[cgbg]

There was an excellent discussion about this issue a month or so ago by Freepers.

Proposition 13 is a major factor driving the escalating price of California real estate.

This is an unintended consequence.

It works like this:

If you hold your property you keep the benefits of low property taxes. If you sell it and move somewhere else your new property is reassessed and you are clobbered.

As a result there is a huge economic incentive for Californians who want to move within the state to stay where they are and keep their home off the market.

Therefore as long as there is any significant net in-migration of potential homebuyers (or renters who move to buying--i.e. younger Californians) then the demand for housing will greatly exceed the supply. The result is wildly escalating housing prices.

There are other factors as well (environmentalist regulations preventing and related zoning restrictions preventing new units) but this is a major impact.

So, if proposition 13 is repealed the impact on California property values will be devastating. Combine that with the current unemployment situation and we could be talking major real estate meltdown here.

This is high stakes politics. I wonder if all the players understand the consequences.

[John Jorsett]

One major factor missing from your analysis is the attidutde in California toward 'sprawl' (i.e. building your home away from the city so that you're not living on top of your neighbors), and development in general. Building a residence in this state is an arduous process and that acts as a big limit on supply.

So, if proposition 13 is repealed the impact on California property values will be devastating.

I don't think there's any real danger of repeal. What is more likely is some sort of 'split-roll' system, where non-residential buildings get taxed at a higher rate and residential continues under the present system. And businesses shouldn't count on Republicans to help them avoid this: after the way corporations sold out to Davis and the Democrats in the past, Republicans aren't inclined to come to their rescue. Their attitude is increasingly to let businesses reap the rewards of their folly.

[tubebender]

If you hold your property you keep the benefits of low property taxes.

I think you'll find that the # 1 beneficiary of prop 13 is the elderly including my two sisters and my brother and wife. That was one of the main reasons prop 13 passed in the first place. They were being taxed out of their homes they purchased after WW II. The number of these homes is a small percentive of the homes in Calif.

[Publius6961]

Proposition 13 is a major factor driving the escalating price of California real estate.
BS!

This is an unintended consequence.
Bigger BS!

Having been in land development as a planner and engineer for 30 years in private industry, I know that is the lamest self-fulfilling prophecy.

The NIMBY factor, "environmental" regulations and the resulting stranglehold in the use of land, plus exorbitant fees are the primary causes of housing prices going through the roof.

No question in my mind!