That sounds like shifting the property tax burden from homeowners to renters - homeowners are generally wealthier than renters, so it's placing more of the property tax burden on those less able to afford it.
That sounds like shifting the property tax burden from homeowners to renters - homeowners are generally wealthier than renters, so it's placing more of the property tax burden on those less able to afford it.
That has some not-fun generational aspects.
(1) If schools have lower taxes, their ability to attract good educators for children is reduced. That in turn leads to lower home values since the school quality factor is reduced.
(2) If munis are unable to collect a sufficient tax base, they must reduce services. There will be hemming and hawing about things like cutting the pensions promised decades ago to attract competent service workers, but those are harder to reduce rather than not fixing the fire trucks, the water pipes, and other hidden taxes citizens pay for by reduced services. So your property values will also be reduced in the long term. Small towns are prime examples of this happening, when towns fail.
Trying to build a community out of one socioeconomic class works about as well as trying to redline. It leads to a less vibrant community, less adaptable community, and people are poorer in life and in their finances for it.
Fire trucks are far more expensive to acquire and maintain than necessary due to monopolistic actions by manufacturers, plus local governments buying fancier apparatus than they really need. There's a lot of room to trim those particular expenses.
https://www.iaff.org/news/fire-apparatus-crisis-sparks-inves...
The real problem with fire equipment is that it will sit there in an emergency unless you have the staff on hand to operate it. Small, remote, or cheap towns get to burn while they wait for volunteer #2 to make it to the station.
Anything past the paycheck is a gamble.
In other words, they couldn’t afford them but the payments were promised anyway. The people making the decisions and benefiting from the pensions didn’t care because they’d be retired by the time it mattered.
This has been a real problem for some cities where dealing with pension related payments and debt has become a huge burden that crushes their budgets and takes away from services that non-retired people need. There are crazy examples like Oregon where the system was so broken that pension payments were actually higher than the person’s salary before they retired, so retiring made their pay go up during the craziest window.
The reason so many people got “screwed” out of those pensions is because they were sold something that couldn’t have worked. The reason those don’t exist any more is because you can’t pull that trick again and the places that had these pensions are already paying too much to old retirees to even think about adding new ones to that crushing expense bucket.
If you start making a reasonable pension program that can last, it’s not as amazing and people aren’t drawn to it.
"Good schools" are mostly about avoiding bad kids and bad parents. Expensive homes (without Section 8 or equivalent in the neighbourhood) is a feature, as it keeps most of them away. It's not a good way of doing it -- it excludes lots of perfectly good kids and parents and it is really expensive. It's just the best way available to most people in the West.
The actual case is about whether the poor school system was allowed to have higher prop taxes than Texas allowed. In the details are the inequality argument (hence 4th amendment being at issue).
In my opinion state INCOME TAXES are the way to fund schools - lower prop taxes and make schools more equal - now everyone is happy (except those who want their 3M home to be in an exclusive school district).
There is a reason we don't send untold billions of dollars in aid to Africa anymore and the answer isn't racism. The same logic applies here.
There are also massive transfers involved (and the US has had them for at least twenty years) so the property taxes (in the US) have little to do with how much money schools have per pupil.
Private schools, even ones that receive less tuition per student than public schools of the same district prove this point because they can set a higher bar and more readily kick out disruptive students.
Nationally, per student cost at Catholic parochial schools is roughly 1/2 of public schools. (Couldn't find California specific numbers, but it tracks what I've seen.) That's cost/spending; tuition is even less. Special education programs eat up 1/4-1/3 of public school budgets, so there's still a gap after accounting for that.
1973 was over 50 years ago. Even the poorest, most "backward" states have long ago largely remediated spending inequities. What you hear today to support claims of inequity are cherry-picked esoteric cases to drive outrage, just like every other topic today. In reality there's clearly much more going on than what advocates for this or that would ever admit.
In any event, "picking your customers" is exactly the point of the previous poster(s). Money doesn't really explain what we're seeing. Once upon a time there was a very strong correlation, and people presumed causation, but now it's quite clear that the causation wasn't there. Certainly not directly, which is why throwing more money at the schools isn't helping.
Public schools have to take children that do not want to be there and make it everyone's problem, and their classmates suffer for it. Maybe this public school policy is the issue that should concern you.
Today in many liberal cities kids simply can't be suspended at all, period. In many other areas corporal punishment and suspensions continue to be used way too much. But actual results don't really track the way people assume they do one way or another.
What's the real difference between parochial schools and public schools? IMO it has little to do with policies or resources, but the fact that parochial schools demand parental engagement. It's often a prerequisite for admission. If the school knows the parent is engaged and working with the school, they'll often deal with behavioral problems that most public schools wouldn't or simply can't. By contrast, a friend of mine saw his entire public grammar school get shutdown by a self-identified radically progressive school board in Boston for failing to expel a kindergartner after a single incident (perpetrator, black boy; victim white girl; though really if anyone was paying attention the boy was arguably the victim, both by the ridiculous outrage, but also whatever was happening in his home life). This was at a school specifically created to mix rich white students with poor black students, and every family opted in to the experiment, and the school staff was simply following the gold-standard liberal policies the school was created for; policies which in this case were easily defensible, IMO. Its sad the way things went down, though the hypocrisy exposed was telling. People want to throw money at problems, virtue signal, and demand everybody else do something about these problems, only so long as they're not personally effected.
If the parent isn't engaged or can't be engaged, throwing more resources at the school won't help. If you want better outcomes, shift attention toward helping parents become more engaged. There are myriad ways to do that, and I really don't know what might help. But trying to fix the problem through school policies and resources isn't going to work. That avenue has been exhausted, though it still demands vigilance in maintaining appropriate resource distribution. Unfortunately, suggesting this kind of approach has categorically become a form of victim blaming--i.e. blaming parents for being poor.
I went to a catholic high school (not for the catholic part, but because it was a good school at a good price and nearby). Anyone with non-trivial behavior issues was kicked out very swiftly, so yes, they definitely turn away the inconvenient kids.
I don't understand your criticism. That 1973, the date of the case in question, is so old that we've solved school inequality?
Because we already know which children will be a drag on society by the time they're six or seven, right? And if we'd started doing this twenty-five years ago, we'd be much better off.
I propose intelligence/physical prowess tests for all children starting at age two or three, so we can start to weed out the dead weight much earlier.
And sterilizing the parents (as well as the kids -- but that goes without saying) will, in the medium term, address much of the tightness in the housing and job markets. It's a win-win!
And if a few decades is too long to wait for this, we could always go with summary executions, right? Or at least work camps for the inferior where they won't be a burden on society.
Sadly, all those "woke" pinko commies want to destroy our way of life by polluting our gene pool with the inferior stock, because they hate us and our free and equal society!
If you're going to say nothing can be done, then okay, the people who want something better will just move to live with each other in a community where this kind of problem doesn't exist, and do everything they can to keep it from following them. They can be happy that they have their standards, and you can be happy that you have yours.
So, by you are those the only two outcomes? Dump/warehouse disruptive kids and deny them any opportunity to become productive members of society before they even hit puberty, or let them run hog wild and burn down the schools?
I'd expect there's some middle ground here that doesn't include either giving up on children just because they're having socialization issues or putting those children in charge of the school.
Do I have all the answers? No. But if you're going to advocate for throwing away children because they misbehave, why stop there? That's not a rhetorical question.
If we're looking at things realistically, some of these children are violent. Yes, those should absolutely be removed and possibly locked in a facility if they can't be controlled. It's unfortunate, but the alternative is allowing everyone else to be harmed, for what exactly? Because you cannot face the reality that they are not going to suddenly turn into a saint and develop an interest in curing cancer when they grow up?
This is the definition of conservatism. It's not a problem as long as it's not your family suffering.
If you had a "problem child" you'd be singing a different tune about how acceptable it was to discard them.
I don't have a problem child. Neither do any of my neighbors. In fact it's apparently normal for 20% of my local school to test at the 99th percentile on state tests, and they're extremely polite. Weird. My wife's volunteering to lead our local girl scout troop and helps regularly at the school. It seems we're doing our part, so I'm really not sure what else you would like.
It's been a problem for literally millennia. This hardly unique to 21st century america.
Yes, I'm glad you don't have a "problem child". That's genuinely great, I wish everyone was that lucky.
What I would like, in the smallest possible way, is some shred of empathy for people who aren't as lucky as you are. Perhaps you could practice the concept of "walking a mile in another man's shoes" and make an attempt to understand what they're dealing with instead of dismissing them as inferior.
I'm also happy your wife is volunteering to help with girl scouts. I think that's a great thing and more people should do it.
But that doesn't excuse your lack of empathy.
Kids are not some kind of deterministic automatons where the same input always produces the same output (as if we could even reproduce the same inputs for an entire life). They're more complicated than that for reasons we frankly can't even understand.
There are a number of things that are highly correlated with producing a "good child", a major one being having enough money that the family isn't under constant stress and you can afford second (or third or fourth) chances.
But callously discarding every child who isn't lucky enough to benefit from this is just wrong. We, as a society, a culture, should be better than that.
Am I expecting you, personally, to go out and change the world? No, no more than I'm expecting myself to do it. But we all make small decisions every day and if enough of us make the "right ones" they can add up, and it starts with empathy for our fellow man.
We do our part, and we've decided to live in an area where others also do their part and try to build a community and a society, and not in an area where people tear down the community around them, or make excuses for those who do that. Again, what exactly are you chiding me for? What should I be doing differently? It's not us keeping them down. We're gone.
Are you familiar with the phrase "pulling up the ladder behind you"?
This isn't pulling the ladder up behind me. It's noticing a ladder, climbing out of a pit, and walking away. Ladder's still right there. Meanwhile others are asking why we don't try to make ourselves more comfortable in the pit.
I would argue that their outcomes in general would still be worse off then their lesser funded counterparts.
Anyways, I'm not taking the position that we shouldn't "remove" "problem children" in the same way I agree that prisons are necessary for society.
I guess if I had to summarize my feelings on this matter in this tiny little text box, it's that while this option should exist, we should all feel shame, a sense of failure, every time we have to exercise it.
We should ask ourselves, collectively, what we could have done differently to prevent the situation from coming to this point.
It's theoretically possible that there was nothing that could be done, but people are way to willing too just leap to that conclusion.
As an extension of that, we should at least pretend a modicum of empathy for our fellow humans. People are... people. They're complicated. Nobody is good or bad. They certainly do good things and bad things, and at some point, given our current society/technology/culture/understanding of the world, our best option might be to put them in prison for the rest of their life, but that doesn't mean we should be happy about it.
Like, I get it, you have a child, you have incredibly strong feelings about how to protect and nurture this child, both biologically/genetically as well as an ingrained cultural response. You want to do the best you possibly can for your child, even if it comes at the expense of everyone else's child.
But society improves when we raise the standards for everyone.
I'm not asking that this guy go out and sell all his possessions and march in the streets or whatever extreme example you want to think of. I'm certainly not doing that either. Just remember that "problem kids" are children just as much deserving of love and respect and help as your child.
Theoretical social causes and activism are great for university discussions and political sloganeering, but it's a whole different pair of sleeves than what's good for your family.
To which "theoretical social causes," "activism" and "political sloganeering" are you referring?
I'm genuinely confused by that, as I mentioned none of those things in my comment. Perhaps you replied to the wrong comment?
Rich parents' kids with drug habits or a sense of entitlement can be just as bad.
Have you ever met a rich kid with rich parents? Punishment is unlikely.
Increased spending doesn't matter if it goes into administrators who increase bureaucracy instead of teachers to keep them from quitting to be baristas, or to supplies and food for kids. Among many other systematic factors, accountability needs to be had for districts and even parents themselves.
0: https://www.census.gov/newsroom/press-releases/2026/school-s...
1: https://www.statista.com/chart/15434/the-countries-spending-...
2: https://worldpopulationreview.com/country-rankings/education...
It doesn't really matter exactly what tax mechanism is used to fund public schools, the actual thing keeping a 3 million dollar home in an exclusive school district is that you have to be able to afford a 3 million dollar home in order to live in the boundaries of the district and send your kids to the school.
Are you referring to the stereotype of rich parents buying their kids out of trouble?
Refusing to discipline your child is hardly restricted to "the lower class".
I never said anything about lower class or wealth. Next time if you want to have a constructive discussion, discuss don’t leave your biased emotions putting words in others mouth.
This is not how you have a constructive discussion.
This is bigotry and prejudice with no factual basis.
Talk to any teacher in America, it’s one of the biggest problems today. It’s not class, or money but something got lost and parents expect schools to raise their children but at the same time will be deeply offended that the child they did not raise is misbehaving.
I'm not sure the opposite is true either, i.e. that expensive homes are a proxy for good schools. I've also worked in schools where the families were affluent, but the environment was toxic due to the behaviour of students and parents.
I went to school in a poor district. Pretty much all the students at my elementary school were poverty adjacent. Most of them were good kids, but that didnt really matter because the 10% who werent often ruined it for everyone else. This is a one bad apple spoils the bunch scenario, so the incentive is to make it as hard as possible for even 1 bad apple to be in the school. Of course there are plenty of bad apples among rich kids too, but as you can imagine the politics is different there.
It's also a feedback loop, once you're known for "good schools" then the homes become more expensive. If you don't care about moving then it's often cheaper to buy a home to send your kid to a good public school vs. sending them to private school.
If you are a parent working 2 dead end part time jobs to barely pay the bills and have no emotional nor physical energy to properly love your child: well, you're a "bad parent" in society's eyes. It's not your fault at all, but that's how you'll be seen.
(and then weirdly, when I leave, I'm "pulling the ladder up." Shouldn't it be good riddance to me? Since I'm wrong and simply bigoted, of course)
I think, believe, that having two parents is better than one parent for a child. In the same way that having some number of grand parents and aunts and uncles and other relatives is also probably better. More relatives, generally speaking, means access to more resources and more resources for children strongly correlates to being richer later in life.
I don't believe that having one "good" parent and one abusive parent is better than having just a single good parent.
Some kids don't get to have two loving parents. What is supposed to happen to them? It's certainly not their fault.
Like, I'm challenging your values here and your response is "well I'll just leave" and you act like this is what I want.
It's not what I want. I want people to care and more crucially do stuff for their community/society/culture/nation/whatever. I want people to work together to raise everyone's standard of living.
It's like building wheel chair ramps everywhere and then discovering that, hey, ramps are also really useful if you're trying to push a baby carriage or wheel some luggage around or even just move up a level with really bad knees.
I think I made it clear with my "we moved somewhere nice" that that's not what I'd like either. It's not a kid's fault that their family sucks. But it's not every other kid's fault either. Schools should do what they can to discipline these kids (generally, they don't). But they also need to still teach the kids who did have loving parents instead of spending all available resources on the kids who didn't, and likely this means separating groups of kids with different needs, which they are loath to do. But it absolutely is the parents' fault. Unless someone died or suffered an extreme random personality change, that includes single parents.
Drug abuse rates tend to be similar in such places, they just tend to use different ones and be able to afford them, at least for a while.
Same with other crimes where things like DUIs can have lawyers involved that "manage" the outcomes.
Have the people in the west not considered letting parents send kids to a school that they pay for directly? Then people can self-sort. It seems like a really obvious solution to have a good school and a cheap school in the local area.
I understand this sort of thing is fantastic for social cohesion and has no negative consequences. (/s)
Everything turns to shit, but hey, the picket fences are white inside my gated HOA.
There are certain very basic standards that one segment wants to live with and normalize for their kids. If the other part aren't going to live up to them, you're never going to get social cohesion anyway. It isn't the people from the HOA community who are going to the ghetto and tagging it with graffiti or littering with used drug needles.
On the subject of children and what they are raised to learn and value, the country also happens to be allergic to instilling a common, non-toxic civic culture. It chants the pledge of allegiance before it's old enough to understand half the words like a prayer or a magical incantation, without ever taking the time to drill down or stand behind any of the values it purports.
PS. Drug use and abuse, shitty parenting, and poor family planning happens to a very significant degree in all communities in this country, but the consequences all those things cause are actively amplified for people living in the trailer park and on MLK way, while society bends over backwards to mitigate them for people living behind picket fences.
I see a lot of empty words around how I shouldn't identify poor behavior, but no suggestions for how we end it. "Break the cycle" okay how? Education is free and lower income areas generally have more school funding. We have programs for rent, utilities, food, medical care, and just straight cash.
How do we get people to value themselves and their families, much less something abstract like our republic? In this very thread there are people who are presumably somewhat wealthy saying e.g. divorce is fine.
Provide a bloody baseline. Every child deserves an environment they are given everything that a child needs to succeed, regardless of how fucked their home life is. The state can only control what happens outside of school so much, but it can control what happens in school.
It means transportation to and from school, or walkable access to them. It means school lunches. It means a space to work and study. It means a space that is safe and free from antisocial disruption. It means dealing with the antisocial disruption, through the counseling and support services children need.
You can't fix every broken human being, but you can not just abandon them after putting in minimal effort.
> Education is free and lower income areas generally have more school funding.
That delta is nowhere near enough, because the job of educating a child with an absolutely fucked home life is monumentally harder than one who doesn't have one. But it's necessary to do it, to work on the problem long-term.
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> How do we get people to value themselves and their families, much less something abstract like our republic?
Teach them to be a part of their community. Put them to meaningful work that improves it. This is huge for social cohesion, and every high-cohesion society or high-cohesion subculture in a low-cohesion society does it.
For a trivial example, Japanese students don't clean their classrooms because their schools are too cheap to hire janitors. There's no shortage of that kind of work that children can meaningfully do that improves them, their environment, and their town, and gives them a reason to give a shit about it.
Clubs are another. The level of support and funding for them dramatically falls short of where they should be. They should not be an optional activity largely available and patronized by the college-application-padding upper-middle-class. They are necessary for proper development.
You can also attack the problem from the other direction - doing less to actively create broken families and households. There's an incredible perception of unfairness in society, and reasonable people will treat it the same way that they feel it treats them.
Punishment is cheap and actually quite likely to work.
I think you maybe misunderstood previous poster? They were suggesting (unless I am the one misunderstanding) that families shouldn't be able to select a school based on how rich they are, which would accomplish a much more egalitarian society, the opposite result of what you suggest.
See for example schools in Finland, where you don't get this US-style outcome of the very rich sending kids to elite schools destined to be CxOs and the very poor having no choice but to go to mostly very bad schools.
https://www.techclass.com/resources/education-insights/are-t...
Have you heard of this fellow named donald trump?
> IME yes, upper middle class people are much less likely to let TV/video games raise their kids, are much less likely to be divorced/have multiple families
You have proof for this, of course? It's something that could easily be measured right?
I don't really feel like quoting a bunch of studies for something obvious, but yes. Go look at SES (or educational attainment as a proxy)'s relation to family structure and screen use policy. Lower income kids are far more likely to own a smartphone or spend more hours on screens, for example. Kids whose parents went to college are far more likely to have 2 married parents. And if you've lived around both groups you'll find this is kind of obvious.
This is likely very intentional in some of these places.
Growing up in suburban TX decades ago, people FREAKED out at talk of potential apartment building development nearby. The duplexes a mile away were 'bad enough.'
The threat model is "been indoctrinated by years of propaganda to be fearful of a vague nebulous threat of being around people who don't look and act like me"
It was not great to watch, but it was great to let my parents know who exactly they should stop associating with.
They do. But it's not a law of nature; it's a conscious decision, by people who should know better, to start lowballing real estate and salaries when they notice "too many" lower-income or black (of any income level, including high) people around.
You don't want to call it a concerted effort, but then you look up, say, the distribution of Whole Foods stores in the National Capital Region, and start to wonder.
Those extra water pipes and electric utilities, superfluous roads, excess lighting, and extra patrol units aren't going to maintain themselves in a lightening tax base. Same with the now-older schools built for their now-grown little kids when they moved in.
Long term, properties decrease as it is no longer a desirable area.
No, no, you don't have to get up, I'll just flag myself.
*who get very angry when you point out that their voting behavior over the past half-century is at the root of almost every issue America faces.
Someone I know is trying to plan such a thing right now. She has a decent paying job and a degenerative, disability-inflicting illness. She'd like to see the possibility of a secure future in the city where she's lived for the past 10 years, but property taxes and HOA fees alone in her city can be multiple thousands of dollars per month in neighborhoods that from the outside you wouldn't think seem particularly new or posh or luxurious. It seems that if she's forced into early retirement by disability, she'll have no choice but to relocate. So instead she feels trapped in a job she hates because she got it before she became disabled because she's reasonably afraid that employment discrimination, which is terrible at her job that nominally espouses inclusive values, will be even worse most other places. And while she's already disabled, her disability will only continue to get more profound for the rest of her life. And property taxes for sole and lived-in-by-the-owner homes is one of the reason that owning a condo or apartment is so much more expensive than renting one for her.
I feel like HOA fees have to be doing most of the damage there. AFAIK the highest property taxes in the US still top out around 2%, so for a "multiple thousands per month" property tax bill it has to be a house worth more than $1.2 million. I'm not sure what the line is for what level of housing expense is reasonable for society to subsidize housing security for, but I'm pretty sure $1.2 million is well past it.
Sure this doesn't prevent issues if someone is stuck on savings/Social Security, etc., but it prevent surprises, such as a boom in your area causing sudden explosion of equity and taxes due.
The cap required it be your residency, i.e. you aren't renting it out and you are a citizen.
So even with the cap, it's more than likely the property tax costs a typical owner more than double what it did 30y ago.
Not a big deal if you bought at age 20 (unlikely) and still receive some work income. But if you are retired, it stings harder each year.
I'm not taking a position here other than to say I don't believe there is a universally acceptable tax. Every tax I've ever read about or experienced personally, someone has made a valid argument for why it leads to a bad outcome or is otherwise unfair. You have to decide what gets priority, pick the system that matches that, and then be honest about where you're making tradeoffs and why.
The property was purchased with "after tax" money. So at purchase date the value was already taxed.
If one sells, and make a profit, we tax that profit. Why ask for a tax on the value of the property, each year.
There should be local taxes, and there are. To fund services and whatnot of course. But taxing a percent of the current value of a property is unfair as the owner may live in there with no intention to sell and potentially no revenue whatsoever.
Everything is unfair. The housing crisis is unfair. Young families struggling to afford a family home is unfair. Having to pay into a pension system you'll never get to use is unfair. Land and housing is different from personal property. There's only so much to go around and we'll have to share. A property tax is one tool to incentivize efficient allocation, and to drive prices down.
The concept of taxing what's already taxed has some perverse effects.
I concede though that property tax in the U.S is just a way for local authorities to be able to fund schools, and other municipal infrastructure. It remains odd though that most countries do have local taxes, but summing to a fraction of what a ~1% tax every year may represent. As it's a small percentage but on the most valuable and critical asset one may have sacrificed during his life, to own a roof as primary residence.
And one value of property taxes (one that is dysfunctional on empty lots) is that it encourages "maximum" use of high value property (lots of bad particulars here, but the overall direction is about right). While we may dislike an elderly person being effectively forced out of the home they have lived in for decades, it is usually for more "productive" uses (for the market definition of productive).
As an example my in-laws have three properties in Hungary that are empty, and have been for quite a few years. Cumulatively they get something like ten weeks of use in a year. But since Hungary does not have property taxes there is almost no incentive to make better use of these properties (yes, they could rent them out for an advantage, but there is no disadvantage pushing them to sell).
It is a problem though, I doubt a property tax is a solution, the proof is, it doesn't solve it.
I wouldn't be against taxing owners on their income, including dividends. To fund municipalities.
My argument isn't that taxes are bad. Public services need funding. Rather, that certain taxes are absurd.
If anything, this particular tax serves one thing that the working class on rental denounces: prime real estate neighborhoods typically are better policed, have better schools, and better infrastructure than what we call "poorer" area.
Edit: I don't imply it is due solely to this tax, but the concept of taxing properties imo makes redistributions naturally or cynically more localized to areas where more gets collected.
The value of that land relies on all of the ongoing services provided around the land. Go look at the value and taxes on land that has zero services (no road, power, water, sewage, maintenance, etc...) and you'll understand the difference.
A fair system is to allow an exemption up to the value of a modest home in the area. So anyone owning a modest home (or less) pays no property tax, which is far to the poor. And those who can afford homes many multiples higher in cost, pay increasing taxes on the difference.
but you also have a much improved quality of life as a result of that property value going up, because theres more desirable stuff around
Why should I get to have that sort of externality on others just because I have more money than them?
Nah, the market is supply constrained, if taxes go down the price of the real estate just goes up to fill the gap. People make purchase decisions based on income & total expenses, not on anything else, "can I afford this house?". The price stops rising when the answer switches from "yes" to "no". If your friend can't afford a house right now they don't have enough buying power to compete in the market with other house buyers. Reducing taxes won't give them any advantage in the market that other buyers don't get.
It seems to be equally straightforward an answer to just not expect homes to function as an investment.
I do not now nor have I ever understood why people expect homes to rise in value. If you live in an area for 20 years, and you enjoy that area, and it serves you well, and educates your kids, and the crime is low, and all that good stuff: why are you then owed money? Why is that a fair expectation? Like I could see it if you made the house bigger, or otherwise improved it? Maybe you put in a new shed, or a nice brick backyard area with a kitchen, sure. House being worth more makes complete sense. But if you just buy a house, and live in it, and maintain it over the years, and then go to sell it: why is it reasonable for you to expect money back out of that?
You've already received what you paid for: a place to live.
Like I just don't see how people go like "My house needs to sell for more than I bought it for years from now" and then complain about the housing market being out of control and houses being expensive. Of course they are. Each time a house changes hands by this logic, it must necessarily be worth more than it was before. So every subsequent buyer of that home is effectively required to tithe to the previous owner for... some fucking reason, that nobody has ever adequately explained to me.
The land goes up in value when other people spend money. More retail is constructed nearby, transportation is improved, schools improve, jobs are created, etc. My land captures some of that value even though I paid nothing. That to me explains some of the fairness of property tax: the owner should contribute to the government services, such as schools and police, that help make the land appreciate in the first place.
Then there's the building. It's a wood box that sits out in the rain and rots. Water soaks in from the outside and pipes burst on the inside. Termites eat it and insects and vermin invade. Carpet and walls slowly degrade. HVAC systems wear out. Appliances break. Concrete breaks apart. Even on the land portion, plants die and need maintenance. (Trees are the only thing on a property that get better with time.) This building needs constant maintenance and I'm always spending money and time on it.
So I figure the land might go up slowly in value over time. I figure I'm lucky if the building appreciates at all after I consider the money I sink into it.
On paper my house is worth a lot more than when I bought it. But I don't know how much of that is nominal price change due to inflation.
Anyway, nowadays population is barely increasing so I guess property values… maybe they’ll keep pace with inflation (for whatever reason)?
Another possibility is that property values tend to go up and down as some areas become more fashionable. Maybe, for whatever reason, there’s a selection bias where we tend to associate ourselves the trajectory of people who lived in those fashionable areas instead of the unfashionable ones?
"Don't turn this into Manhattan" is such a common refrain yet turning it into Manhattan would wildly increase their land value.
It sure would rocket the land value.
The flip side is that it is important to understand not everyone wants to live in Manhattan (or a look-alike). Some people moved out to the boonies specifically because they want to live out in the boonies.
If you take their view for a moment, which is good exercise in a debate: would you be happy if your house in the boonies is suddenly surrounded by high-rise apartment towers? It's not the boonies anymore.
Jesus it’s not rocket surgery. People want to live in a nice area, as more people show up and want to live in a nice area prices rise with rising demand accordingly. For the counter example, there are very large houses basically for free in Detroit. No one wants them.
Is that true, or do they actually come with large tax liabilities?
Because getting the mortgage to buy the house involves parting with a large sum of money, after which some part of the mortgage payment goes towards something called principal. If it just goes towards interest, it may as well be rent.
Not to mention that when you try to sell the thing, there's some expectation by one or more third parties of some percentage of it.
Nothing in this gives any good reason for one to expect homes to appreciate in value, other than that some buyers want it to, and I haven't heard any good reason why those buyers shouldn't just be told, "no". If these people then decide not to get mortgages, due to it not being an investment, then all the better for everyone else, who want a home to live in.
I suppose you could always buy a mobile home.
Essentially everybody in the US is continually trying to make their fortune by picking a winner instead of adding productivity and value.
Have your house appreciate.
Pick the right stocks.
Invest in the right company.
Become a landlord in the right neighborhoods.
Everyone wants to be a genius speculator instead of doing work.
This big obvious one is inflation. There will always be inflation (less, or more) so real property like a home can only ever go up in market price (unless the economy around it craters).
The second one is growth of the town. If you built a home 60 years ago in the middle of empty fields, it wasn't worth very much. Now 60 years later it is surrounded by lots of housing and a whole town. There is no economic model where it could possibly be worth less (assuming it hasn't been let to rot to be unihabitable, of course).
One idea here is deferral - if it's your primary residence the taxes are deferred until the property is sold to someone else. This way you won't get evicted but the locality/state can get the payment at some point. This is better than just charging a tax on sale as many countries do because it doesn't discourage transactions.
If you see that as inflated due to payback, then it's already inflated due to the yearly tax currently in place. Plus interest.
Back taxes would appreciate at say interest rates +1% so the state can borrow against sum of those obligations. This needs to be this way because common argument for transaction taxes is that "state needs to raise revenue now". Those taxes are very distortionary though.
Just because the seller has some personal debt they are required to sell once they sell (or move primary residence or w/e) doesn't lower the value of the property for the buyer.
I understand that this doesn't fully solve the issue in that your friend, if to take advantage of this has to move, but it might be worth seeing if there are similar options around where she lives.
The taxman says not enough. I should borrow money I don't have or sell for a cheaper place just to cover for the state's inability to do with sales tax
So no self induced problem, which doesn't even exist for me.
You can also do this with combinations of renter protections + owner-occupier protections.
Currently the latter (whether the recent trend of red states lower property taxes, or Prop 13 in CA) is much more broadly-popular in the US than the former.
Property owners generally show pretty little empathy for anyone else wanting that security.
I go the other way: nobody should be forced out of their home because other people who have more money than them decide to increase the paper-value of their home. Something has to give between "I have a lot of money, I want this place" and "I was already here, I want to stay" and I think incumbency and stability is a better tiebreaker than "money wins."
They could always borrow against their massively appreciated property, after all.
And why is being a Google Programmer "earning" that money, but a construction worker who spent 30 years paying off their house is an "unearned" windfall?
The premise being that if property values change city-wide, property taxes don't, because property tax revenue only changes if the city's population does -- and if population increases then it's usually associated with new construction, so as long as the newly constructed units have a similar value per-bedroom to the existing ones, the amount you pay in property taxes doesn't change then either.
If yes, then that means replacing their entire income once they’re no longer able to work.
If no, then something must diminish. That may include needing to relocate to a less expensive living situation. If we accept that disability means reduced means, then I don’t see why housing should be exempt from that as long as they’re not on the streets.
HOAs are just a micro version of corrupt government, with all the same behaviors.
There is an astonishing amount of corruption in HOAa. They overpay for nearly all services they contract out, and just by coincidence those contracts go to companies owned by friends and families of the HOA board.
And that's the reasonably well-run HOAs. The truly corrupt ones just have board members that pocket the money directly by using the HOA fund as a personal checking account.
edit: on slightly further thought, you'd also need this effect to either increase overall vacancy or reduce total construction, since any supply shift from occupied rental units to owner-occupied condos also implies a demand shift from renting to owning.
I don't think anyone I know will own a business that is not profitable.
Nothing particularly wrong with that, but it does reduce the amount of rental units in town, increasing the number of owner-occupied units in town.
Some people do prefer to rent so they might be unhappy about that. Some people prefer to own, so they'd be happy about that.
"But that'll just put landlords out of busine--" no it won't. Margins have width. Commercial property ownership is an incredibly high-margin business if you want it to be. If you don't shrink your margins by expanding, you can make a shitload of money; this isn't like a goods-and-services business in which failure to grow is penalized. The cost of the services you do provide is either low (property management/leasing) or quickly amortized (purchase and development). And almost all of your business assets not only don't depreciate, but appreciate at incredible rates.
"But they'll find other ways to pass the costs on to tenan--" not if you write your regulations well. Regulation prevents all sorts of income increases in all sorts of industries whose participants have accepted that they'll stay within the lines, money to be made or not. There's no reason that a combination of increased taxes from landlords and controlled rent can't extract money from commercial property owners while shielding tenants from harms. Sure, implementing that is complex and fallible (e.g. you likely want to permit different kinds of rate flexibility for commercial renters like small businesses than for luxury apartment residents or low-income family residents), but so is everything.
not really. VAT is popular because it is straightforward to implement and hard to evade unless someone is outright cheating.
> it won't [put large landlords out of busine-]
It won't. But like any complex regulations, it will give large landlords an upper hand over smaller ones. Large ones have economies of scale to rely upon (eg. one dedicated lawyer to deal with govt for 100 properties). Will just worsen the inequality.
Possible, but doubtful. Small and large landlords in rent-stabilized NYC manage to be numerous. I also don't think that the inequality between small and large landlords is what's important here--inequality between resident single homeowners and non-homeowners is more impactful (ethically and for national stability and social progress).
The little town I live in is growing about 22,000 people per year. That's 64-67 people per day or about 16 new households populated with new residents every single day. The rental population is growing dramatically faster than the owner population.
That growth trend has very little to do with wealth and is almost exclusively a factor of availability. Most single family households in this growth area are rental properties, because the most urgent buyers are rental corporations who buy many of these houses the earliest moment they hit the market. Sometimes they are buying the houses before they hit the market by working directly with the home builders. Home renters tend to pay more to access the property than home owners even before taxes are considered.
So, its not just about houses versus apartments.
Also, the school systems and local municipalities attempt to sell their multi-billion bond proposals by taxing future residents at the benefit of current residents. That also disproportionately hurts renters compared to owners. The moment I see a bond proposal that will be paid for almost exclusively by residents who aren't living here yet I vote for it... because why not. We need a lot of shit to accommodate this growth and somebody has to pay for it. We need new high schools every couple of years. We need new roads. We need more plumbing, sewage, and electricity before the data centers eat it all up. Somebody has to pay for all this.
It was supposed to be for aging old people who were forced to move because they couldn't afford the taxes as their homes increased in valuation.
But commercial was also included, with the thought that lower taxes would let landlords pass the benefits onto the tenants.
But they never did, they just pocketed the savings.
https://en.wikipedia.org/wiki/1978_California_Proposition_13...
In addition, commercial properties would be owned by immortal corporations, which would change hands without reassessing.
https://en.wikipedia.org/wiki/1978_California_Proposition_13...
The source for this claim in Wikipedia is an obscure 1999 opinion piece in a SF magazine.
And it doesn’t make any sense if the rental market is competitive. Obviously higher costs to landlords get passed along to tenants, so the reverse is also likely true in a competitive market, which CA is.
Just keep the tally, and then when the house changes hands, mandate that the back taxes get paid out of the sale.
California, 1978. Trickle down economics. You don't even need to know state history to know who was governor at this time.
... Okay, it was Jerry Brown. But Reagan only stepped down in 1975 to run for president in '76.
It had nothing to do with Reagan or Jerry Brown. They were just responding to what voters wanted.
And who spread the narrative over the decades that the government wasn't worth the high taxes? This is a very well examoned initiative at this point.
No narrative spread needed. Voters could figure it out on their own
Brooklyn, for example, has seen an explosion of high-rent apartment buildings, occupied by nerds like us.
If you are lucky enough to own a home/apartment in the city, you are either crazy rich, or, more likely, brought the home before it exploded in value, making you "paper rich."
Many of the apartment-dwellers in the city make a lot more than homeowners.
Farmers, for example, are often multimillionaires "on paper," but don't have a pot to piss in.
Owner-occupiers can and do refinance to turn their wealth into cash. It's routine.
So do you. I assume that you like to eat? Farmers are how that happens.
> refinance
Are you familiar with the downsides of refinancing?
Yes. Actual food, not government-subsidized high fructose corn syrup.
And I have enough knowledge on the matter to know who benefits most from such subsidies. It's not your "average joe" multimillionaire farmer.
Same thing for farmers.
If you need thst money back at some point it makes much more sense to tax the sale or purchase of the property because nobody living there is affected until that sale actually happens.
And make the house unsellable? That's the absolute opposite of what society should want, which is land repeatedly being repurposed for the best and highest use.
The answer is that land should be publicly owned and people should pay land rents. If you can't pay the land rents, there should be a publicly subsidized (temporary, until end of natural life at most) reverse mortgage that allows the owner of the house to pay the land rents with their house equity.
Or maybe you’re saying all the homes increase in value by 3x and your income didn’t keep up? Clearly many people did see their incomes increase if there is a market for such homes…
Then you sell the house and move somewhere cheaper, as is normal in any place that doesn't let you externalize "I can't afford the cost of living no more".
Hope you didn't ban housing developments to keep prices high, or fail to ensure economic diversity in different areas instead of outsourcing everything, or you'd be in some real trouble.
This is all obviously very specific to the locality where you live, but at least where I live, property values were recently reassessed to account for the large post-pandemic increases. Individual homeowners were generally stuck with these reassessments, while commercial properties, especially those managed by large property management groups, were organized and successfully petitioned to reduce those assessments in disproportionate numbers. So the balance of power was not equal to start with.
An individual, could go bankrupt just because the property tax follows its' property value which itself changes nothing with regards to that owner's income.
on paper; remove the 'value' of the home and the typical home "owner" (mortgage means bank owns your home) is more likely to be paycheck-to-paycheck
looking at the housing market currently, that actual wealth is 40% off what they thought it was, going by starting asking price -> actual cash in pocket after taxes, fees, and points paid to all involved
And what is more, when a tenant leaves and the landlord puts the unit up for rent again, there is no price limit for what they can ask for new rent. They are free to ask above market rent if they want.
So really I would not say the burden is shifted entirely on the owner of the building when they still possess two levers for ameliorating overhead increases: increasing to the limit of the RSO even when the market doesn't support any increase, and increasing rent on the next tenant. In high demand cities the market rate is not so much a wall, and landlord generally enjoys good success pricing above market rate and still leasing the unit out in a reasonable timeframe for them.
https://www.sf.gov/information--operating-and-maintenance-ex...
When the annual allowable increase does not completely cover the landlord’s yearly increase in operating and maintenance expenses for a property, a landlord may petition for an additional base rent increase of up to 7%. This is known as an Operating and Maintenance or O&M increase. In determining whether an O&M increase is justified, all operating expenses must be considered (excluding debt service), including: property taxes, repairs, maintenance, insurance, pest control, garbage, water, etc
You can be wealthy and still have poor cashflow, especially as a leveraged property owner
For owner-occupied, it sounds like someone who made a risky financial decision because of perverse incentives. Which also seems good to revisit.
Also in these cases cash-poor is not low-income. It's likely to be high-income+high-obligations the way you describe it. Hard to get all that leverage otherwise.
Rental yields are so low in the UK compared to the cost of finance, tax and maintenance that being a landlord has become completely unprofitable, which means the rental sector is falling apart.
Pretty much no landlords in the south east of England are cashflow positive on a monthly basis, and if they are they are yielding less than government bonds
Right, this is the narrative that people who have built a life somewhere should be required to uproot and move to a cheaper place because others want to take over their home.
That's why this idea doesn't get much support.
If we are going say houses are not just investments, they are homes, then we can reduce the property taxes and let the government take the profits/losses in the home's value.
If we are saying houses are investments, then they should be subject to taxes and costs accrued in the upkeep of that investment which includes the infrastructure that property taxes pay for.
You should talk to some (or a lot) of homeowners to see who feels that way. Personally I've never met any who thinks of their home like it was a stock certificate.
To most people, but especially older people, their home is home. Where they built a life, saw kids born and raised and where that now-adult kids bedrooms still brings them memories. They'll talk to you about those memories and how that neighborhood still has some of their lifelong friends and how their trusted doctors are all nearby (this latter might seems like trivia to 20-somethings, but is all-important to 70 or 80 year olds).
Ask them about the zillow zestimate of their home and very few will be able to tell you what the home is worth on the open market, and even fewer care. They're aware it has some value, the kids will inherit it someday and they are happy to pass it on, but it has zero investment value to them personally in their life.
I'm not in that demographic yet, my kid is still a kid living at home, but I'm getting older so I can visualize it is how I will also feel. I also don't know what our home is worth. Last time I looked it up was years ago. I guess I could look it up again but it's not important, it is our home, the value doesn't mean anything. I'm not going to sell it to take profits, I'm going to live in it.
So this is completely opposite of actual invesments, where I check my stock prices many times a day every day.
> If we are saying houses are investments, then they should be subject to taxes
This is interesting because on actual investments, where I might be sitting on 1000+% profits, I pay zero taxes until I sell someday. So you want to declare a home an investment, but tax it in ways no other investment gets taxes?
What’s happening is income inequality manifesting on the market. The middle and upper middle of the market is seeing accelerated appreciation as incomes rise for the upper quartile. Some places see >10% annualized appreciation over the last 20 years.
The lower part of the market is very different, and are basically depreciating away. Property taxes are the most fair tax for the most part — you basically pay a prorated share of the levy based on the market value of your home. So if the poorer property is getting less valuable proportionally, your share of the tax pie increases. Some states share Medicaid expenses at the county level so there’s demand pressure for more tax levy.
The problem is old people generally cannot afford their homes, and are usually profoundly ignorant about everything except tax avoidance, even when tax avoidance hurts them. The tax knob is one that can be turned, which makes the problems worse. Senior exemptions, veterans exemptions, all increase the overall share for everyone else.
The new Republican platform is accelerating that — pushing property taxes to non-homestead property and driving up sales tax. In other words, it just a consumption tax, which pushes the tax burden to families and inflates retail costs, so grandma can sit in her big house and her kids get to inherit the place at the stepped up cost basis.
The problem with this form of taxation is that it slows down consumption and impacts poor and middle class people more.
Part of it is honestly just people wanting a safe harbor preserving generational wealth. I think people who are generational wealthy understand what a damn advantage that is and obviously push hard to guarantee that for their family as much as they can. The alternatives are a bit terrifying given the direction of the economy, world, and climate. The only social safety net afterall in this country really beyond an abject poverty level of subsistence is reliance on well off family.
Maybe you can call it a sort of restart of feudalism, but there are no serfs in the mix really. Its not a productive estate in most cases (in some cases sure e.g. family business), but really often just a little lot with a house on it. People don't like the idea of the state coming in and carving that up and carting it off.
And really I think there are far more real things to set the tax burden upon. I mean grandmas home once again produces nothing, it is a box to sleep in; it's value is based on pure speculation. It is now worth 'more' because people say it is worth more and believe in that, not because it now actually does anything it didn't do thirty years ago. It is in far poorer shape than 30 years ago, even. Like, this is not where you find money flowing in this country. Tax where the flows actually are not the stagnant ponds, slowly being filled by the leaks off those profoundly vast flows of money and the speculative abilities those flows grant the flow controllers.
Pretty unbelievable, really. They get a free house and tax bills from decades ago. The whole thing is made to screw over future generations, and act like it’s all hunky dory.
Because we don’t have universal healthcare, we have this weird scenario where long-term care is provided by Medicare for 90 days, tops, add further care requires that you private pay and then transition to Medicaid when your assets are depleted. Everyone’s costs go up, how’s the nursing homes have to continue, have to accept the lower Medicaid reimbursement.
On the other side of the equation, many people find themselves in a situation where they’re stuck in a house that’s too big, but they’re afraid of the capital gains tax they may owe.
I’m of the age where I’ve lost my parents, and most of my friends have parents who are struggling with health issues, and the other things that come with aging. I live in an urban neighborhood that has a lot of people aging in place… I find it tragic and sad because a lot of these folks find themselves in not great circumstances. because they feel forced to hang onto a property that they can’t maintain and is depreciating around them.
However, tax rates give perverse incentives. What you'll probably get is a lot of commercial slumlords as repairs are seen to increase the value, thus the tax.
oh shoot why didnt anyone think of this. genius.
They can’t raise rents higher because they are in competition with other rental properties. In equilibrium, if all commercial properties have taxes raised on them, (a) the majority of the market will raise rents to cover the cost of the tax and (b) those rental units that are no longer financially sustainable at the higher rate will exit the market (e.g. sell the homes to an owner occupant or redevelop the property if allowed to by zoning). Some fraction of property owners might take a haircut on their capital returns in the short run (the housing market is fairly illiquid) but the market will return to equilibrium in time.
> Higher rents have never caused wages to increase
ignorant.
The reason is that rents compete on net profitability to the renter, not revenue. If rents go up, tenant profit goes down, and they move to lower value land further out where the lower revenue minus lower costs gives them their original profit. Buildings are affected uniformly by property tax and cannot be escaped in this way.
Therefore, your prediction would be most accurate in cases where building prices dominate the optimal land usage. Non-optimal uses would get redeveloped, as you point out, and building tax can be pushed to tenant, but the land tax component must be eaten by the landlord. The exception is for properties in a market where the owner occupier distortion allows them to sell at a higher price (can sell to a renter now or could redevelop for owner occupier in the future).
In this case, landlord is neither happy nor sad since it the tax is irrelevant to them.