> In fact, you're benefiting through increasing home values (for which you are not taxed due to Prop. 13)
This is completely untrue. I have a house in 94087 where I live about 7 months/year (the other 5 months are in Tel Aviv, where it's also very expensive!) I own the house, bought in in 1989. I don't benefit at all from increased house prices. It just makes everything more expensive.
And even under Prop 13, my property tax goes up 2% a year. That's more than inflation.
I don't benefit at all from the "increased value" in my house. If I could, I'd tear down the house and build a 2-family house on the property. But even if zoning laws allowed it, the house would be reassessed at current market value, and it wouldn't be worth it to pay $32,000/year in property taxes alone. (I've looked into this to the extent of hiring a real-estate lawyer to see if it's feasible).
If there were no prop 13, people would be forced out of their homes because specu-vesters would drive the prices up making just the taxes affordable.
The solution is to BUILD MORE HOUSES. Build apartment buildings. Close by so people can walk or take existing mass transit to work. And allow people with single family homes to tear them down and build 2-family homes without being reassessed.
Prop 13 makes houses a net negative on city budgets, so there is a financial incentive for cities to reject new housing units, while encouraging development of hotels and commercial properties which are net positives.
Prop 13 also induces people to not sell their property, or convert properties into more units like you, so there are less available units on the market, which increases prices even further.
For example go look at SF or LA vs Miami on Redfin and see the stark difference in how many units are for sale at one time.
Higher property taxes encourages people to sell their properties if it's not economically worth it anymore to hold the property and give it to people who would actually use it. And it also encourages them politically to build more housing so their property tax bill does not go up too much.
So your saying that they don't lose money on new housing units, but gain it?
If the city doesn't make enough money, then it become bankrupt. Roads, schools, sewers and police can't function properly anymore. The money has to come from somewhere!
Speaking personally, the value of my house means little to me. I plan to live in this region for a long time - when my house goes up, other houses in the region go up. When my house goes down, other houses in the region go down. My house may be worth $1million, but selling it and buying another will get me the same house as when it was worth $500k.
It only matters if I decide to sell it AND move somewhere else. Which probably isn't going to happen.
I just want to make it clear that this is a choice you're afforded because of the value of your home.
You (quite literally) have a million-dollar offer on the table to move to, say, Austin, TX (or dozens of other great cities). The fact that you choose not to accept that offer does not negate the existence of the offer. The offer is always there. And this is a very real asset that you have (that, I hope it's clear, most people don't have), whether you choose to acknowledge it or not.
I'm sorry, but no. If you have a million-dollar gold statue of a pig that you're unwilling to sell, your unwillingness doesn't even enter into it. You still have the million-dollar statue and it's still worth a million dollars. It doesn't matter what rationale you provide for not selling it. It just doesn't matter. Those reasons seem important to you. But they aren't important in assessing the value of the statue.
Speaking of moving - a downside of prop 13 is that people used to upgrade / downgrade their houses. Have kids? Get a little bigger house. Retire? Downsize.
IIRC you can usually transfer your tax advantaged status to the same county if you buy a smaller place. It's a little restrictive but it still enables you to downgrade.
This is completely untrue. I have a house in 94087 where I live about 7 months/year (the other 5 months are in Tel Aviv, where it's also very expensive!) I own the house, bought in in 1989. I don't benefit at all from increased house prices. It just makes everything more expensive.
And even under Prop 13, my property tax goes up 2% a year. That's more than inflation.
I don't benefit at all from the "increased value" in my house. If I could, I'd tear down the house and build a 2-family house on the property. But even if zoning laws allowed it, the house would be reassessed at current market value, and it wouldn't be worth it to pay $32,000/year in property taxes alone. (I've looked into this to the extent of hiring a real-estate lawyer to see if it's feasible).
If there were no prop 13, people would be forced out of their homes because specu-vesters would drive the prices up making just the taxes affordable.
The solution is to BUILD MORE HOUSES. Build apartment buildings. Close by so people can walk or take existing mass transit to work. And allow people with single family homes to tear them down and build 2-family homes without being reassessed.