the objection is that, even after looking at longer timeframes to smooth bubbles, california real estate has appreciated by much more than 2%/yr over the last several decades. this is a policy that favors people who bought houses a long time ago over people who have bought more recently or are looking to buy for the first time. why/whether that's a problem depends on your perspective on what the purpose of a property tax is.
a simple way of looking at it is that property tax is just one of many ways that a city raises funds. it seems unfair that two people/families living in similar houses, consuming similar amounts of public services, might pay wildly different amounts of tax depending on how recently they bought their houses.
a more nuanced view is that taxes are not only about revenue collection, but also incentivizing or disincentivizing certain behaviors. high property taxes discourage people from living in highly demanded areas without having a strong reason to do so. a pair of empty nesters living in a detached 3/4BR home in SF is not an efficient use of the limited housing stock. if they really want to do that, they should be allowed to, but imo they should not be insulated from the economic consequences.
of course, this is all in conflict with the american ideal that you can lock in a fixed rate mortgage, pay it off, and have your heirs monopolize a particular plot of land in perpetuity. this has always seemed to me a promise that should never have been made, but at this point it would be very painful to unwind all the policy that props this up.
a simple way of looking at it is that property tax is just one of many ways that a city raises funds. it seems unfair that two people/families living in similar houses, consuming similar amounts of public services, might pay wildly different amounts of tax depending on how recently they bought their houses.
a more nuanced view is that taxes are not only about revenue collection, but also incentivizing or disincentivizing certain behaviors. high property taxes discourage people from living in highly demanded areas without having a strong reason to do so. a pair of empty nesters living in a detached 3/4BR home in SF is not an efficient use of the limited housing stock. if they really want to do that, they should be allowed to, but imo they should not be insulated from the economic consequences.
of course, this is all in conflict with the american ideal that you can lock in a fixed rate mortgage, pay it off, and have your heirs monopolize a particular plot of land in perpetuity. this has always seemed to me a promise that should never have been made, but at this point it would be very painful to unwind all the policy that props this up.