Their say is their ability to move away. Neighborhoods change. The irony is that when they moved in, their neighbors were complaining about all the change happening.
Here in Cupertino, everyone says, "this should all be single family homes!". If you look at the old newspapers from the 30s and 40s, everyone was saying, "We should remain farmland!".
Why is it that the people who built the single family homes happen to be right? Maybe it should have been farmland. Or maybe it will be even better as a mixed community of single family and multi-unit dwellings.
It's called progress. For some reason people think that when they bought the house everything was perfect. The progress until then was good, and any progress afterwards is bad.
Being priced out of one's home is a red herring that the low tax zealots want you to believe to keep prop 13 in place.
Somehow in the 49 other states that don't have Prop 13, people aren't priced out of their homes from taxes.
There are other options. There are home equity lines, reverse mortgages, or even freezing tax payments and adding them as liens on the property at time of transfer.
But even if you're worried about that, you should still support repealing prop 13 on anything that isn't an owner occupied single family home.
There is no reason a rental property should have tax protection, or a commercial property.
>Somehow in the 49 other states that don't have Prop 13, people aren't priced out of their homes from taxes.
Allow me to introduce you to the great state of New Jersey. People here are absolutely priced out because of the property taxes, especially older retired couples and low earners who may have a house but hit hard financial times. A $400k house will probably have property taxes over $10k.
It’s a tax to try and equalize resources for all schools, and is very progressive in sense. Other states let poor areas have poor funding for schools, whereas NJ requires richer areas to send funding to poorer areas to try to give the poor children a chance. I actually think this is an admirable goal of NJ.
NJ also has one of the worst unfunded defined benefit pension problems, which is obviously not so admirable, and will continue to contribute to rising taxes of all kinds and decrease in government services in NJ for the next 30 years.
As a former resident of New Jersey, I'm aware of Abbott districts, and trying to place the blame them for NJ's high property taxes is absurd. It's not a separate tax, it's simply redistributing school funds from existing tax income. As for the amounts of funding the districts get, here's what it says in the wiki article:
Abbott district students received 22% more per pupil (at $20,859) vs. non-Abbott districts (at $17,051) in 2011.
That is a HUGE amount of money being spent regardless of district classification. As for the pension problem, please do not underestimate the ability of the NJ government to kick that can down the road as hard as they can. I firmly believe that they will do anything they can to not solve it until it's too late.
I really think this line of argument is going nowhere; you seem to have fundamental opinions on taxation that others here don't share, and I don't think further discussion is going to be all that productive.
That’s because others seem to have opinions about taxation and no understanding of how taxes work while I am trying to point out that property taxes are Ad Valorem.
High density isn’t the answer either. I don’t know one high density city in the entire world where housing became affordable and available for all as density increased.
Medium density and spreading out is the right solution. The example that comes to mind is the snail shell structure/concentric circle design of Paris, France.
That never comes up..the same tech sector working population want to pass their fortunes to their children through trusts and tax planning. I have seen them bristle when I suggested that their kids should pay taxes on their inheritance. It would be hilarious if it weren’t so hypocritical
Property taxes are paid on the sale price. It is not a punitive tax to fund new entrants.
An example:
Consider a 75 year old senior couple on fixed retirement income living in their fully paid 40 year old home. They paid the 300k mortgage and the house is worth 1 million.They raised their kids who attended public schools for 12 years each.
Property taxes are used for public school education. 45% of California budget is for schools. Property taxes go into a common pot and distributed to different school districts. It averages between 10-15k per student.
Schools have taken over nannying and provide more than basic education. They take on services that are generally the area of social services and social workers.
For example, if there are more non native English speaking families with children in school, the district gets extra funding. But more often than not, the children who know English as second language don’t come from high income areas..that is..their homes don’t contribute a lot of property taxes to the pot. Renters get the best deal because they don’t have to pay property taxes in the best school districts and often these are older properties that enjoy low taxes.
The problem here is that homes are roofs over our heads. It’s not speculative investments. They are not funding sources for the waves of new migrants and their children.
To ask 75 year old retirees to pay more taxes on property they haven’t profited from is heartless. That you need senior citizens to educate this working generation’s children’s education is shameful. It just means that the current generation doesn’t know how to manage their finances. It’s like someone living off their ageing parents pensions even when they are earning fat pay checks because they think their parents don’t need the money.
In my observation..those who ask for prop 13 to be repealed are usually : 1. First time house owners or renters 2. Transplants to California from other states that are usually economically depressed..almost always suffering from CA sticker shock 3. In their first high paying jobs 4. Don’t have parents living in California 5. Don’t have parents who were home owners in California 6. Really bad at financial management.
It boggles my mind when I see 25-30 year old Silicon Valley tech workers crying for prop 13 repeal and want you make seniors on fixed pensions homeless. They are people who are looking into other people’s homes and coveting what they think they are entitled to...
Most of the property taxes are going to fund public schools. If you want affordable housing, turn your ire towards parents who have kids and are not willing to pay for their own kids education...Instead of demanding from seniors who have paid their dues and have built the public schools and roads and infrastructure of California with their taxes when most of us weren’t even born.
I am deeply ashamed to be part of Silicon Valley that is disrespectful to the senior citizenry. On one hand, they want homeless people from all the states and undocumented immigrants to get free services and be taken care of..just when you think that such charity is laudable...on the other hand they are demanding to repeal prop 13 which will create more homeless seniors and retirees will end up without a nest egg for their safety net making them more vulnerable and even dependent on the state for services. How is this in any way logical or rational..even setting aside the fact that it’s definitely not ethical or moral.
Senior citizens in the other 49 states are doing just fine.
There are problems with increasing property taxes on elderly folks on fixed incomes, the solution isn't to say "you never own any tax on the appreciated value" the solution is to say "you can pay the tax on the appreciated value when you sell your home" which is an insane liberal tax and spend policy practiced in the hippie haven of the... state of Texas.
Additionally, the lions gain of the benefits of prop 13 don't accumulate to the working class elderly living in appreciated homes, it goes to giant corporations like Walt Disney (yes, Disney Land is protected by prop 13), golf courses, extremely wealthy property investors, and the heirs of people who have owned nice homes and then died who then bequeath both their house AND their insane tax rate on to their children.
maybe because young people in other 49 streets are not trying to make their senior citizenry homeless by increasing their taxes to educate their children for free.
Inheritance should be taxed at assessed value as should rental properties as well as commercial properties. Primary homes should not have prop 13 protections repealed. It’s not an investment to many..it’s their home.
In California, public money is spent on things like gender reassignment surgeries for govt/public sector employees and prison inmates..we have student loan forgiveness schemes if you work for 3-5 years for the county...retirement at 50 for most law enforcement and Fire Dept employees. Billions of dollars in pension funds and unfunded pension liabilities. Mayor Newsom just increased funds homelessness by another one billion. Yes, one billion in services like counseling. Not actual homes for the homeless. We offer services and education for all undocumented immigrants. First two years of community college free.
That’s why so many flock to California. Because life in the golden state is golden. And then they try to change prop 13 to punitively tax the senior citizenry and retirees on fixed income. Because. As someone spat out earlier ..”low taxation zealots” are the bad guys.
And then they try to change prop 13 to punitively tax the senior citizenry and retirees on fixed income.
I'm not going to bother digging into most of the rest of your claims but this is particularly disingenuous. Most of the recent attempts at changing Prop 13 have focused on a split roll that would keep the tax limits on primary residences. Putting grannie out on the street is exactly what the anti-tax zealots (Jarvis and co) used to sell the state on Prop 13 and 8 in the first place. What's being proposed now would raise taxes on things like vacation homes and commercial property.
That’s not what repealing prop 13 means..do you know the wording of prop 13?
Yes. In addition to following the flurry of news articles every time some politician dares to bring up Prop 13, I grew up in the Bay Area, and in fact I studied Prop 13 along with its consequences and potential changes while at university. If you'd like to be pedantic, your words were "And then they try to change prop 13".
Nobody (at least nobody with any sort of visibility) has proposed repealing Prop 13 wholesale.
They used repeal and partial repeal interchangeably.
Prop 13 also pushes undue costs onto new property development. Lower development costs equals fewer luxury condos. Were California to both build more and repeal Prop 13 fully it's unlikely that retired tech bros would be priced out of their houses.
Even so one of the primary roles of a county assessor is to determine where tax breaks are suitable. Allowing the (typically elected) assessor more discretion via a Prop 13 repeal almost certainly guarantees you won't be putting grannies (or retired tech bros) out on the street.
No, property taxes are paid on the assessed value, and assessments don't just happen at sale time. Only CA has this weird freeze-taxes-at-time-of-sale thing.
> It is not a punitive tax to fund new entrants.
No one is claiming it is. Hell, it isn't great even for homeowners who are "protected" by Prop 13, because if they want to move (say a widow/widower whose kids have moved out, living alone in a 3000 sq ft house who wants to downsize), they often can't, because their new property -- even if it's smaller! -- will destroy them with higher property taxes.
All this protects are people who never want to move, and, worse, it protects wealthy families who can pass their property down to their descendants without a market-rate tax.
> because their new property -- even if it's smaller! -- will destroy them with higher property taxes.
Nope. Prop 13 allows transferring assessed value of the old house to the new house if it's in the same county. Even inter-county if the new county allows it. The assessed value is also preserved when the property is inherited by children and grandchildren. The number of carve-outs it has to favor incumbent landowners is pure insanity.[1]
EDIT: These were allowed to die in December, 2018.
> Only CA has this weird freeze-taxes-at-time-of-sale thing.
Not even California has that, strictly speaking. California just sharply limits the rate of value assessment increase without qualifying events (mostly transfer outside of close family and new construction).
What’s wrong with never wanting to move? Out of homes people paid off after 30 years of mortgage? Why should we promote the notion that tax paying citizens should become transients due to tax burden?
So tax the descendents. Property rights are one of the reasons why this country was founded..primary homes need to be protected from predatory taxes and redistribution of wealth.
If those who had lived in their house for 30 years sold their property, they will have made more in capital gains from that sale alone than the average American has made in their entire life. I'm not exactly awash in sympathy here.
So you are saying people who invested earlier should be penalized because they were..I don’t know..alive before you and had a life and build a home that happened to appreciate in value even though it’s a perceived value with no real liquid gains.
Maybe they don’t want to profit out of capital gains. Maybe some people love their home of 30 years and would like to spend the reminder of their lives debt free after planning their retirement.
Seniors and retirees are such low impact on society. They have savings. They pay for services they don’t use. Their pensions and ssi is based on pre inflation valuations. They don’t use schools. Probably drive less and consume less and have a smaller carbon footprint. Most importantly they have already paid for themselves and probably paid their dues to society and several batches of public school kids.
To be envious of them and trying predatory taxation techniques on them is a breach and violation of social contract.
On the flip side, there is a finite supply of housing. A retired senior citizen living in a house prevents a young professional from living in that house. Given that the former is going to provide far less benefit to society than the latter, there is an opportunity cost that needs to be accounted for somehow. A property tax is not a bad way to account for the opportunity cost.
> Seniors and retirees are such low impact on society.
IIRC, medical care accounts for more government spending than all other discretionary spending combined. And most of medical care is going to be caring for seniors.
I never said there's anything wrong with never wanting to move. I just said that Prop 13 mainly protects incumbents who never want to move, and creates a really bad situation for everyone else.
Normally property taxes are paid based on assessed value. Assessed value is a function of market value that is determined recent neighborhood/comparable sales. The problem with Prop 13 is that it doesn't allow for the taxes to capture increased market value.
Why should taxes capture market value? That’s surrender to the state to keep taxing us.
To ask for higher taxation is asking for the state to take care of individual expenses through redistribution of wealth. Other states don’t offer as many services as California which is practically a nanny state.
The young people are expecting the state to do the grabbing so they can be taken care by the state. This is mostly due to public schools brainwashing kids with extreme progressive liberalism.
All these seniors that paid their dues paid how much in UC fees/"tuition"? And now they want to tell this generation to pay when they didn't? Isn't that called pulling up the ladder behind them?
No. The seniors paid for subsequent generations of public schools. Even when their children were all grown up and no longer in the school system.
It’s time for those kids who were educated with public funds and tax money to pay back. Not ask for more money from retired seniors.
So fix the university system. Don’t ask retired people to shoulder the burden of grown ass employed and able bodied younger generation and their children.
Most people have rental properties as investment properties.
Example: a 1 million dollar home rents for about 3500-4000/month in my Bay Area city. 10% goes to management company. And insurance is another expense, it’s not a lot.
Assessed value of a million dollar at current rates would be around $12k without parcel taxes or special special taxes added which can be another 3-6k extra.
It leaves about 2000-2500 as income. Assuming the home is completely paid off. If there is a mortgage or if it’s refinanced, there won’t be much of an income.
Rental income is considered income and subject to income tax.
Rents will RISE making housing even more affordable if people 13 is repealed. Any form of taxation is only designed so the house..aka the govt...wins. The house always wins.
Lobbies with housing interests are simply making home owners the villains...while the problem is lack of public transport, infrastructure and proper city planning and commercial zoning.
It’s easy to make seniors(who have no PR companies or lobbies) the villains or hard working people who have one or two rental properties as income nest eggs because they don’t have pension funds or stock options.
The Silicon Valley tech workers act like they are sharing and passing around a single brain cell amidst themselves when it comes to housing issues in the Bay Area. It’s mind boggling how easy it is to manipulate people into a mob when a nameless faceless villain who can’t be identified is painted to be the victimizer.
That’s not really true. Market values are based on total cost of ownership, and higher taxes reduce the value or value growth.
Your taxes go up, but so does your debt service. I live in a secondary market of a very high tax state (NY). My effective property tax rate is about 1.8%, almost double what you see in NYC. But... my housing value is much lower. My home in NYC would be well over $1.5M, and is a fraction of that. It’s better to pay the tax.
In terms of old people, the answer depends. Usually people sell because they cannot maintain the home, want to be near family, or have medical issues. I’ve never heard of anyone (other than a farmer) who moved because of property tax.
Property in CA is speculative and fluctuating. One cannot accept paying taxes based on assessed value. Property market is a volatile market.
It is the equivalent of gambling. Would it make sense if our taxes on the roof over our heads are pegged to Wall Street or stock exchange indices?
When property taxes have to be imposed based on fluctuating speculative assessed value, how would people on fixed income and pensions plan to pay their property taxes at the end of the year?
The assessed values already increase every year. Social security payments are capped. Salaries are based on employment contracts and is capped.
The habit of paying tech workers with stock options that are essentially speculative financial instruments have taken away all realistic financial intelligence one would assume amongst the current generation.
A good economy relies on stability. How does pegging fixed incomes to volatile speculative property value make any sense? It is entirely irrational and illogical. It’s financial illiteracy. You can’t plan for anything and especially not retirement. Such short term thinking.
Your hypothetical old people utilize their stored equity via a loan, just like you draw from your pension. Reverse mortgages are a common way to do that. Or, you sell and downsize into a property or place that you can afford.
Real estate markets are fairly liquid, and assessors always have a process to grieve your assessment based on market or other conditions.
California is way too protective of the property owner. Carrying costs in terms of taxes are frozen in time and anyone can walk away from a mortgage. Stock options are what keep the machine going.
Why are you making financial decisions for strangers? Esp in a way that benefits you and has no value to them?
What is the sense in extending their lines of credit to PAY TAXES?
Are you suggesting that they should go into debt to pay taxes? It is equivalent of highway robbery. Akin to saying.. mortgage your home again to give us the money?
Real estate markets are not liquid. Liquidity is exchange of monetary and financial instruments for an asset. A home is an immovable fixed asset. As long as it’s owner occupied, it’s domicile and not an asset. When it’s rented out, it accrues rental income which is taxed.
Right to property is a fundamental right. This is not a feudal economy and it’s not the Middle Ages. Stock options are speculative financial instruments and relying on them is akin to gambling.
Your understanding of finances ..if representative of the wider California working population..sheds light on why the current generation has no financial management skills. I am beginning to suspect it’s by design starting at public schools where children are taught to suckle at the govt teat and think taxes are nourishing food.
Moving where? Why should people leave their homes that they built and paid for ..Human beings like their community and neighborhood where they have a support system. When you know your neighbour is just a phone call away next door, you don’t have to rely on doctors or nurses or ambulances or fire departments. As you get older, community is a great source of comfort and moral support.
People won’t realize this until they get older or have lived with older family members/friends. Older family members are also a great source of support and mentorship for the younger generation. It is not always about money.
A million dollar check won’t speak to you or hold your hand. Most of the million dollars will go to taxes and then barely paying for the next roof in a not well serviced and strange new zipcode. It’s a downgrade. Why would anyone want to downgrade their lives and walk into uncertainty when they are old and vulnerable?
They could literally move anywhere with that money and live like proverbial kings. But I’m not for or against prop 13, I was just saying. My friends parents retired and moved to Portugal. Best move they could ever make, they’re happy, well settled, etc..
maybe they dont want to move. i am genuinely flabbergasted by the number of people who think seniors should just pick up and 'move elsewhere'.
how is this different from someone telling an accented immigrant to 'go back home'?
many retired folks want to stay with their families and grandchildren. finally enjoy their communities after decades of working and paying off bills and mortgages. perhaps some would want to cash out, but many simply do not because they have been fairly successful in the bay area and dont need the extra money, but they are not literal millionaires with liquidity.
30 something year olds after less than a couple of years in a stable job and having another thirty years of earning potential asking people who have a couple of decades left in their lives to uproot themselves.
it is even more bizzare when the suggestion is to take reverse morgages to pay more taxes and supporting the repealing of prop 13. thats like saying that having a $5000 credit card limit is like having $5000 in the bank. reverse mortgages are literally betting on the fact that the person holding it would die eventually. that's someone's inheritance..legacy...a house they built and memories. most importantly, its their property.
there is a vulture like quality to young people in silicon valley's tech sector..those who hover around retiree's homes hoping they'd either sell and leave or find taxes unbearable and sell.
if someone cant afford housing, it means they have to take it up with their employer. if there isnt enough housing, move. take another job. convince your employee to build better cities. its not coveting someone's properties or wishing that they will 'move away'.
this is not an emotional appeal to be 'nice' to seniors. its just absolute shock at the helplessness of a workforce that is supposed to define bay area to come up with creative solutions and their impotence when it comes to creating change with their local governments.
what this shows is that the current working class generation has no influence, no clout, no real wealth, no creativity, no grit to challenge government or authority. most shocking of all, they are cutting off their noses to spite the face by asking for more taxes to be collected and to be delivered to a bloated state govt that has a terrible record with managing public funds, delivering results, being transparent and accountable.
Guaranteed almost 40-50% of these are jobs are going to disappear in the next decade. Guaranteed. what then? what would happen when automation displaces workers/employees and incomes dry up? this is how ghost town are born. while sf bay area is not there yet, it will be a whole different world.
Not saying they should move, just pointing that theres a great opportuniy many don’t see or are aware it exists where moving can buy you a whole lot more in terms of quality of life, healthcare, property.. For that money they could move together with family and still have plenty of resources left. Cali is no longer worth it with everything that is going on right now. Just saying not imposing anything...
I hear you. But that’s like suggesting defeat. The problem here is bad city planning and Sacramento shenanigans. A very cunning move of turning people against people so the govt can get away with doing nothing while pocketing all the cash.
They are literally pitting us against each other instead of fixing infrastructure, public transport, homelessness, community services and tax reform so its less taxes, not more.
Imagine you are a household and you want to maintain a standard of living. As family size grows, it makes sense to cut down the budget, eat out less and making the money and resources stretch more over more heads.
What the govt is doing is essentially vying for free money by taxing people more and creating more cash rich people. And pocketing the cash for the care and feeding of big Gov. they are making out like bandits. This is what Kings and feudal lords did...just tax working class more.
Just follow the money. I did it with just one thing. Prop 47. They don’t even charge people anymore for crimes that involve goods valued less than $950.
Why? Because it costs money to maintain prisons, police force and courts etc. waste of time and resources to petty crime.
This has resulted in more petty crime. Car break ins, property theft, chain snatching, lap top snatching, shopping mall robberies etc. the police won’t even take a report so there is a record of it. Who knows what that number is..
So you’d think they’d save oodles of money, right? Where is it going? It goes back to unfunded pension liabilities. It costs $70k per prisoner. Prison guard unions are the most influential unions. It’s going back to fill the hole that is unfundwd pension liabilities. It’s the same with teachers union, police officers unions, Fire Dept unions. These departments keep shrinking as density increases but they become more and more expensive and have larger budgets. Where is the money going? Pensions negotiated by unions.
Look at homelessness reforms. Where is all the millions going? Half the budget is for salaries and employees. It’s all coming from our taxes. Take every expense and scratch the surface. Beneath all the goop and gunk obscuring transparency, there is the govt playing with our money. With no accountability. We don’t ask questions because we are fighting amongst ourselves. Turning tech workers against seniors. Homeless against working class. Teachers against parents. And indoctrination begins at public schools where kids walk out to ‘support teachers unions’.
This has to end. Let’s not be suckers. This is the oldest game in the book. This is how the British colonized my people for 250 years. They called it Divide and Conquer.
The issue that I would see is a situation where the new construction causes property value to drop and therefore the original residents cannot afford to sell their homes and move to a neighborhood similar to the one before the construction. If they cannot afford to move away then its really not a meaningful say.
Here in Cupertino, everyone says, "this should all be single family homes!". If you look at the old newspapers from the 30s and 40s, everyone was saying, "We should remain farmland!".
Why is it that the people who built the single family homes happen to be right? Maybe it should have been farmland. Or maybe it will be even better as a mixed community of single family and multi-unit dwellings.
It's called progress. For some reason people think that when they bought the house everything was perfect. The progress until then was good, and any progress afterwards is bad.