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0 pointsburlesona3y ago0 comments

Prop 13 ensures that once you’ve bought in you feel no more pain from the housing crisis, and thus most Californian voters would have to vote against their own individual self-interest to do anything positive on housing, which just won’t happen. By contrast, in Texas there is no income tax but high property tax, and as prices have shot up recently most homeowners have reason to be worried about it and to vote to take action to increase supply to meet demand. It’ll be interesting to see if that actually happens, now that the theory is being put to the test.

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mertd3y ago

I stand to benefit from Prop 13; yet I would vote against Prop 13 without a second thought. It is causing enormous and unjust human suffering. People vote against their self interest all the time, if you convince them that it is for the greater good.

0xFACEFEED3y ago

Would voting against Prop 13 result in you having to sell your home/condo? I've wondered this myself and if I'm perfectly honest... I'm not so sure.

Voting against my self interest when all it does is affect my bank balance? No problem. But if it forces my kid to change neighborhoods (and therefore schools) while giving up a home I plan to retire in... that's harder.

epistasis3y ago

It's hard to imagine a situation where property values rise would kick me out of my home, were Prop 13 repealed. If the home is going up massive in value, a 1-2% tax on the value of the home is dwarfed by the increase in property value. Refi or whatever to take care of it. The tax portion of a mortgage isn't that big anyway.

And if property values are rising so quickly that I even notice an increase in the property tax, then every single renter is completely screwed by comparison.

The only way that property value increases could cause somebody to lose their house is if they are completely financially incompetent, as far as I can see.

ctvo3y ago

A system that requires self sacrifice isn’t ideal, especially in a heterogeneous society like the US where cohesiveness is lower than say … Japan.

Crafting the message, targeting the various groups, etc. Yes, there are folks like you who may do it, but convincing the majority is an uphill battle.

anamax3y ago

Prop 13 also stabilizes property tax revenues.

When housing drops 10% in a year, my property tax bill, like most people who bought a few years go, goes up 2%.

Yes, my property tax bill also goes up 2% when property value jump 10%. But, the cost of govt services didn't jump 10% that year, so why should property tax go up that much?

dragonwriter3y ago

> Prop 13 also stabilizes property tax revenues.

Not really; yes, it reduces total volatitlity in property tax revenues asymmetrically, since tax assessments fall without restriction in downturns irrespective of turnover, but rise with a sharp limit in upturns outside of a limited set of qualifying events.

But stabilizing property tax revenues, even to the extent it is true, is made less relevant by the way Prop 13 cuts property taxes so low that it shifts the burden to other, more volatile, revenue streams. (While the assessment increase is what most people focus on with Prop 13, it also capped nominal property tax rates in California at a low rate.)

anamax3y ago

> Not really; yes, it reduces total volatitlity in property tax revenues asymmetrically, since tax assessments fall without restriction in downturns irrespective of turnover

The only tax assessments that fall during downturns are the folks who are underwater, that is, the recent purchases. The folks who aren't underwater get a 2% increase.

That's why, as I wrote, when there's a 20% downturn, most people still have a 2% increase, which keeps tax revenues from falling significantly. In other words, stable.

I write "most" because one of the key arguments of the "prop-13 is bad" folks are that most properties are paying too little tax because of when they were bought.

You can't have it both ways. If you make that argument, the arithmetic shows that prop 13 stabilizes property tax revenues during a downturn.

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mertd3y ago

0xFACEFEED3y ago

Would voting against Prop 13 result in you having to sell your home/condo? I've wondered this myself and if I'm perfectly honest... I'm not so sure.

epistasis3y ago

And if property values are rising so quickly that I even notice an increase in the property tax, then every single renter is completely screwed by comparison.

The only way that property value increases could cause somebody to lose their house is if they are completely financially incompetent, as far as I can see.

ctvo3y ago

A system that requires self sacrifice isn’t ideal, especially in a heterogeneous society like the US where cohesiveness is lower than say … Japan.

Crafting the message, targeting the various groups, etc. Yes, there are folks like you who may do it, but convincing the majority is an uphill battle.

anamax3y ago

Prop 13 also stabilizes property tax revenues.

When housing drops 10% in a year, my property tax bill, like most people who bought a few years go, goes up 2%.

Yes, my property tax bill also goes up 2% when property value jump 10%. But, the cost of govt services didn't jump 10% that year, so why should property tax go up that much?

dragonwriter3y ago

> Prop 13 also stabilizes property tax revenues.

anamax3y ago

> Not really; yes, it reduces total volatitlity in property tax revenues asymmetrically, since tax assessments fall without restriction in downturns irrespective of turnover

The only tax assessments that fall during downturns are the folks who are underwater, that is, the recent purchases. The folks who aren't underwater get a 2% increase.

That's why, as I wrote, when there's a 20% downturn, most people still have a 2% increase, which keeps tax revenues from falling significantly. In other words, stable.

I write "most" because one of the key arguments of the "prop-13 is bad" folks are that most properties are paying too little tax because of when they were bought.

You can't have it both ways. If you make that argument, the arithmetic shows that prop 13 stabilizes property tax revenues during a downturn.

j / k navigate · click thread line to collapse