[quote=SK in CV] . . . Your argument that population growth is primarily non property tax payers is wholly fallacious. Much of the growth is organic. And all new residents need a place to live, so it doesn’t matter whether they own or rent. They’re still living somewhere. I’d be surprised if half of all residences in the state were built post 1978.
And the argument that they’re paying 1/10th of 1% of value is BS. If 1% of the state has valuations that low I’d be surprised.[/quote]
SK, I didn’t argue that CA’s population growth is primarily non property taxpayers. Of course, everyone needs a place to live. I really don’t know what the percentage is of “newcomers” to CA (with <10 yrs residency) who own their residence versus those who rent. But I suspect those percentages vary wildly depending on micro-area.
That's not the issue I was discussing.
There are a millions of property taxpayers in this state paying taxes based on an assessment equal to 1/10th of the current market value of their property. This is especially pronounced in lower-tier SFR areas and multifamily bldgs in high-priced coastal areas (ex LA and SF). It is not uncommon at all to find an owner today who is paying $400 to $600 annual tax (incl all voter-approved bonds and agency fees) whose property is now worth $300K to $500K. When you look at the ad-valoreum portion of their bill, their actual assessment is equal to 1/10 of their current market value (or $30K to $50K). In SF, the disparity of the tax bills between old and new owners is even more pronounced due to the skyrocketing values of former SFR’s which have been turned into 2-4 units (flats) over multiple decades in which EACH unit (regardless of size) now rents for $1700 to $3600. Do the math x 2, 3 or 4 units. And it’s not uncommon at all to find that some of these districts were upzoned to light commercial in the past, making them even MORE valuable in the eyes of a buyer. For example, it’s not uncommon to find a property tax bill in SF for $850 to $2200 annually for a bldg which now has a market value of $1-$2M+.
This doesn’t even include the millions of CA property owners whose assessment is equal to ~11% to ~65% of the current market value of their property … that is, those who purchased between 1978 and 1999 and still own that property.
Prop 13 (and its progeny, Props 58 and 193) have had far reaching ramifications for state and local governments ability to finance their day-to-day operations, the largest being the inherent instability created by not knowing precisely how much they can expect to recover year to year from property tax coffers.
Other states, who reassess all properties every year or every two years, don’t have this huge disparity between similarly-situated owners’ tax bills. Thus, their local governments are able to plan better and they are less subject to the vagaries of boom/bust microeconomics which tend to be all concentrated in a handful of areas (in CA, read: *newer* areas). This boom/bust cycle ends up spreading to adjacent, more established communites where there was little (if any) distress. This happens insidiously thru extremely low sold comps in adjacent *newer* areas during a “bust” cycle, causing buyers to shun the established areas to bottom-fish in the newer areas where same-size listings abound at 40-50 cents on the dollar (nearly 100% “distressed”). The REASON for the depth of the bust (besides “creative” financing) has a LOT to do with the huge disparity of carrying costs between a similar-sized older and newer property (largely due to MR/HOA dues and disparity in assessments).
The above is what happened in Chula Vista between 2007 and 2012.
In other states, developers have to pay for all their infrastructure up front as a condition of permitting. So they have to charge enough for the homes in their new subdivisions to pay for all of this. If a project doesn’t “pencil out” for them, they don’t build. They don’t depend on “bond money” concealing part of the actual purchase price from buyers, allowing them to build freely without using their own funds for the necessary pre-construction infrastructure and then letting their buyers sort their finances out after COE (and they’ve closed up shop and left), as CA developers do.
Yes, the original assessment basis used at the time Prop 13 was passed was that of the ’75/76 FY assessment (which was the assessment in effect at the time of its writing) … before election day 1977.
Perhaps the reason why half your old haunt (in the western half of DC has changed hands since 1978 is because of the many canyon rim and “view properties” there which were/are VERY marketable and allowed their owners to “retire” who otherwise would not have had the funds to do so 🙂
Try the same plat map exercise in Allied Gardens, Clairemont, LG, LM, EC, Talmadge, Rolando, College area, Mission Hills or the interior of PL (ex Loma Portal, Plumosa Park). Just pick a couple of random streets which have single-family units (preferably 50+ yrs old) and tell us of your findings. CA state and local governments have been losing BILLIONS for decades (just as CAR stated earlier here) by not periodically reassessing parcels of every stripe, as other states do.
