Californians voted themselves two massive boons in the 70s.
1. Prop 13. This was in response to rising inflation in the 70s that had a knock-on effect to property taxes. The argument of kicking old people out of their homes was used as a stalking horse for giving the likes of Disney a massive tax break.
But there have been periods of high inflation since and some massive growth in property values. So you have a house that might've sold for $60,000 in 1975 with tax set accordingly, now being worth $3,000,000 and being taxed at twice that rate (1-2% per year capped cumulatively). So someone who buys an identical house now might be paying 20x the property tax rate.
This was further expanded by allowing people to inherit their low tax rates so you really have a two-tier system where long-term residents and corporations aren't paying anywhere near their fair share of property taxes.
2. Rent Control. This turned out to be another massive boon to incumbents. Inflation created issues with rents going up too fast. The solution? Cap the increases, just like Prop 13. And give tenants the right to stay. These too can be inherited.
So you might have someone in SF living in a $3,000,000 house that's paying $400/month in rent.
This hasn't really helped anyone since.
NYC had this too but steadily moved away from it. The last rent control lease was created in the early 1970s. There's a greater (but shrinking) pool of rent stabilized units that tend to have more reasonable rents.
Anyway, as you can imagine this creates a bunch of bad incentives. Under the table payments for leases. Illegal subletting. Properties remaining vacant because rather than be rented (I saw one estimate that 1 in 8 units in SF was vacant). The only recourse for evicting a rent controlled tenant was really an Ellis Act eviction.
Price caps only work in the very short term. They are not a long term solution.
Higher property taxes would actually help with the housing crisis in California because it's too cheap to park money in Californian property plus you could do something useful with those funds, not the least of which should be reducing state income taxes at the lower brackets.
1. Prop 13. This was in response to rising inflation in the 70s that had a knock-on effect to property taxes. The argument of kicking old people out of their homes was used as a stalking horse for giving the likes of Disney a massive tax break.
But there have been periods of high inflation since and some massive growth in property values. So you have a house that might've sold for $60,000 in 1975 with tax set accordingly, now being worth $3,000,000 and being taxed at twice that rate (1-2% per year capped cumulatively). So someone who buys an identical house now might be paying 20x the property tax rate.
This was further expanded by allowing people to inherit their low tax rates so you really have a two-tier system where long-term residents and corporations aren't paying anywhere near their fair share of property taxes.
2. Rent Control. This turned out to be another massive boon to incumbents. Inflation created issues with rents going up too fast. The solution? Cap the increases, just like Prop 13. And give tenants the right to stay. These too can be inherited.
So you might have someone in SF living in a $3,000,000 house that's paying $400/month in rent.
This hasn't really helped anyone since.
NYC had this too but steadily moved away from it. The last rent control lease was created in the early 1970s. There's a greater (but shrinking) pool of rent stabilized units that tend to have more reasonable rents.
Anyway, as you can imagine this creates a bunch of bad incentives. Under the table payments for leases. Illegal subletting. Properties remaining vacant because rather than be rented (I saw one estimate that 1 in 8 units in SF was vacant). The only recourse for evicting a rent controlled tenant was really an Ellis Act eviction.
Price caps only work in the very short term. They are not a long term solution.
Higher property taxes would actually help with the housing crisis in California because it's too cheap to park money in Californian property plus you could do something useful with those funds, not the least of which should be reducing state income taxes at the lower brackets.