[quote=EconProf]BG: I fully agree that when Prop 13 allowed relatives to keep the same assessment as the original owners a huge and growing “welfare” benefit was created. And it is welfare that is totally unwarranted, as it confers benefits on those with above-average net worth.
Blame the CA legislature, which responded to a small cry-baby segment of the population, ignoring the long-term implications.
Having said all that, I’m not sure a lot of money is involved, since properties constantly change hands, and heirs can’t always take over properties for a variety of reasons.
Do you have any hard numbers of how much this unwarranted benefit is costing in lost CA property tax revenues?[/quote]

Econprof, Firstly, I don’t believe “properties constantly change hands.” In some micro areas of the state (especially coastal areas), properties almost never change hands. And the more “desirable” the micro area, the less frequently properties actually “change hands” (meaning change hands outside of intra-family transfers).

I believe the City of Chula Vista has got to be losing an average of about $2500 annually per parcel in my own micro area in property tax transfers (teeter funds) from the state. And that figure is factoring in that a typical “market rate” assessment is about $100K LESS than current market value. (My area was originally built 55-70 years ago as a “working class area” but many homes have been remodeled over the years beyond that … even far beyond that due to generous lots.)

I don’t really have any “hard facts,” just anecdotal from looking at property tax bills of about 100 homes surrounding my home. But what I’ll do is this. Early next week, I’ll be downtown and will purchase four random “plat maps” of the City of San Diego at $2 page (for starters). Of course, all of them will be of improved parcels or parcels in the process of rehab (not vacant parcels or plats). I’m going to attempt to get one from the La Playa section of 92106, one from the Mission Hills section of 92103, one from either the Linda Vista or Clairemont section of 92111 and one from an established “working class” area outside the city such as Lemon Grove or National City. (I’m not going to have a chance to “cherry pick” the maps prior to purchasing them because it would be too time consuming.) I’ll then take them home and run up the tax bills on each parcel, noting which parcels directly face the bay (with an unobstructed view from the front or behind) or otherwise have superior lots in size, ingress/egress or configuration. Then I’ll post the tax bills of each parcel of each map here using addresses (when possible) without identifying owners but stating whether or not the HOEX was taken.

The Piggs can then look up current for sale or sold comps in those micro-areas at their leisure.

I’m going to illustrate this effect using random micro areas of single family homes in San Diego, CA but Props 13, 58 and 193 are a MUCH BIGGER subsidy to the wealthiest individuals and families, ESPECIALLY for those owners (and their heirs) of large multifamily and commercial properties located in expensive, tight markets such as San Francisco and Los Angeles. If you want to know how landlords are surviving (and thriving) in longtime rent-controlled environments, look no further than the ubiquitous presence of Props 13, 58 and 193!

I believe I can prove how much the existence of Prop 13 and its progeny are costing the state (and its subdivisions) using almost any random parcel map within a CA coastal county which was improved prior to April 1978. I want to include plat maps from two well-established micro-areas which are extremely desirable so we can all see the depth and breadth of these state-sanctioned subsidies awarded owners of these fine properties.

No other state bestows this type of subsidy to the “well off” and “rich” anywhere near to the magnitude that CA does. Most states use a “mill levy formula” to determine what the new assessment will be in a given area and conduct reassessments on ALL parcels every 1-3 years (avg every 2 years).

Note: High net-worth individuals live in all four corners of the county and many thousands of them are still living in homes they purchased ~40+ years ago (or their younger able-bodied heirs are residing in them). You cannot judge a book by its cover in CA coastal counties. Just because an individual lives in a modest home they own and/or owns/lives in a “working class” area and drives an older vehicle doesn’t mean they are “poor” or living paycheck to paycheck. It really doesn’t mean anything. All it means is that these individuals are living within (or well under) their means. There are HUNDREDS OF THOUSANDS (perhaps MILLION(s)) of high net-worth homeowners who fit this description in CA!