Very happy if they eliminate the corporate loophole, but not as concerned about inherited Prop 13 protection as long as the heirs are using the property as their sole, primary residence. That being said, I do think that if they get the inherited Prop 13 protection, then they should not be able to step up the cost basis to market value when the original owner passes away. One or the other, but they shouldn’t have both. I value community roots and private property; families should not be priced out of their own homes, no matter which generation lives there.

OTOH, I’m much more bothered by landlords and other property owners of rental or other non-primary homes getting Prop 13 protection. Taxpayers have absolutely no business subsidizing landlords’ profits and/or the costs of a second home, vacation property, or tracts of raw land (as with the Williamson Act).

OTOH, I’m much more bothered by landlords and other property owners of rental or other non-primary homes getting Prop 13 protection. Taxpayers have absolutely no business subsidizing landlords’ profits and/or the costs of a second home, vacation property, or tracts of raw land (as with the Williamson Act).

Profits get taxed as income. Much more equitable for the state to tax income and distribute it to municipalities than having rich towns be able to tax much more than less wealthy areas.

Capping property taxes at ~1% of value with a defined rate of increase for everyone in the state seems like an equitable solution. It makes the property market fairly predictable — owners can’t suddenly be hit with a 50% rise in taxes, killing their profit margins or making properties suddenly money-losing. A large tax increase would either be passed on to tenants, or if it can’t be, would result in a lot of abandonment and insurance fires. As happened in places like Detroit and Newark, NJ in the 60s.

Prop 13 is not a subsidy. It’s a tax limit. One that can be overridden anyway by things like parcel taxes, provided the people living in an area have the will to do so.

Property taxes cannot be passed on to tenants unless the landlords are willing to accept much higher densities in their rental house.

So what’s a landlord to do when the rental property is no longer profitable because increases can’t be passed on?

I see a few alternatives:
(1) condoize and sell to tenants. takes money.
(2) insurance fire
(3) abandonment/foreclosure

Making rental properties unprofitable is not in the public interest, as shown by (2) and (3). This kind of stuff was very common in the 70s and 80s.

Lastly, a limit on taxation is not a subsidy, any more than taxing incomes at 50% vs 100% is a “subsidy to business.” It’s just a tax cap, which is what it is.

And as far as subsidizing landlords vs owner-occupied, the last decade has shown that many Americans are too financially illiterate to safely own their own homes. Better to put more ownership in the hands of people who can (and do) run the numbers, rather than paying $100,000 over value and operating with zero margin for error because OMG! the view!

No need to go through the trouble of any of those three options. Just sell. If taxes make it unprofitable, chances are prices are higher than they should be. That would mean the LLs could sell when prices are highest, all the while increasing desperately needed inventory in times when it’s in short supply.

We should not allow speculation or “ownership for profit” of finite natural resources, especially if those resources are in excess of what that person/family needs for their own use. Rentier capitalism is NOT productive; it is zero-sum and subjects the economy to dangerous booms and busts, and it has the potential to create dangerous wealth/income inequalities while exploiting those least fortunate.

As for the subsidy:

“Definition of ‘Subsidy’

A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction.”

http://www.investopedia.com/terms/s/subsidy.asp

…..

tax subsidy
noun [C or U] TAX, GOVERNMENT, ECONOMICS
› a reduction in tax in order to reduce the cost of producing food, a product, etc. and to help to keep its price low:

[Which Prop 13 largely fails to do, BTW, since most LLs charge market rent, irrespective of the subsidies they receive.]

http://dictionary.cambridge.org/us/dictionary/business-english/tax-subsidy
—–

Prop 13 is absolutely the very essence of a tax subsidy to those who least need it (people who own more property than they can use for themselves). It is unconscionable that we are providing these subsidies when the state and local governments are so strapped.

No need to go through the trouble of any of those three options. Just sell. If taxes make it unprofitable, chances are prices are higher than they should be.

We should not allow speculation or “ownership for profit” of finite natural resources, especially if those resources are in excess of what that person/family needs for their own use.

(a) most landlords are small businesses and work damn hard at maintaining their properties, dealing with tenants, etc
(b) not everyone wants to own. A good supply of inexpensive rental properties is important for mobility — if I have to move to a given city for six months for work, I’d want to rent, not buy
(c) the current situation has proven that a lot of Americans are simply too rock-dumb, not to mention financially retarded to be allowed to buy property

How is a given level of taxation a “subsidy?” It’s just a given level of taxation.

By your logic, any level of taxation below 100% would be a subsidy. Besides, owning to live in is already plenty subsidized vs owning as a business.

As to renters, there are plenty that are engaged in their communities in areas where renting is the norm. Look at NYC and San Francisco for examples of this.

My point is that Prop 13 *is* the market rate. At least for residential property, the same protections should apply regardless of usage.

If you want to tax landlords more, the equitable way to do so would be to put a surtax on rental income. Same as taxes on cigarette sales, rental cars, or hotel rooms in many states.