).

It's not reset of you inherit, or a bunch of other bullshit exemptions.

We live in a gerontacracy. Every advantage and tax break and handout is given to the elderly and the ladder has fully been pulled up for the new generations.

They patched that with a recentish assembly bill, but they really need to patch the LLC loophole too.

Prop 13 also applies to commercial real estate.

Most states also rely on sales taxes and various fees, and assign limited property taxes. A Georgist land value tax would have much greater effects than the current tax regimes.

Many states have senior property tax reduction programs. It doesn't go as far as prop 13, but had similar goals.

Prop 13 isn't for seniors, though, it's for all ages. And the heirs inherit the tax base. A senior-only prop 13 would reset at death, so at least it's limited in duration.

The effects have got to be pretty intense.

‘We need new shit! Let’s raise taxes.’ While not having to pay them yourself.

A common one I've seen is that for the elderly, property taxes are deferred until they die and are then deducted from their estate (including a sale of the house).

IMO this is a much more fair system than just saying "lol no taxes on the elderly."

> Prop 13 has completely distorted the housing market; it is, perhaps unintuitively, a co-cause of CA's housing unaffordability issues. (Prop 13 discourages new development, and is an enabler of housing NIMBYism.)

I have heard this assertion with no proof or backing data a lot. There is an assumption but no explanation how kicking long time residents out of their homes due to tax pressure is a benefit to the community, or real estate market prices. Real estate agents and other service companies might benefit from more transactions.

There is also usually no mention that the main problem of Prop 13 is that it applies to commercial and industrial properties, not just individual primary residences. Individuals have a limited impact scoped to their life, but tax implications applied to long term corporations is what has an outsized effect.

The nonexistence of Prop 13 in other states should be pretty clear evidence that there are more options besides Prop 13 or kicking out lifelong residents.

California already has property tax deferment.

Sure, Florida doesn't have prop 13 and experiences 10x the property tax forclosure rate of California. It's not a desirable thing.

Florida also doesn't have swarms of homeless people like CA does.

I find that forcing the elderly out of multimillion dollar homes and into apartments or even smaller homes is infinitely preferable to the human catastrophe plainly obvious on the streets of LA and SF.

> There is an assumption but no explanation how kicking long time residents out of their homes due to tax pressure is a benefit to the community

One benefit of an equal property taxation system would b having workers close to the city centres where they work rather retirees.

You shouldn't strawman the other side. Us "people who fancy" actually understand that there are real negative side effects. But the money has to come from somewhere.

If not from land taxes, where? Would you like to double sales tax? Or increase income taxes? Every solution costs something, what does yours cost?

> actually understand that there are real negative side effects.

Everything has real negative consequences. One side does not hold the monopoly on negative side effects.

Land is not cheap to repurpose. The Georgism dream that land can be optimally used is a farce. There is significant costs to repurposing land - to make those costs worth it because of the taxes would heavily distort current society, and I think the assumption that this would be desirable compared to the status quo is unproven.

> double sales tax? Or increase income taxes?

Why not the taxes we have? Where is the presumption that taxes need to be changed at all, never mind doubled?

Even if we decide we want to raise taxes, choosing where to do so is delicate. Again, the optimal answer from an economist is not necessarily desirable from an emotional perspective of the people being governed.

The negative side effects of taxes on labor are enormous, and have distorted humanity probably more than any other factor.

Any consideration of the consequences of taxes also has to consider the consequences of the current taxation.

But taxes have and will always be a transfer of wealth from the working poor to the rich and powerful. People talking about tax reform or more effective and just systems tend to forget this. It's like the lamb having an opinion on how the wolves should share it.

Stating truisms ahead of straw manning me avoids the actual discussion. "Everything has real negative consequences." "Land is not cheap to repurpose." I never said otherwise.

You're right about my estimate being off though and it was a disservice to the discussion. An equivalent revenue from sales tax would require ~2.1%. In SF, that would move the total sales tax from 8.6% to 10.7%; in Oakland, 13.8%. A large increase would likely bend some consumer behavior (chasing sales that have feet, aka move to the informal/grey market).

> Again, the optimal answer from an economist is not necessarily desirable from an emotional perspective of the people being governed.

This is the real difference between us imo. I believe the optimal answer is based on realistic projections on revenue collected and what prevents bankruptcy. The compromise answer is what passes a vote and in fact, the bankrupt answer.

I would prefer we didn't raise taxes and instead reduce spending. But given the complexity of reducing spending and the scale of our deficit, we will have to do both. On the side of raising revenue, a land tax offers a way of taxing a wealth that cannot flee.

> Land is not cheap to repurpose. The Georgism dream that land can be optimally used is a farce. There is significant costs to repurposing land - to make those costs worth it because of the taxes would heavily distort current society, and I think the assumption that this would be desirable compared to the status quo is unproven.

Your friction is real - and already exists.

So the bar for improvement is not no friction.

The bar is less friction, and higher productive use of land, which benefits everyone. Lowering the costs of both housing and business space, while increasing economic output.

That is was economic alignment does, it doesn't just improve one thing, or improve on a one-time or fixed percentage basis.

And less passive, underutilizing, economically-parasitic investments from the rich. (Rich passive investment in land, uses land like Bitcoin for its deflationary nature, which compounds land prices while suppressing its full productive use.

Not raises. Compounds. The more the rich passively invest in land, the more profitable land becomes to passively invest in.

Existential nihilism is always possible to have regardless of how taxes are setup.

Some things to keep in mind:

1. There are many states such as New Jersey or Texas that do not have Prop 13 style laws and their seniors are not suffering excessively. However housing is much more affordable for younger people in those states.

2. States that freeze property taxes have more volatility and boom/bust cycles. You are trading being shielded from tax volatility for increasing economy-wide volatilty and asset price volatility, so the gains are not as high as you think, and seniors are exposed to this volatility indirectly.

3. There are more targeted relief mechanisms available, such as deferring the tax liability until the owner dies for senior owners.

Many states have prop 13 style laws, and they’re fine. The key difference is that they kick in at retirement age.

Kicking in at retirement age plus limiting it to a single owner occupied property is the key, IMO.

In California, it applies to multiple properties, you can pass it down to your children and it applies to property owned by businesses both commercial and industrial, which is absolutely crazy.

California has basically created a class of landed gentry.

As someone from NJ...you think seniors and young people don't have affordability problems, especially wrt housing here, in the 5th most expensive state to buy a house? (California, Hawaii, Massachusetts, Washington, New Jersey, in that order, according to redfin, if you're going by house cost to income ratio, NJ is 6th)

https://www.redfin.com/blog/most-expensive-states-to-buy-a-h...

> you think seniors and young people don't have affordability problems?

Of course I don't think that, which is why I didn't say it. That would be a silly thing to write. What is the advantage for you in mischaracterizing what someone wrote and then expending effort to "correct the record" for a statement no one made?

You created a strawman and then knocked it down.

What I actually said: "New Jersey or Texas that do not have Prop 13 style laws and their seniors are not suffering excessively. However housing is much more affordable for younger people in those states."

Both of these statements are demonstrably true. Let's look at the data.

   * NJ price to income ratio for housing: 5.5
   * mortgage cost burden: 31% of mortgage owners spend more than 30% of their income on housing.
   * renter cost burden: 52% of renters spend more than 30% on rent

   * CA price to income ratio for housing: 8.0
   * mortgage cost burden: 38% of mortgage owners spend more than 30% on housing
   * renter cost burden: 58% of renters spend more than 30% on rent

So housing in NJ is more affordable than in CA.

Now, let's look specifically at seniors.

In California:

   * 68% of senior renters are cost burdened
   * 35% of senior homeowners are cost burdened

In New Jersey:

   * 59% of senior renters are cost burdened
   * 35% of senior homeowners are cost burdened

So we see that across the board, seniors in NJ are not cost burdened more than in California, and that in fact they are cost burdened a bit less.

Therefore if your solution is to look to Prop 13 style fixes to address cost burdens for either seniors or the general population, then you are not making a data based argument, and in fact the data goes against you, because there is no excess cost burden in states without these property tax freezes.

Your exact words were "housing is much more affordable for younger people in those states", which, even by the numbers you have cited, is not correct. More affordable? Sure, we are number 5 or 6, not number 1. Much more affordable? Come on now.

And no, I don't think prop 13 style laws would be helpful, it would just create more problems, as it has in California.

> So housing in NJ is more affordable than in CA.

I don't know if it changes the result significantly, but remember the NJ has very high property taxes, more than double of California. So mortgage cost alone does not paint the full picture.

This is more significant for seniors, who likely have a paid-off home so their main expense is property tax. So being a fixed-income senior with a home is likely more affordable in California than in NJ. The worst thing after retirement is cost increases when you no longer have a salary that goes up with inflation.

HOA are forclosing more than banks in some regions, it's not just trailer parks these days getting hard lessons in being the "fake owner" of your property

> I would argue that this is unpopular not only amongst retirees but everyone. And it would have tons of negative side effects.

Every tax is unpopular and undesireable.

Why would I work if government is taxing my income? Why would I invest? Why would I drive the car, blah blah.

Land tax is easy to collect, fast to pay, hard to avoid or game, and encourages productivity and efficiency.

And this cuddling of boomers who've benefited by piling up gigantic government debts and expect to be paid back (typically holding gov bond) is literally going to destroy the financial system. Part of the benefit of this tax is that if you can't pay for fair value of the land you're preventing others from using, you have to sell and get out, so e.g. a productive family can pay your for it, and use it instead of your now unproductive self. If you don't want that, you have to pay the same tax they would pay. Just because you're retired doesn't mean "your done with your duties to the rest of society and you can just expect free shit and do nothing" _especially_ that your "wealth" is just rent seeking on younger generations.

If boomers keep preventing younger generations from being productive and having opportunities, the economy will dwindle, the pile of of debt and other financial assets will collapse, hyperinfation is going to destroy their paper wealth and they will be starving or worse. Just watch, because I doubt at this point is avoidable anyway.

For what it's worth, the way Israel deals with this is that property tax is levied on the property resident, not the property owner. In other words, when you rent a house, the person who is legally responsible for paying the tax is the renter.

This makes it exceedingly easy to ensure that old people are not affected by property taxes: if you are elderly resident, you simply get a discount. If you are an elderly landlord who owns multiple properties, your younger tenants don't get a property tax discount, and you pay income taxes (not discounted for age) on the rental income. If you are elderly and want to downsize, your property tax discount follows you into the smaller apartment.

The system has its challenges, but it is far superior to Prop 13 and achieves the same goal.

> if you are elderly resident, you simply get a discount.

New York does it this way as well. If you are over the age of 65, you get a different rate.

> fixed income at the end of your life in no position really to deal with inflation.

This might be true if you have everything in cash in a safe at your house and plan on taking out fixed amounts for the rest of your life, I guess, but who are those people?

Most people are on social security, which is inflation adjusted.

Others with more wealth have retirement savings, which are likely mostly in bonds and stocks, which weather inflation not too shabbily. Interest rates go up, and banks start actually yielding interest!

Prop 13 passed mostly as a populist revolt against taxes, but in reality it does a lot more for people in their prime of earning and a toooon more for commercial property tax cuts than it does for retirees.

Every other state has better tax deferral mechanisms, and given the tiny fraction of Prop 14 effect that goes to retirees, I don't really buy this back formation of what was going on. If people really voted for such a lie, it wouldn't be the first time with propositions but from the media I've seen from the time I really don't think people were that duped and probably knew the broad effects of Prop 13.

Inflation does not keep pace with the housing market

And not in small part because Prop 13 disconnects property from housing costs, which leads to political incentives where beneficiaries of Prop 13 embrace policy that causes housing prices to rise precipitously.

Prop 13 or not most people historically resisted zoning changes and pretty much all cities in the country, even in Manhattan, were downzoned dramatically from what was possible as far as infill development the pre war zoning plans. Even today, the trend is never to recognize the housing crisis for what it is and widely upzone, but to just nudge a little more capacity in some containment zone of the city at good arms length from the best of the single family home neighborhoods, in the form of say transit oriented development of certain specific constraining factors, rather than just opening up the floodgates and allowing for market to actually establish prices freely.

I was alive at the time prop 13 passed. I was a little kid in Ohio. Even I remember the stories that were being circulated on the national news about old people being priced out of their homes in LA. It was a big campaign.

"Big campaign" sounds right. These sort of tax revolt campaigns tend to spread wide, with the hope of passing similar things elsewhere shortly after.

Fortunately, this one did not spread which is very good news, because the long term effects have been absolutely horrific for housing prices in California. However, I hear of other states right now proposing adoption of California's housing crisis via similar tax measures... Hopefully they don't pass and learn the lessons of what has happened here.

Vancouver used to have a land value tax, which was widely credited with the its prosperity up to the ~1960s. However eventually enough homeowners and landowners got sick of paying their fair share and overturned it, which has resulted in Vancouver's housing situation which is possibly even worse than the SF Bay Area's...

> This might be true if you have everything in cash in a safe at your house and plan on taking out fixed amounts for the rest of your life, I guess, but who are those people?

It seems an astonishingly large number of people, including on here, talk as if that were the case despite their actual living and retirement finances. People really hate inflation.

Something about the lizard brain wants the exchange rate between shiny object and edible object to be fixed and gets extremely upset if it changes.

(Or, as is becoming increasingly relevant, the exchange rate between shiny object and flammable fluids)

The exchange rate between shiny objects and edible objects has nothing to do with inflation though; they're both physical objects. Unless people start trading glittery balloons it is quite difficult for shiny objects to inflate and the fluctuations from increasing supply are generally not a problem.

The inflation complaints are people who prefer not to be taxed for saving currency and earning money in fiat. As far as it is a lizard brain thing it's more about principles of fairness in who should be paying taxes and the aversion people have to things taken away from them.

> Most people are on social security, which is inflation adjusted.

Right. Technically. And I have a bridge to sell you!

I was managing all the finances of one of my parents until they passed away. In 2022 inflation peaked at ~9%

That same year, their social security monthly payment went up by..... $10

That for sure covered all the rising costs (/s)

Social Security Announces 8.7 Percent Benefit Increase for 2023

https://www.ssa.gov/news/en/press/releases/2022-10-13.html

So either your parents were getting $115 from social security, or you are trying to report increase of a year with essentially 0% inflation as if it were the year with 9% inflation.

I have the numbers right here. Monthly payment went up from $2455 to $2465. So that's $10.

This is not from a press release or news article, it's from the actual check that got deposited monthly.

Retirees are not on fixed income and haven't been for decades. Social Security gets adjusted for inflation. 401ks grow. https://www.slowboring.com/p/seniors-arent-living-on-fixed-i...

> Retirees are not on fixed income and haven't been for decades. Social Security gets adjusted for inflation.

Tell me you're not a retiree on social security (or know any) without telling me...

Social security gets adjusted up a very tiny percentage of actual inflation. Watching my elder parent go through this while managing their finances, I'm very aware.

So the way we fix it is by pulling more tax from net contributors and pushing it via social security so it can be pulled as property taxes. What a disaster.

That's exactly what we are already doing. Directly with social security and indirectly through not charging proper property tax

The key bit is that California is relatively unique here. There are a few other states that have Prop-13-like laws, but California's is the most restrictive and incumbent-homeowner-friendly. All those other states (and the ones with nothing similar) seem to get along just fine.

Of course, the solution to increased demand (driving increases in property market value) is to build more housing. Without Prop 13, a big chunk of the NIMBYs who are currently against more housing would likely change their tune if they had to choose between no new housing or much higher property taxes.

I think it would be reasonable and productive to phase out Prop 13 over time, rather than immediately getting rid of it. We could structure it so a property doesn't lose Prop 13 protection until the next time it's sold (and then it never has that protection again). We could completely remove the inheritance loophole (which was tightened up in 2020 but still exists). We could even set a date, say, 10 or 15 years in the future, when re-assessments at market value will start for everyone, regardless of whether or not they've sold. We could also phase in higher allowed assessment percentage increases over time (right now it's capped at 2% per year, but we could, say, add 0.5% to that figure every year for some number of years).

Hell, we could even leave Prop 13 in place as it is today, and just bump up the assessment increase cap to 5% or 10% or something like that. (Texas, for reference, has their own 10% yearly cap on assessment increases.)

There are so many ways to solve this, but all of them are politically unpopular. (Hell, we couldn't even reform Prop 13 as it applies to commercial properties.) As a homeowner in California, I get it, but I still support Prop 13 reform and eventual Prop 13 abolishment.

Most of the other states have not seen the rise in population growth and real estate values seen in CA. There are still places where homes are like 250k or less. There is also way more value drop off outside the metros in most other states with high cost cities such as MA or NY. You could be 30 mins drive from boston in a great 400k home. Try and find that 30 mins out from SF or LA. There just isn't really that fall off in california that you might expect from real estate markets elsewhere. It is like the rising tide has lifted all boats.

To be fair 250K homes and under homes are increasingly uncommon and increasingly undesirable. Rural areas with almost zero industry are averaging out at 600-750K. Maybe a bit of a downward trend, but the average salary in the area is like 50K. so it doesn't matter.

>Rural areas with almost zero industry are averaging out at 600-750K.

Where exactly? Not true for the midwest. E.g. (1,2,3)

1. https://www.zillow.com/homedetails/933-Atmore-Ct-Indianapoli...

2. https://www.zillow.com/homedetails/10916-S-Wabash-Ave-Chicag...

3. https://www.zillow.com/homedetails/3920-15th-Ave-S-Minneapol...

Here's what you might find 20 miles outside boston, this one is 350k:

https://www.zillow.com/homedetails/55-Emory-St-Brockton-MA-0...

While there is certainly some (very) expensive real estate outside of Boston, to a much greater degree than San Francisco, you can actually get a house within a drive for an evening event that's pretty reasonable to a much greater degree than the Bay Area.

"Rural areas with almost zero industry are averaging out at 600-750K."

Source? This is completely inconsistent with my experience.

"There are still places where homes are like 250k or less."

By land mass that's the majority of the country. Population concentration is the real issue.

This is what people in about five cities in the US think.

I live in San Antonio, a metro of 2M people (city itself is one of the 10 most populous in the US). That's pretty sizable. Median home is between 260K and 310K. That is, of course, with the larger homes you'll find here vs SF/Chicago/LA/etc.

San Antonio is in the middle of the state with 360 degrees of growth and relatively flat. California’s land growth has half of that with hills and mountains near the desirable areas.

It all comes down to zoning. The demand requires capacity and the only way to add it given the geographical constraints are through infill development. Still, cities are getting dragged kicking and screaming to these conclusions, hence the opposition of SB79, as well as the entire concept of SB79 of differential upzoning vs simply widely upzoning. Even just reverting to pre 1960 zoning plans would see LA's zoned capacity rise from the present day 4.5 million (it is in the 90s% as far as population to zoned capacity) or so to something north of 10 million. If you adjust it to the ratio of that pre 1970s zoning plan, when LA had about 2.5 million people in it, the city would be zoned for 20 million with today's population.

In fact that is all that really needs to be done to ameliorate the housing crisis in California: pass a single law that repeals every single zoning adjustment from after say 1960. Or pass a law that mandates a 4:1 ratio of zoned capacity to population. The ship will right itself if it is allowed to.

> Without Prop 13, a big chunk of the NIMBYs who are currently against more housing would likely change their tune if they had to choose between no new housing or much higher property taxe

I mean, the way you make housing units more affordable is to make more of them, but for existing homeowners of SFH, building condo buildings in their neighborhood will increase their property value because the competition for the remaining lots increase. Given we build close to zero family friendly multi family in this country (ie, appartments buildings have zero family oriented amnenities), there isn’t much in there for nimbys. It’s the right thing to do but you can’t except nimbys to join in on a purely monetary basis.

>appartments buildings have zero family oriented amnenities

This isn't always true. I've seen apartment buildings that have a playground and little astroturf field and some small goals. The kids also are using the pool pretty heavily in every apartment I've lived with one. Some have other facilities like basketball or tennis as well that kids could take up (or use the smooth surface for skating or something).

This is a solved problem in other jurisdictions. Effectively you can just allow seniors to defer their property taxes at low interest rates and it becomes a liability on the house when it is transferred on death.

This is how the government countered the people demanding the end of debtor’s prison. And it’s not “transferred on death” it’s whenever the house is sold whether the owner is alive or not. Property tax is just rent paid to the government and the taxman always gets their dues one way or the other.

Just allow natural persons to defer these taxes until after death. Then when the house goes for sale you just subtract the taxes from the inheritance.

Empirically, according to Doucet, a land value tax would only raise average tax rates if you're living on a parking lot, or vacant lot. Aging homeowners would mostly see a slight decline in their property taxes ( California excluded ).

> the idea of being displaced at the end of your life out of the home you already paid off due to market forces you aren't even a participant in is actually widely unpopular even if it makes better economic sense.

Once you are old enough it makes a whole lot more sense to move to places designed to care for the elderly. Living alone in a huge house isn't good for your mental health and it isn't for your physical health, either, once you no longer have the energy to maintain it.

> Once you are old enough it makes a whole lot more sense to move to places designed to care for the elderly. Living alone in a huge house isn't good for your mental health and it isn't for your physical health, either, once you no longer have the energy to maintain it.

This betrays some things. Not everyone is in a "huge house", and having this bias is going to lead you to bad conclusion. Most people don't have a huge house.

And, more importantly, tax should not be used to force people into one way of living in their latter years. They might be self-sufficient into their early 90s, and the last people who should be determining where they live are people who want to do it.

I could use a much smaller house than I have now and a much larger garage for tools, workshops, art studio, etc. But for me, the value of a larger property is that I get to go out of the house and spend time in the garden. Sometimes something as simple as pulling up weeds is a considerable boost to my mental health. Kneeling on a garden bench in the sun in the weather and pulling weeds is not something that's “enjoyable," but it is rejuvenating.

My 92-year-old mom has been the same way. Until one of her daughters moved in, she lived by herself in her house and garden. Just being able to go outside and experience the green space she planned and planted has kept her alive and healthy. If she were in some senior living place, she'd be dead by now. She would have withdrawn into her room and waited for her time.

The single biggest problem is that Prop-13 applies to commercial properties too.

Yes, this is the actual issue with Prop-13. That makes no sense at all.

Protecting retirees from getting kicked out of their lifelong homes is a wonderful thing.

But then allowing corporations to take advantage of that is insane.

I think the marketing of prop 13 was old people getting kicked out of their houses.

But I think the majority of the tax avoidance goes to not-old-people, like immortal corporations that can own the land forever.

EDIT: random link - it seems like residential owners don't benefit anywhere NEAR as much as commercial, rental and industrial entitites.

https://youngamericans.berkeley.edu/wp-content/uploads/2023/...

The linked study in OP shows that the single biggest beneficiary of Prop 13 on a category basis was vacant land.

They reference the same site, slightly different article

Berkeley Institute for Young Americans (2023)

what I attached was: "Who Benefits from Proposition 13?" (2023)

Page 2 of what I attached shows the results in a slightly different light.

You handle that the same way income taxes do: the first X amount is exempt, like a standard deduction, applied to the land under someone's primary residence. Pair it with a rolling multi-year average for assessment so value spikes phase in gradually instead of hitting all at once. Keeps the incentive against passive land-holding everywhere else intact, without the blanket caps that also protect speculators. Instead of using one tool to fix it all, you use multiple tools that work together to make efficient systems

> being displaced at the end of your life out of the home you already paid off due to market forces you aren't even a participant in is actually widely unpopular even if it makes better economic sense

Whether it makes economic sense or not, it is extremely inhumane and that matters (or should matter) far more.

This idea that it is ok to kick out (via taxes) someone who spent 40 or 50 years contributing to society just so someone else can make more profit on their home is very sad.

Washington has a much lower property tax rate for a primary residence owned by a person over 65 years old.

Total Boomer Luxury Communism

61 years old. Also your household disposable income must be below a certain threshold that is based off county median household income.

Elderly retired people living in large houses close to where the work is has caused massive social, economic, political, and cultural harm. Young people can no longer afford to buy homes close to work, so they're forced to commute long distances. Their taxes then go in part to pay for the elderly person who lives in a million dollar house with multiple rooms, who receives many tax breaks. The young person cannot afford to start a family, cannot afford to buy a home, loses a lot of time each day on commuting, spends a fortune on commuting, has less time for family, and causes enormous inefficiencies in the job market. This is nothing short of a concerted redistribution of wealth from the young to the old. It's a travesty which the elderly today would not have accepted.

I do not feel sorry for the elderly person sitting on a large and expensive property who demands to spend their final decades squatting on land which could house a family and allow parents to get to work within a reasonable amount of time. They have options the young person does not. They can get a reverse mortgage, for example. They get social security, and draw down on whatever pensions and investments they've accrued over their lives. Their costs are much lower - they don't have children to support. Or they can move, and I'm sorry, but it's not impossible for a retired person to move. Millions of them do it every year all over the country. Often to really nice elderly communities full of activities and specialised care.

I say all of this as someone who leans more libertarian than collectivist. Society is interconnected and interdependent. We cannot function if he keep young people under our boots. Asking the elderly to move is a *very* small price to pay if we expect the young to shoulder the enormous tax and debt burdens said elderly have imposed upon them.

“Beat it, grandma!” “But I’ve lived here all my life, my husband has passed, and all my friends live here!” “Not for long; we’re kicking them out, too!”

That line of thinking sounds insanely unpopular to me and while it might be more efficient in some ways, I think its unpopularity makes it unlikely in a democracy.

"Pay your taxes, grandma." If you think tax is theft I can see why this doesn't abide, but I do not share your opinion.

Exactly. And I am appalled by the level of injustice and stupidity (I will explain both) demonstrated by so many comments here.

Injustice, because they refuse to see the other side of the coin, or the full picture, and a decision ignoring the full picture can be just only by accident (at least in common moral systems).

Stupidity, because it betrays a lack of touch with reality. In this regard I am reminded of a recent thread here, where an article about artificial meat was being discussed. An author of the article expressed their uncomfortable feeling when eating the artificial meat, caused by their thought about the unnatural, "lab" origin of that substance. If that article was sincere, that person have probably never visited a slaughterhouse, or killed an animal by their own hands in order to eat it. This kind of cessation of contact with underlying reality behind our everyday experience is quite common in our modern societies.

In order to be succinct, let me just say that historically it was common for elderly people to live in multigenerational households, sharing their space with a younger family and helping (as long as they could) with chores and taking care of children. While that is not the only viable way, and I am in no way against the modern pension system in general (although its current implementations in most if not all western societies have their problems; and also make many people to lose "touch with reality" in the way I alluded to above), it was quite a natural way of handling the issue of old age that reflected constraints under which a human society existed (and still continues to exist today).

Since I feel that the dominant sentiment of the commenters here is based on emotions and "morality" in a way that I believe is inherently evil, I will close this comment with a refrain from emotions and morality, and state a cold-hearted truth: A society that discards its old people might be a bad one to live in but might be able to survive. A society that discards its young people is destined to die. [To avoid misunderstanding: I do not argue that we should discard old people.]

tl;dr: retirement benefits and children

Why should the typical old person or couple have a large home all to themselves?

I think (in a semi ideal world) individuals and couples should be entitled to small apartments or tiny houses, which would be cheap enough for an old person on retirement benefits. An average American home is for a family: as the parents age, some of their kids start financing the home, while other kids may move living spaces, or everyone splits up and the house goes to a new family (presumably a couple moving from a small apartment).

A land tax means that you don't own property but rent it.

This is bringing us back to the dark ages in terms of land rights.

If you can own land, what happens when all the land is owned but newly born people need some?

Old people die.

And owners pay taxes on (some of the) assets they have, land being a big one. Hoarding mentality may have been fine for frontier wild west but ain't much compatible with modern societies which are chock full of humans in all the sweet spots.

Expectation that this comes with 0 cost just because it would suit you is a bit naive, innit

And then their land goes back to the government free pool? Is that still ownership or is it just renting for life?

Drive through New Mexico, there’s a lot of land.

>A land tax means that you don't own property but rent it.

A few comments:

1) we already have property taxes so I don't understand the objection; a land value tax is just a property tax with a different way of assessing value.

2) I don't think this idea of "not owning property, only renting it" is actually that crazy if you take a long term view over it. Land is a finite, shared resource. We already acknowledge that you don't have absolute rights over land that you own in the same way you do over, say, a toaster. We place all kinds of restrictions on what you can do with it, we tax its ownership, we have eminent domain laws, etc.

The idea of treating land as a pure asset has had a lot of negative social effects and ultimately will lead to a kind of neo-feudalism where the megarich own everything and the underclasses are perpetual renters.

>Land is a finite, shared resource.

Everything is a finite shared resource.

That's the point of ownership.

>The idea of treating land as a pure asset has had a lot of negative social effects and ultimately will lead to a kind of neo-feudalism where the megarich own everything and the underclasses are perpetual renters.

The idea that land is not a pure asset leads to regular feudalism.

> The idea that land is not a pure asset leads to regular feudalism.

Yup. And despite the claims made that it's a solution for the common folk, the people who "own" and can make decisions about the land will be the megarich, so it will be feudalism, with rent due on the land you own.

No, some resources aren't shared (for example, human capital: things that I know how to do aren't shared, since nobody can 'borrow' my knowledge) or are effectively infinite (for instance, you can travel arbitrarily far into outer space and not run out of space).

What do you think an income tax is? Its the shared resource from human capital. It doesn't have to be homogenous or even equal to be shared.

> Everything is a finite shared resource. > That's the point of ownership.

I think the point is that (up to a limit that we're a long way from reaching) we can make more toasters to satisfy any additional demand that arises for toasters. But we can't make more land to satisfy any additional demand that arises for land. So we have to share the land in a way that we don't have to share toasters.

every tax can be expaned to a infinite series of rent.

> A land tax means that you don't own property but rent it.

how is this any different from the statement "a property tax means that you don't own the property but rent it"

We never left the dark ages in this respect. The government grants you title to deed and then you must pay your share to the lord (gov).

You are mistaken on several grounds, but the most glaring issue is that you do not properly understand the concept of property/ownership.

For all practical purposes property/ownership is a service provided by society, not a static "attribute" of stuff (the only exception is when you live entirely without any sort of contact with other people, in which case, however, the concept of property becomes void, at least practically). And any service carries a cost with it.

For instance, in our kind of societies, the institution of property requires, at the very least: (1) legislature that defines what property is and all the related rules, (2) the administrative part that handles property transfers and other issues, and keeps the record of who own what, (3) the judiciary system that interprets the legislation and resolves disagreements and other issues related to property, (4) the police or some other body that enforces and protects the whole system within the society, (5) the army that protect the property of the society against the claims of external groups. In our societies many of these institutions carry also other functions, but enabling the system of ownership is an important part of their job. And this service is very expensive --- so not paying any taxes on property means that those costs must be covered by some other sources (e.g. selling natural resources, income taxes, ...) and, usually, lead to a transfer of wealth within the society.

So the idea that you just "own" something (your house for instance) and any kind costs of that imposed on you by the society/government are unjust is completely and patently misguided. If anything, the opposite it true.

(That does not mean that the tax system must be necessarily constructed to reflect that, as there is no single and obvious correct way to design a tax system, and other important considerations enter that issue.)

displaced because the land has become so valuable you can no longer pay the tax on it and have to sell for a massive profit?

boo hoo? My generation has never even had access to affordable housing. Sorry you have to take your millions and live on a smaller property for your last few years.

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