“In CA one of the problems for the young but benefit to those who have been settled a while is that property taxes are locked in at a low valuation and (if any) interest rates locked in at half or below the current borrowing costs. Thus, there in little desire for homeowners to sell They’d have to reset their rate and the property tax, and probably pay a lot in state and federal taxes on the gain. Lots of government interference in the housing market and it is exacerbated by taxes and interest rates at the moment.”
So to prevent government market interference you’d tax people out of their homes and social networks.
How about your employer and its employees setting up shop in another square mile of our multi-million square mile country and not trash my square mile?
I didn’t say anything of the sort. In fact one proposal I put forth was to eliminate the property tax; or at least eliminate the property tax for one residence. That would lower the cost of owning a home for young people and allow them to live near their families, friends, schoolmates etc.
Another solution would be to make the sale of a primary residence 100% tax free. If you bought a $200k home in Los Angeles in 1988 it may be worth say $2 million today (some a lot more some less depending on zip code). After the exemption for a married couple, that sticks them with (if I did the math right) $260,000 in capital gains on federal taxes and around $140,000 in state income taxes. No small number. If they could keep all of it, they may be more apt to make their own decision to leave the area, or, could afford to downsize and stay in the general area without having to take on another mortgage. And that $400,000 would do them well if they age poorly thereafter and need to hire some forms of in home care or other improvements for accessibility etc.